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                                                                   EXHIBIT 10.38

                AMENDED AND RESTATED INITIAL ONCOVAX CENTER LEASE


                THIS AMENDED AND RESTATED INITIAL ONCOVAX CENTER LEASE (this
"LEASE"), is entered into as of December 11, 1998 by and between LEHIGH VALLEY
HOSPITAL AND HEALTH NETWORK, a Pennsylvania non-profit corporation ("LANDLORD"),
having its principal office at Cedar Crest & I-78, Allentown, PA and INTRACEL
CORPORATION, a Delaware corporation (the "TENANT"),having its principal office
at 1330 Piccard Drive, Rockville, MD.

                WHEREAS, on October 21, 1998 the parties hereto were negotiating
in good faith the terms of a Joint Venture Agreement to be entered into by and
between the parties (the "JOINT VENTURE AGREEMENT"), which contemplated that the
parties would enter into an Initial OncoVax Center Lease (the "INITIAL ONCOVAX
CENTER LEASE") and notwithstanding the fact that the Joint Venture Agreement was
not entered into on such date, the parties entered into the Initial OncoVax
Center Lease and an accompanying letter agreement;

                WHEREAS, the parties have concluded the negotiations of the
Joint Venture Agreement and desire to enter into such Joint Venture Agreement;
and

                WHEREAS, the parties desire to enter into this Lease to amend
and restate the Initial OncoVax Center Lease in its entirety to reflect all of
the additional terms and conditions relating to said lease as negotiated between
the parties since the execution of the Initial OncoVax Center Lease.

                NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                              W I T N E S S E T H:

1.      LEASED PREMISES; FIXTURES AND EQUIPMENT; COMMON AREAS

                Landlord does hereby grant, demise and lease unto Tenant, and
Tenant does hereby lease and take from Landlord, for the Term (as defined below)
and upon the terms and conditions set forth in this Lease, the premises known as
the "Clean Room" which is located on the second floor of the General
Services Building of Landlord's hospital and described on Exhibit A attached
hereto, together with the clinical patient care, administrative and storage
space also


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described on Exhibit A, and all improvements made by Landlord, now or hereafter
constructed thereon and all rights, privileges, easements and appurtenances
belonging or pertaining thereto (collectively, the "LEASED PREMISES" ), together
with all of Landlord's fixtures and personal property, whether owned or leased
by Landlord, located on or used or useful or associated with, the Leased
Premises, including but not limited to the Clean Room Equipment (as defined in
Exhibit B), and all other furnishings, machinery, apparatus, movable or
non-movable equipment and materials described in Exhibit B attached hereto
(collectively the "FIXTURES AND EQUIPMENT"). Landlord also hereby grants to
Tenant a nonexclusive license for the benefit of Tenant, its employees, agents
and invitees for access to and from the Leased Premises through the building and
over the property of Landlord appurtenant thereto, and to use those parts of the
building designated by Landlord for use by tenants including, but not limited to
toilet rooms, elevators and unrestricted parking areas, all as more particularly
described in Exhibit C attached hereto (collectively, the "COMMON AREAS").


2.      SERVICES

                During the Term, Landlord shall provide Tenant with all
services, including, but not limited to, electricity, heat, gas and air
conditioning (collectively "UTILITIES"), removal of hazardous waste, cleaning
services and laundry, necessary and sufficient for Tenant to use the Leased
Premises as described in Section 9.1 below.


3.      POSSESSION

                Landlord shall deliver to Tenant on the Commencement Date (as
herein defined) actual and exclusive possession of the Leased Premises, free and
clear of all leases, tenancies, agreements, matters, liens and defects in title,
together with exclusive possession of the Fixtures and Equipment.


4.      TERM

                The term of this Lease (the "TERM") shall commence on November
1, 1998 (the "COMMENCEMENT DATE") and shall end, unless earlier terminated as
described in Section 5 below, on the Final Closing Date as that term is defined
in that certain Joint Venture Agreement (the "JOINT VENTURE AGREEMENT") entered
into by and between the parties hereto and dated of even date herewith. The
parties agree that this Lease shall immediately expire or terminate upon the
Final Closing Date or earlier terminate as described in Section 5 below without
the necessity of any notice from either Landlord or Tenant to terminate the
same, and Tenant hereby expressly waives all right to any notice which may be
required under any laws now or hereafter enacted and in force in Pennsylvania,
including The


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Landlord and Tenant Act of 1951, Act of April 6, 1951, Act of April 6, 1951,
P.L. 69 as amended (the "Act") upon such expiration or termination.


5.      EARLY TERMINATION


        5.1.    TERMINATION OF JOINT VENTURE AGREEMENT

        This Lease shall immediately terminate if the Joint Venture Agreement is
terminated for any reason.


        5.2.    EVENTS OF DEFAULT; REMEDIES

                5.2.1.  EVENTS OF DEFAULT BY TENANT

                Any of the following occurrences or acts shall constitute an
"Event of Default" under this Lease:

                        (i) Tenant fails to pay, on the date on which the same
is due and payable, any installment of monthly rent and any additional payments,
within ten days after Landlord notifies that such payment is overdue and due and
owing.

                        (ii) Except as otherwise provided herein, a party fails
to observe or perform any other provision hereof for 30 days (or such shorter
period of time if such default endangers life or property) after the
non-breaching party shall have delivered to Tenant notice of such failure.

                        (iii) A party's filing of a petition in bankruptcy under
Title 11 of the United States Code, as amended, or the commencement of a
proceeding under any other applicable law concerning insolvency, reorganization
or bankruptcy or a party becomes generally unable to pay its debts as they
become due; provided, however, if a proceeding with respect to an act of
bankruptcy is filed or commenced against Tenant, the same shall not constitute
an Event of Default if such proceeding is dismissed within 60 days from the date
of such filing.

                        (iv) The Leased Premises shall have been abandoned.

                        (v) Any representation or warranty made herein or any
statement or representation made in any certificate, report or opinion
(including legal opinions), financial statement or other instrument furnished in
connection with this Lease, proves to have been incorrect, false or misleading
in any material respect when made.

                        (vi) A party fails to comply with any requirement of any
governmental authority having jurisdiction within the time required by such
governmental authority; or any proceeding is commenced or action taken to
enforce


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any remedy for a violation of any requirement of a governmental authority or any
restrictive covenant affecting the Leased Premises or any part thereof.

                5.2.2.  REMEDIES

                If an Event of Default shall have happened and be continuing, a
party shall have the right at its election, then or at any time thereafter while
such Event of Default shall continue, to give written notice of its intention to
terminate this Lease on a date specified in such notice. Upon the giving of such
notice, the Term and the estate hereby granted shall expire and terminate on
such date as fully and completely and with the same effect as if such date were
the date hereinbefore fixed for the expiration of the Term.


        5.3.    OTHER TERMINATION EVENTS

                This Lease may also be earlier terminated as further described
in Sections 10.4 and 15 below.


6.      ACTIONS UPON TERMINATION

                Upon the expiration or termination of this Lease,

                (i) Tenant shall immediately permit Landlord and its employees
and agents full access to the Leased Premises to aid in the transition to a new
operator, and further agrees to give up quiet and peaceful possession without
further notice from Landlord.

                (ii) If termination results because of Tenant's Event of
Default, Tenant shall continue to pay to Landlord the monthly rent until the end
of the Term; provided, that Tenant shall not be responsible for such rent if the
Leased Premises have been relet.


7.      PAYMENTS

        7.1.    RENTAL PAYMENTS

                Tenant shall pay as rent for the Leased Premises and the
Fixtures and Equipment to Landlord during the period of time from the
Commencement Date through the Term monthly installments of Six Thousand Six
Hundred and Ninety Dollars and no cents ($6,690.00), in advance without demand
on or before the first day of each month from and including the month in which
the Commencement Date occurs, which the parties agree (i) reflects the fair
market rental value of the Leased Premises and the Fixtures and Equipment and
(ii) is attributable in its entirety to


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the Fixtures and Equipment. Rent for any partial month shall be prorated based
upon the actual number days in such month.


        7.2.    ADDITIONAL PAYMENTS

                Tenant shall pay as additional payments for the services
provided in Section 2 above (except Utilities which Landlord shall provide to
Tenant without any additional payments), monthly installments of Two Thousand
Dollars and no cents ($2,000.00), in advance without demand on or before the
first day of each month from and including the month in which the Commencement
Date occurs, which the parties agree reflects the fair market value of the
services provided in Section 2.


        7.3.    DEFAULT

                Tenant may not be declared in default for non-payment of rent or
any additional payments due hereunder if such rent or additional payments is/are
received by Landlord by the 10th day of the month.


8.      TITLE AND QUIET ENJOYMENT

                Subject to Section 18 below, Landlord hereby represents,
warrants and covenants that it has good and marketable fee simple title to the
Leased Premises, that the same is subject to no other leases, tenancies,
agreements, encumbrances (including delinquent taxes), liens or defects in title
affecting said property or the rights granted Tenant in this Lease. Landlord
further covenants that there are no restrictive covenants, zoning or other local
ordinances or regulations which will prevent Tenant from using and occupying the
Leased Premises for a current Good Manufacturing Practices ("CGMP") laboratory
and support area. Landlord further represents, warrants and covenants that it
has good and marketable title to all Fixtures and Equipment and that same are
subject to no leases, agreements, encumbrances, liens or defects in title
affecting said property or the rights granted Tenant in this Lease. Landlord
covenants and agrees that during the Term, Tenant shall, upon paying the rent
and performing the covenants of this Lease on its part to be performed,
peaceably and quietly have, hold and enjoy the Leased Premises and Fixtures and
Equipment and all rights granted Tenant in this Lease.


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9.      USES OF LEASED PREMISES; ACCESS TO LEASED PREMISES AND COMMON AREAS


        9.1.    TENANT'S USE OF LEASED PREMISES

                The Leased Premises and the Fixtures and Equipment therein shall
be used for the conduct and operation of a cGMP laboratory and support area in
conformity with applicable law and the terms and conditions of the Joint Venture
Agreement. The Leased Premises shall be operated under the names of "Intracel
Corporation," and no other names shall be permitted to be used in lieu of or in
addition to such name without the prior written consent of Landlord. Tenant
hereby agrees to comply and conform in all material respects with all legal
requirements concerning the use, occupancy and conditions of the Leased Premises
and all machinery, equipment, furnishings, fixtures and improvements therein. If
any such legal requirement requires an occupancy or use permit, license, special
exception, or other local, state or federal agency certification, then Tenant
shall promptly obtain and keep current the same.


        9.2.    LANDLORD ACCESS TO LEASED PREMISES

                Landlord may enter upon the Leased Premises, upon reasonable
notice to Tenant, to inspect, maintain, repair the Leased Premises. Landlord may
enter the Leased Premises at any time to perform emergency repairs to preserve
the Leased Premises and/or the Fixtures and Equipment.


        9.3.    TENANT'S ACCESS TO LEASED PREMISES AND COMMON AREAS

                Landlord shall keep the Leased Premises and the Common Areas
"open" during normal business hours which, for purposes of this Lease, shall
mean 24 hours a day, 365 days a year. Landlord shall provide lighting,
electricity, heat, air conditioning, water, elevator service and other necessary
services for Tenant's use and access to the Leased Premises and the Common Areas
when open. Tenant's use of the Common Areas shall not unreasonably hinder or
interfere with the Landlord's or other tenants' use of their Common Areas.


10.     CONDITION OF LEASED PREMISES, FIXTURES AND EQUIPMENT; MAINTENANCE AND
        REPAIRS


        10.1.   CONDITION OF LEASED PREMISES, FIXTURES AND EQUIPMENT

                Landlord hereby represents and warrants that the Leased Premises
are constructed substantially in compliance with all applicable building codes
and regulations and substantially in accordance with the plan and specifications


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approved by the Commonwealth of Pennsylvania Board of Health (the "BOARD OF
HEALTH"). Upon the expiration or earlier termination of the Lease, Tenant shall
surrender the Leased Premises in good condition, reasonable wear and tear and
damage by casualty and fire excepted, with all lighting, plumbing, electrical
and life/safety systems and the Fixtures and Equipment, in good working
condition, other than the "Tenant's Fixtures and Equipment Required to be
Removed or Otherwise Transferred" (as defined in Section 11.2).


        10.2.   TENANT'S MAINTENANCE AND REPAIRS

                During the Term of this Lease, Tenant, at its expense, hereby
agrees to clean, and maintain and keep in good repair its equipment.


        10.3.   LANDLORD'S MAINTENANCE AND REPAIRS

                Landlord shall make and pay for all repairs, replacements and
maintenance which are necessary for the operation of the Leased Premises, the
Common Areas, and the Fixtures and Equipment, excluding repairs or maintenance
necessitated by Tenant's willful acts or gross negligence. Tenant agrees to
notify Landlord of any necessary repairs within a reasonable period time of its
discovery. If Landlord fails to commence to perform any such maintenance,
replacement and repair after five days notice from Tenant, Tenant shall have the
right to undertake such maintenance, replacement and repair and to deduct any
expenditures associated therewith from the rent payments due under Section 7.1
above.


           10.4.     FIRE OR OTHER HAZARD

                     Tenant hereby agrees to notify Landlord of any damages to
the Leased Premises resulting from fire or other hazard and also of any
dangerous or hazardous condition within the Leased Premises immediately upon the
occurrence of such fire or other hazard or discovery of such condition, or as
soon as practicable thereafter. Upon occurrence of a fire, repairs shall be made
by Landlord as soon as reasonably may be done unless the costs of repairing the
Leased Premises exceed 25% of the replacement cost of the building in which case
the Landlord may, at its option, terminate this Lease by giving Tenant written
notice of termination within 45 days of the date of such fire. If the Landlord
does not terminate this Lease as described above, then Landlord has 45 days
after the date of such fire to give written notice to Tenant setting forth
Landlord's unqualified commitment to make all necessary repairs or replacements,
the projected date of commencement of such repairs, and Landlord's good faith
estimate of the date of completion of the same. If Landlord fails to give such
notice, or if the date of completion is more than 90 days after the date of the
fire or other hazard, then Tenant may, at its option, terminate this Lease and
Landlord will be obligated to refund to Tenant any rent allocable to the period
subsequent to the date of the fire. During any period of restoration and


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repair Tenant shall continue to operate within the Leased Premises to the extent
practicable, with a pro-rata reduction in the rental payments based upon the
usable portions of the Leased Premises.


11.     ALTERATIONS AND REMODELING OF LEASED PREMISES, AND FIXTURES AND
        EQUIPMENT


        11.1.   ALTERATIONS AND MODIFICATIONS TO THE LEASED PREMISES

                Tenant may, at its own expense, from time to time during the
term of this Lease, upon the prior written approval of Landlord as described in
Section 11.3 below, make such structural alterations, additions, replacements
and changes, in and to the Leased Premises, and any buildings thereon, as it
finds necessary or desirable for the operation of the Leased Premises as a cGMP
laboratory. All such alterations, demolitions, additions, replacements and
changes shall be made in accordance with plans and specifications prepared by
Tenant and approved by Landlord, in conformity with applicable building laws and
regulations. Except for Fixtures and Equipment acquired, or purchased and
contributed to ICC (as defined below) by Tenant pursuant to Section 11.2 below,
such alterations, additions, replacements and changes shall become a part of the
Leased Premises, shall be maintained and kept in repair in accordance with the
provisions of Section 10, and at the expiration or termination of this Lease
shall become the property of Landlord without the payment of any money or other
consideration.


        11.2.   ALTERATIONS AND MODIFICATIONS TO THE FIXTURES AND EQUIPMENT

                Tenant may, at its own expense, from time-to-time during the
term of this Lease, install, replace and operate in the Leased Premises such
removable medical equipment and personal property ("TENANT'S FIXTURES AND
EQUIPMENT") as it shall deem necessary or desirable in the conduct of its
business, provided all laws, rules and regulations of governmental bodies with
respect thereto shall be in all material respects complied with by Tenant.
Tenant may also, upon the prior written approval of Landlord as described in
Section 11.3 below, make such alterations, additions, replacements and changes,
in and to the Fixtures and Equipment, as it finds necessary or desirable for the
operation of a cGMP laboratory. The Clean Room Equipment as described on Exhibit
B shall be sold to Tenant by Landlord as of the Final Closing Date and this
Lease's expiration date pursuant to Section 6.1 of the Joint Venture Agreement
and together with any alterations, additions, replacements and changes thereto
shall be concurrently contributed to Intracel Cancer Center of Pennsylvania,
Inc. ("ICC") pursuant to Sections 3.1 and 6.2 of the Joint Venture Agreement. If
this Lease is earlier terminated by Tenant pursuant to Section 5.2.1 above, the
Clean Room Equipment and together with any alterations, additions, replacements
and changes thereto shall remain Landlord's property and Landlord shall
reimburse Tenant the actual


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costs of all alterations, additions, replacements and changes thereto. Prior to
the expiration or termination of this Lease, Landlord and Tenant shall designate
those items of Tenant's Fixtures and Equipment that Landlord or Tenant desires
be removed from the Leased Premises, and the Clean Room Equipment to be
purchased by Tenant and contributed to ICC upon the expiration or termination of
the Lease ("TENANT'S FIXTURES AND EQUIPMENT REQUIRED TO BE REMOVED OR
CONTRIBUTED"). With the exception of Tenant's Fixtures and Equipment Required to
be Removed or Contributed, all of the Fixtures and Equipment shall remain on the
Leased Premises at the termination of this Lease and shall remain the property
of Landlord.


        11.3.   LANDLORD'S CONSENT

                Landlord agrees not to unreasonably withhold, delay or condition
its consent to any action proposed by Tenant pursuant to this Section 11,
provided that (i) the alterations, construction or installation shall not have a
material adverse effect on the structure, appearance or use of the Leased
Premises or the building in which the Leased Premises are located or Fixtures
and the Equipment, in the reasonable judgment of Landlord, (ii) all such
alterations, construction and installations shall be expeditiously completed in
compliance with all legal requirements, (iii) all work done in connection with
any such alterations, construction or installation shall comply with the
requirements of any insurance policy required to be maintained by Tenant
hereunder, (iv) Tenant shall promptly pay all costs and expenses of any such
alteration, construction or installation and shall discharge all liens filed
against any of the Leased Premises or the Fixtures and Equipment arising out of
the same, (v) Tenant shall procure and pay for all permits and licenses required
in connection with any such alteration, construction or installation, (vi) such
alterations shall comply with any recorded lien or covenant affecting the Leased


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Premises, and (vii) Landlord shall incur no expense or cost whatsoever in
connection with such alterations, including without limitation, costs for
reviewing and approving plans, or tap fees or other utility fees. Landlord may
require, as a condition to its consent to any alterations, reasonable
appropriate payments, bonds, assurances and undertakings from Tenant to ensure
that all such conditions are satisfied. Notwithstanding the foregoing, it shall
not be unreasonable for Landlord to withhold its consent, or to condition its
consent, if the holder of a mortgage withholds its consent to any of the
foregoing, or requires that certain conditions or requirements be satisfied or
observed.


        11.4.   LIENS OR ENCUMBRANCES

        Except as permitted under Section 18, neither Tenant nor Landlord will
directly or indirectly, create or permit to be created or to remain, and will
promptly discharge, at its expense, any lien or encumbrance with respect to, the
Leased Premises or any part thereof, or the Fixtures and Equipment or either
party interest therein as a result of any alteration, construction, installation
or other action of either party. The existence of any mechanic's, laborer's,
materialman's, supplier's or vendor's lien, or any right in respect thereof,
shall not constitute a violation of this Section 11.4 if payment is not yet due
upon the contract or for the goods or services in respect of which any such lien
has arisen so long as such payment is made or bonded off within 30 days after
the later to occur of the completion of the work which gave rise to the
imposition of said liens or the rendering of the invoice, statement or demand
for such payment. Nothing contained in this Lease shall be construed as
constituting the consent or request of Landlord, expressed or implied, of any
contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or other furnishing of any materials for
any construction, alteration, addition, repair or demolition of or to the Leased
Premises or any part thereof.


12.     ENVIRONMENTAL MATTERS


        12.1.   DEFINITIONS

                As used in herein, the following items shall have meanings set
forth below:

                        (i) "CAA" shall mean the Clean Air Act, codified at 42
U.S.C. Section 7401, et seq., as amended.



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                        (ii) "CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, codified at 42 U.S.C.
Section 9601, et seq., as amended.

                        (iii) "CWA" shall mean the Clean Water Act, codified at
33 U.S.C. Section 407, et seq., as amended.

                        (iv) "ENFORCEMENT AGENCY" shall mean, collectively, the
Environmental Protection Agency ("EPA") and any state, county, municipal or
other agency having authority to enforce any Environmental Laws.

                        (v) "ENVIRONMENTAL LAWS" - shall mean CERCLA, HMTA,
RCRA, CAA, CWA, TSCA, RHA and the Right-to-Know Act and all other federal, local
and municipal laws, statutes, ordinances and codes, guidelines and standards
relating to health, safety, sanitation, and the protection of the environment or
governing the use, storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Materials, including, without
limitation, the Pennsylvania Solid Waste Management Act, 35 P.S. Section
6018.103, et. seq., the Pennsylvania Hazardous Sites Clean Up Act (Act 108 of
1988), laws and regulations regarding the discharge of water or other materials
or fluids into waterways, and the rules, regulations, guidelines, decisions,
orders and directives of federal, local and municipal governmental agencies,
authorities and courts with respect thereto presently in effect or hereafter
enacted, promulgated or implemented.

                        (vi) "ENVIRONMENTAL PERMITS" - shall mean all permits,
licenses, approvals, authorizations, consents or registrations required by any
applicable Environmental Laws, on either an individual or group basis, in
connection with the construction, ownership, use or operation of the Leased
Premises, or the storage, treatment, generation, transportation, processing,
handling, production or disposal of Hazardous Materials related to the Leased
Premises.

                        (vii) "HAZARDOUS MATERIALS" - shall mean, without
limitation, flammable, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum
based or related substances, hydrocarbons or like substances and their additives
or constituents, and any substances now or hereafter defined as "hazardous
substances," "extremely hazardous substances," "hazardous wastes," "infectious
wastes" or "toxic chemicals" in any Environmental Laws, or in any regulation or
order issued pursuant to any Environmental Laws.

                        (viii) "HMTA" - shall mean the Hazardous Materials
Transportation Act, codified at 49 U.S.C. Section 1801, et seq., as
amended.

                        (ix) "RCRA" - shall mean the Resource Conservation and
Recovery Act of 1976, codified at 42 U.S.C. Section 6801, et seq., as amended.

                        (x) "RELEASE" - shall have the same meaning as given to
that term in CERCLA, as amended, and the regulations promulgated thereunder.

                        (xi) "RHA" - shall mean the Rivers and Harbors
Appropriation Act, codified at 33 U.S.C. Section 401, et seq., as
amended.

                        (xii) "RIGHT-TO-KNOW ACT" - shall mean the Emergency
Planning and Community Right-To-Know Act, codified at 42 U.S.C. Section
11001, et seq., as amended.

                        (xiii) "TSCA" - shall mean the Toxic Substances Control
Act, codified at 15 U.S.C. Section 2601, et seq., as amended.


        12.2.   LANDLORD OBLIGATIONS; REPRESENTATION AND WARRANTIES

                Landlord hereby represents and warrants to Tenant that on the
Commencement Date the Leased Premises does not contain asbestos or any Hazardous
Materials. Landlord shall be responsible for costs, expenses, damages and
penalties resulting from the existence of any Hazardous Materials in the


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Leased Premises at the date of execution of this Lease and all alterations made
by Landlord to the Leased Premises or the Common Areas shall be made in
accordance any comply with all Environmental Laws and the requirements of any
Enforcement Agencies.


        12.3.   TENANT OBLIGATIONS

                Tenant shall comply at all times and in all respects with the
provisions of all Environmental Laws and Environmental Permits, and shall not
commit any actions or omissions that result in the incurrence of any liability
under such Environmental Laws and Environmental Permits. Tenant shall obtain,
whenever necessary and in its own name, appropriate Environmental Permits for
its operations and shall comply in all respects with the requirements of such
Environmental Permits. All alterations made in the Leased Premises made by
Tenant shall be made in accordance with and shall comply with all Environmental
Laws and the requirements of any Enforcement Agencies. If any statutes, laws,
ordinances, rules or regulations are promulgated at any time after the date of
execution of this Lease for the removal, abatement or containment of Hazardous
Materials in the Leased Premises or any portion of the Leased Premises and, in
the reasonable judgment of Landlord, it is hazardous for the Tenant to remain in
the Leased Premises during such removal, abatement, or containment of the
Hazardous Materials, Tenant shall vacate the Leased Premises or that portion of
the Leased Premises that is hazardous and, provided that such condition did not
result from Tenant's acts, omissions, or operations, Tenant's rent shall be
abated proportionately for the period of time in which Tenant's use of such
portion of the Leased Premises has been interrupted. Tenant shall not
intentionally or unintentionally use, store, handle, spill or discharge any
Hazardous Materials at or in the vicinity of the Leased Premises, other than
those Hazardous Materials generally used, stored or handled in a cGMP
laboratory. Tenant shall promptly deliver to Landlord copies of all notices made
by Tenant to, or received by Tenant from, any Enforcement Agency or from the
United States Occupational Safety and Health Administration concerning
environmental matters or Hazardous Materials at the Leased Premises.


        12.4.   INDEMNIFICATION; HOLD HARMLESS

                Landlord shall indemnify, defend and hold Tenant harmless of and
from actual and direct losses arising out of or relating to any and all claims
arising from the existence, removal, containment, or abatement of any Hazardous
Materials from the Leased Premises related to Hazardous Materials existing in
the Leased Premises prior to the Commencement Date. Tenant shall indemnify,
defend and hold Landlord harmless of and from actual and direct losses arising
out of or relating to any and all claims arising by reason of any violation by
Tenant of the


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provisions of Section 12.3 above. This indemnity provision shall survive
expiration or earlier termination of this Lease.


        12.5.   INSPECTIONS

                At any time throughout the Term of this Lease, Landlord may
cause an inspection to be made of the Leased Premises and its surrounding area
for the purpose of determining whether any Hazardous Materials is present
thereon.


13.     INSURANCE


        13.1.   TENANT INSURANCE

        Tenant shall, at all times through the Term and at its sole expense,
maintain professional and general liability insurance (through third party
insurers) against claims for bodily injury or death occurring in or about the
Leased Premises, such insurance to provide coverage not less than $3,000,000 per
occurrence, $5,000,000 per annual aggregate. In addition, Tenant shall, at all
times through the Term and at its sole expense, maintain insurance for the
Fixtures and Equipment at replacement cost value, without coinsurance
provisions, against fire and such other hazards as are included within extended
coverage and against earthquake and flood damage, which insurance shall also
include major mechanical system repair and replacement coverage. All such
insurance shall name Landlord as an additional insured and shall provide that
Landlord be given 30 days prior notice of any material change or cancellation of
such insurance. Copies of such insurance policies shall be delivered to
Landlord, upon Landlord's request. The parties shall mutually determine how to
distribute any insurance proceeds received to replace any or all of the Fixtures
and Equipment.


        13.2.   LANDLORD'S INSURANCE

                Landlord shall, at all times through the Term and at its sole
expense, maintain insurance for the Leased Premises and the Common Areas at
replacement cost value, without coinsurance provisions, against fire and such
other hazards as are included within extended coverage and against earthquake
and flood damage, which insurance shall also include major mechanical system
repair and replacement coverage. Copies of such insurance policies shall be
delivered to Tenant, upon Tenant's request.


14.     LIABILITY OF LANDLORD

                Landlord shall be liable for all loss of property by theft or
otherwise, for all damage to property, for all injuries to persons while on the
Leased Premises


                                       13
<PAGE>   14

from escape or leakage of water, rain, snow, or steam from any part of the
building on which the Leased Premises are located or from the pipes or plumbing
system therein, and for all damage resulting from the short circuiting of
electricity or from any other cause, where any such losses, damages and/or
injuries are due to the willful acts or negligence of the Landlord, its servant,
agents, or employees.


15.     CONDEMNATION

                If all or a part of the Leased Premises and/or Common Areas are
taken by eminent domain or conveyed in lieu thereof and such Leased Premises
cannot then be used by Tenant for its intended use as set forth in Section 9.1
above, this Lease shall immediately terminate as of the date that the condemning
authority takes possession of the Leased Premises, subject to the following:

        (i)     All compensation awarded for the taking (or the proceeds of any
                sale in lieu thereof) of the Leased Premises and/or Common Areas
                shall be the property of the Landlord;

        (ii)    All compensation awarded for the taking or loss of any of the
                Tenant's Fixtures and Equipment or for moving or relocation
                expenses shall be the property of Tenant; and

        (iii)   If only part of the Leased Premises and/or Common Areas are
                taken such that Tenant may still use the Leases Premises for its
                intended use, this Lease shall remain in effect with a pro-rata
                reduction in the rental payments based upon the usable portions
                of the Leased Premises.


16.     ASSIGNING OR SUBLETTING

                Tenant shall not assign, sublet or in any manner transfer this
Lease or any estate or interest therein, or grant a license, concession or other
right of occupancy, to all or part of the Leased Premises, without Landlord's
prior written consent, except that Tenant may assign, sublet or in any manner
transfer this Lease of any estate or interest therein, or grant a license,
concession or other right of occupancy, to all of part of the Leased Premises
(i) to any successor to Tenant in the event of a merger or consolidation of
Tenant with another entity, or to any purchaser of all or substantially all of
the assets or business of Tenant, and (ii) to an Affiliate (as defined below).
For purposes of this Section 16, an Affiliate shall mean, as to any party
hereto, any corporation or other entity which, directly or indirectly, through
one or more intermediaries, controls (i.e., possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of an
entity, whether through ownership of voting securities, by contract, or
otherwise) is controlled by, or is under common control with such party. In the


                                       14
<PAGE>   15

event of any permitted assignment, all rights, obligations and liabilities
herein shall extend to any successors or assigns.


17.     WAIVER OF SUBROGATION

                To the extent permitted by their insurers, Landlord hereby
releases Tenant, and Tenant hereby releases Landlord, and their respective
shareholders or members, directors, officers, employees and agents, from any and
all claims or demands for damages, losses, expenses, or injury to the Leased
Premises, or to the Fixtures and Equipment, or the inventory or other property
of Landlord or Tenant, as the case may be, in, or about, the Leased Premises
which may be caused by or results from events or happenings which 
are covered by insurance carried by the respective parties and in force at the
time of any such damages, losses, expenses, or injury.


18.     SUBORDINATION; ESTOPPEL CERTIFICATES

                Subject to Section 8 above, this Lease is subordinate to the
lien of all present or future mortgages which affect the Leased Premises and to
all renewals, modifications, replacements and extensions thereof. This provision
shall be self-operative, but in any event Tenant hereby agrees to execute
promptly and deliver any estoppel certificate or other assurances that Landlord
may request in furtherance hereof. In the event of any foreclosure of any such
mortgage or modification, Tenant shall attorn to the purchaser in foreclosure of
who shall be named in any deed in lieu of foreclosure, shall recognize any such
purchaser as the Landlord under this Lease, and so long as Tenant is not in
default hereunder, this Lease shall remain in full force and effect.

19.     MISCELLANEOUS


        19.1.   NOTICE

                All notices, demands, requests or other communications which may
be or are required to be given, served or sent by any party to any other party
pursuant to this Lease shall be in writing and shall be hand delivered
(including delivery by courier), sent by Federal Express or by other recognized
overnight delivery service, mailed by first-class, registered or certified mail,
return receipt requested, postage prepaid, or sent by telegram, telex, or
facsimile transmission, addressed as follows:


                                       15
<PAGE>   16

If to Intracel:

                             Intracel Corporation
                             1330 Piccard Drive
                             Rockville, Maryland  20850
                             Attn:  Daniel S. Reale
                             Facsimile:  (301) 296-0082


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

                             Hogan & Hartson L.L.P.
                             555 13th Street, N. W.
                             Washington, D.C.  20004-1004
                             Attn:  Donna A. Boswell, Esq.
                             Facsimile:  (202) 637-5910

If to Lehigh:

                             Lehigh Valley Hospital and Health Network

                             Cedar Crest & I-78
                             P.O. Box 689
                             Allentown, Pennsylvania  18105-1556
                             Attn:  Louis L.  Liebhaber
                             Facsimile:  (610) 402-7253

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

                             Tallman, Hudders & Sorrentino
                             The Paragon Centre
                             1611 Pond Road, Suite 300
                             Allentown, Pennsylvania  18104-2256
                             Attn:  Matthew R. Sorrentino, Esq.
                             Facsimile:  (610) 391-1800

                Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so given,
served, or sent. Each notice, demand, request, or communication which shall be
mailed, delivered, or transmitted in the manner described above shall be deemed
sufficiently given, served, sent, or received for all purposes at such time as
it is delivered to the addressee (with the return receipt, the delivery receipt,
the affidavit of messenger, or (with respect to a telex or facsimile) the answer
back being deemed conclusive, but not exclusive, evidence of such delivery) or
at such time as delivery is refused by the addressee upon presentation.


                                       16
<PAGE>   17

        19.2.   COMPLETE AGREEMENT

                This Lease, and all Exhibits hereto and incorporated agreements
(including the Joint Venture Agreement) set forth the entire agreement of the
parties hereto with respect to its subject matter and any and all prior
agreements, whether oral or written, between or among the parties hereto and
relating to the subject matter hereof are superseded hereby.


        19.3.   GOVERNING LAW

                This Lease and the rights and obligations of the parties hereto
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Pennsylvania (excluding choice of laws rules thereof).


        19.4.   PARAGRAPH HEADINGS

                The paragraph headings in this Lease are for convenience only
and are not a part of this Lease and do not in any way limit or amplify the
terms and provisions hereof and in no way shall be held to explain, modify or
aid in the interpretation, construction or meaning of the provisions of this
Lease.


        19.5.   SEVERABILITY

                In the event that a court of competent jurisdiction holds that a
particular provision or requirement of this Lease is in violation of any
applicable law, each such provision or requirement shall be enforced only to the
extent it is not in violation of such law or is not otherwise unenforceable and
all other provisions and requirements of this Lease shall remain in full force
and effect.


        19.6.   MODIFICATION; WAIVER

                This Lease shall not be modified or amended except by an
instrument in writing signed by Landlord and Tenant. No delay or failure on the
part of any party hereto in exercising any right, power, or privilege under this
Lease or any other instruments executed and delivered in connection with or
pursuant to this Lease, shall impair any such right, power, or privilege or be
construed as a waiver of any default hereunder or any acquiescence therein. No
single or partial exercise of any such right, power, or privilege shall preclude
the further exercise of such right, power, or privilege, or the exercise of any
other right, power, or privilege. No waiver shall be valid against any party
hereto unless made in writing and signed by the party against whom enforcement
of such waiver is sought and then only to the extent expressly specified
therein.


                                       17
<PAGE>   18

        19.7.   BENEFIT OF THIS LEASE

                It is the explicit intention of the parties hereto that except
as set forth below no person or entity other than a party hereto is or shall be
entitled to bring any action to enforce any provision of this Lease against any
of the parties hereto, and that the covenants, undertakings, and agreements set
forth in this Lease shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto or their respective successors and assigns as
permitted hereunder.


        19.8.   SIGNAGE ON LEASED PREMISES

                Landlord shall, at its own expense, erect all exterior and
interior signage at the Leased Premises as approved by Tenant.


        19.9.   INDEPENDENT CONTRACTOR

                Tenant shall lease and operate the Leased Premises as an
independent contractor, and shall not be considered an agent, employee of,
partner of or joint venturer with Landlord.


        19.10.  EXECUTION IN COUNTERPARTS

                This Lease may be executed in counterparts, each of which shall
constitute an original hereof for all purposes.


                                       18
<PAGE>   19

                IN WITNESS WHEREOF, each of the parties intending to be legally
bound has duly caused this Lease to be duly executed and delivered in its name
and on its behalf, as of the date first written above.

                                       TENANT:

                                       INTRACEL CORPORATION


                                       By:___________________________________
                                       Name:________________________________
                                       Title:_________________________________


                                       LANDLORD:

                                       LEHIGH VALLEY HOSPITAL AND HEALTH NETWORK

                                       By:___________________________________
                                       Name:________________________________
                                       Title:_________________________________




                                       19
<PAGE>   20

                                    EXHIBIT A

              DESCRIPTION OF CLEAN ROOM, AND CLINICAL PATIENT CARE,
                        ADMINISTRATIVE AND STORAGE SPACE

                                  SEE ATTACHED



<PAGE>   21

                                    EXHIBIT B
                      DESCRIPTION OF FIXTURES AND EQUIPMENT

         Set forth below is a description of the Fixtures and Equipment.

        1. Clean Room Equipment. For purposes of this Lease, the term "Clean
Room Equipment" shall include all of the following equipment:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
EQUIPMENT NAME                            MANUFACTURER          MODEL #             SERIAL #
---------------------------------------------------------------------------------------------------
<S>                                       <C>                   <C>                 <C>  
Bio Safety Hood, 4'                       Baker                 SG400               58432
---------------------------------------------------------------------------------------------------
Bio Safety Hood, 6'                       Baker                 SG600               58388
---------------------------------------------------------------------------------------------------
Bio Safety Hood, 6'                       Baker                 SG601               58382
---------------------------------------------------------------------------------------------------
Gammacell Irradiator                      Nordion               1000 A              247
---------------------------------------------------------------------------------------------------
Controlled Rate Freezer                   Gordinier             7009                06911-0497
---------------------------------------------------------------------------------------------------
Freezer Chamber                           Gordinier             8753                06911-0497
---------------------------------------------------------------------------------------------------
MVE-TEC 2000 Storage                      MVE                   XLC-500F            CDRA97B101
---------------------------------------------------------------------------------------------------
Incubator, CO2                            Sanyo                 MCO-17AI            60905781
---------------------------------------------------------------------------------------------------
Incubator, CO2                            Sanyo                 MCO-17AI            60905783
---------------------------------------------------------------------------------------------------
Ultralow Freezer                          Sanyo                 MDF-U6088SC         61006995
---------------------------------------------------------------------------------------------------
Water Bath, 1 of 2                        Precision             180                 697050163
---------------------------------------------------------------------------------------------------
Water Bath, 2 of 2                        Precision             180                 697030900
---------------------------------------------------------------------------------------------------
Refrigerator/Freezer                      Kenmore               363-9662825         L70640925
---------------------------------------------------------------------------------------------------
Chemical Fume Hood                        Kewaunee              H05                 R106417
---------------------------------------------------------------------------------------------------
Balance                                   Ainsworth             De410-D             73866
---------------------------------------------------------------------------------------------------
Microscope                                Nikon                 Labophot-2          462566
---------------------------------------------------------------------------------------------------
Refrigerator, undercounter                Kenmore               564.9936111         961003215
---------------------------------------------------------------------------------------------------
Refrigerator, undercounter                Kenmore               564.9936111         960901790
---------------------------------------------------------------------------------------------------
Immersible Stirrer                        VWR                   230                 0094
---------------------------------------------------------------------------------------------------
Immersible Stirrer                        VWR                   230                 0066
---------------------------------------------------------------------------------------------------
Immersible Stirrer                        VWR                   230                 0086
---------------------------------------------------------------------------------------------------
Immersible Stirrer                        VWR                   230                 0092
---------------------------------------------------------------------------------------------------
Pipetman                                  Rainin                P-1000
---------------------------------------------------------------------------------------------------
Pipetman                                  Rainin                P-200
---------------------------------------------------------------------------------------------------
Pipetman                                  Rainin                P-200
---------------------------------------------------------------------------------------------------
Pipetman                                  Rainin                P-200
---------------------------------------------------------------------------------------------------
Magnahelic Gauge                          Sure Flow
---------------------------------------------------------------------------------------------------
Magnahelic Gauge                          Sure Flow
---------------------------------------------------------------------------------------------------
Megafuge 1.0R                             Hereaus               75003062/02         232331
---------------------------------------------------------------------------------------------------
Calibrated Timer                          VWR
---------------------------------------------------------------------------------------------------
4 Work Stations with Divider Panels
---------------------------------------------------------------------------------------------------
3 Two Drawer Lateral Files
---------------------------------------------------------------------------------------------------
4 Office Chairs
---------------------------------------------------------------------------------------------------
5 Lab Chairs
---------------------------------------------------------------------------------------------------
Six door locker
---------------------------------------------------------------------------------------------------
2 two drawer file cabinets
---------------------------------------------------------------------------------------------------
1 Four Drawer File Cabinet
---------------------------------------------------------------------------------------------------
1 Six Drawer Lateral File Cabinet
---------------------------------------------------------------------------------------------------
</TABLE>




<PAGE>   22



<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
EQUIPMENT NAME                            MANUFACTURER          MODEL #             SERIAL #
---------------------------------------------------------------------------------------------------
<S>                                       <C>                   <C>                 <C>  
3 Four Drawer File Cabinets
---------------------------------------------------------------------------------------------------
Computer Workstation with Printer
---------------------------------------------------------------------------------------------------
Fax Machine                               Murata
---------------------------------------------------------------------------------------------------
</TABLE>


        2. Other furnishings, machinery, apparatus, movable or non-movable
equipment and materials. For purposes of this Lease, the term "Other
furnishings, machinery, apparatus, movable or non-movable equipment and
materials" shall include all of the following:


                                      NONE

<PAGE>   23




                                    EXHIBIT C

                           DESCRIPTION OF COMMON AREAS

                                  SEE ATTACHED