**Exhibit10.35**

 

**THISLEASE**, Made this 1st day of March 2004, by and between MIE Properties, Inc. as agent for owner, hereincalled “Landlord”, and **BBI Biotech ResearchLaboratories, Inc.,** herein called “Tenant”.

 

**WITNESSETH**, that in consideration of the rental hereinafter agreed upon and theperformance of all the conditions and covenants hereinafter set forth on thepart of Tenant to be performed, Landlord does hereby lease unto said Tenant,and the latter does lease from the former an agreed upon **65,160** square feet at the followingpremises: **8425 Progress Drive, Suites A-Y,Frederick, Maryland 21701,** (herein called the “Premises”) for theterm of **Eleven (11)** years,beginning on the **Rent****Commencement****Date (as defined below)** and ending on the **31st day of July 2015,** for the annualrental of **see Rent schedule below**,(herein called “Annual Rent”), subject to Annual Rent increases payable inadvance beginning on the Rent Commencement Date (as defined below) and on the firstday of each and every month thereafter during the term of this Lease in equalmonthly installments of **seerent schedule below (provided thatsuch installments shall be prorated in the case of any partial month)**.

 

For the first year of the lease term, Tenant will occupy and use 39,120square feet of the Premises and commencing on August 1, 2005, Tenant willoccupy and use the entire 65,160 square feet of the Premises.

 

Said installments of Annual Rent shall be paid to **MIE Properties. Inc.**, **5104 Pegasus Court. Suite a, Frederick, Maryland 21704,** or at such otherplace or to such appointee of Landlord, as**Landlordmay from time to time designate in writing.

 
| **Lease Year**                       |   | **Annual  Rent** |         | **Monthly  Rent** |   |
|--------------------------------------|--------|------------------|--------------|-------------------|--------|
|                                 |   |             |         |              |   |
| August 1, 2004 —  July 31, 2005 |   | $                | 483,132.00   |              | $      | 40,261.00 |   |
| August 1, 2005 —  July 31, 2006 |   | $                | 828,867.78   |              | $      | 69,072.32 |   |
| August 1, 2006 —  July 31, 2007 |   | $                | 853,733.81   |              | $      | 71,144.48 |   |
| August 1, 2007 —  July 31, 2008 |   | $                | 879,345.83   |              | $      | 73,278.82 |   |
| August 1, 2008 —  July 31, 2009 |   | $                | 905,726.20   |              | $      | 75,477.18 |   |
| August 1, 2009 —  July 31, 2010 |   | $                | 932,897.99   |              | $      | 77,741.51 |   |
| August 1, 2010 —  July 31, 2011 |   | $                | 960,884.93   |              | $      | 80,073.74 |   |
| August 1, 2011 —  July 31, 2012 |   | $                | 989,711.48   |              | $      | 82,475.96 |   |
| August 1, 2012 —  July 31, 2013 |   | $                | 1,019,402.82 |              | $      | 84,950.24 |   |
| August 1, 2013 —  July 31,2014  |   | $                | 1,049,984.91 |              | $      | 87,498.74 |   |
| August 1, 2014 —  July 31, 2015 |   | $                | 1,081,484.45 |              | $      | 90,123.70 |   |

 

**TENANTCOVENANTS AND AGREES WITH LANDLORD AS FOLLOWS:**

 

1.             Tenant shall pay saidrent and each installment of Annual Rent thereof as and when due without setoffor deduction. Installments of Annual Rent and Additional Rent (as defined inparagraph 4 hereof) shall become due on the earlier of (i) 30 days after Tenantgives Landlord written notice of substantial completion of the TenantImprovements set forth in Exhibit B hereto or (ii) August 1, 2004

 
|   |   | mm     | 2/27/04 |
|--------|--------|--------|---------|
|   | [SEAL] |   |    |

 

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(hereafter, the “Rent Commencement Date”). Norent shall be due or payable prior to the Rent Commencement Date.

 

**RENTALESCALATION**

 

2.             Beginningwith the first anniversary of the Rent Commencement Date and on each annualanniversary hereafter throughout theremainder of the lease and renewal term if any, the Annual Rent shall beincreased by an amount equal to **three percent(3%)** of the previous year’s rent, which sum shall be payable toLandlord in equal monthly installments in advance as set forth herein.

 

**USE**

 

3.             Tenantshall use and occupy the Premises solely for the following purposes:

Premises shall be used andoccupied by Tenant only as a Biological Specimen Repository, ReagentRepository, Biotechnology Repository, Biotechnology and Clinical TestingLaboratory and life science product manufacturing facility, with ancillaryoffices.

 

**ADDITIONAL RENT**

 

4.*            *All sums of money other than Annual Rentrequired to be paid by Tenant to Landlord pursuant to the terms of this Lease, unless otherwise specified herein,shall be considered additional rent and shall be collectible by Landlord asadditional rent (herein called “Additional Rent”), in accordance with the termsof this Lease.

 

“Tenant’s Pro Rata Share” shall mean the same percentage that the grosssquare foot area of Tenant’s Premises bears to the gross square foot area ofall leasable floor area within the building in which the Premises is located(the “Building”). Landlord shall notify Tenant of any change in “Tenant’s ProRata Share”. Tenant’s Pro Rata Share is equal to **(86.6%)**.

 

A. UTILITIES:

 

Tenant shall apply for and pay all costs of electricity, gas, telephoneand other utilities used or consumed on the Premises, together with all taxes,levies or other charges on such utilities. Tenant agrees to pay as AdditionalRent, Tenant’s Pro Rata Share **(86.6%)**of the water and sewer service charges chargeable to the total building inwhich the Premises are located. However, if in Landlord’sreasonable judgment, the water and sewercharges for the Premises are substantially higher than normal due to Tenant’swater usage, then Tenant agrees that it will, upon written notice fromLandlord, install a water meter at **Tenant’s**Expense and thereafter pay all water charges for the Premises based on suchmeter readings. Landlord represents and warrants that the supply of electricalpower initially available to the Tenant shall be a minimum of 800 amps. If theforegoing amount of power is insufficient to adequately meet Tenant’s buildoutrequirements for its use and occupancy, Tenant shall have the right to procuresufficient supplemental power to the Premises.

 

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B. TAXES

 

Tenant shall pay to the Landlord, as Additional Rent, Tenant’s Pro RataShare **(86.6%)** of the Real EstateTaxes that may be levied or assessed by lawful taxing authorities against theland, buildings and improvements on the property of which the Premises is apart. If this Lease shall be in effect for less than a full fiscal year, Tenantshall pay a proportionate share of the increased taxes based upon the number ofmonths that this Lease is in effect. Said taxes shall include, but not by wayof limitation, all paving taxes, and any and all benefits or assessments whichmay be levied on the Premises hereby leased but shall not include the UnitedStates Income Tax, or any State or other income tax upon the income or rentpayable hereunder. Landlord agrees to appeal the taxes uponTenant’s written request, and Tenant shall beentitled to Tenant’s Pro Rata Share of any refund received by Landlord (lessTenant’s Pro Rata Share of Landlord’s appeal costs). If any refund attributableto the Lease term is received after Lease termination, Landlord will forwardTenant’s Pro Rata Share to Tenant; this obligation shall survive termination ofthe Lease.

 

C. COMMON AREA EXPENSES

 

For each full or partial calendar year during the term of the Lease,Tenant shall pay to Landlord, as Additional Rent. Tenant’s Pro Rata Share **(86.6%)** of the “Common Area Expenses”. Forthe purposes of this section, Common Area Expenses shall be defined as onehundred percent (100%) of all reasonable costs and expenses incurred by or onbehalf of Landlord in each calendar year in operating, maintaining, andrepairing (which includes replacements, additions, and alterations) of commonareas of the Building. These include, without limitation, a) the cost ofmaintaining and repairing all service pipes, electric, gas and water lines andsewer mains leading to and from the Premises; b) all costs incurred inpainting, resurfacing, and landscaping; c) all costs for repairs andimprovements, line painting and striping, lighting, removal of snow, grasscutting, cleaning of parking areas; d) all costs incurred in maintaining,repairing and replacing the paving, parking areas, curbs, gutters, sidewalks,and steps; e) all costs for repairs and improvements to roof and exteriorwalls; and f) management fees, overhead and expenses directly attributable tomanagement of the Building. Landlord shall cap increases on all controllableexpenses with the exception of snow removal at five (5%) percent per yearcumulative.

 

**Exclusions****to the above**: a)commissions or advertising costs; b) costs of sale, financing, and refinancing;c) legal and accounting expenses not specifically for Tenant; d) costs ofenforcement of Leases; e) ground rents; f) fines or penalties of any kind ornature, unless directly resulting from a

 

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default by Lease; g) costs of any servicesprovided to any other Tenant in the project, and not made available to Tenanton the same basis; h) damage and repairs necessitated by the negligence orwillful misconduct of the Landlord; I) any amount paid to the Landlord, themanagement agent or any affiliate of either of them, to the extent in excess ofthat negotiable on an arm’s length basis: j) the cost of repairs or work to theextent reimbursed or paid by insurance proceeds or covered by warranty and (k)any expense which under generally accepted accounting principals, should becapitalized, except as specifically permitted.

 

D. INSURANCE

 

Tenant shall not do anything in or about the Premises that willcontravene or affect any policy of insurance against loss by fire or otherhazards, including, but not limited to, public liability now existing or whichLandlord may hereafter place thereon, or that will prevent Landlord fromprocuring such policies in companies acceptable to Landlord. Tenant andLandlord will use commercially reasonable efforts (and Landlord will requirethat any other tenant(s) in the Building will use commercially reasonableefforts) to obtain the greatest possible reduction in the insurance rates onthe Premises hereby leased, or for the Building. Tenant further agrees to pay,as Additional Rent:

 

1)             Tenant’s Pro Rata Share **(86.6%)** of the premium of any insurance onthe Premises or for the Building and /or property of which the Premises herebyleased are apart;

 

2)             any increase in premium on the amount of suchInsurance that may be carried byLandlord on all or any part of the Premises, Building or property resultingfrom the activities carried on by Tenant in or at the Premises, regardless ofwhether Landlord has consented to the same.

 

Landlord shall notify Tenant from time to time of the amounts whichLandlord estimates will be payable by Tenant for Tenant’s Pro Rata Share ofUtilities, Taxes, Common Area Expenses and Insurance herein set forth andTenant shall pay such amounts to Landlord in equal monthly installments inadvance on or before the first day of each month.

 

Within a reasonable period of time following the end of each calendaryear, or fiscal year (with regard to taxes) Landlord shall submit to Tenant aline-item statement (the “Expense Statement”) setting forth Landlord’s actualcosts for the Utilities, Taxes, Common Area Expenses and Insurance to be paidby Tenant with respect to such year and Tenant’s Pro Rata Share thereof; the amountpaid by Tenant, and the amount of the resulting balance due or overpayment.Landlord’s Expense Statement shall be conclusive and binding upon Tenantunless, within 90 days after receipt, Tenant notifies Landlord that it disputesthe correctness of the Expense Statement, specifying the element of the ExpenseStatement which is claimed to be incorrect. Pending determination of suchdispute by agreement or otherwise, Tenant shall pay Tenant’s Pro Rata Share ofthe disputed expense in accordance with the disputed Expense Statement and suchpayment shall be without prejudice to either

 

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party’s position. Should the dispute bedetermined in Tenant’s favor, any overpayment will be refunded to Tenant within30 days. If Landlord’s Expense Statement is demonstrated to be correct orwithin 5% of the correct amount, Tenant shall pay all fees incurred by Landlord(including Landlord’s accountants’and attorneys’ fees, if any) by virtue of such dispute, if Landlord’sstatement is more than 5% greater than the correct amount, Landlord shall payall fees incurred by Tenant (including Tenant’s accountants’ and attorney’sfees, if any) by virtue of such dispute.

 

Notwithstanding the forgoing provisions of the above paragraph,Landlord shall have the right to require Tenant to pay in arrears Tenant’s ProRata Share of Utilities, Taxes, Common Area Expenses and Insurance in quarterlyor semi-annual payments rather than on a monthly basis as provided above.

 

**MUNICIPAL REGULATING**

 

5.             Tenantshall observe, comply with and execute at its expense, all laws, orders, rules,requirements, and regulations of theUnited States, State, City or County of the said State, in which the Premisesare located, and of any and all governmental authorities or agencies and of anyboard of fire underwriters or other similar organization, respecting thePremises and the manner in which the Premises are or should be used by Tenant.

 

**ASSIGNMENT AND SUBLET**

 

6.             Tenantshall not assign this Lease, in whole or in part, or sublet the Premises, orany part or portion thereof, orgrant any license or concession for any part of the Premises, without the priorwritten consent of Landlord, said consent shall not be unreasonably withheld,conditioned or delayed. If such assignment or subletting is permitted, Tenantshall not be relieved from any liability whatsoever under this Lease. Landlordshall be entitled to **fifty percent (50%)**of the “Net Profits” (as hereinafter defined) derived from any sublease and/orassignment (other than a sublease or assignment to a successor, partner,affiliate or subsidiary, as provided herein). “Net Profits” shall refer to theexcess of rents and other amounts collected with respect to any assignee,subtenant or occupant of all or a portion of the Premises, over the sum of (i)rent payable with respect to the Premises or the applicable portion thereof,under this Lease plus (ii)**reasonablelegal costs, advertising, leasing commissions, rental abatements, and the valueof fit up concessions, to the extent directly related to the sublease orassignment, amortized over the term of the sublease or assignment. Except asotherwise provided herein, no option rights can be assigned or transferred byTenant to an assignee or subtenant. Any sublet or assignment of this Lease willbe assessed with processing fees to be paid for by Tenant as Additional Rent.Such one time fee shall not exceed $250,00.

 

Landlord’s permission shall not be required for any assignment orsublet to any of Tenant’s successors, partners, affiliates or subsidiariesresulting from any merger, stock acquisition, asset

 

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acquisition or consolidation. Tenant shallhave the right to retain one hundred percent (100%) of all profits from anysublease or assignment to a related successor, partner, affiliate orsubsidiary.

 

**INSURANCE**

 

7*.**            *Tenant covenants and agrees that, from andafter the earlier of the commencement of this Lease or the date of delivery of the Premises from Landlord toTenant, Tenant will carry and maintain at its sole cost and expense and in theamounts specified, a commercial general liability insurance policy covering thePremises and Tenant’s use thereof against claims for bodily injury or death andproperty damage occurring upon, in or about the Premises, such insurance toafford protection to the limit of not less than Two Million Dollars($2,000,000) arising out of any one occurrence. The insurance coverage requiredunder this Section 7 shall, in addition, extend to any liability of Tenantarising out of Tenant’s indemnities hereinafter provided, as well asindependent contractor’s liability and contractual liability. If such insurancecontains an annual aggregate limit, the annual aggregate limit may not be diminishedby claims occurring at locations other than the Premises.

 

All policies of insurance to be provided by Tenant shall be issued in aform acceptable to Landlord by insurance companies with general policyholder’srating of not less A-XI as rated in the most current available “Best’sInsurance Reports,” and qualified to do business in the state in which thePremises are located.  Each such policyshall be issued in the names of Landlord and Tenant and shall be for the mutualand joint benefit and protection of each of said parties.  Executed copies of each such policy ofinsurance or certificate thereof shall be delivered to Landlord within ten (10)days after the earlier of the commencement of this Lease or delivery ofpossession of the Premises to Tenant and thereafter at least fifteen (15) daysprior to the expiration of each such policy. As often as any such policy shall expire or terminate, renewal oradditional policies shall be procured and maintained by Tenant in like mannerand to like extent. All such policies of insurance shall contain a**provision that the company writing saidpolicy will give to Landlord at least thirty (30) days’ notice in writing inadvance of any cancellations, or lapse, or the effective date of any reductionin the amounts of insurance.   In theevent Tenant shall fail to promptly furnish any insurance herein required,Landlord may effect the same and Tenant shall promptly reimburse Landlord upondemand as Additional Rent, the premium so paid by Landlord.  Such commercial general liability policyshall contain a provision that Landlord shall nevertheless be entitled torecover under said policies for any loss occasioned to it, its servants, agentsand employees by reason of the negligence of Tenant or any other named insured.  Any insurance provided for may be affectedby a policy or policies of blanket insurance, covering additional items orlocations; provided, however, that (i) Landlord shall be named as an additionalinsured thereunder as its interests may appear; (ii) the coverage affordedLandlord will not be reduced or diminished by

 

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reason of the use of such blanket policy ofinsurance. Any Insurance policies herein required to be procured by Tenant andall insurance policies procured by Landlord in respect of the Premises and/orthe Building, shall contain an express waiver of any right of subrogation bythe insurance company against the Landlord, Tenant and all other tenants oroccupants of space in the building.

 

**ALTERATIONS**

 

8.             a)             Tenant shall make noalterations in addition to original improvements existing in the Premises atthe time of occupancy without the prior written consent of Landlord, whichconsent will not be unreasonably withheld, conditioned or delayed. Landlord’sconsent shall not be required for any interior, non-structural cosmeticalterations.

 

b)            If Tenant shall desire to make any suchalterations, plans for the same shall first be submitted to Landlord forapproval, and upon approval, the same shall be performed by Tenant at its ownexpense. Tenant agrees that all such work shall be done in a**good and workmanlike manner, that thestructural integrity of the Building shall not be impaired, that no liens shallattach to the Building by reason thereof (other than liens which aredischarged or bonded by Tenant within 15 days from the filing thereof), and that all alterations shall be in accordance withall applicable codes. Tenant agrees to obtain at Tenant’s expense all permitspertaining to the alterations. Tenant also agrees to obtain, prior tocommencing to make such alterations, and to keep in full force and effect atall time while such alterations are being made, all at Tenant’s sole cost andexpense, such policies of insurance pertaining to such alterations and/or tothe making thereof as Landlord reasonably may request or require Tenant toobtain, including, but not limited to, public liability and property damageinsurance, and to furnish Landlord evidence satisfactory to Landlord of theexistence of such insurance prior to Tenant’s beginning to make suchalterations.

 

c)             Any such alterations shall become theproperty of Landlord as soon as they are affixed to the Premises and allrights, title and interest therein of Tenant shall immediately cease, unlessotherwise agreed to by Landlord in writing. Landlord shall elect in writing, atthe time of consent, whether all or part of any alterations installed by Tenantshell remain, or be removed by Tenant, at its own expense, at the expiration ofits tenancy.  Landlord shall have thesole right to collect any insurance for any damage of any kind caused by anyalterations or improvements placed upon the Premises by Tenant that become theproperty of Landlord as provided herein. If the making of any such alterations, or the obtaining of any permitstherefore shall directly or indirectly result in a franchise, minor privilegeor any other tax or increase in tax, assessment or increase in assessment, suchfranchise, privilege, tax or assessment shall be paid, immediately upon itslevy and subsequent levy, by Tenant.

 

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d)            Unless Landlord shall consent in writing thatall or part of any alterations installed by Tenant shall remain, the Premisesshall be restored to their original condition by Tenant, at its own expense,before the expiration of its tenancy.

 

e)             Costs of alterations or modifications (inaddition to the improvements as describedherein in Section 34) Tenant requests Landlord to make on Tenant’s behalfduring the term of this Leaseshall be due and payable as Additional Rent.

 

**MAINTENANCE**

 

9.             a)             Tenant shall, during the term of this Lease,keep the Premises and appurtenances(including, but not limited to, interior and exterior windows, interior andexterior doors, interior plumbing, heating, ventilating and air conditioning(HVAC), interior electrical or replacement works thereof) in good order andcondition and will make all necessary repairs or replacement thereof. Landlorddoes, however, give a ninety (90) day warranty on all of the above-mentioneditems if installed by Landlord. This warranty does not include the requiredannual maintenance contract on the HVAC unit(s) as described below. Tenant willbe responsible for all exterminating services, except termites, required in thePremises. If Tenant does not make necessary repairs within fifteen (15) daysafter receiving written notice from Landlord of the need to make a repair.Landlord may proceed to make said repair and the cost of said repair willbecome part of and in addition to the next due monthly rental. Any repair madeby Landlord at Tenant’s request to Tenant’s Premises shall be invoiced toTenant and shall become due and payable as Additional Rent.

 

b)            Tenant agrees to furnish to Landlord, at theexpense of Tenant, prior to occupancy, a copy of an executed and paid forannual maintenance contract on all heating and air conditioning (HVAC)equipment with a reputable company reasonably acceptable to Landlord and saidcontract will be kept in effect during the term of the Lease at the expense ofTenant. Should Tenant not provide a satisfactory HVAC Maintenance contract toLandlord prior to occupancy, Tenant shall be provided a contract through  MIE Properties, Inc. Billings for thiscontract shall become due and payable upon receipt of invoice and shall beconsidered Additional Rent.

 

c)             Landlord shall make all necessary structuralrepairs to the exterior masonry walls and roof of the Premises, after beingnotified in writing of the need for such repairs, provided the necessity forsuch repairs was not caused by the negligence or misuse of Tenant, itsemployees, agents or customers.

 

d)            Tenant shall, at the expiration of the termor at the sooner termination thereof by forfeiture or otherwise, deliver up thePremises in the same good order and condition as they were at the beginning ofthe tenancy, reasonable wear and tear excepted.

 

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**DEFAULT**

 

10.           In the event Tenant shall fail to pay saidInstallments of Annual Rent, Additional Rent, or any other sum required by thisLease to be paid by Tenant and such failure shall continue for five (5) daysafter written notice thereof to Tenant, Landlord shall have along with any andall other legal remedies the immediate right to make distress therefore, andupon such distress, in Landlord’s discretion, this tenancy shall terminate.

 

In the event Tenant shallfail to comply with any of the provisions, covenants, orconditions of this Lease, on its part to be keptand performed, and such default shall continue for a period of thirty (30) daysafter written notice thereof shall have been given to Tenant by Landlord(provided that such 30-day period shall be extended for such additional periodof time as may reasonably be necessary to cure such default, if such default,by its nature, cannot be cured within such period, and provided, further, thatTenant commences to cure such default within such 30-day period and is, at alltimes thereafter, in the process of diligently curing the same), and/or ifTenant shall fail to pay said Annual Rent, Additional Rent or any other sumrequired by the terms of this Lease to be paid by Tenant, then, upon thehappening of any such event, and in addition to any and all other remedies thatmay thereby accrue to Landlord, Landlord may do the following:

 

A)           Landlord’s Election to Retake PossessionWithout Termination of Lease

 

Landlord may retakepossession of the Premises, without being deemed to haveaccepted a surrender thereof, and withoutterminating this Lease. If Landlord retakes possession of the Premises, or ifthis Lease is terminated as a result of Tenant’s default and vacated by Tenant,Landlord shall take commercially reasonable action to relet the Premises inorder to mitigate its damages, provided that that in attempting to mitigate itsdamages, as aforesaid, (i) Landlord may, in its sole, absolute and subjectivediscretion, relet the Premises, or any portion thereof, for a shorter or longerperiod of time than the term of this Lease and may make any reasonable repairsor alterations necessary to relet the Premises, or any portion thereof(provided the cost of such repairs and alterations do not unreasonably exceedthe quality of the initial Tenant Alterations), (ii) the terms of any relettingmay include a reasonable amount of free rent, and (iii) if other space in theBuilding reasonably equivalent to the Premises is vacant at the time of thetermination of the Lease as a**resultof Tenant’s default, or subsequently becomes vacant before Landlord has reletthe Premises, or any portion thereof,Landlord shall not be obligated to relet the Premises, or any portion thereof,before letting such other vacantspace. If the rent received from such reletting does not at least equal therent and other sums payable byTenant hereunder. Tenant shall pay and satisfy the deficiency between theamount of rent and other sums so provided in this Lease and the rent receivedthrough reletting the Premises; and, in addition, Tenant shall pay reasonableexpenses in connection with any such reletting, including,

 

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but not limited to, the cost of renovating,altering, and decorating for any occupancy, leasing commissions paid to anyreal estate broker or agent, and attorney’s fees incurred.

 

B)            Landlord’sElection to Terminate Lease

 

Landlord may terminate the Lease and forthwith repossess the Premises and be entitled to recoveras damages a sum of money equal to the total of the following amounts:

 

1)             anyunpaid rent or any other outstanding monetary obligation of Tenant to Landlordunder the Lease as of the date of termination;

 

2)             atthe time of Landlord’s reletting of the Premises as set forth in clause (A) above, the balance of the rent and othersums payable by Tenant through the time of such reletting; provided that ifLandlord has not reletted the Premises within one year of Lease terminationdespite commercially reasonable efforts to do so. Landlord shall be entitled torecover from Tenant the entire balance, discounted to net present value, ofrent and other sums payable by Tenant for the remainder of the Lease term.

 

3)             damagesfor the wrongful withholding of the Premises by Tenant

 

4)             allreasonable legal expenses, including attorney’s fees, expert and witness fees,court costs and other costs incurred in exercising its rights under the Lease;

 

5)             allcosts incurred in recovering the Premises, restoring the Premises to good orderand condition, and all commissions incurred by Landlord in reletting thePremises; and

 

6)             anyother reasonable amount necessary to compensate Landlord for all detrimentcaused by Tenant’s default.

 

**DAMAGE**

 

11.           In the case of the total destruction of the Premises by fire, othercasualties, the elements or other cause, or of such damage thereto as shallrender the same totally unfit for occupancy by Tenant for more than sixty (60)days, this Lease, upon surrender and delivery to Landlord of the Premises,together with the payment of the Annual Rent and Additional Rent to the date ofsuch occurrence, shall terminate and be at an end. If the Premises are renderedpartly untenantable by any cause mentioned in the preceding sentence, Landlordshall, at its own expense, restore the Premises with all reasonable diligence, andthe Annual Rent and Additional Rent shall be abated proportionately for theperiod of said partial untenantability and until the Premises shall have beenfully restored by Landlord.

 

**BANKRUPTCY**

 

12.           In the event of the appointment of a receiver or trustee for Tenant byany court, Federal and State, in any legal proceedings under any provisions ofthe U.S. Bankruptcy Code, if the

 

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appointment of such receiver or such trustee is not vacated withinsixty (60) days, or if said Tenant be adjudicated bankrupt or insolvent, orshall make an assignment for the benefit of its creditors, then and in any ofsaid events. Landlord may, at its option, terminate this tenancy by ten (10)days written notice, and re-enter upon the Premises.

 

**POSSESSION/BENEFICIAL OCCUPANCY**

 

13.           Landlord  covenants and agrees that possession of the Premises  shall  be given to Tenant within five (5) days of the execution of this Lease byLandlord and that the Premises shall be in compliance with all applicable laws,codes, rules and regulations, including, without limitation, the Americans WithDisabilities Act.  If Tenant occupiesany portion of the Premises prior to lender of possession thereof by Landlord,such occupancy shall be deemed to be beneficial occupancy and a proportionateshare of the rent shall be due and payable as to that portion of the Premisesso occupied, immediately upon Tenant’s occupancy.  Such occupancy by Tenant and rent thereby due shall not depend onofficial governmental approval of such occupancy, state of completion ofbuilding, availability or connection of utilities and services as but notlimited to sewer, water, gas, oil, or electric.  No rent credit shall be given because of lack of utilities orservices  unless caused  by the negligence of Landlord.

 

**SIGNS, ETC.**

 

14.           Tenant covenants and agrees that;

 

a)             Exceptas permitted in paragraph 14(d) below, Tenant shall not place or permit anysigns, lights, awnings or poles on or about the exterior of the Premiseswithout the prior permission, in writing, of Landlord and in the event suchconsent is given, Tenant agrees to pay any minor privileges or other tax.

 

b)            Landlord,at Landlord’s option, may immediately remove and dispose of any of theunauthorized aforementioned items at the expense of Tenant and said cost shallbecome part of and in addition to the next due monthly rental, as AdditionalRent. Tenant further covenants and agrees that it will not paint or make anychanges in or on the outside of the Premises without the written permission ofLandlord.  Tenant agrees that it willnot do anything on the outside of the Premises to change the uniformarchitecture, paint or appearance of said building, without the written consentof Landlord.

 

c)             Landlordshall have the right to place a “For Rent” sign on any portion of the Premisesfor ninety (90) days prior to termination of this Lease and to place a “ForSale” sign thereon at any time.

 

d)            Landlordshall allow Tenant to install exterior signs on the Building’s existing signpanels and a monument sign in front of the building with Tenant’s logo.Landlord shall use reasonable

 

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best efforts to obtain any third-partyconsents, waivers or approvals (including, without limitation, a waiver of theRiverside Technology Park recorded covenants) required for Tenant to displayits color logo on the monument sign. Tenant shall use Landlord standards andspecifications for construction of signs and locations to be approved byLandlord, which approval shall not be unreasonably withheld. Tenant shall beresponsible for all costs associated with all signs.

 

**EXTERIOR OF PREMISES**

 

15.           a)  Tenant further covenants andagrees not to put any items on the sidewalk or parking lot in the front, rear,or sides of said building or block said sidewalk, and not to do anything thatdirectly or indirectly takes away any of the rights of ingress or egress oflight from any other tenant of Landlord or do anything which will, in any way,change the uniform and general design of any property of Landlord of which thePremises hereby leased shall constitute a part. Tenant will also keep the stepsto the Premises free and clear of ice, snow and debris.

 

b)  Notwithstanding the foregoing, Tenant shall be permitted to placethe following items outside in the immediate vicinity of the Building inlocations mutually agreeable to Landlord and Tenant: two flammable storageunits (approximately 14' X 6" and 20' X 10'); six generators; three dieselfuel tanks, and two bulk tanks. In addition, if requested by Tenant, Landlordwill use reasonable best efforts to obtain any third-party consents, waivers orapprovals (including, without limitation, a**waiverof the Riverside Technology Park recorded covenants) necessary for theinstallation of a portable biosafety level-3 laboratory (trailer); storagetrailer (for bulk freezer relocations); and walk-in chambers (refrigerator,freezer and/or environmental test chamber). 

 

**WATER DAMAGE**

 

16.           Tenant covenants and agrees that Landlord shall not be held responsiblefor and Landlord is hereby released and relieved from any liability by reasonof or resulting from damage or injury to person or property of Tenant or ofanyone else, directly or indirectly caused by (a) dampness or water in any partof the Premises (b) any leak or break in any part of the Premises in the pipesof the plumbing or heating works thereof, unless the damage is due toLandlord’s or its employees’, agents’ or servants’ negligence.

 

**LIABILITY**

 

17.           Landlord shall not be liable to Tenant for any loss or injury to Tenantor to any other person or to the property of Tenant or of any other personunless such loss or damage shall be caused by or result from a negligent act oromission on the part of Landlord or any of its agents, servants, or employees.Tenant shall, and does hereby, indemnify and hold harmless Landlord and anyother parties in interest from and against any and all liabilities, fines,claims, damages and actions, costs and expenses of any kind or nature(including reasonable attorneys’ fees) (i) relating to or arising from the

 

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use and occupancy of the Premises; (ii) due toor arising out of any mechanic’s lien filed against the building, or any partthereof, for labor performed or for materials furnished or claimed to befurnished to Tenant, or (iii) due to or arising out of any breach, violation ornonperformance of**any covenant,condition or agreement in this Lease set forth and contained on the part ofTenant to be fulfilled, kept, observed or performed.

 

**RIGHT OF ENTRY**

 

18.           It is understood and agreed that Landlord, and its agents, servants, andemployees, including any builder or contractor employed by Landlord, shallhave, and Tenant hereby gives them and each of them, the absolute, andunconditional right, license and permission, at any and all reasonable times,and for any reasonable purpose whatsoever, to enter through, across or upon thePremises or any part thereof, and, at the option of Landlord, to make suchreasonable repairs to or changes in the Premises as Landlord may deem necessaryor proper. In connection with any non-emergency entry, Landlord shall provideTenant with 24 hours prior notice (which may be oral) and shall usecommercially reasonable efforts to minimize the disruption to Tenant’s use ofthe Premises. Tenant agrees Landlord and its agents and assigns have theunconditional right to show the Premises to (i) prospective purchasers at anyreasonable time during the Lease term and (ii) to prospective tenants at anyreasonable time during the last six months of the Lease term.

 

**EXPIRATION**

 

19.           It is agreed that the term of**thisLease expires on **July 31, 2015**,without the necessity of any notice by or to any of the parties hereto, subjectto Tenant’s option to extend pursuant to Paragraph 37 hereof.  In the event Tenant shall occupy thePremises after such expiration, it is understood that, in the absence of anywritten agreement to the contrary, said Tenant shall hold the Premises as a“Tenant from month to month”, subject to all the other terms and conditions ofthis Lease, at **150%**the highestmonthly Installments of Annual Rent reserved inthis Lease; provided that Landlord shall, upon such expiration, beentitled to the benefit of all public general or public local laws relating tothe speedy recovery of the possession and lands and tenements held over byTenant that may be now in force or may hereafter be enacted.

 

Prior to Lease expiration,Tenant agrees to schedule an inspection with Landlord to confirm that thePremises will be in proper order at expiration, including, but not limited to,lighting, mechanical, electrical and plumbing systems. 

 

**CONDEMNATION**

 

20.           It is agreed that in the event condemnation proceedings are**instituted against the Premises andpossession taken by the condemning authority, then this Lease shall terminateat the date possession is taken and Tenant shall not be entitled to recover anypart of the award.

 

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If the entire Premises, orany portion of the Building required for reasonable access to, or thereasonable use of, the Premises, are taken by eminent domain, this Lease shallautomatically end on the earlier of:

 

(i)            The date title vests; or

 

(ii)           The date Tenant is dispossessed by the condemning authority.

 

If the taking of a part of the Premises materiallyinterferes with Tenant’s ability to continue its business operations in substantially the same manner andspace, then Tenant may end this Lease on the earlier of:

 

(i)            Thedate when title vests;

 

(ii)           The date Tenant is dispossessed by the condemning authority: or 

 

(iii)          30 days following notice to Tenant of the date when vesting ordispossession is to occur.

 

If there is a partial takingand this Lease continues, then the Lease shall end as to the part of thePremises taken and Annual Rent and Additional Rent shall abate in proportion tothe part of the Premises taken and Tenant’s Pro Rata Share shall be equitablyreduced.

 

If this Lease is notterminated, then Landlord, at its expense, shall promptlyrepair and restore the Premises to thecondition that existed immediately before the taking, except for the parttaken, in order to render the Premises a complete architectural unit, but onlyto the extent of the:

 

(i)            Condemnation award received for the damage;and

 

(ii)           The Initial Leasehold improvements.

 

If part or all of thePremises are condemned for 60 days or less (a “Temporary Condemnation”), thisLease shall remain in effect, subject to the terms of this Paragraph 20. Ifpart orall of thePremises are condemned for a period of time exceeding 60 days. Tenant shallhave the right, at its sole election, to terminate this Lease. If Tenant electsto terminate this Lease, notice of its election shall be given to Landlord within 15 days following thesixtieth day after such condemnation and this Lease shall end on the datespecified in the termination notice, which date shall be at least 30, but notmore than 45, days after the date notice is given. In the event of a TemporaryCondemnation or in the event Tenant does not elect to terminate this Leasefollowing a condemnation for a period of time exceeding 60 days, Rent andTenant’s obligations for the part of the Premises taken shall abate inproportion to the part of the Premises that Tenant is unable to use in theconduct of its business, such abatement to begin on the date the Tenantdetermines it is unable to use the portion of the Premises so taken in theconduct of its business until the date Tenant determines it is again able touse the portion

 

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of the Premises so taken in the conduct of itsbusiness, and Landlord shall receive the entire award attributable to suchcondemnation.

 

**SUBORDINATION**

 

21.           It is agreed that Landlord shall have theright to place a mortgage or deed of trust on the Premises and this Lease shallbe subordinate to any such mortgage or deed of trust whether presently existingor hereafter placed on the Premises, and Tenant agrees to execute anyreasonable documents assisting the effectuating of said subordination. Landlordshall obtain from any such lender a non-disturbance agreement, in recordableform, providing that in the event of foreclosure or other right assertedpursuant to the respective loan documents. Tenant shall be permitted to remainin quiet and peaceful possession of the Premises and this Lease and the rightsof Tenant hereunder shall continue in full force and effect and shall not beterminated or disturbed except in accordance with the provisions of thisLease.   Furthermore, if any person orentity shall succeed to all or part of Landlord’s interest in the Premises,whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale,termination of lease, or otherwise, Tenant shall automatically attorn to suchsuccessor in interest, which attornment shall be self operative and effectiveupon the signing of this Lease, and Tenant shall execute such other agreementin confirmation of such attornment as such successor in interest shallreasonably request.

 

**NOTICE**

 

22.           Any written notices required by this Leaseshall be deemed sufficiently given, if hand delivered, or sent via first class U.S. mail or by overnight courierservice.

 

Any notice required by this Lease is to be sent to Landlord at.

 

5104 Pegasus Court, Suite A

 

Frederick. Maryland 21704

 

Any notice required by thisLease is to be sent to Tenant at:

 

Attn:  Mark Manak

 

217 Perry Parkway

 

Gaithersburg. MD 20832

 

With a copy to:

 

Kevin W. Quinlan

 

Boston Biomedica, Inc.

 

375 West Street

 

West Bridgewater, MA 02379

 

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**REMEDIES NOT EXCLUSIVE**

 

23.           No remedy conferred upon Landlord shall beconsidered exclusive of any other remedy, but shall be in addition to everyother remedy available to Landlord under this Lease or as a matter of law.Every remedy available to Landlord may be exercised concurrently or from timeto time, as often as the occasion may arise. Tenant hereby waives any and allrights which it may have to request a jury trial in any proceeding at law or inequity in any court of competent jurisdiction.

 

**NON-WAIVER**

 

24.           It is agreed that the failure of Landlord toinsist in any one or more instances upon a strict performance of any covenantof this Lease or to exercise any right herein contained shall not be construedas a waiver or relinquishment for the future of such covenant or right, but thesame shall remain in full force and effect, unless the contrary is expressed inwriting by Landlord.   The receipt ofAnnual Rent or Additional Rent by Landlord, with knowledge of any breach ofthis Lease by Tenant or of any default on the part of Tenant hereunder, shallnot be deemed to be a waiver of any provisions of this Lease.  Neither acceptance of the keys nor any otheract or thing done by Landlord or any agent or employee of Landlord shall bedeemed to be an acceptance of a surrender of the Premises, excepting only anagreement in writing by Landlord accepting or agreeing to accept suchsurrender.

 

**SECURITYDEPOSIT AND FINANCIAL STATEMENTS**

 

25.           A security deposit of **$40,261.00**is required to accompany thisLease, when submitted for approval byLandlord, subject to all the conditions of the security deposit agreementattached. If this Lease is not approved by Landlord within thirty (30) days ofits submission to Landlord, Tenant’s security deposit will be refunded in full.On the first anniversary of the Rent Commencement Date, Tenant shall deliver anadditional security deposit to Landlord in the amount of $29,072.32; failure todeliver such additional security deposit shall be an event of default underthis Lease. Landlord shall have the right to require annual financialstatements for Tenant, which Landlord agrees not to disclose to any otherperson (other than Landlord’s accountants, attorneys and other representatives,each of whom shall be advised of the confidential nature of such information).

 

**FINAL AGREEMENT**

 

26.           This Lease contains thefinal and entire agreement between the parties hereto, and neither they northeir agents shall be bound by any terms, conditions or representations notherein written.

 

**LEGAL EXPENSE**

 

27.           In the event, to enforce the terms of thisLease, either party files legal action against the other, and is successful insaid action, the losing party agrees to pay all reasonable expenses to theprevailing party, including the attorney’s fees incident to said legalaction.  In the event that Landlord is

 

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successful in any legal action filed againstTenant, Landlord’s expenses incident to said legal action shall be due asAdditional Rent.

 

**LAND**

 

28.           It is agreed that the Premises is the buildingarea occupied by Tenant and only the land under that area.

 

**29*.******         *****Intentionally Deleted.**

 

**ENVIRONMENTAL REQUIREMENTS**

 

30.           Tenant hereby represents and warrants toLandlord that no materials will be located by Tenant on the Premises which,under federal, state, or local law, statute, ordinance or regulations; or courtor administrative order or decree; or private agreement (hereinaftercollectively known as “Environmental Requirements”), require special handlingin collection, storage, treatment, or disposal (collectively, “RegulatedMaterials”). Notwithstanding the foregoing, Landlord acknowledges and agreesthat the repository and/or laboratory may contain material that is biohazardousand infectious to humans. Landlord further agrees and acknowledges that Tenantmay store and use Regulated Materials used in the ordinary course of business(e.g., cleaning fluids, photocopier toner and the like), provided same arestored, used and disposed of in accordance with all applicable EnvironmentalRequirements.

 

Landlord covenants that there are no Regulated Materials present in, onor under the Premises, the Building and the land thereunder and that thePremises, the Building and the land are in compliancewith all Environmental Requirements as of thedate hereof. Landlord shall be responsible for the identification and removalfrom the Building and the property, within thirty (30) days after writtennotice thereof, of any and all Regulated Materials which are not placed on thePremises or generated by the Tenant on the Premises during the normal course ofbusiness..

 

Tenant hereby covenants and agrees that if at any time it is determinedthat there are Regulated Materials placed on the Premises by Tenant. Tenantshall, within thirty (30) days after written notice thereof, take or cause tobe taken, at its sole expense, such actions as may be necessary to comply withall Environmental Requirements. If Tenant shall fail to take such action,Landlord may make advances or payments towards performance or satisfaction ofthe same but shall be under no obligation to do so; and all sums so advanced orpaid, including all sums advanced or paid in connection with any Judicial oradministrative investigation or proceeding relating thereto, including, withoutlimitation, reasonable attorney’s fees, fines, or other penalty payments, shallbe at once repayable by Tenant as Additional Rent and shall bear interest atthe rate of three percent (3%) per annum above the Prime Rate from time to timeas published by the Wall street Journal, from the date

 

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the same shall become due and payable untilthe date paid.  Failure of Tenant tocomply with all environmental requirements shall constitute and be a defaultunder this Lease.

 

**SEVERABILITY**

 

31.           In case any one or more of the provisionscontained in this Lease shall for any reason be held to be invalid, illegal orunenforceable in any respect, such invalidity, illegality or unenforceabilityshall not affect any other provisions of this Lease, but this Lease shall beconstrued as if such invalid, illegal or unenforceable provision had never beencontained herein.

 

**LATE CHARGE**

 

32.           If Tenant shall fail to pay when due, theAnnual Rent, Additional Rent or any other sum required by the terms of thisLease to be paid by Tenant, then, in addition to any and all other remediesthat may thereby accrue to Landlord, Tenant agrees to pay to Landlord a latecharge of five percent (5%) of the monthly account balance. The late charge onthe base rent accrues after ten (10) days of the due date and said late chargesshall be collectible as Additional Rent.

 

In the event Tenant’s rentis received fifteen (15) days after due date, Landlord shall have option torequire the rental payment be made with a certified or cashier’s check.

 

**QUIET ENJOYMENT**

 

33.           Tenant, upon paying the minimum rent,Additional Rent and other charges herein provided and observing and keeping allof its covenants, agreements, and conditions in this Lease, shall quietly haveand enjoy the Premises during the term of this Lease without hindrance or molestationby anyone claiming by or through Landlord; subject, however, to all exceptions,reservations and conditions of this Lease.

 

**LANDLORD’S WORK**

 

34.           The Premises shall contain only the followingitems at the expense of Landlord:

 

Landlord Shall provide a Tenant Improvement allowance of $1,954 800.00subject to the terms and conditions of the Tenant Improvement agreement asattached here to as “Exhibit B”. 

 

**WINDOW COVERINGS**

 

35.           Tenant shall not install any window coveringother than a one-inch horizontal mini-blind of an off-white color unlessapproved in writing by Landlord.

 

**PARKING**

 

36.           Throughout the Lease term and any renewalterm(s), Landlord shall provide Tenant with free, common parking in the parkingarea immediately adjacent to the Premises, at a ratio of 4 parking spaces per1000 square feet leased.

 

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**OPTIONS**

 

37.           Provided Tenant is not then in defaulthereunder, Tenant may extend the term of this Lease, as it may be amended from time to time, for two (2)**further successive periods of five(5) years each, by notifying Landlord in writing of its intention to do so at least six (6) months prior to theexpiration of the then current term.The annual rental for each succeeding extension shall be at a Lease rate equalto the then prevailing fair market rental rate for renewal tenants incomparable industrial buildings in the Frederick sub-market. If Landlord andTenant are unable to agree upon “market rate,” then “market rate” shall bedetermined as follows: Landlord and Tenant shall each engage a real estateagent who has at least 10 years’ experience inthe leasing of commercial property in the Frederick, Maryland area(a “Determining Broker”). Each party shall bear the cost, if any, of its appointedDetermining Broker. If the two Determining Brokers are unable to agree uponmarket rate within thirty days of their respective appointments, then the twoDetermining Brokers shall choose a third Determining Broker (the “NeutralBroker”), the cost, if any, of which shall be borne equally by Landlord andTenant. The two Determining Brokers engaged by Landlord and Tenant,respectively, and the Neutral Broker shall deliver to Landlord and Tenant theirrespective determinations of the fair market rental rate of the Leased Premises. The market rate for theLeased Premises shall be the averageof the three rates determined by the Determining Brokers, and shall be bindingupon the parties commencing with the first year of the option term.

 

a.             If the option to extend the term of thisLease is not timely exercised, the unexercised option to extend shallautomatically become null and void.

 

b.             The right to extend the term of the Lease maybe exercised only by the undersigned Tenant for its continued use and occupancyof the Premises and only if it is in possession of the Premises and operating apermitted use when it exercises the right. No such right shall be assignableeven though Landlord may have approved an assignment of the Lease.  However, if Tenant assigns this Lease to anyentity into which or with which Tenant merges or consolidates, or to anypurchaser of Tenant’s capital stock or substantially all of Tenant’s assetsand/or to any parent, subsidiary, or affiliated corporation, the assignee mayexercise such right to renew.

 

c.             If Tenant shall default under the Leasebeyond any applicable grace or cure period, then all unexercised rights toextend the term of the Lease shall automatically be extinguished and becomenull and void.

 

**RULES AND REGULATIONS**

 

38.           Tenant shall at all times comply with theRules and Regulations attached hereto. In the event of aconflict between the Rules and Regulations and the terms of this Lease, theterms of the

 

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Lease shall prevail. Landlord shall make a reasonable effort to enforcethe Rules and Regulations equitably against all tenants of the Property.

 

**ESTOPPELCERTIFICATE**

 

39.           Tenant shall, at any time during the term ofthis Lease or any renewal thereof, upon request of Landlord, execute,acknowledge, and deliver to Landlord or its designee, a statement in writing,certifying that this Lease is unmodified and in full force and effect if suchis the fact that the same is in full force and effect.

 

**EXCULPATION CLAUSE**

 

40.           Neither Landlord nor any principal, partner,member, officer, director, trustee,or affiliate of Landlord (collectively, “Landlord Affiliates”) shall have anypersonal liability under any provision of this Lease. In the event Landlorddefaults in performing any of its obligations hereunder, Tenant shall looksolely to Landlord’s equity in the Property to satisfy Tenant’s remedies onaccount therefore. If Tenant obtains a money judgment against Landlord, Tenantshall be entitled to have execution upon such judgment only upon Landlord’sequity in the Property, and not on Landlord or Landlord Affiliates.

 

**INDUSTRIAL USER SURVEY**

 

41.           Tenant agrees to complete the attached Exhibit“A” known as the Frederick County Bureau of Water and Sewer Industrial UserWaste and Slug Potential Survey.

 

**RIGHTS OF FIRST OFFERING**

 

42.           a) Tenant shall have an ongoing right of first offer throughout the primaryLease term for all or any part of 50,000 net rentable square feet of space inLandlord’s adjacent proposed Building A at Riverside Technology Park(“Expansion Space”). Landlord further represents and warrants that it will notunder any circumstances market or lease any portion of said Expansion Space toany other prospects prior to December 31, 2006. If at any time after December31, 2006, all or any portion at the Expansion Space becomes available forleasing, Landlord shall give Tenant a written offer (the “Landlord’s Offer”)setting forth the amount of space available and the basic economic terms andconditions upon which the space will be leased. The Landlord’s Offer shallprovide that rent for the spaceoffered shall be the pro forma rent required by Landlord’s construction lenderfor the Expansion Space pursuant to Landlord’s financing documents (providedthat if no such requirement exists, then the rent offered shall be the fairmarket value for comparable industrial buildings in the Frederick flexIndustrial sub-market). Tenant will have seven (7) business days after receiptof Landlord’s Offer to accept or decline the space offered. If Landlord doesnot receive written notice from Tenant of acceptance or declining then Landlordwill assume Tenant has declined the Landlord’s Offer and

 

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Landlord shall be entitled to offer theportion of the Expansion Space which was offered to Tenant to any otherprospective tenant. If Landlord does not execute a lease for the ExpansionSpace (or the portion thereof which was offered to Tenant) after compliancewith the provisions set forth in this Paragraph 42 within six months after thedate of Landlord’s Offer, it shall again be required to give Tenant notice withrespect to any subsequent proposed lease of all or any portion of the ExpansionSpace.

 

b)            In addition to the foregoing right of firstoffer, Tenant shall have a right of first offer for the remaining space in theBuilding. If any other space in Building becomes “Available” (as said term ishereinafter defined), Tenant shall have a right of first offer to lease all ofthe available space (the “Adjacent Space”).

 

Promptly after Landlord becomes aware that the Adjacent Space is, or isabout to become, Available, Landlord shall notify Tenant thereof, which noticeshall specify the amount of the Adjacent Space Available and the basic economicterms and conditions upon which the Adjacent Space will be leased. Landlord’snotice shall provide that rent for the space offered shall be a fair marketvalue for comparable industrial buildings in the Frederick flex industrialsub-market. Tenant will have seven (7) business days after receipt ofLandlord’s notice to accept or decline the Adjacent Space specified therein. IfLandlord does not receive written notice from Tenant of acceptance ordeclining, then Landlord will assume Tenant has declined the Landlord’s offerand Landlord shall be entitled to offer the portion of the Adjacent Space whichwas offered to Tenant to any other prospective tenant. If Landlord does notexecute a lease for the Adjacent Space after compliance with the provisions setforth in this Paragraph 42(b) within six months of Landlord’s notice, it shallagain be required to give Tenant notice with respect to any subsequent proposedlease of the Adjacent Space. For purposes of this Paragraph 42(b), “Available”with respect to Adjacent Space means that the Adjacent Space is not subject toa lease with a third-party tenant which lease contains any unexercised orunexpired expansion, renewal or extension right.

 

**AS WITNESS THE HANDS AND SEALS OF THE PARTIES HERETOTHE DAY AND YEAR FIRST ABOVE WRITTEN:**

 

 
| **WITNESS:**        | **TENANT:  BBI BIOTECH RESEARCH LABORATORIES, INC.** |
|---------------------|------------------------------------------------------|
|                |                                                 |
| /s/ Kristin  Pettit |                                                 | By: |   | /s/ Mark Manak |   |
|                |                                                 |
|                | Printed Name:                                        |   | Mark Manak |   |
|                |                                                 |
|                | Title:                                               |   | General Manager & Sr. Vice President |   |
|                     |                                                      |  |  |  |  |  |  |  |  |  |

 

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| **WITNESS:**          | **LANDLORD:** | **MIE  Properties, Inc.,  as agent for owner** |
|-----------------------|---------------|------------------------------------------------|
|                  |          |                                           |
| /s/ Jennifer  Roschel |          | By:                                            |   | /s/ Julianne A. Wagner |   |
|                  |          |
|                  | Printed Name: | Julianne A. Wagner                             |   |
|                  |          |
|                  | Title:        | Partner                                        |   |
|                       |               |                                                |  |  |  |  |  |  |  |

 

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**SECURITY DEPOSIT AGREEMENT**

 

This is **NOT**a receipt.

 

Date:3/1/04

 

Received from **BBI Biotech ResearchLaboratories, Inc.,** the amount of **$40,261.00,**as security deposit for the Premises: **8425Progress Drive, Suites A-Y, Frederick, Maryland 21701.**

 

Landlord agrees to deposit the security deposit in a simpleinterest-bearing account. Landlord agrees that, subject to the conditionslisted below, this security deposit (with interest accrued thereon) will bereturned in full within thirty (30) days of vacancy.

 

Tenant agrees that this security deposit may not be applied by Tenant asrent and that the full monthly rent will be paid on or before the first day ofevery month, including the last month of occupancy; provided that in the eventof Landlord’s bankruptcy, or the bankruptcy of the owner of the Building, theTenant shall have the right to apply the security deposit to the nextinstallment(s) of rent. Tenant further agrees that a**mortgagee of the property demised by the Lease to whichthis Security Deposit Agreement is appended and/or a mortgagee thereof in**possession of said property and/or apurchaser of said property at a foreclosure sale shall not have any liabilityto Tenant for this security deposit.

 

**SECURITY DEPOSIT RELEASE PREREQUISITES**

 

1.     Full term of Lease has expired.

2.     No damage to property beyond ordinary wear and tear.

3.     Entire Premises broom clean and in order.

4.     No unpaid late charges or delinquent rents, or other delinquent sumspayable by Tenant.

5*.**    *All keys returned to Landlord.

6.     All debris and rubbish and discards placed in proper rubbish containers.

7.     Forwarding address left with Landlord.

 

**AS WITNESS THE HANDS AND SEALS OF THE PARTIES HERETOTHE DAY AND YEAR FIRST ABOVE WRITTEN:**

 
| **WITNESS:**         | **TENANT:  BBl BIOTECH RESEARCH LABORATORIES, INC**.    |
|----------------------|---------------------------------------------------------|
|                 |                                                    |
| /s/ Kristin Pettit   |                                                    | By: |   | /s/ Mark Manak |   |
|                 | Printed Name:                                           |   | Mark Manak |   |
|                 | Title:                                                  | General Manager  & Senior Vice President |   |
|                 |                                                    |
|                 |
| **WITNESS:**         | **LANDLORD:  MIE Properties, Inc., as agent for owner** |
|                 |                                                    |
| /s/ Jennifer Roschel |                                                    | By: | /s/ Julianne A . Wagner |   |
|                 | Printed Name:                                           | Julianne A. Wagner |   |
|                 | Title:                                                  | Partner |   |
|                      |                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

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**RULES AND REGULATIONS**

** **

**8425 Progress Drive, Suites A-Y, Frederick, Maryland 21701**

 

1.             The Common Facilities, and the sidewalks,driveways, and other public portion of the property (herein “Public Areas”)shall not be obstructed or encumbered by Tenant or used for any purpose otherthan ingress or egress to and from the Premises, and Tenant shall not permitany of its employees, agents, licensees or invitees to congregate or loiter inany of the Public Area. Tenant shall not invite to, or permit to visit thePremises; persons in such numbers or under such conditions as may interferewith the use and enjoyment by others of the Public Areas. Landlord reserves theright to control and operate, and to restrict and regulate the use of, thePublic Areas and the public facilities, as well as facilities furnished for thecommon use of tenants, in such manner as it deems best for the benefit oftenants generally.

 

2.             No bicycles, animals (except seeing-eye dogs)or birds of any kind shall be brought into, or kept in or about any Premiseswithin the building.

 

3.             No noise, including, but not limited to,music, the playing of musical instruments, recordings, radio or television, which,in the judgment of Landlord, might disturb other tenants in the building orpublic areas, shall be made or permitted by any tenant.

 

4.             The Premises shall not be used for lodging orsleeping or for any immoral or illegal purpose.

 

5.             Tenant shall not cause or permit any odors ofcooking or other processes, or any unusual or objectionable odors, to emanatefrom the Premises, which would annoy other tenants or create a public orprivate nuisance. Smoking is not allowed in the building.

 

6.             Plumbing facilities shall not be used for anypurpose other than those for which they were constructed. No sweepings,rubbish, ashes, newspapers, objects or other substances of any kind shall bethrown into the plumbing facilities.

 

7.             Tenant agrees to keep the Premises in a neat,good and sanitary condition and to place garbage, trash, rubbish and all otherdisposables only where Landlord directs.

 

8.             Landlord reserves the right to rescind,alter, waive or**add, any rule orRegulation at any time prescribed for the building when, in the reasonablejudgment of Landlord. Landlord deems it necessary or desirable for thereputation, safety, character, security, care, appearance or interests of theBuilding, or the preservation of good order therein, or the operation or maintenanceof the Building, or the equipment thereof, or the comfort of tenants of othersin the Building. No rescission, alteration, waiver or addition of any rule orregulation in respect of one tenant shall operate as a rescission, alterationor waiver in respect of any other tenant.

 

9.             Tenant shall have the non-exclusive right topark in parking spaces in front of and behind Tenant’s Premises. This areashall be defined by two imaginary lines extending out from Tenant’s demisingwalls.

 

10.           Except as otherwise provided in the Lease, Tenant shall not placestorage trailers or other storage containers of any type outside the Premises.

 

11.           Except as otherwise provided in the Lease, Tenant shall not park on apermanent or semi-permanent basis, any trailer behind dock doors or in anyother location outside the Premises for the purpose of storage.

 

12.           Non-compliance with any of the above rules and regulations may, inLandlord’s sole judgment, result in a monetary fine not to exceed $25 per day.Landlord will notify Tenant of such violations and Tenant will have five (5)days to rectify, after which, daily fine will be applied.

 

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[GRAPHIC]

 

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**EXHIBIT B**

 

**Tenant Improvement Agreement**

 

THIS TENANT IMPROVEMENT AGREEMENT (this “Agreement”) is made andentered into as of March 1, 2004, by and between MIE Properties, Inc. (“Landlord”),and BBI Biotech Research Laboratories, Inc, (“Tenant”).

 

**RECITALS**

 

This Agreement is attached to and forms a part of that certain LeaseAgreement of even date herewith by and between Landlord and Tenant pursuant towhich Landlord has leased to Tenant certain real property situated at *8425 Progress Drive Ste A-Y Frederick, MD 21701*,consisting primarily of a 65,160 square foot portion of the Building.

 

Landlord and Tenant desire to enter into this Agreement to set forththeir agreements with respect to the improvements to be constructed by Tenanton the Premises prior to Tenant’s occupancy thereof,

 

NOW, THEREFORE, in consideration of these premises and the covenantsand agreements of Landlord and Tenant set forth in the Lease, the parties agreeas follows;

 

1.             **Definitions****.**  Allcapitalized terms used herein and not defined herein shall have the meanings assigned thereto in theLease.   When used in this Agreement,the following terms shall have the meanings set forth in this Paragraph 1:

 

(a)           **Completion Date****.** The date on which all requisite finalcertificates of occupancy have been issued by applicable GovernmentalAuthorities and a certificate of final completion has been issued by thearchitect or engineer responsible for preparing the Final Plans.

 

(b)           **Governmental Requirements****.** All laws*,*ordinances, statutes, codes, rules, regulations, orders and decreesof the United States, the state, the county, the city or any other politicalsubdivision in which the Demised Premises is located, and any other politicalsubdivision, agency or instrumentality exercising jurisdiction over Landlord,Tenant or the Demised Premises (collectively, the “Governmental Authorities”).

 

(c)           **Improvements.**  Those certainimprovements, including without limitation,the 65,160 square foot portion of the Building as described in the Lease, asset forth in the Final Plans.

 

(d)           **Material Work****.**  Anywork performed by a single contractor or subcontractor the aggregate cost ofwhich exceeds $2,000.

 

2.**            ****Plans: Work Schedule****.**

 

(a)           Within five (5) business days after fullexecution of the Lease, Tenant will submit to Landlord a Work Schedule whichspecifies the projected dates for commencement and completion of theImprovements, the dates by which Landlord and/or

 

 

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Tenant is required to make filings orapplications to any Governmental Authorities in connection with the constructionand completion of the Improvements, and such other dates as Tenant determinesshould be identified for the mutual benefit of Tenant and Landlord to enablethe parties to comply with their respective obligations under the Lease,including this Agreement.

 

(b)           Whenever any of Tenant’s plans, specifications and drawings identifiedon the Work Schedule (“Tenant’s Plans”) are subject to Landlord’s approval (asset forth on the Work Schedule), Landlord shall review said Tenant’s Planswithin five (5) business days following receipt thereof and shall advise Tenantwithin such five (5) day period whether the Tenant’s Plans are acceptable orwhether Landlord requires changes to such Tenant’s Plans. In each case,Landlord’s approval of Tenant’s Plans shall not be unreasonably withheld,conditioned or delayed and in no event shall Landlord’s requested changessubstantially alter the scope of Tenant’s Plans. Upon Landlord’s approval ofthe working drawings identified on the Work Schedule, such plans shall be the“Final Plans” for the Improvements. Approval by Landlord of any of Tenant’sPlans shall not be a representation or warranty of Landlord that such plans areadequate for any use, purpose or condition, or that such plans comply with anyapplicable Governmental Requirement, but shall merely be the consent byLandlord to the improvements to be constructed pursuant to such plans.

 

3.             **Approved Contractors****.** All work with regard to construction of theImprovements shall be performed only by contractors and subcontractors licensedto do business in the state in which the Premises are located. All contractorsand subcontractors shall be required to procure and maintain insurance againstsuch risks, in such amounts, and with such companies as Landlord may reasonablyrequire, and those contractors and subcontractors performing Material Workshall be obligated to obtain payment and performance bonds covering the cost oftheir work and certificates of insurance before construction of theImprovements is commenced. All work shall be performed in a good andworkmanlike manner that is free of defects and is in strict conformance withthe Final Plans and all applicable Governmental Requirements.   Tenant shall obtain warranties on allImprovements for a minimum of one (1) year.

 

4.             **Insurance Requirements****.** In addition to the insurance to bemaintained by the contractorsand subcontractors for the Improvements, until the Completion Date, Tenantshall be obligated to maintain or cause to be maintained the followinginsurance, in the minimum amounts indicated, naming Landlord as an additionalinsured, pursuant to policies issued by companies authorized to do business inthe state where the Premises are located which are satisfactory to Tenant:

 

(a)           Workers’ Compensation with full statutorylimits for employer’s liability;

 

(b)           A standard builder’s risk policy withextended coverage in the amount of one hundred percent (100%) of the value ofthe Improvements, as agreed to by Landlord and Tenant, together with allstandard construction industry clauses and endorsements and such other clausesand/or endorsements as Landlord may reasonably require;

 

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(e)           “All risk” propertyinsurance covering all risks of direct physical loss to the Improvements in anamount not less than 100% of the replacement value of the improvemnets; and

 

(d)           Commercial GeneralLiability Insurance, including direct and contingent liability, in theaggregate amount of $2,000,000 combined single limit coverage per occurrencefor personal injury, death or property damage.

 

Original policiesor copies of the foregoing insurance, or, in lieu thereof, certificatesevidencing such insurance, shall be delivered to Landlord before Tenantcommences construction of the Improvements.

 

5.             **Bidding of Contract.** Tenant shallutilize its own construction manager and competitively bid the actualconstruction to three qualified contractors reasonably acceptable to Landlord,provided that Landlord or a general contractor designated by Landlord shall beentitled to bid the actual construction as one of the three biddingcontractors. Tenant shall have the sole discretion to select the contractor forthe Tenant Improvements, except that Tenant agrees to use Landlord’s roofingcontractor.

 

6.             **Landlord’s Right to Inspect.**Landlord shall designate a representative authorized to act on its behalf forthe purpose of inspecting the Improvements and the status of construction(“Landlord’s Representative”), Landlord’s Representative shall be entitled toenter the Premises at reasonable times during the**construction of the Improvements for purposes of suchinspection. Tenant and LandLord will**schedulemutually convenient progress meetings during the construction of theImprovements among Landlord’s Representative, Tenant’s construction manager andthe appropriate architects, engineer’s, contractors and/or subcontractors.

 

7.             **Costs of Improvements.** Landlord shallprovide the Tenant with aTenantimprovement allowance of $1,954,800 towards the construction of theImprovements and related expenses including, without limitation, preparation ofthe Tenant’s Plans and the Final Plans, costs of all building permits and otherauthorization necessary to commence and continue construction, costs ofconstruction labor and materials, all related tax and insurance costs, thecosts of obtaining all requisite certificates of occupancy for Tenant’s use ofthe Premises, the cost of furniture, fixtures, machinery and equipment, and moving expenses associated with Tenant’srelocation to the Building. Tenant shall submit a budget to Landlord before thecommencement of construction as per the attached form. During the constructionTenant shall submit amonthlydraw request, including the budget template for work in place category, allinvoices and executed lien waivers (form attached). Upon receipt of the drawrequest, Landlord shall have five (5) calendar days to inspect the completionof the improvement requisitioned. Landlord shall notify Tenant in writing ofany discrepancies within the 5-day period or Landlord shall fund the drawwithin fifteen (15) business days of receipt of the draw request from Tenant.At Tenant’s option, Landlord shall either pay the invoice(s) attached to thedraw request directly to the vendor(s), or provide Tenant with sufficient fundsto pay such vendor(s).

 

8.             **Liability for Improvements****.** Tenant assumes complete responsibility and liability forconstruction of the Improvements in accordance with the Final Plans and allapplicable Governmental Requirements and in that regard, to the fullest extentpermitted by

 

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applicable law, Tenant shall and does agreeto indemnify, protect, defend and hold harmless Landlord, Landlords’s officers,directors, shareholders, employees and agents (collectively the “Indemnitees”)from and against all claims, damages, losses, liens, causes of  action, suits, judgments, and expenses,including reasonable attorneys fees, of any nature, kind or description(including personal injury and death), directly or indirectly arising out of,caused by, or resulting from (in whole or in part) (a) the work performedhereunder, or any part thereof, (b) the Final Plans, or (c) any act or omissionof Tenant or of any architect, engineer, contractor, or subcontractor, inanyone directly or indirectly employed by them, or anyone that they control orexercisecontrol over inconnection with the construction and completion of the Improvements ((a)through (c) being herein referred to collectively as the “Liabilities”).The obligations of Tenant under this indemnification shall not apply to Liabilitiesto the extent such Liabilities are caused in whole or in part by the negligenceof any Indemnitee.

 

9.             **Incorporation****.** This Agreement is incorporated into and madea part of the Lease by**thisreference, and the Lease is hereby incorporated into and made a part of thisAgreement by reference.

 

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