**Exhibit 10.65**
**FIRST MODIFICATIONAGREEMENT**
     THIS FIRST MODIFICATION AGREEMENT (“AGREEMENT”) is made to be effective asof April 30, 2004, by and between MANUFACTURERS AND TRADERS TRUST COMPANY, asAdministrative Agent (“ADMINISTRATIVE AGENT”); MANUFACTURERS AND TRADERS TRUSTCOMPANY (“M&T”), BANK OF AMERICA, N.A. (“BANK OF AMERICA”), SUNTRUST BANK(“SUNTRUST”), COMERICA BANK (“COMERICA”), FIFTH THIRD BANK (“FIFTH THIRD”), andCHEVY CHASE BANK (“CHEVY CHASE”); MARTEK BIOSCIENCES CORPORATION, a Delawarecorporation (“BORROWER”); MARTEK BIOSCIENCES BOULDER CORPORATION (“MARTEKBOULDER”), a Delaware corporation; and MARTEK BIOSCIENCES KINGSTREE CORPORATION(“MARTEK KINGSTREE”), a Delaware corporation. Hereafter, M&T, BANK OF AMERICA,SUNTRUST, COMERICA, FIFTH THIRD, and CHEVY CHASE are collectively referred toas the “LENDERS”; MARTEK BOULDER and MARTEK KINGSTREE are collectively referredto as the “GUARANTORS”; the BORROWER and the GUARANTORS are collectivelyreferred to as the “OBLIGORS”; and the ADMINISTRATIVE AGENT, the LENDERS, andthe OBLIGORS are collectively referred to as the “PARTIES.”
**RECITALS**
     The BORROWER is party to a Loan And Security Agreement dated January 26,2004 (“LOAN AGREEMENT”) with the ADMINISTRATIVE AGENT and the LENDERS.Hereafter, all defined terms in the LOAN AGREEMENT shall have the samedefinitions and meanings in this AGREEMENT. All defined terms used in thisAGREEMENT shall be set forth in all capital letters.
     The BORROWER has requested that the LENDERS agree to certain modificationsto the terms of the LOANS and of the CREDIT DOCUMENTS. All of the PARTIES haveconsented to the requested modifications and have entered into this AGREEMENTto accomplish the required modifications.
     NOW, THEREFORE, in consideration of the premises, and other good andvaluable consideration, the receipt and adequacy of which are herebyacknowledged, the parties hereby agree as follows:
**AGREEMENT**
     Section 1.Acknowledgment Of Obligations. The OBLIGORS acknowledge that:(a) each of the CREDIT DOCUMENTS is the valid and binding obligation of each ofthe OBLIGORS that is a signatory thereto; (b) the CREDIT DOCUMENTS areenforceable in accordance with all stated terms; and (c) the OBLIGORS have nodefenses, claims of offset, or counterclaims against the enforcement of theCREDIT DOCUMENTS in accordance with all stated terms.
     Section 2. Amendment and Modification of Loan Agreement. The LOANAGREEMENT is hereby amended and modified as follows:
          Section 2.1 Increases In Commitment Amounts. The amounts set forthopposite each LENDER’S name on the signature pages of the LOAN AGREEMENTunder the caption “Commitment Amount” shall be modified and increased tothe following COMMITMENT AMOUNTS:     M&T $26,500,000.00 BANK OF AMERICA $23,500,000.00 SUNTRUST BANK $17,600,000.00 COMERICA BANK $11,800,000.00 FIFTH THIRD BANK $11,800,000.00 CHEVY CHASE BANK $8,800,000.00 
 

 

          Section 2.2 Fixed Charge Coverage Ratio. Section 1.42 of the LOANAGREEMENT shall be modified such that the present references to“aggregate cash balances” shall be “aggregate values of PERMITTEDINVESTMENTS.”
          Section 2.3 Increase In Maximum Aggregate Loan Amount. Section 1.73of the LOAN AGREEMENT shall be modified such that the reference to“Eighty-Five Million Dollars ($85,000,000.00)” shall be as of April 30,2004 “One Hundred Million Dollars ($100,000,000.00).”
          Section 2.4 Definition of Fixed Charge Coverage Ratio. Thereference to CAPITAL EXPENDITURES in Section 1.42(a) of the LOANAGREEMENT shall be deleted for the time period beginning on April 30,2004 and ending on October 31, 2004, and shall thereafter be reinstatedin Section 1.42 effective as of November 1, 2004. Beginning for theperiod beginning on November 1, 2004 and continuing thereafter, CAPITALEXPENDITURES shall be measured for purposes of Section 1.42(a) on acumulative basis beginning on November 1, 2004 until October 31, 2005,and thereafter for the immediately preceding four (4) FISCAL QUARTERS.
          Section 2.5 Interest Periods. Section 2.2.2(d) of the LOANAGREEMENT shall be modified such that the current reference to “five (5)”shall be “seven (7).”
          Section 2.6 Increase in Fixed Charge Coverage Ratio. Section 5.14of the LOAN AGREEMENT shall be modified such that the current referenceto “1.2 to 1.0” shall be as of April 30, 2004 and continuing thereafter“2.5 to 1.0.”
          Section 2.7 Leverage Ratio. For the period beginning on April 30,2004 and ending on January 31, 2005, the definition of LEVERAGE RATIO inSection 1.65 of the LOAN AGREEMENT shall be modified to be the ratio of“FUNDED INDEBTEDNESS minus the aggregate value of the PERMITTEDINVESTMENTS of the BORROWER and its SUBSIDIARIES on a consolidated basis(as existing on the last day of such FISCAL QUARTER) to EBITDA.”Beginning on February 1, 2005 and continuing thereafter, the definitionof LEVERAGE RATIO shall be reinstated as originally defined in the LOANAGREEMENT.
          Section 2.6 Capital Expenditure Limitations. The following Section6.14 shall be added to the LOAN AGREEMENT:
               Section 6.14 2004 Capital Expenditures. The BORROWERand its SUBSIDIARIES shall not make CAPITAL EXPENDITURESduring the 2004 FISCAL YEAR in excess of an aggregate amountof Two Hundred Million Dollars ($200,000,000.00).
     Section 3. Amendment And Modification Of Notes. Each of the NOTES shallbe amended and restated in its entirety as of May 1, 2004 in order to reflectthe revised and increased COMMITMENT AMOUNTS of the LENDERS, as reflected inExhibits 3-1 through 3-6 attached hereto.
     Section 4. Obligors’ Representations And Warranties. As an inducement tothe SECURED PARTIES to enter into this AGREEMENT, each of the OBLIGORS makesthe following representations and warranties to the SECURED PARTIES andacknowledges the justifiable reliance of the SECURED PARTIES thereon:
          A. Authority And Good Standing. The BORROWER: (a) has the power toenter into this AGREEMENT and any related documents and to perform all ofits obligations hereunder and thereunder; (b) has duly authorized theentry into and performance of this AGREEMENT and all related documents;and (c) is in good standing in the state of its organization and isqualified to do business and is in good standing in all other states inwhich the BORROWER transacts business and in which the failure to qualifycould reasonably be expected to be or result in a MATERIAL ADVERSE EVENT.
          B. Violations. The execution, delivery, and performance of thisAGREEMENT by the BORROWER will not immediately, or with the passage oftime, the giving of notice, or both: (a) violate any LAWS or result in adefault under any contract, agreement, or instrument to which theBORROWER is a party
2

 

or by which the BORROWER or any properties of the BORROWER arebound; or (b) result in the creation or imposition of any securityinterest in, or lien or encumbrance upon, any of the assets of theBORROWER, except in favor of the SECURED PARTIES.
          C. Liens. The SECURED PARTIES hold first lien priority perfectedliens and security interests in and to the assets of the BORROWER asrequired by the terms and conditions of the CREDIT DOCUMENTS, which liensshall survive intact the transactions contemplated by this AGREEMENT inthe same lien priority existing prior to this AGREEMENT.
          D. Enforceability. This AGREEMENT and all of the CREDIT DOCUMENTS,as modified and amended in accordance herewith, are the valid and bindingobligations of the OBLIGORS, as indicated, and are fully enforceable inaccordance with all stated terms.
     Section 5. Guaranty Agreements. The GUARANTORS hereby ratify and reaffirmthe terms and conditions of the GUARANTY AGREEMENTS and acknowledge that theGUARANTY AGREEMENTS will continue to be fully enforceable against theGUARANTORS in accordance with all stated terms after the execution and deliveryof this AGREEMENT and the consummation of the transactions contemplated herein.
     Section 6. Fees. On or before May 14, 2004, the BORROWER shall pay to theADMINISTRATIVE AGENT for the prorata benefit of the LENDERS an amendment feein the amount of Eighty-Five Thousand Dollars ($85,000.00), and an “UpfrontFee” of Fifty-Six Thousand Two Hundred Fifty Dollars ($56,250.00), which feesshall be deemed to have been fully earned upon the execution and delivery ofthis AGREEMENT by the LENDERS.
     Section 7. No Other Modifications Of Credit Documents. The PARTIESacknowledge that except as specifically stated in this AGREEMENT, the CREDITDOCUMENTS shall not be deemed to have been amended, modified or changed in anyrespect, and shall continue to be enforceable against the parties thereto inaccordance with all stated terms. Nothing contained herein is intended tolimit, vary, or terminate any liens, pledges, or security interests presentlyexisting for the benefit of the SECURED PARTIES or to alter the lien prioritythereof. Each OBLIGOR reaffirms and ratifies all of such liens, pledges,security interests or mortgage liens previously granted for the benefit of theSECURED PARTIES.
     Section 8. Further Assurances. The OBLIGORS each agree to execute anddeliver to the ADMINISTRATIVE AGENT such other and further documents as may,from time to time, be reasonably requested by the ADMINISTRATIVE AGENT in orderto execute or enforce the terms and conditions of this AGREEMENT or any of theCREDIT DOCUMENTS.
     Section 9. No Novation; No Refinance. It is the intent of each of thePARTIES that nothing contained in this AGREEMENT shall be deemed to effect oraccomplish or otherwise constitute a novation of any of the obligations owed byany of the OBLIGORS to the LENDERS or to be a refinance of any of the LOANS.Nothing contained herein shall be deemed to extinguish, terminate or impair anyof the duties or obligations owed by the OBLIGORS to the LENDERS with respectto any of the LOANS, the CREDIT DOCUMENTS or the GUARANTY AGREEMENTS.
     Section 10. Enforceability. This AGREEMENT shall inure to the benefit ofand be enforceable against each of the PARTIES and their respective successorsand assigns.
     Section 11. Choice Of Law; Consent To Jurisdiction; Agreement As To Venue.This AGREEMENT shall be construed, performed and enforced and its validity andenforceability determined in accordance with the LAWS of the State of Maryland(excluding, however, conflict of laws principles). Each of the PARTIESconsents to the jurisdiction of the courts of the State of Maryland and thejurisdiction of the United States District Court for the District of Maryland,if a basis for federal jurisdiction exists. Each of the PARTIES waives anyright to object to the maintenance of a suit in any of the state or federalcourts of the State of Maryland on the basis of improper venue or inconvenienceof forum.
     Section 12. Expenses. The BORROWER agrees to reimburse the ADMINISTRATIVEAGENT upon demand for the costs and expenses incurred by the ADMINISTRATIVEAGENT in connection with the preparation of this AGREEMENT, includingreasonable attorneys’ fees.
3

 

     Section 13. Counterparts And Delivery. This AGREEMENT may be executed anddelivered in counterparts, and shall be fully enforceable against eachsignatory, even if all designated signatories do not actually execute thisAGREEMENT. This AGREEMENT, and the signatures to this AGREEMENT, may bedelivered via facsimile.
     IN WITNESS WHEREOF, the parties have executed this AGREEMENT with thespecific intention of creating a document under seal to be effective as of thedate first above written.       WITNESS/ATTEST: **BORROWER**:         **MARTEK BIOSCIENCES CORPORATION,**  A Delaware Corporation        By: /s/ Peter L. Buzy (SEAL)          Peter L. Buzy,     Chief Financial Officer           **GUARANTORS:**         MARTEK BIOSCIENCES BOULDER CORPORATION        By: /s/ Peter L. Buzy (SEAL)          Peter L. Buzy,     Chief Financial Officer and Treasurer           MARTEK BIOSCIENCES KINGSTREE CORPORATION        By: /s/ Peter L. Buzy (SEAL)          Peter L. Buzy,     Chief Financial Officer and Treasurer  
[Signatures Continued On The Following Page]
4

 

**Signature Page to First Modification Agreement – Continued:**         **WITNESS/ATTEST:** **AGENT:**           MANUFACTURERS AND TRADERS TRUST COMPANY,  AS ADMINISTRATIVE AGENT          By:    /s/ Robert F. Topper (SEAL)          Name:  Robert F. Topper             Title:  Vice President                     **LENDERS:**           MANUFACTURERS AND TRADERS TRUST COMPANY          By:    /s/ Robert F. Topper (SEAL)          Name:  Robert F. Topper             Title:  Vice President          
[Signatures Continued On The Following Page]
5

 

**Signature Page to First Modification Agreement – Continued:**           **LENDERS :**         **WITNESS/ATTEST:** BANK OF AMERICA, N.A.          By:    /s/ Michael J. Radcliffe (SEAL)          Name:  Michael J. Radcliffe             Title:  Senior Vice President          
[Signatures Continued On The Following Page]
6

 

**Signature Page to First Modification Agreement – Continued:**           **LENDERS :**         **WITNESS/ATTEST:** SUNTRUST BANK          By:    /s/ J. MacGregor Tisdale (SEAL)          Name:  J. MacGregor Tisdale             Title:  Vice President          
[Signatures Continued On The Following Page]
7

 

**Signature Page to First Modification Agreement – Continued:**           **LENDERS :**         **WITNESS/ATTEST:** COMERICA BANK          By:    /s/ Richard S. Bugosy (SEAL)          Name:  Richard S. Bugosy             Title:  Vice President          
[Signatures Continued On The Following Page]
8

 

**Signature Page to First Modification Agreement – Continued:**           **LENDERS :**         **WITNESS/ATTEST:** FIFTH THIRD BANK          By:    /s/ David C. Melin (SEAL)          Name:  David C. Melin             Title:  Vice President          
[Signatures Continued On The Following Page]
9

 

**Signature Page to First Modification Agreement – Continued:**           **LENDERS :**         **WITNESS/ATTEST:** CHEVY CHASE BANK          By:    /s/ William J. Olsen (SEAL)          Name:  William J. Olsen             Title:  Group Vice President          
10