Exhibit 10.41
PROMISSORY NOTE
(Term Note)

$22,750,000.00 December 30, 2009
 
FOR VALUE RECEIVED, EMERGENT BIODEFENSE OPERATIONS LANSING INC., formerly known
as BioPort Corporation, a Michigan corporation (the “Borrower”) promises to pay
to the order of HSBC REALTY CREDIT CORPORATION (USA), a Delaware corporation
(hereinafter referred to as the “Bank”) at its office at 1130 Connecticut
Avenue, N.W., 12th Floor, Washington, D. C. 20036, or at such other place as the
Bank may from time to time direct, the sum of TWENTY-TWO MILLION SEVEN HUNDRED
FIFTY THOUSAND AND NO/100 DOLLARS ($22,750,000.00), with interest computed daily
on the unpaid principal balance at the Interest Rate (as such term is
hereinafter defined), and payable according to the repayment terms set forth
herein (the “Loan”). The Loan is made pursuant to a Loan Agreement of even date
herewith (the “Loan Agreement”) among the Borrower, the Bank and Emergent
BioSolutions Inc. (the “Guarantor”). The Loan is guaranteed by a Guaranty of
even date herewith from the Guarantor to the Bank (the “Guaranty”).  The Loan is
secured by, among other things, those certain Mortgages dated as of August 25,
2006, from the Borrower in favor of the Bank, each as amended by a First
Amendment to Mortgage dated June 29, 2007, and each as further amended by a
Second Amendment to Mortgage of even date herewith (collectively, the
“Mortgage”), and a Security Agreement of even date herewith from the Borrower to
the Bank (the “Security Agreement”). This Note, the Loan Agreement, the
Guaranty, the Mortgage, the Security Agreement and any other documents entered
into in connection with the Loan are referred to as the “Loan Documents”).
 
Interest Rate and Payment Terms
 
This Note shall bear interest at a rate per annum (the “Interest Rate”) equal to
90-day LIBOR plus three and 25/100 percent (3.25%).  “LIBOR” shall mean the rate
of interest (rounded upwards if necessary to the next 100th of one percent)
determined by the Bank to be the prevailing rate per annum at which deposits in
United States dollars for the applicable period are offered to the Bank by first
class banks in the London Interbank Market in which the Bank regularly
participates at any such time (as shown on the Reuters Screen LIBOR01 Page, at
approximately 11:00a.m. (London time) on the proposed borrowing date), or, in
the discretion of the Bank, the base, reference or other rate then designated by
the Bank for general commercial loan reference purposes, it being understood
that such rate is a reference rate, not necessarily the lowest, established from
time to time, which serves as the basis upon which effective interest rates are
calculated for loans making reference thereto.  Interest will accrue on any
non-banking day at the rate in effect on the immediately preceding banking day.
 
This Note shall be payable in monthly installments of principal and interest in
the amount required to amortize this Note over fifteen (15) years, payable on
the 1st day of each month beginning January 1, 2010, and in one final balloon
payment of all accrued interest and outstanding principal on December 30, 2014
(the “Maturity Date”).
 
The Interest Rate on this Note:  (a) will not exceed applicable legal limits,
and in the event a payment is made by the Borrower or received by the Bank in
excess of the applicable legal limits, such excess payment shall be credited as
a payment of principal; and (b) shall be computed on the basis of 360-day year
and charged for the actual number of days elapsed in each interest calculation
period.
 
In the event that the Bank shall determine that by reason of circumstances
affecting the interbank Eurodollar market, adequate and reasonable means do not
exist for determining  LIBOR, or Eurodollar deposits in the relevant amount and
for the relevant maturity are not available to the Bank in the interbank
Eurodollar market, the Bank shall give the Borrower prompt notice of such
determination.  If such notice is given, and until such notice is withdrawn, the
Interest Rate on this Note shall be a rate per annum equal to the Prime Rate
plus 2.25%. “Prime Rate” means the rate per annum from time to time established
by the Bank as the Prime Rate and made available by the Bank at its main office
or, in the discretion of the Bank, the base, reference or other rate then
designated by the Bank for general commercial loan reference purposes, it being
understood that such rate is a reference rate, not necessarily the lowest,
established from time to time, which serves as the basis upon which effective
interest rates are calculated for loans making reference thereto. If, after the
date of this Note, any applicable law, treaty, regulation or directive, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for the Bank to make or maintain any LIBOR loan, the Interest Rate on
this Note shall be a rate per annum equal to the Prime Rate plus 2.25%, for so
long as such illegality exists.
 
Prepayment
 
Upon five (5) business days’ written notice from the Borrower to the Bank, the
Borrower may prepay the outstanding principal balance of this Note, in whole or
in part, subject to the following terms and conditions:
 
(a)           any prepayment must include payment of all interest accrued and
unpaid on the amount so prepaid as of the date of such prepayment;
 
(b)           partial prepayment shall not postpone the due date of any
subsequent payment, nor shall it change the amount of any monthly payment
otherwise required to be made under this Note, unless the Bank otherwise agrees
in writing and in advance of receipt of such partial prepayment;
 
(c)           Borrower shall pay a breakage fee equal to the aggregate of all
costs, fees and penalties incurred by Bank in connection with such prepayment;
and
 
(d)           if the Interest Rate at the time of prepayment has been converted
to a fixed rate pursuant to an ISDA Master Agreement or other interest rate
protection agreement (“Master Agreement”), the Borrower shall pay a prepayment
fee equal to the aggregate of any breakage fees related to such Master
Agreement.
 
Late Charge
 
In the event the Borrower fails to make a payment of principal and/or interest
in fully collected funds within fifteen (15) days after such payment is due, the
Borrower shall pay a late charge to the Bank in an amount equal to five percent
(5%) of the overdue installment.
 
Default Interest
 
Upon an Event of Default (as such term is hereinafter defined) and until such
Event of Default is cured or this Note is paid in full, this Note shall bear
interest at a rate equal to three percent (3%) per annum above the Interest Rate
in effect on the date of such Event of Default.
 
Events of Default and Remedies
 
Subject to any applicable notice and cure periods contained in the Loan
Documents, each of the following shall constitute a default (“Event of Default”)
under this Note:
 
(a)           A failure to make a payment of any sum within ten (10) days of
when due under this Note.
 
(b)           A failure to perform or observe any of the covenants, conditions
or terms of this Note or any other Loan Document.
 
Upon the occurrence of an Event of Default or failure to pay the balance hereof
when otherwise due, and notwithstanding the payment of any late charges: (i) all
remaining payments under this Note shall become due and payable together with
interest accrued to the date of payment without notice, at the option of the
Bank; (ii) the Borrower shall reimburse the Bank for any reasonable expenses,
costs and attorneys’ fees which the Bank may incur in connection with the
collection of any monies due under this Note or in connection with the
enforcement of any right under this Note or under any of the Loan Documents; and
(iii) the Bank may exercise any or all of the other rights, powers and remedies
provided for in any of the Loan Documents, or now or hereafter existing at law
or in equity or by statute or otherwise.
 
Miscellaneous
 
The Borrower hereby waives demand, presentment for payment, protest, and notice
of dishonor, and agrees that at any time and from time to time and with or
without consideration, the Bank may, without notice to or further consent of the
Borrower and without in any manner releasing, lessening or affecting the
obligations of the Borrower: (a) release, surrender, waive, substitute, settle,
exchange, compromise, modify, extend or grant indulgences with respect to: (i)
this Note; and (ii) all or any part of any collateral or security for this Note;
or (b) grant any extension or other postponements of the time of payment hereof.
 
Each right, power and remedy of the Bank as provided for in this Note, or now or
hereafter existing at law or in equity or by statute or otherwise, shall be
cumulative and concurrent and shall be in addition to every other right, power
or remedy, and the exercise or beginning of the exercise by the Bank of any one
or more of such rights, powers or remedies shall not preclude the simultaneous
or later exercise by the Bank of any or all of such other rights, powers or
remedies.
 
No failure or delay by the Bank to insist upon the strict performance of any
term, condition or covenant of this Note, or to exercise any right, power or
remedy upon a breach hereof, shall constitute a waiver of any such term,
condition or covenant or of any such breach, nor shall it preclude the Bank from
exercising any such right, power or remedy at any later time or times, unless
such waiver is in writing signed by an authorized representative of the Bank. If
the Bank accepts any payment after its due date, this does not constitute a
waiver of the Bank’s right to receive timely payment of all other subsequent
amounts or to declare a default for the failure to make any other subsequent
payment when due.
 
Any payment on this Note coming due on a day on which the Bank is not open to
conduct full banking business shall be due on the next succeeding business day.
Each payment hereunder may be applied to pay interest, principal, late fees or
costs as the Bank, in its sole discretion, may determine.
 
All notices under this Note shall be given as provided in the Loan Agreement.
 
The Borrower authorizes the Bank to disburse funds represented by this Note to
the Borrower and agrees that such disbursement shall be deemed to be full and
absolute consideration for the undertaking to make payment hereunder. The
Borrower hereby authorizes the Bank to disclose to any subsidiary or affiliate
of the Bank, to any fiduciary institution or to any banking institution, credit
union or savings and loan association organized under the laws of any State, and
hereby authorizes all subsidiaries and affiliates of the Bank, to disclose to
the Bank, the financial records of the Borrower.
 
THE BORROWER AND THE BANK HEREBY VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING, OR
COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS NOTE AND THE TRANSACTIONS CONTEMPLATED HEREIN. THE
BORROWER ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE BANK THAT THE PROVISIONS
OF THIS PARAGRAPH CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE BANK HAS
RELIED, IS RELYING AND WILL RELY IN MAKING THE LOAN. THE BORROWER HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE BANK (INCLUDING ITS COUNSEL)
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN THE EVENT
OF LITIGATION, ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL. THE BORROWER
ACKNOWLEDGES THAT IT HAS CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTANDS THE
LEGAL EFFECT OF THE PROVISIONS OF THIS PARAGRAPH.
 
This Note shall be governed by and construed under and in accordance with the
laws of the State of Maryland (but not including the choice of law rules
thereof). The Borrower hereby submits to the non-exclusive jurisdiction of any
State of Maryland court or Federal court sitting in the State of Maryland in any
action or proceeding arising out of or relating to this Note, and hereby waives
any objection it may have to the laying of venue of any such action or
proceeding in any of said courts and any claim that it may have that any such
action or proceeding has been brought in an inconvenient forum. A final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.
 
Whenever used herein, the word “Borrower” or “Bank” shall be deemed to include,
as appropriate, its/his/her respective heirs, personal representatives,
successors and assigns. All words used herein shall be deemed to refer to the
singular, plural, masculine, feminine or neuter as the identity of the person or
entity or the context may require.
 
Borrower has previously executed and delivered to Bank that certain Promissory
Note dated June 29, 2007, in the original principal amount of $30,000,000.00
(the “Original Note”).  In connection with the execution and delivery of this
Note, the Original Note shall be hereby terminated and replaced with this Note
evidencing a total loan amount of $22,750,000.00.
 
(Signature Page Follows)

 
 
 
 

IN WITNESS WHEREOF, the Borrower has duly executed this Note under seal as of
the date and year first hereinabove set forth.
 
EMERGENT BIODEFENSE OPERATIONS
LANSING INC., formerly known as BioPort Corporation, a Michigan corporation

By:/s/R. Don Elsey (SEAL)
Name:R. Don Elsey
Title:Treasurer

 
 
 
 

CONSENT OF THE GUARANTOR
 
The undersigned Guarantor hereby consents to the terms of this Note and
acknowledges it has guaranteed this Note pursuant to the terms of that certain
Guaranty executed by the undersigned of even date herewith.
 
EMERGENT BIOSOLUTIONS INC.,
a Delaware corporation

By: /s/Jay G. Reilly(SEAL)
Name: Jay G. Reilly
Title: Assistant Secretary