Exhibit 10.11
 
 
HUMAN GENOME SCIENCES, INC.,
as Lessee
and
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Bank
 
REIMBURSEMENT AGREEMENT
 
$23,000,000
Maryland Economic Development Corporation
Taxable Variable Rate Demand/Fixed Rate Revenue Bonds
(Human Genome Sciences, Inc. Facility)
1997 Series
 
Dated as of December 1, 2009
 
 
 

 

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TABLE OF CONTENTS
     (This Table of Contents is not a part of the Reimbursement Agreement and is
only for convenience of reference.)

              SECTION       PAGE  
RECITALS
        1  
AGREEMENTS
        1  

ARTICLE I
DEFINITIONS

             
Section 1.1
  Definitions     2  
Section 1.2
  Rules of Construction     8  

ARTICLE II
EFFECTIVE DATE OF REIMBURSEMENT
AGREEMENT; DURATION OF TERM

             
Section 2.1
  Effective Date of Reimbursement Agreement; Duration of Term     8  

ARTICLE III
PAYMENT PROVISIONS

             
Section 3.1
  Reimbursement and Other Payments     9  
Section 3.2
  Payments due Upon Expiration of Letter of Credit     11  
Section 3.3
  Late Payments     11  
Section 3.4
  Increased Costs Due to Change in Law     12  
Section 3.5
  Computation     13  
Section 3.6
  Payment Procedure     13  
Section 3.7
  Business Days     13  

ARTICLE IV
UNCONDITIONAL OBLIGATIONS

             
Section 4.1
  Obligations Absolute     13  

ARTICLE V
REPRESENTATIONS AND WARRANTIES

             
Section 5.1
  Representations, Warranties and Undertakings     14  

ARTICLE VI
AFFIRMATIVE COVENANTS OF LESSEE

             
Section 6.1
  Affirmative Covenants of Lessee     15  

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ARTICLE VII
INDEMNIFICATION

             
Section 7.1
  Indemnification of Bank     16  
Section 7.2
  Indemnification Under Letter of Credit and Letter of Credit Agreement     17  

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

             
Section 8.1
  Events of Default Defined     17  
Section 8.2
  Remedies on Default     19  
Section 8.3
  No Remedy Exclusive     20  
Section 8.4
  Agreement to Pay Attorneys’ Fees and Expenses     21  
Section 8.5
  Waiver of Event of Default; No Additional Waiver Implied by One Waiver     21
 

ARTICLE IX
MISCELLANEOUS

             
Section 9.1
  Notices     21  
Section 9.2
  [Intentionally Omitted]     22  
Section 9.3
  [Intentionally Omitted]     22  
Section 9.4
  Binding Effect     22  
Section 9.5
  Illegality; Severability     22  
Section 9.6
  Assignment     22  
Section 9.7
  Consent to Jurisdiction; Service of Process; Waiver of Jury Trial     23  
Section 9.8
  Further Assurances and Corrective Instruments     23  
Section 9.9
  Right to Perform; Advances by Bank     23  
Section 9.10
  Amendments, Changes and Modifications     24  
Section 9.11
  Execution of Counterparts     24  
Section 9.12
  Law Governing Construction of Agreement     24  
Section 9.13
  Effective Date     24  
Section 9.14
  Conflicting Agreements     24  
Section 9.15
  Set-off     24  

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REIMBURSEMENT AGREEMENT
     THIS REIMBURSEMENT AGREEMENT is dated as of December 1, 2009 and is made by
and between HUMAN GENOME SCIENCES, INC., a Delaware corporation (the “Lessee”),
and MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation (the
“Bank”).
RECITALS
     Certain of the terms and words used in these Recitals are defined in
Section 1.1 of this Reimbursement Agreement.
     Pursuant to and in accordance with the Act, the Issuer has previously
issued and sold Bonds in the original aggregate principal amount of $23,000,000
for the sole and exclusive purpose of financing the acquisition and construction
by the Issuer of the Facility. The Issuer leases the Facility to the Lessee
pursuant to the Facility Lease.
     The Bonds were issued pursuant to the Indenture.
     In order to enhance the marketability of the Bonds, at the request of the
Issuer and the Lessee, Allfirst Bank, a Maryland state-chartered commercial bank
(“Allfirst”), predecessor in interest to the Bank, issued to the Trustee the
Letter of Credit to provide payment for, and to secure the payment of the
principal of, and interest on, and the purchase price of the Bonds. Allfirst
issued the Letter of Credit pursuant to a Letter of Credit Agreement dated as of
December 1, 1997, by and between Allfirst and the Issuer (the “Allfirst Letter
of Credit Agreement”).
     The Letter of Credit expires on December 15, 2009.
     At the request of the Issuer and the Lessee, the Bank, as successor in
interest to Allfirst, has agreed to extend the Letter of Credit, and, in
connection therewith, the Issuer and the Bank have entered into the Letter of
Credit Agreement, which amends and restates the Allfirst Letter of Credit
Agreement in its entirety.
     As a condition to the Bank’s extension of the Letter of Credit, the Bank
has required that the Lessee enter into this Reimbursement Agreement for the
benefit of the Bank.
AGREEMENTS
     NOW, THEREFORE, in consideration of the premises, the respective
representations, covenants and agreements hereinafter contained, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

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ARTICLE I
DEFINITIONS
     Section 1.1 Definitions. Certain terms used in this Reimbursement Agreement
are defined in this Section or are defined by reference to one of the Bond
Documents or one of the other Letter of Credit Documents; and, when and if used
herein, such terms shall have the meanings given to them by the language
employed in this Section defining such terms or by the language employed in such
Bond Document or other Letter of Credit Document defining such terms, unless the
context clearly indicates otherwise.
     “Acceleration Drawing” has the meaning given to that term in the Letter of
Credit.
     “Act” means Section 10-101, et. seq. of the Economic Development Article of
the Annotated Code of Maryland, as amended, and all future laws supplemental
thereto or amendatory thereof.
     “Act of Bankruptcy” means the filing of a petition in bankruptcy under the
Bankruptcy Code, or the commencement of a proceeding under any other applicable
law concerning insolvency, reorganization or bankruptcy.
     “Administration Expenses” means compensation, indemnities and reimbursement
of fees, expenses and advances payable to the Issuer, the Trustee, the
Remarketing Agent, the Paying Agent and the Registrar, all as described in
Section 7.10 of the Indenture.
     “Assignment of Leases” means the Assignment, Subordination and
Non-Disturbance Agreement dated as of December 1, 1997, by and among the Issuer,
the Bank and the Lessee, together with any and all Supplements thereto.
     “Bank” means Manufacturers and Traders Trust Company, a New York banking
corporation, its successors and assigns.
     “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. §§ 101
et seq., and all future acts supplemental thereto or amendatory thereof.
     “Bond Documents” means and includes (without limitation) the Bonds, the
Indenture, the Placement and Remarketing Agreement and any and all other
documents which the Issuer or any other party or parties or their
representatives, have executed and delivered, or may hereafter execute and
deliver, to evidence or secure the Issuer’s Bond Obligations or any part
thereof, or in connection therewith, together with any and all Supplements
thereto.
     “Bond Fund” means the Bond Fund created in Section 5.1 of the Indenture.
     “Bond Payment Date” means any Interest Payment Date or any Sinking Fund
Installment Date and any other date on which the principal of, premium (if any)
on or interest on the Bonds is to be paid to the Owners thereof (whether at
maturity thereof, or by acceleration of maturity or after notice of redemption
or prepayment or otherwise).

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     “Bond Purchase Drawing” means a Bond Purchase Interest Drawing or a Bond
Purchase Principal Drawing.
     “Bond Purchase Interest Drawing” and “Bond Purchase Principal Drawing” each
has the meaning given to that term by the Letter of Credit.
     “Bonds” means the Issuer’s $23,000,000 Taxable Variable Rate Demand/Fixed
Rate Revenue Bonds (Human Genome Sciences, Inc. Facility), 1997 Issue, issued
pursuant to the Indenture.
     “Bonds Tendered or Deemed Tendered for Purchase” has the meaning given to
that term in the Letter of Credit.
     “Building” means the approximately 80,000-square-foot process development
and manufacturing plant located on the Land.
     “Business Day” or “business day” means a day on which (a) banks located in
any of the cities in which the Principal Office of the Trustee, the Bank, the
Paying Agent and the Remarketing Agent is located are not required or authorized
by law or executive order to close for business, and (b) The New York Stock
Exchange is not closed.
     “Collateral Pledge Agreement” means the Collateral Pledge Agreement of even
date herewith by and among the Lessee, as Pledgor, the Bank, as Pledgee, and
Manufacturers and Traders Trust Company, acting in its capacity as Collateral
Agent, together with any and all Supplements thereto.
     “Condemnation Award” has the meaning given to that term in the granting
clauses of the Deed of Trust.
     “Deed of Trust” means the Deed of Trust dated as of December 1, 1997,
between the Issuer and the Individual Trustees, together with any and all
Supplements thereto.
     “Downgrade” shall mean a withdrawal or a downgrading of one full grade from
the long term debt ratings of the Bank as of the date hereof.
     “Eligible Lease Payments” means all payments made by the Lessee under the
Facility Lease except (a) the amounts to be paid pursuant to the State Loan
Documents, (b) any common area maintenance fee or rent or similar charge under
the Facility Lease and (b) $3,125 per month.
     “Event of Default” and “Events of Default” shall have the meanings given to
such terms in Section 8.1 hereof.
     “Facility” means the Land and the Building.
     “Facility Lease” means the Lease Agreement dated as of December 1, 1997,
between the Issuer and the Lessee, pursuant to which the Issuer leases the
Facility to the Lessee, together with any and all Supplements thereto.

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     “Fixed Rate”, “Fixed Rate Date” and “Fixed Rate Period” each has the
meaning given to that term by the Indenture.
     “Government Acts” shall have the meaning given to such term in Section 7.2
hereof.
     “Improvements” has the meaning given to that term in the granting clauses
of the Deed of Trust.
     “Indenture” means the Trust Indenture dated as of December 1, 1997, between
the Issuer and the Trustee, together with any and all Supplements thereto.
     “Individual Trustees” means the individual trustees acting as trustees
under the Deed of Trust, or their successors in trust who may be acting under
and pursuant to the Deed of Trust from time to time.
     “Interest Drawing” has the meaning given to that term by the Letter of
Credit.
     “Interest Payment Date” has the meaning given to that term by the
Indenture.
     “Issuer” means Maryland Economic Development Corporation, a body politic
and corporate and a public instrumentality of the State, its successors and
assigns.
     “Issuer’s Bond Obligations” means the limited obligations of the Issuer
under the Bond Documents to (a) pay solely from the Trust Estate the principal
of, premium (if any) and interest on, and purchase price of, the Bonds as
required by Section 7.2 of the Indenture, when and as the same become due and
payable (whether at the stated maturity thereof, or by acceleration of maturity
or after notice of redemption or prepayment or otherwise), (b) pay from the
sources described in Section 4.4 of the Indenture the purchase price of Bonds
Tendered or Deemed Tendered for Purchase, (c) pay solely from Eligible Lease
Payments all other payments required by the Bond Documents to be paid by the
Issuer to the Trustee or to others, when and as the same shall become due and
payable, and (d) timely perform, observe and comply with all of the terms,
covenants, conditions, stipulations, and agreements, express or implied, which
the Issuer is required by the Bond Documents to perform or observe.
     “Issuer’s Letter of Credit Obligations” means the limited obligations of
the Issuer under the Letter of Credit Documents to pay all payments required by
the Letter of Credit Documents, when and as the same become due and payable, and
timely perform, observe and comply with all terms, covenants, conditions,
stipulations and agreements, express or implied, which the Issuer is required by
the Letter of Credit Documents to observe or perform. The “Issuer’s Letter of
Credit Obligations” constitute “Issuer’s Credit Facility Obligations” (as
defined in the Indenture).
     “Land” means the 10-acre (approximate) tract of land located in Montgomery
County, Maryland, and more particularly described in Exhibit A attached to the
Deed of Trust and made a part thereof, together with any and all improvements
thereon.
     “Lessee” means Human Genome Sciences, Inc., a Delaware corporation, its
successors and assigns.

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     “Letter of Credit” means the Irrevocable Transferable Letter of Credit
No. SB-901483-0101 issued by the Bank’s predecessor in interest, Allfirst, to
secure the Bonds and dated December 31, 1997. Any extension, amendment or
renewal of or substitution issued by the Bank for Letter of Credit
No. SB-901483-0101 shall, without any action on the part of the Issuer, the
Trustee or the Bank, be deemed an amendment to Exhibit A to the Letter of Credit
Agreement and shall be deemed a part of Letter of Credit No. SB-901483-0101 as
herein described.
     “Letter of Credit Agreement” means the Amended and Restated Letter of
Credit Agreement of even date herewith between the Issuer and the Bank, together
with any and all Supplements thereto.
     “Letter of Credit Documents” means the Letter of Credit, the Letter of
Credit Agreement, the Deed of Trust, the Pledge and Security Agreement, the
Pledged Bonds Custody Agreement, the Facility Lease, the Assignment of Leases,
the Swap Agreement, the Standstill Agreement, and any and all other documents
which the Issuer or any other party or parties or their representatives, have
executed and delivered, or may hereafter execute and deliver, to evidence or
secure the Issuer’s Letter of Credit Obligations, or any part thereof, or in
connection therewith, together with any and all Supplements thereto. The “Letter
of Credit Documents” constitute “Credit Facility Documents” (as defined in the
Indenture).
     “LIBOR Rate” means the fluctuating annual rate of interest which shall at
all times equal the interest rate which the Bank announces and declares from
time to time to be its one (1) month London Interbank Offered Rate, adjusted for
any Federal Reserve Board requirements imposed on the Bank from time to time.
All interest at the LIBOR Rate or computed thereon shall be calculated on the
basis of a 360 day-year factor applied to actual days elapsed and shall be
adjusted on any date on which a change occurs in the LIBOR Rate.
     “Mandatory Tender Date” and “Mandatory Tender Notice” each has the meaning
given to that term by the Indenture.
     “Outstanding”, “outstanding” or “Bonds Outstanding” has the meaning given
to that term by the Indenture.
     “Owner” or “Owners” or “Owner of Bonds” or “Owners of Bonds” means the
person or persons in whose name any Bond is registered on the books of the
Issuer maintained by the Registrar.
     “Paying Agent” means the Trustee, or any successor Paying Agent appointed
under the Indenture.
     “Penalty Rate” means the fluctuating rate per annum which is at all times
equal to the Reimbursement Rate plus 2% per annum.
     “Permitted Encumbrances” has the meaning given to that term by the Deed of
Trust.
     “Person” or “person” means any natural person, firm, association,
corporation, company, trust, partnership, public body or other entity.

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     “Placement and Remarketing Agreement” means (a) the Placement and
Remarketing Agreement dated as of December 1, 1997, by and between the
Remarketing Agent and the Issuer, together with any and all Supplements thereto,
and (b) any other Remarketing Agreement or similar agreement by and between the
Remarketing Agent and the Issuer, pursuant to which the Remarketing Agent agrees
to use its best efforts to remarket and sell Bonds Tendered or Deemed Tendered
for Purchase, together with any and all Supplements thereto.
     “Pledge and Security Agreement” means (a) the Pledge and Security Agreement
dated as of December 1, 1997, by and between the Issuer and the Bank, together
with any and all Supplements thereto, and (b) any other pledge and security
agreement or similar agreement between the Issuer and the Credit Facility
Provider pursuant to which Pledged Bonds are pledged as security for the
Issuer’s Credit Facility Obligations, together with any and all Supplements
thereto.
     “Pledged Bonds” means Bonds that, subsequent to a Bond Purchase Principal
Drawing, are delivered to and held by the Pledged Bonds Custodian as security
for the Issuer’s Letter of Credit Obligations and registered as directed by the
Bank.
     “Pledged Bonds Custodian” means Manufacturers and Traders Trust Company, as
agent for the Bank under the Pledged Bonds Custody Agreement, or any successor
custodian of the Pledged Bonds acting as the Bank’s agent.
     “Pledged Bonds Custody Agreement” means the Pledged Bonds Custody Agreement
dated as of December 1, 1997, by and between the Bank and the Pledged Bonds
Custodian, together with any and all Supplements thereto.
     “Principal Drawing” has the meaning given to that term by the Letter of
Credit.
     “Principal Office” means, with respect to the Trustee, the Registrar, the
Paying Agent, the Remarketing Agent, or the Bank, the office designated as such,
from time to time, by the respective party in writing to the Issuer, the
Trustee, the Paying Agent, the Registrar, the Remarketing Agent, and the Bank.
     “Property” means the Land, the Improvements, and all other items of
property included in the term “Property” as used and defined in the granting
clauses of the Deed of Trust.
     “Registrar” or “Bond Registrar” means the Trustee, or any successor
Registrar appointed under the Indenture.
     “Reimbursement Rate” means the fluctuating rate of interest which is at all
times equal to the LIBOR Rate plus 1% per annum.
     “Remarketing Agent” means Manufacturers and Traders Trust Company, or any
successor Remarketing Agent appointed under the Indenture.
     “Sinking Fund Installment” and “Sinking Fund Installment Date” each has the
meaning given to that term by the Indenture.

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     “Standstill Agreement” means the Amended and Restated Standstill and
Subordination Agreement of even date herewith among the Bank and the Maryland
Department of Business and Economic Development, together with any and all
Supplements thereto.
     “State” means the State of Maryland.
     “Supplement” or “Supplements” means any and all extensions, renewals,
modifications, amendments, supplements and substitutions.
     “Swap Agreement” means, collectively, any ISDA Master Agreement and
attached Schedules executed and delivered at any time and from time to time
whether before or on or after the date hereof by the Issuer and the Bank, and
any and all other documents relating to such Master Agreement, and any and all
replacements of or substitutions for such Master Agreement or such other
documents, as any such Master Agreement and other documents with attached
Schedules or any such replacement or substitution thereof may at any time or
from time to time be amended, restated, supplemented or otherwise modified.
     “Swap Obligations” means and includes all present and future indebtedness,
obligations and liabilities of the Issuer to the Bank of any nature whatsoever
under or in connection with the Swap Agreement, whether such indebtedness,
obligations and liabilities are direct or indirect, secured or unsecured, joint
or several, absolute or contingent, due or to become due, or now existing or
hereafter arising. The Swap Obligations constitute part of the Issuer’s Letter
of Credit Obligations.
     “Taxes” means all taxes, water rents, sewer rents, assessments and other
governmental or municipal or public or private dues, charges and levies and any
prior liens (including federal tax liens) for the Taxes which are or may be
levied, imposed or assessed upon the Property or any part thereof, or any leases
pertaining thereto, or upon the rents, issues, income or profits thereof,
whether any or all of the aforementioned be levied directly or indirectly or as
excise taxes or as income taxes.
     “Trust Estate” has the meaning given to that term by the Indenture.
     “Trustee” means Manufacturers and Traders Trust Company, a New York banking
corporation having its Principal Office in Baltimore, Maryland, and its
successor or successors in the trust created by the Indenture.
     “Variable Rate” has the meaning given to that term by the Indenture.
     “1999 Bond Documents” means the Bond Documents as defined in the 1999
Indenture, together with any and all Supplements thereto.
     “1999 Bonds” means, collectively, (a) the $4,375,000 Maryland Economic
Development Corporation Taxable Variable Rate Demand/Fixed Rate Revenue Bonds
(Human Genome Sciences, Inc. Facility), Series 1999 A and (b) the $13,125,000
Maryland Economic Development Corporation Taxable Variable Rate Demand/Fixed
Rate Revenue Bonds (Human Genome Sciences, Inc. Facility, Series 1999 B.

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     “1999 Indenture” means the Amended and Restated Trust Indenture of even
date herewith between the Issuer and the Trustee, together with any and all
Supplements.
     “1999 Letter of Credit Documents” means the Letter of Credit Documents as
defined in the 1999 Indenture, together with any and all Supplements thereto.
ACCOUNTING TERMS
     Unless specifically provided otherwise, all accounting terms have the
definitions given them in accordance with generally accepted accounting
principles as applied to the applicable person on a consistent basis by its
accountants in the preparation of its previous annual financial statements.
     Section 1.2 Rules of Construction. The words “hereof”, “herein”,
“hereunder”, “hereto”, and other words of similar import refer to this
Reimbursement Agreement in its entirety.
     The terms “agree” and “agreements” contained herein are intended to include
and mean “covenant” and “covenants”.
     References to Articles, Sections, and other subdivisions of this
Reimbursement Agreement are to the designated Articles, Sections, and other
subdivisions of this Reimbursement Agreement as originally executed.
     The headings of this Reimbursement Agreement are for convenience only and
shall not define or limit the provisions hereof.
     All references made (a) in the neuter, masculine or feminine gender shall
be deemed to have been made in all such genders, and (b) in the singular or
plural number shall be deemed to have been made, respectively, in the plural or
singular number as well.
ARTICLE II
EFFECTIVE DATE OF REIMBURSEMENT AGREEMENT;
DURATION OF TERM
     Section 2.1 Effective Date of Reimbursement Agreement; Duration of Term.
This Reimbursement Agreement shall become effective on the date hereof and shall
continue in full force and effect until (a) the Letter of Credit has expired as
therein provided, and (b) all of the Lessee’s obligations under this
Reimbursement Agreement have been fully performed and satisfied.
     In the event that an Act of Bankruptcy has occurred on or prior to the
satisfaction of the conditions specified in the immediately preceding paragraph,
then this Reimbursement Agreement shall continue in full force and effect, and
shall not expire, until (a) the Letter of Credit has expired in accordance with
its terms, (b) all of the Lessee’s obligations hereunder have been fully
performed and satisfied, and (c) either (i) a final order has been issued,
holding that the Bank is not required to return any funds it has received from
the Issuer or the Lessee, or

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(ii) all statutes of limitation for all causes of action under Chapter 5 of the
Bankruptcy Code have expired.
ARTICLE III
PAYMENT PROVISIONS
     Section 3.1 Reimbursement and Other Payments. In consideration for the
Bank’s agreement to extend the Letter of Credit, the Lessee hereby
unconditionally acknowledges and agrees, for the benefit of the Bank, to pay and
perform all of the Issuer’s Letter of Credit Obligations, including, without
limitation, the Issuer’s obligation to reimburse the Bank for all amounts drawn
under the Letter of Credit and all other amounts advanced or paid by the Bank,
plus all expenses, indemnities and other amounts payable to or for the benefit
of the Bank under the Letter of Credit Agreement, as and when the same shall
become due and payable, provided however, that all such obligations shall be
payable by the Lessee on a full recourse basis without regard to Section 14.15
of the Letter of Credit Agreement, and all of the obligations of the Lessee
under this Reimbursement Agreement, and such obligations of the Lessee shall
include, without limitation, the Lessee’s unconditional promise to pay to the
Bank:
          (a) immediately on demand by the Bank, a sum equal to (i) any amount
drawn under, or paid by the Bank in good faith under, the Letter of Credit
pursuant to a Bond Purchase Principal Drawing, plus (ii) interest on such amount
as provided in paragraph (j) below;
          (b) immediately and no later than 5:00 p.m. (without the necessity of
any demand by or notice from the Bank) on each date that the Bank pays any
amount drawn under, or paid by the Bank in good faith under, the Letter of
Credit pursuant to a Principal Drawing or an Interest Drawing or an Acceleration
Drawing, a sum equal to (i) such amount so drawn under, or paid by the Bank in
good faith under, the Letter of Credit pursuant to a Principal Drawing or an
Interest Drawing or an Acceleration Drawing, plus (ii) interest on such amount
as provided in paragraph (j) below;
          (c) immediately on demand by the Bank, any amount drawn under, or paid
by the Bank in good faith under, the Letter of Credit pursuant to a Bond
Purchase Interest Drawing, a sum equal to (i) such amount so drawn under, or
paid by the Bank in good faith under, the Letter of Credit pursuant to a Bond
Purchase Interest Drawing, plus (ii) interest on such amount as provided in
paragraph (j) below
          (d) immediately on demand by the Bank, a sum equal to (i) any and all
reasonable charges and expenses (excluding the Bank’s internal overhead) which
the Bank may pay or incur relative to the payment of any draft drawn under, or
paid by the Bank in good faith under, the Letter of Credit or in connection with
any amendment or extension of or substitution for or renewal of the Letter of
Credit, plus (ii) interest thereon as provided in paragraph (j) below;
          (e) immediately on demand by the Bank, a sum equal to (i) the amount
advanced or paid by the Bank pursuant to the provisions of Section 4.7 or
Section 14.9 of the Letter of Credit Agreement, plus (ii) interest on such
amount as provided in paragraph (j) below,

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plus (iii) any and all reasonable charges and expenses which the Bank may pay or
incur relative to such payment;
          (f) immediately (without the necessity of any demand by or notice from
the Bank) as and when due and payable, the Letter of Credit Fee and the
Negotiation Fee as set forth in Section 4.1 of the Letter of Credit Agreement
(including any additional amounts required by Section 5.4 of the Letter of
Credit Agreement), plus interest thereon as provided in paragraph (j) below;
          (g) immediately on demand by the Bank, any and all expenses incurred
by the Bank in enforcing any rights under the Letter of Credit Agreement or this
Reimbursement Agreement plus interest thereon as provided in paragraph
(j) below;
          (h) immediately on demand by the Bank, all other costs and expenses of
the Bank, as set forth in the Letter of Credit Agreement (including, without
limitation, all costs and expenses payable pursuant to Section 4.6 of the Letter
of Credit Agreement) plus interest thereon as provided in paragraph (j) below;
          (i) immediately on demand by the Bank upon any transfer of the Letter
of Credit, the transfer charge payable to the Bank pursuant to the Letter of
Credit ($750) plus interest thereon as provided in paragraph (j) below (a
“transfer” of the Letter of Credit means the designation of a new beneficiary
thereunder as a substitute Trustee under the Indenture); and
          (j) immediately on demand by the Bank, interest on any and all amounts
and sums payable by the Lessee under this Reimbursement Agreement at any time
(including, without limitation, any and all amounts or sums described or
referred to in paragraphs (a) through (i) above), such interest being payable
from the date such amounts and sums become due until the Bank actually receives
payment thereof in full, at the Reimbursement Rate. Interest on any amounts
advanced or paid by the Bank or any costs, charges and expenses incurred by the
Bank shall be due and payable from the date such amounts are advanced or costs
are incurred or paid by the Bank until the Bank actually receives payment
thereof in full at the Reimbursement Rate; provided, however, notwithstanding
the foregoing provisions of this paragraph, interest on the amounts due pursuant
to paragraphs (d), (f) and (h) shall not be due and payable until 15 days after
notice to the Lessee of the amounts due.
     The Bank and the Lessee contemplate that pursuant to the Indenture, the
amounts paid by the Bank under the Letter of Credit pursuant to a Principal
Drawing or an Interest Drawing or a Bond Purchase Interest Drawing, will, in the
ordinary course, be repaid directly to the Bank by the Trustee from certain
payments made to the Issuer by the Lessee pursuant to the Facility Lease, which
payments are to be deposited by the Trustee in the Bond Fund. The Lessee shall
not, however, be relieved of liability for repaying any such amounts (plus
interest thereon, at the Reimbursement Rate, from the date such amounts are paid
by the Bank under the Letter of Credit) to the Bank by reason of any action or
inaction on the part of the Trustee or any other person which results in a
failure by the Bank to actually receive such amounts from the Trustee pursuant
to the Indenture or results in any delay in the receipt by the Bank of such
amount from the Trustee pursuant to the Indenture.

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     All amounts paid by the Bank under the Letter of Credit shall bear interest
from the date such amounts are paid by the Bank until such time as such amounts
are actually repaid to the Bank.
     In connection with the foregoing, the Lessee acknowledges and agrees as
follows: (a) the Issuer shall apply any and all amounts which it receives in
respect to the principal of and interest on the Pledged Bonds to the repayment
of amounts from time to time owing to the Bank under the Letter of Credit
Agreement; and (b) notwithstanding any other terms and provisions of any of the
Letter of Credit Documents, the amounts set forth hereinabove shall be due and
payable in full by the Lessee at the time indicated, regardless of whether or
not the Bank (or the Pledged Bonds Custodian, for the account of the Bank) is
then holding any Pledged Bonds as a result of any Bond Purchase Principal
Drawing and regardless of whether or not the Bank (in its sole discretion) has
theretofore extended the time for payment of any amounts payable by the Lessee
hereunder.
     Notwithstanding anything to the contrary set forth in this Section,
following the date on which the Bank honors a Bond Purchase Principal Drawing,
the Bank will not make demand for the payment of the amounts payable under
paragraph (a) above in connection with such Bond Purchase Principal Drawing, so
long as (1) within 48 hours after the Bank honors such Bond Purchase Principal
Drawing (or such longer period of time not to exceed five Business Days if the
Trustee advises the Bank that the delay is caused by administrative
difficulties), the Pledged Bonds Custodian receives an aggregate principal
amount of Bonds equal to the amount of such Bond Purchase Principal Drawing,
registered by the Trustee in the Issuer’s name, as owner, and in the Bank’s
name, as pledgee, (2) the Bank actually receives all payments of the principal
of and interest on such Bonds, when due, (3) no Event of Default shall have
occurred and be continuing, and (4) the Letter of Credit shall not have expired.
On the date of the expiration of the Letter of Credit, all amounts payable under
paragraph (a) above in connection with such Bond Purchase Principal Drawing
which shall not have been repaid, together with all accrued and unpaid interest
thereon, shall become immediately due and payable, without the necessity of any
demand by or notice from the Bank; provided, however, if such Bond Purchase
Principal Drawing is the result of a Downgrade, all amounts payable in
connection with such Bond Purchase Principal Drawing which shall not have been
repaid, together with all accrued and unpaid interest thereon, shall become
immediately due and payable, without demand or notice from the Bank, on the day
which is 180 days following the date on which the Bank honors such Bond Purchase
Principal Drawing.
     Section 3.2 Payments due Upon Expiration of Letter of Credit. On the date
on which the Letter of Credit expires, all amounts described in Section 3.1
above, and all other amounts owed to the Bank hereunder, together with all
accrued and unpaid interest thereon, shall become immediately due and payable,
without the necessity of any demand or notice from the Bank.
     Section 3.3 Late Payments. In the event any payment required to be made by
the Lessee in accordance with the provisions of Section 3.1 or Section 3.2
hereof or in accordance with any other provision of this Reimbursement Agreement
is not paid within 15 days from the date on which the same is due and payable,
such payment in default shall continue as an obligation of the Lessee, and such
payment in default and the entire unpaid balance of all amounts owing hereunder
shall bear interest, from the date on which the payment was due until

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such payment in default is paid in full, at the fluctuating rate which is at all
times equal to the Penalty Rate. In addition, the Lessee shall pay (a) a late
charge in an amount equal to 2% of the amount of any payment which is made more
than 15 days after the date on which the same is due and payable (except for any
payment with respect to a Bond Purchase Principal Drawing), and (b) all costs of
collection, including reasonable attorneys’ fees, if this Reimbursement
Agreement is referred to an attorney for collection after default by the Issuer.
     Section 3.4 Increased Costs Due to Change in Law. If any change in any law,
regulation or official directive of any international, federal, state or local
governmental authority (whether or not having the force of law) or in the
interpretation thereof by any court or administrative agency or compliance by
the Bank with any lawful request, law, regulation or directive from any
applicable fiscal or monetary authority (whether or not having the force of law)
shall either:
          (a) impose, modify or render applicable any reserve, special deposit
or similar requirement against letters of credit issued by the Bank or require
the inclusion of such letters of credit in any analysis of minimum capital
requirements or capital adequacy; or
          (b) subject the Bank to any tax with respect to such letters of credit
or any amount payable under the Letter of Credit Agreement (other than a tax on
the overall net income of the Bank) imposed by the United States of America or
the State; or
          (c) impose on the Bank any other condition regarding the Letter of
Credit Agreement or the Letter of Credit, and the result of any such event shall
be:
          (i) to increase the cost to the Bank of issuing or maintaining the
Letter of Credit or any renewal thereof or of making, funding or maintaining the
whole or any part of any unpaid drawing under the Letter of Credit (which
increase in cost shall be determined by the Bank’s reasonable allocation of the
aggregate of such cost increases resulting from such events); or
          (ii) to reduce the amount of any sum received or receivable by the
Bank under the Letter of Credit Agreement or to require the Bank to make any
payment or forego any interest; or
          (iii) to reduce the rate of return on the Bank’s capital as a result
of issuing or maintaining the Letter of Credit and/or any renewals thereof
(which reduction shall be determined by the Bank taking into consideration the
Bank’s policies concerning capital adequacy),
then and in each such case, within five (5) days following the Lessee’s receipt
of demand therefor from the Bank, the Lessee shall pay to the Bank, from time to
time as specified by the Bank, additional amounts which shall be sufficient to
compensate the Bank for such increased cost, reduction, payment or foregone
interest, together with interest on each such amount from the date demanded
until payment in full thereof at the Reimbursement Rate. A certificate as to
each such increased cost, reduction, payment or foregone interest as a result of
any such event, submitted in good faith by the Bank to the Lessee, shall be
conclusive evidence of such

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additional amounts to be paid by the Lessee and the basis therefor, absent
manifest error as to the amount thereof.
     Section 3.5 Computation. All payments of interest and other charges under
this Reimbursement Agreement shall be computed on the basis of a 360-day year
factor applied to the actual number of days elapsed. The rate of interest shall
be adjusted on any day on which a change occurs in the LIBOR Rate.
     Section 3.6 Payment Procedure. All payments made by the Lessee under this
Reimbursement Agreement shall be made to the Bank in lawful money of the United
States of America at the time of payment and in immediately available funds at
the Bank’s offices at 25 South Charles Street, Baltimore, Maryland 21201, before
12:00 noon, prevailing Baltimore, Maryland time on the date when due.
     Section 3.7 Business Days. If the date for any payment hereunder is a day
which is not a Business Day, then for all purposes of this Reimbursement
Agreement the payment then due shall be made on the next following Business Day,
and such extension of time shall in each case be included in any computation of
payments of interest.
ARTICLE IV
UNCONDITIONAL OBLIGATIONS
     Section 4.1 Obligations Absolute. The obligations of the Lessee under this
Reimbursement Agreement shall be paid strictly in accordance with the terms of
this Reimbursement Agreement, under any and all circumstances whatsoever;
including, without limitation, the following circumstances: (a) any invalidity
or unenforceability of the Letter of Credit, the Letter of Credit Agreement or
any other agreement or instrument related thereto; (b) any amendment or waiver
of, or any consent to or departure from, the terms of the Letter of Credit, the
Letter of Credit Agreement or any other agreement or instrument related thereto;
(c) the existence of any claim, set-off, defense or other right which the Lessee
may have at any time against any beneficiary or any transferee of the Letter of
Credit (or any person for whom the Lessee, any such beneficiary or any such
transferee may be acting), the Bank or any other Person, whether in connection
with this Reimbursement Agreement or any unrelated transaction; (d) any
statement or any other document presented under the Letter of Credit proving to
be forged, fraudulent, invalid or insufficient in any respect, or any statement
therein being untrue or inaccurate in any respect whatsoever; (e) payment by the
Bank under the Letter of Credit against presentation of a sight draft or
certificate which substantially complies with the terms of the Letter of Credit;
(f) the surrender or impairment of any security for the performance or
observance of any of the agreements or terms of the Letter of Credit Agreement
or this Reimbursement Agreement; or (g) any other circumstance, happening or
omission whatsoever, whether or not similar to any of the foregoing. The Lessee
understands and agrees that no payment under any other agreement will release it
from liability hereunder unless the Bank has been indefeasibly paid in full.

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ARTICLE V
REPRESENTATIONS AND WARRANTIES
     Section 5.1 Representations, Warranties and Undertakings. The Lessee makes
the following representations and warranties to induce the Bank to enter into
this Reimbursement Agreement, to enter into the Letter of Credit Agreement and
to extend the Letter of Credit:
          (a) Authority. The Lessee is a corporation duly organized and validly
existing under the laws of the State of Delaware. The Lessee has the power to
enter into this Reimbursement Agreement and the transactions contemplated
hereunder and to carry out its obligations hereunder. By proper action, the
Lessee has duly authorized the execution and delivery of this Reimbursement
Agreement.
          (b) Binding Agreements. This Reimbursement Agreement and the Letter of
Credit Documents to which the Lessee is a party have been duly and properly
authorized, executed, sealed and delivered by the Lessee, constitutes valid and
legally binding obligations of the Lessee, and is fully enforceable against the
Lessee in accordance with their respective terms; provided, however, that the
enforceability and binding nature of this Reimbursement Agreement and the Letter
of Credit Documents to which the Lessee is a party are subject to bankruptcy,
insolvency, reorganization and other state and federal laws affecting the
enforcement of creditors’ rights generally, and, to the extent that certain
remedies under such instruments require, or may require, enforcement by a court
of equity, such principles of equity as the court having jurisdiction may
impose.
          (c) Litigation. There are no proceedings pending or, to the knowledge
of the Lessee, threatened in writing before any court or administrative agency
which may affect the authority of the Lessee to enter into this Reimbursement
Agreement or the Letter of Credit Documents to which the Lessee is a party.
          (d) No Conflicting Agreements, Laws, etc. The execution, delivery and
performance by the Lessee of this Reimbursement Agreement and the Letter of
Credit Documents to which the Lessee is a party, or any other document required
to be delivered hereby by the Lessee, do not constitute a violation or breach of
or a default under the Bylaws of the Lessee or any existing mortgage, indenture,
contract, instrument or agreement binding on the Lessee or affecting its
property, or any provision of law or order of any court binding upon the Lessee.
          (e) Liens or Security Interests. Except for liens being granted to the
Bank, there exist no liens or security interests on or with respect to the
Property (other than Permitted Encumbrances) or with respect to any security
provided by the Lessee to the Bank for the Lessee’s obligations under this
Reimbursement Agreement.
          (f) Full Disclosure. All information heretofore furnished by the
Lessee to the Bank in writing for purposes of or in connection with this
Reimbursement Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Lessee to

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the Bank will be, true and accurate in all material respects on the date as of
which such information is stated or certified.
ARTICLE VI
AFFIRMATIVE COVENANTS OF LESSEE
     Section 6.1 Affirmative Covenants of Lessee. Until the termination of this
Reimbursement Agreement, unless the prior written consent to do otherwise is
obtained from the Bank, the Lessee will:
          (a) Financial Statements. Furnish or cause to be furnished to the Bank
the following:
     (i) as soon as available but in no event more than forty-five (45) days
after filing with the Securities and Exchange Commission (the “SEC”), a copy of
the 10Q Report of the Lessee filed with the SEC accompanied by a certificate of
the chief financial officer of the Lessee stating whether any event has occurred
which constitutes an Event of Default, or which would constitute such an Event
of Default with the giving of notice or the lapse of time or both, and, if so,
stating the facts with respect thereto; and
     (ii) as soon as available but in no event more that one hundred twenty
(120) days after the close of each fiscal year of the Lessee, a copy of the 10K
Report of the Lessee filed with the SEC and a copy of the annual audited
financial statements relating to the Lessee prepared in accordance with GAAP,
which financial statements shall include a balance sheet of the Lessee as at the
end of such fiscal year and a statement of earnings and changes in stockholder’s
equity of the Lessee for such fiscal year; and
     (iii) promptly upon transmission thereof, copies of any financial
statements, proxy statements, reports and the like which the Lessee sends to its
shareholders and copies of all registration statements (with exhibits); and
     (iv) with reasonable promptness, such budgets, cash flow projections,
financial forecasts and other additional information, reports or statements as
the Bank may from time to time reasonably request concerning the Lessee, the
Property or any other matter related to the transactions that are the subject of
this Reimbursement Agreement.
          (b) Taxes and Claims. Pay and discharge or cause to be paid and
discharged all Taxes imposed upon the Property or any income derived therefrom
prior to the date on which penalties attach thereto, and all lawful claims
which, if unpaid, might become a lien or charge upon the property. The Lessee
shall have the right to contest the validity of any such tax, assessment,
charge, levy or claim, by timely and appropriate proceedings, provided that the
Lessee shall (a) give the Bank written notice of its intention to contest,
(b) diligently prosecute such contest, (c) at all times effectively stay or
prevent any official or judicial sale of the Property or any part thereof by
reason of nonpayment of any such taxes, and (d) establish reasonable reserves
for such liabilities being contested if the Bank reasonably determines such
reserves to be necessary.

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          (c) Compliance with Laws. Comply with all applicable federal, State
and local laws, rules and regulations, subject to the Lessee’s right to contest
the validity or applicability of any of the foregoing, at its sole cost and
expense, in good faith and by appropriate and diligent proceedings.
          (d) Books and Records. Maintain appropriate books and records with
respect to the Property and permit access by the Bank and its authorized
representatives and employees to the books and records of the Lessee at the
offices of the Lessee during normal business hours.
ARTICLE VII
INDEMNIFICATION
     Section 7.1 Indemnification of Bank. To the extent permitted by law, in
addition to all amounts payable hereunder, the Lessee shall protect, indemnify,
and save harmless the Bank and its officers, employees and agents against and
from any and all liabilities, suits, actions, claims, demands, losses, expenses
and costs of every kind and nature incurred by, or asserted or imposed against,
the Bank and its officers, employees or agents, by reason of (a) any accident,
injury (including death) or damage to any person or property, however caused
(other than the gross negligence or willful misconduct of the Bank), resulting
from, connected with or growing out of any act of commission or omission of the
Lessee, or any officers, employees, agents, assignees, contractors or
subcontractors of the Lessee or any use, non-use, possession, occupation,
condition, operation, service, design, construction, acquisition, maintenance or
management of, or on, or in connection with, the Property, or any part thereof;
(b) federal and state securities laws, including, without limitation, any
failure to register the Bonds, the Letter of Credit or any other “separate
security” under federal or state securities laws; (c) solely with respect to
information about the Lessee provided by the Lessee, any untrue statement of a
material fact or any omission to state a material fact necessary in order to
make any statements made, in light of the circumstances under which they were
made, not misleading in connection with the sale of the Bonds (other than as a
result of the gross negligence or willful misconduct of the Bank); and, in any
such case, regardless of whether such liabilities, suits, actions, claims,
demands, damages, losses, expenses and costs be against, or be suffered or
sustained by, the Bank or its officers, agents or employees, or be against, or
be suffered or sustained by, legal entities, officers, agents, or other persons
to whom the Bank or its officers, agents or employees, become liable therefor.
The Lessee may, and if so requested by the Bank shall, undertake to defend, at
its sole cost and expense, any and all suits, actions and proceedings brought
against the Bank or its officers, agents or employees in connection with any of
the matters indemnified against in this Section. The Bank agrees to give the
Lessee timely notice of and shall forward to the Lessee every demand, notice,
summons or other process received with respect to any claim or legal proceedings
within the purview hereof, but the failure of the Bank to give such notice shall
not affect its right to indemnification hereunder, unless such failure shall
have deprived the Lessee of a reasonable opportunity to contest any such claim
or legal proceeding.
     If the indemnification provided for herein is held by a court to be
unavailable or is insufficient to hold the Bank harmless in respect of any
losses, claims, damages or liabilities (or actions in respect thereof), then the
Lessee shall contribute to the amount paid or payable by the Bank as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
(except

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those caused by the gross negligence or willful misconduct of the Bank) in such
proportion as is appropriate to reflect the relative fault of the Lessee on the
one hand and the Bank on the other hand, as well as any other relevant equitable
considerations.
     Section 7.2 Indemnification Under Letter of Credit and Letter of Credit
Agreement. In addition to all amounts payable hereunder and to the extent
permitted by law, the Lessee hereby protects, indemnifies and holds harmless the
Bank from and against, and hereby agrees to defend the Bank against, any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which the
Bank may, at any time, sustain or incur by reason of or in consequence of or
arising out of the issuance of the Letter of Credit; it being the intention of
the parties that this Reimbursement Agreement shall be construed and applied to
protect and indemnify the Bank against any and all risks involved in the
issuance of the Letter of Credit all of which risks are hereby assumed by the
Lessee, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions, herein
called “Government Acts”). Notwithstanding anything to the contrary herein
contained, the Lessee shall have no obligation to indemnify the Bank from and
against any liability incurred by the Bank arising solely out of the gross
negligence or willful misconduct of the Bank. The Bank shall not, in any way, be
liable for any failure by the Bank or anyone else to pay any drawing under the
Letter of Credit as a result of any Government Acts or any other cause beyond
the control of the Bank. Nothing in this Section 7.2 is intended to limit the
Issuer’s reimbursement obligations contained in Article V hereof.
     The provisions of this Article shall survive the expiration of the Letter
of Credit and the termination of the Bond Documents and the Letter of Credit
Documents.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
     Section 8.1 Events of Default Defined. The following shall be “Events of
Default” under this Reimbursement Agreement, and the term “Event of Default”
shall mean, whenever it is used in this Reimbursement Agreement, any one or more
of the following events:
          (a) Any representation or warranty made herein or any statement or
representation made in any certificate, report or opinion (including legal
opinions), financial statement or other instrument furnished by the Lessee in
connection with this Reimbursement Agreement, the Letter of Credit or the Letter
of Credit Agreement, proves to have been incorrect, false or misleading in any
material respect when made; or
          (b) The Lessee fails to pay, on the date on which the same is due and
payable as herein provided, (i) any payment required by Article III hereof, or
(ii) any other payment whatsoever required by this Reimbursement Agreement to be
paid by the Lessee; and any such failure is not cured within 5 days after notice
from the Bank to the Lessee; or
          (c) The Lessee fails to duly and promptly perform, comply with or
observe any other term, covenant, condition or agreement contained in this
Reimbursement Agreement,

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which failure remains unremedied for 30 days after written notice thereof shall
have been given to the Lessee by the Bank; provided, however, if such failure be
such that it cannot be corrected within 30 days, it shall not be an Event of
Default if, in the reasonable opinion of the Bank, the Lessee is taking
appropriate corrective action to cure the failure and if such failure will not
impair the ability of the Lessee to pay or perform the Lessee’s obligations
under this Reimbursement Agreement; or
          (d) An Act of Bankruptcy occurs with respect to the Lessee or the
Lessee becomes generally unable to pay its debts as they become due; provided,
however, if a proceeding with respect to an Act of Bankruptcy is filed or
commenced against the Lessee, the same shall not constitute an Event of Default
if such proceeding is dismissed within 60 days from the date of such Act of
Bankruptcy; or
          (e) An “event of default” or “Event of Default” occurs under the
Collateral Pledge Agreement, any of the Bond Documents, any of the other Letter
of Credit Documents, any of the 1999 Bond Documents or any of the 1999 Letter of
Credit Documents; or
          (f) Any execution or attachment is levied against the Lessee’s
interest in the Property, or any part thereof, and such execution or attachment
is not set aside, discharged, bonded against, or stayed within 30 days after the
same is levied; or
          (g) Any change in any zoning ordinance or any other public restriction
is enacted, limiting or defining the uses which may be made of the Property or a
part thereof, such that the existing use of the Property, as specified in the
Letter of Credit Documents, would not be permitted after such restriction or
zoning change; or
          (h) The Lessee fails to comply with any requirement of any
governmental authority having jurisdiction over the Property within the time
required by such governmental authority; or any proceeding is commenced or
action taken to enforce any remedy for a violation of any requirement of a
governmental authority or any restrictive covenant affecting the Property or any
part thereof; provided, however, such failure shall not be an Event of Default
if the Lessee is diligently contesting such requirement in good faith; or
          (i) Any amendment to any of the Bond Documents or the Letter of Credit
Documents shall have been made without the prior written consent of the Bank; or
          (j) Notwithstanding the provisions of Section 9.5 hereof, if any
material provision of this Reimbursement Agreement at any time for any reason
ceases to be valid and binding on the Lessee, or is declared to be null and
void, or the validity or enforceability thereof is contested by the Lessee or
any governmental agency or authority, or the Lessee denies that it has any or
further liability or obligation under this Reimbursement Agreement or any of the
Bond Documents or the Letter of Credit Documents; or
          (k) Within 48 hours following a Bond Purchase Principal Drawing (or
such longer period of time, not to exceed five Business Days, if the Trustee
advises the Bank that the delay is caused by administrative difficulties), the
Trustee does not deliver, or cause to be delivered to the Pledged Bonds
Custodian an aggregate principal amount of Bonds equal to the

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amount of the Bond Purchase Principal Drawing, registered in the name of the
Bank, as pledgee; or
          (l) Any mechanics’ liens are established against the Property and are
not caused to be discharged or bonded against by the Lessee within 30 days after
it receives notice of the establishment thereof; or
          (m) The Facility Lease is terminated for any reason prior to the
expiration or termination of the Letter of Credit or the full payment and
performance of all of the Lessee’s obligations under this Reimbursement
Agreement; provided, however, such termination shall not constitute an Event of
Default if it is as a result of the Lessee’s exercise of its option to purchase
the Property pursuant to the Facility Lease; or
          (n) The Deed of Trust, after delivery thereof, except to the extent
permitted by the terms thereof, ceases to create a valid and perfected lien or
security interest, as appropriate, of the priority required thereby, on any of
the property purported to be covered thereby, or the Issuer or any other person
liable for the Issuer’s Letter of Credit Obligations so states in writing.
     Section 8.2 Remedies on Default. Whenever any Event of Default referred to
in Section 8.1 hereof occurs, the Bank may take any one or more of the following
remedial steps:
          (a) The Bank, at its option, may (i) demand that the Trustee exercise
its remedies under the Indenture and accelerate the maturity of the Bonds (in
which event the Trustee is required to immediately draw under the Letter of
Credit pursuant to Section 9.2(a) of the Indenture), and (ii) declare all
amounts payable under Article III hereof (including amounts payable as a result
of a drawing under the Letter of Credit as described in clause (i) above),
together with all other moneys payable hereunder, to be immediately due and
payable, whereupon the same shall become immediately due and payable, by written
notice to that effect given to the Lessee, without protest, presentment, or
further notice or demand, all of which are expressly waived by the Lessee. Upon
such declaration by the Bank, payment of all amounts due under Article III
hereof (including amounts payable as a result of a drawing under the Letter of
Credit as described in clause (i) above) shall be made immediately by the
Lessee, and the Lessee hereby promises to pay such amount immediately, to the
Bank. Upon payment in full of all of the Lessee’s obligations under this
Reimbursement Agreement, whether contingent or otherwise, but only upon the
expiration of this Reimbursement Agreement, any remaining surplus of such funds
held by the Bank as a result of payment pursuant to this Section 8.2(a) shall be
applied first to pay any unpaid Administration Expenses and any remainder shall
be returned to the Lessee, unless otherwise agreed by the Lessee and the Bank.
          (b) The Bank may take whatever action at law or in equity may appear
necessary or desirable to collect the payments and other amounts then due and
thereafter to become due or to enforce performance and observance of all of the
Lessee’s obligations under this Reimbursement Agreement.
          (c) The Bank, with or without resort to judicial process, may take
such steps as the Bank deems appropriate to protect the Property from
depredation or injury, including (without limitation) employment of watchmen or
other protective services, and any expenses

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incurred by the Bank in taking such steps shall be paid by the Lessee to the
Bank as provided in Section 9.9 hereof.
          (d) The Bank may proceed under the Maryland Uniform Commercial Code
(or under the Uniform Commercial Code of any other jurisdiction in which any
security for the Issuer’s Letter of Credit Obligations may be located from time
to time) as to all or any part of the security for the Issuer’s Letter of Credit
Obligations, and in conjunction therewith exercise all of the rights, remedies
and powers of a secured party under the Maryland Uniform Commercial Code (or
under the Uniform Commercial Code of any other jurisdiction in which any
security for the Issuer’s Letter of Credit Obligations may be located from time
to time), including, without limitation, taking possession of any security for
the Lessee’s obligations under this Reimbursement Agreement without judicial
process pursuant to Section 9-609 of the Maryland Uniform Commercial Code. Upon
the occurrence of any Event of Default hereunder, the Lessee shall assemble all
of the security for the Lessee’s obligations under this Reimbursement Agreement,
and make the same available to the Bank. Any notification required by
Section 9-611 of the Maryland Uniform Commercial Code shall be deemed reasonably
and properly given if mailed certified mail, return receipt requested, postage
prepaid, by the Bank to the Lessee at the address specified in Section 9.1
hereof at least 10 days before any sale or other disposition of the security for
the Lessee’s obligations under this Reimbursement Agreement, or any portion
thereof. Disposition of the security for the Lessee’s obligations under this
Reimbursement Agreement, or any portion thereof, shall be deemed commercially
reasonable if made pursuant to a public offering advertised at least twice in a
newspaper of general circulation in the community in which the Property is
located.
          (e) The Bank may exercise any and all remedies available to it under
the Collateral Pledge Agreement, any of the Bond Documents and any of the Letter
of Credit Documents.
     No action taken pursuant to this Section shall relieve the Lessee from any
of the Lessee’s obligations under this Reimbursement Agreement, all of which
shall survive any such action, and the Bank may take whatever action at law or
in equity as may appear necessary and desirable to collect the payments and
other amounts then due and thereafter to become due or to enforce the
performance and observance of the Lessee’s obligations under this Reimbursement
Agreement.
     Any amounts collected pursuant to action taken under this Section shall be
paid over to the Bank and applied to the Lessee’s obligations under this
Reimbursement Agreement.
     Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Bank is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Reimbursement Agreement, the
Collateral Pledge Agreement or any of the Letter of Credit Documents or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Bank to exercise any remedy reserved to it in
this Article, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required.

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     Section 8.4 Agreement to Pay Attorneys’ Fees and Expenses. In the event the
Lessee defaults under any of the provisions of this Reimbursement Agreement, and
the Bank employs attorneys or incurs other expenses for the collection of
amounts due hereunder or the enforcement of performance or observance of any
obligation or agreement on the part of the Lessee herein contained, the Lessee
agrees that it will on demand therefor pay to the Bank the fees of such
attorneys and such other expenses so incurred by the Bank.
     Section 8.5 Waiver of Event of Default; No Additional Waiver Implied by One
Waiver. The Bank in its sole discretion may waive an Event of Default, provided
that either (a) notice of the occurrence of an Event of Default has not yet been
given to the Trustee, or (b) following such Event of Default, a drawing under
the Letter of Credit is not required to be made by the Trustee in accordance
with Section 9.2 of the Indenture.
     In the event any agreement contained in this Reimbursement Agreement is
breached by the Lessee and thereafter waived (expressly or impliedly) by the
Bank, such waiver shall be limited to the particular breach so waived and shall
not be deemed to waive any other breach hereunder. Any forbearance (expressly or
impliedly) by the Bank to demand payment for any amounts payable hereunder shall
be limited to the particular payment for which the Bank forebears demand for
payment and will not be deemed a forbearance to demand any other amount payable
hereunder.
ARTICLE IX
MISCELLANEOUS
     Section 9.1 Notices. Except as otherwise provided in this Reimbursement
Agreement, all notices, demands, requests, consents, approvals, certificates or
other communications required under this Reimbursement Agreement to be in
writing shall be sufficiently given and shall be deemed to have been properly
given (i) if delivered by hand, when written confirmation of delivery is
received by the sender, (ii) three days after the same is mailed by certified
mail, postage prepaid, return receipt requested, or (iii) if sent by overnight
courier, 24 hours after delivery to such overnight courier, addressed to the
person to whom any such notice, demand, request, approval, certificate or other
communication is to be given, at the appropriate address for the Principal
Office of such person designated below:

     
Bank:
  Manufacturers and Traders Trust Company
 
  25 South Charles Street, 11th Floor
 
  Baltimore, Maryland 21201
 
  Attention: Letter of Credit Department
 
   
 
  and
 
   
 
  Manufacturers and Traders Trust Company
 
  1 Research Court, Suite 400
 
  Rockville, Maryland 20850
 
  Attention: Arthur L. Perraud

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  with a copy to:
 
   
 
  Nancy R. Little, Esquire
 
  McGuireWoods LLP
 
  One James Center
 
  901 East Cary Street
 
  Richmond, Virginia 23219
 
   
Lessee:
  Human Genome Sciences, Inc.
 
  14200 Shady Grove Road
 
  Rockville, Maryland 20850
 
  Attention: James H. Davis, Executive Vice President, General
 
  Counsel and Secretary

Any person listed above may, by notice given hereunder, designate any further or
different addresses to which subsequent communications shall be sent. During any
period in which the Registrar and the Paying Agent are the same and have the
same address, any notice required to be given to either the Registrar or the
Paying Agent, or both, may be given by one notice to the address for the
Registrar and Paying Agent set forth above.
     Section 9.2 [INTENTIONALLY OMITTED].
     Section 9.3 [INTENTIONALLY OMITTED].
     Section 9.4 Binding Effect. This Reimbursement Agreement shall inure to the
benefit of and shall be binding upon the Bank, the Lessee and their respective
successors and assigns.
     Section 9.5 Illegality; Severability. If fulfillment of any provision
hereof or any transaction related hereto or to the Letter of Credit Documents,
at the time performance of such provisions shall be due, shall involve
transcending the limit of validity prescribed by law, then ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such validity; and
if any clause or provisions herein contained, operates or would prospectively
operate to invalidate this Reimbursement Agreement in whole or in part, then
such clause or provision only shall be void, as though not herein contained, and
the remainder of this Reimbursement Agreement shall remain operative and in full
force and effect.
     Section 9.6 Assignment. None of the Letter of Credit Documents to which the
Lessee is a party may be assigned by the Lessee unless otherwise expressly
permitted by the terms thereof. The Bank may at any time sell or grant
participations to any other Person (a “participant”) in the Issuer’s Letter of
Credit Obligations and the Letter of Credit Documents; provided, however, except
as provided in the immediately following sentence, the Lessee shall continue to
deal solely and directly with the Bank in connection with the Bank’s rights and
remedies under this Reimbursement Agreement. The Lessee hereby authorizes the
Bank and each such participant, in case of an Event of Default hereunder, to
proceed directly, by right of setoff, banker’s lien or otherwise, against any
assets of the Lessee which may at the time of such default be in the hands of
the Bank or in the hands of such participant.

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     Section 9.7 Consent to Jurisdiction; Service of Process; Waiver of Jury
Trial.
          (a) The Lessee hereby agrees and consents that any action or
proceeding arising out of or brought to enforce the provisions of this
Reimbursement Agreement may be brought in any appropriate court in Montgomery
County, Maryland or Baltimore City, Maryland, all at the sole election of the
Bank, and by the execution of this Reimbursement Agreement the Lessee
irrevocably consents to the jurisdiction of each such court.
          (b) If for any reason the Lessee should become not qualified to do
business in the State, the Lessee hereby agrees to designate and appoint,
without power of revocation, an agent for service of process within the State,
as the agent for the Lessee upon whom may be served all process, pleadings,
notice or other papers which may be served upon the Lessee as a result of any of
the Lessee’s obligations under this Reimbursement Agreement.
          (c) The Lessee covenants that throughout the period during which any
of the Lessee’s obligations under this Reimbursement Agreement remain
outstanding, if a new agent for service of process within the State is
designated pursuant to the terms of subsection (b) of this Section, the Lessee
will immediately file with the Bank the name and address of such new agent and
the date on which such appointment is to become effective.
          (d) The Lessee and the Bank hereby jointly waive trial by jury in any
action or proceeding to which the Lessee and the Bank may be parties, arising
out of or in any way pertaining to this Reimbursement Agreement or any of the
Letter of Credit Documents. It is agreed and understood that this waiver
constitutes a waiver of trial by jury of all claims against all parties to such
actions or proceedings who are parties to the Letter of Credit Documents and the
Bond Documents.
     This waiver is knowingly, willingly and voluntarily made by the Lessee, and
the Lessee hereby represents that no representations of fact or opinion have
been made by any individual to induce this waiver of trial by jury or to in any
way modify or nullify its effect. The Lessee further represents that it has been
represented in the signing of this Reimbursement Agreement and in the making of
this waiver by independent legal counsel, selected of its own free will, and
that it has had the opportunity to discuss this waiver with counsel.
     Section 9.8 Further Assurances and Corrective Instruments. The Bank and the
Lessee agree that they will, from time to time, execute and deliver or cause to
be executed and delivered, such supplements hereto and such further instruments
as may reasonably be required for carrying out the intention of the parties to,
or facilitating the performance of, this Reimbursement Agreement.
     Section 9.9 Right to Perform; Advances by Bank. If the Lessee fails to make
or cause to be made any payment, or fails to perform, observe or comply with any
of the Lessee’s obligations under this Reimbursement Agreement, the Bank,
without notice to the Lessee and without waiving any default or releasing the
Lessee from any of the Lessee’s obligations under this Reimbursement Agreement,
and without being under any obligation to do so, may make such payment or
perform any of the Lessee’s obligations under this Reimbursement Agreement for
the account of the Lessee, and may enter upon the Property or any part thereof
for that

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purpose and take all such action thereon as the Bank may consider necessary or
appropriate for such purpose. All amounts so paid by the Bank and all costs,
fees and expenses incurred by the Bank in connection with such payment or
performance (including, without limitation, attorneys’ fees and expenses) shall
be immediately due and payable by the Lessee as additional payments, together
with interest thereon from the date the same are paid or incurred at the Penalty
Rate until the same are paid in full by the Lessee.
     Section 9.10 Amendments, Changes and Modifications. This Reimbursement
Agreement may not be amended, changed, modified, altered or terminated except by
a written instrument executed by the Bank and the Lessee.
     Section 9.11 Execution of Counterparts. This Reimbursement Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
     Section 9.12 Law Governing Construction of Agreement. This Reimbursement
Agreement is prepared and entered into with the intention that the law of the
State shall govern its construction.
     Section 9.13 Effective Date. This Reimbursement Agreement has been dated as
of the date above written solely for the purpose of convenience of reference and
shall become effective upon its execution and delivery, on the date hereof, by
the parties hereto. All representations and warranties set forth herein shall be
deemed to have been made on the date hereof.
     Section 9.14 Conflicting Agreements. In the event of any conflict between
the provisions of the Letter of Credit Documents and this Reimbursement
Agreement regarding the payment and performance obligations of the Lessee, the
provisions of this Reimbursement Agreement shall control as between the Bank and
the Lessee.
     Section 9.15 Set-off. In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such rights, during the
continuance of any Event of Default hereunder, the Bank is hereby authorized at
any time and from time to time, without notice to the Lessee or to any other
person or entity, any such notice being hereby expressly waived, to set-off and
to appropriate and apply any and all deposits and any other indebtedness at any
time held or owing by the Bank to or for the credit or the account of the Lessee
against and on account of the obligations and liabilities of the Lessee to the
Bank under this Reimbursement Agreement, irrespective of whether or not the Bank
shall have made any demand hereunder.
[SIGNATURES APPEAR ON FOLLOWING PAGE]

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     IN WITNESS WHEREOF, the Lessee has caused this Reimbursement Agreement to
be executed under seal in its name and on its behalf by its duly authorized
officer; and the Bank has caused this Reimbursement Agreement to be executed
under seal by its duly authorized officer, all being done as of the day and year
first above written.

            WITNESS:   HUMAN GENOME SCIENCES, INC., as Lessee
        By:   /s/ H. Thomas Watkins (SEAL)       Name:   H. Thomas Watkins      
    Title:   President and Chief Executive Officer         WITNESS:  
MANUFACTURERS AND TRADERS TRUST
COMPANY, as Bank
        By:   /s/ Arthur L. Perraud (SEAL)       Name:   Arthur L. Perraud      
    Title:   Vice President        

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