Document:

LOAN AGREEMENT

 

THIS LOAN AGREEMENT (“Agreement”), made and entered into as of the 10th day of December, 2010, by and between the WEST VIRGINIA WATER DEVELOPMENT AUTHORITY, a governmental instrumentality and body corporate of the State of West Virginia (the “Authority”), acting by and on behalf of the WEST VIRGINIA INFRASTRUCTURE AND JOBS DEVELOPMENT COUNCIL (the “Council”; the Authority and Council are hereinafter collectively referred to as the “Lender”), and PROTEA BIOSCIENCES, INC., a Delaware corporation (“Borrower”).

 

WITNESSETH:

 

WHEREAS, Borrower desires to obtain permanent financing for the acquisition of that certain equipment more particularly described on Exhibit A attached hereto (collectively, the “Equipment”), which Equipment is used in Borrower’s pharmaceutical and biomedical research facilities located in Morgantown, West Virginia; and

 

WHEREAS, use of the Equipment will assist Borrower in expanding its operations and increasing the number of individuals that it employs in the State of West Virginia; and

 

WHEREAS, the total cost of the Equipment is $2,095,496.72, of which Borrower has contributed the sum of $295,496.72 to the acquisition thereof and has paid for the balance of the acquisition cost with the proceeds of a loan from the West Virginia Economic Development Authority (“WVEDA”) in the principal amount of $900,000 (the “WVEDA Loan”); and

 

WHEREAS, Borrower has submitted an application to the Council for a term loan (the “Loan”) of not more than $900,000 as permanent financing for a portion of the cost of purchasing the Equipment and said application has been approved by the Council, upon certain terms and conditions as set forth in the Council’s loan commitment letter dated August 17, 2010 (the “Commitment Letter”); and

 

WHEREAS, as collateral for the Loan, Borrower will grant to the Lender a first-priority security interest in the Equipment, the priority of which security interest shall be shared with WVEDA on a pro rata basis in accordance with the terms of that certain Intercreditor Agreement of even date herewith (the “Intercreditor Agreement”) among Lender, WVEDA and Borrower; and

 

WHEREAS, Borrower has represented to the Lender that all of the Loan proceeds shall immediately be applied toward the costs incurred in connection with the acquisition of the Equipment as outlined in the Loan application submitted by Borrower to the Lender.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree to as follows:

 

{C1859844.1}

  

 

  

 

1.        Financing.

 

(a)           Subject to the terms and conditions hereof, the Lender hereby agrees to loan to Borrower the sum of $900,000 for a term extending from the date hereof until December 3, 2020. The Loan shall be repaid in accordance with the debt service schedule set forth on Schedule I attached hereto.

 

(b)           The principal balances on the Loan shall bear interest at a rate of 3.25% per annum.

 

(c)           The Loan may be prepaid, in whole or in part, at any time without penalty of any kind. Partial prepayments shall be applied to installments due in inverse order of maturity. The Borrower shall make payments of principal directly to United Bank, Inc., as trustee for the Lender in accordance with the payment instructions set forth on Schedule Z attached hereto and incorporated herein by reference.

 

(d)           For purposes of this Agreement and all documents referred to herein, the term “Closing” shall mean the date on which this Agreement and all other documents which are required to be executed and delivered by the Borrower and the Lender, as the case may be, pursuant to the terms of Section 3 hereof are executed and delivered by such parties.

 

(e)           The Loan shall be evidenced by a single Promissory Note (the “Note”) of the Borrower which shall be executed and delivered to the Lender at the Closing.

 

(f)            Borrower agrees that the Loan shall be due in full and that Borrower shall immediately pay the Loan in full upon the sale, lease or other transfer of all or any portion of the Equipment in any manner whatsoever by the Borrower to any person, firm, corporation or other entity without the prior written consent of the Lender.

 

(g)           The Loan shall be for permanent financing only. The Loan will be closed and disbursed only upon (i) Borrower’s acquisition of the Equipment, and (ii) the satisfaction of all other terms and conditions contained herein. The obligations of the Borrower with respect to the Loan may not be assigned to any party without the Lender’s prior written consent, which may be withheld in the Lender’s sole discretion.

 

(h)           The total proceeds of the Loan shall be used solely for an “Infrastructure Project” as defined by the West Virginia Infrastructure and Jobs Development Act, and the total proceeds shall be applied in those amounts and only for those purposes as set out in the Loan application submitted to the Lender by Borrower for acquisition of the Equipment.

 

(i)            Borrower shall refer to the Loan in any press release, publication, program, bulletin, sign or other public communication made by Borrower that references the Equipment.

 

{C1859844.1}

  

2

  

 

2.        Security. As security for the Loan, Borrower shall convey to the Lender a first-priority security interest in the Equipment pursuant to the terms of a Security Agreement (the “Security Agreement”) and subject to the terms of the Intercreditor Agreement.

 

3.        Conditions Precedent to Financing. The obligation of the Lender to disburse the Loan proceeds is subject to the following conditions precedent:

 

(a)           Borrower shall have delivered to the Lender (i) a certified copy of the Articles of Incorporation of Borrower, certified by the Delaware Secretary of State, together with a Good Standing Certificate issued by the Delaware Secretary of State; (ii) a Certificate of Authority issued by the West Virginia Secretary of State with respect to Borrower; and (iii) a copy of the Borrower’s Bylaws, certified by the Secretary of the Borrower.

 

(b)           Borrower shall have delivered to the Lender resolutions approving the execution, delivery and performance of this Agreement and all transactions and documentation contemplated herein, duly adopted by the Board of Directors of Borrower, together with a certificate of the Secretary of Borrower stating that such resolutions are true and correct, have not been altered or repealed, and are in full force and effect as of the date hereof.

 

(c)           Borrower shall have executed and delivered this Agreement, the Note, the Security Agreement, and all other documents required to be executed and delivered by the Borrower pursuant to the terms hereof (collectively, the “Loan Documents”), and a Uniform Commercial Code financing statement shall have been filed in the office of the Delaware Secretary of State perfecting the security interest granted under the Security Agreement, and Lender shall have received evidence that no other financing statements are of record covering the Equipment other than the financing statement naming WVEDA as secured party.

 

(d)           Borrower shall have delivered to the Lender an opinion of Borrower’s counsel which addresses such matters as may be requested by the Authority with respect to the Loan, including, but not limited to, (i) an opinion that each of the Loan Documents has been duly authorized and constitutes a valid, enforceable and legally binding obligation of Borrower, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other statutes in effect from time to time affecting the rights of creditors generally and except to the extent that the enforceability thereof may be limited by the application of general principles of equity, and (ii) to such counsel’s knowledge, no suit, claim or proceeding is pending or threatened against or involving Borrower.

 

(e)           Borrower shall have delivered to the Lender, or caused to be delivered to the Lender, copies of the insurance policies which evidence that the insurance policies required by this Agreement and any of the other Loan Documents have been obtained and are in full force and effect as of Closing, in each case in a form acceptable to the Lender. Borrower shall provide the Lender with copies of said insurance policies annually thereafter.

 

{C1859844.1}

  

3

  

 

(f)            Lender shall have received a fully executed copy of the Intercreditor Agreement.

 

(g)           Borrower shall deliver to Lender copies of all invoices and bills of sale evidencing Borrower’s purchase of the Equipment described on Exhibit A, and that Borrower holds good and marketable title thereto.

 

(h)           Borrower shall have delivered to the Lender, or cause to be delivered to the Lender, evidence that Borrower has workers’ compensation coverage with respect to its West Virginia employees, and is in good standing under West Virginia’s unemployment compensation laws with respect to its West Virginia employees.

 

(i)            Borrower shall have delivered to Lender copies of the documents evidencing the WVEDA Loan (the “WVEDA Loan Documents”).

 

(j)            Borrower and WVEDA shall have executed and delivered the Intercreditor Agreement.

 

(k)           Borrower shall deliver, or cause to be delivered, such other documents as requested by Lender.

 

4.            Representations and Warranties. Borrower hereby represents and warrants to the Lender as follows:

 

(a)           Borrower is a duly organized and validly existing corporation in good standing under Delaware law, and is duly qualified to conduct business as a foreign corporation under West Virginia law, and has all requisite corporate power and authority to own its assets and carry on its business as currently conducted and as proposed to be conducted.

 

(b)           The execution, delivery and performance of this Agreement and all other documents and writings referred to herein are all within Borrower’s corporate powers, have been duly authorized by Borrower and are not in contravention of applicable law, Borrower’s Articles of Incorporation or Bylaws or any other organizational documents of Borrower (collectively, the “Organizational Documents”), or of any indenture, agreement or undertaking to which Borrower is a party or by which it or any of its properties is bound.

 

(c)           Each Loan Document to which Borrower is a party has been duly and validly executed and delivered by Borrower and constitutes a legal, valid and binding obligation of Borrower, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors’ rights.

 

{C1859844.1}

  

4

  

 

(d)           All information at any time furnished to the Council and the Lender by Borrower concerning Borrower’s financial condition or otherwise, for the purpose of obtaining the Loan has been prepared on a basis consistent with that of prior financial periods, is true and correct and fairly discloses the financial condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to the Lender. Borrower has no liabilities contingent or otherwise involving material amounts except as disclosed in such financial statements.

 

(e)           Neither the execution and delivery of this Agreement or any of the other Loan Documents, nor consummation of the transactions contemplated hereby and thereby, nor compliance with the terms, conditions and provisions thereof, will conflict with or result in a breach of any of the terms, conditions or provisions of Borrower’s Organizational Documents, or of any applicable law, regulation, order, writ, injunction or decree of any court, governmental instrumentality or agency or any agreement or instrument to which Borrower is a party or by which it or any of its properties is subject or bound, or result in the creation or imposition of any lien, charge, security interest or encumbrance of any nature whatsoever upon any of its property.

 

(f)            No action, litigation, suit, arbitration or claim, including those for unpaid indebtedness, is pending or threatened against Borrower or the Equipment other than as disclosed to Lender, and no other event has occurred which may materially and adversely affect Borrower’s financial condition or the Equipment. Moreover, no material fact exists that has not been disclosed to the Lender which would have a material adverse effect on the Equipment.

 

(g)           Borrower has acquired and maintained in good standing all permits, licenses, consents and approvals required under federal, state or local statutes, ordinances, rules and regulations for the ownership and use of the Equipment. The Equipment complies with all applicable federal, state and local laws, ordinances, orders, rules and regulations and all applicable restrictive covenants.

 

(h)           No Event of Default has occurred or is continuing or exists, and there exists no condition, event, act or omission which, with the giving of notice or passage of time or both, would constitute an Event of Default.

 

(i)            The liens conveyed by the Security Agreement constitute, and shall constitute during the term of the Loan, a first priority security interest lien on the collateral described therein, subject to the terms of the Intercreditor Agreement.

 

(j)            Borrower has good and marketable title to the Equipment described on Exhibit A attached hereto, in each case free and clear of all security interests, liens, claims and other encumbrances, other than the security interest granted to Lender under the Security Agreement and the security interest granted to WVEDA to secure the WVEDA Loan.

 

5.            Affirmative Covenants. So long as this Agreement is in effect and any part of the Loan is outstanding, Borrower shall:

 

{C1859844.1}

  

5

  

 

(a)           Promptly inform Lender in writing of: (i) any Event of Default, together with a written statement of the action being taken by Borrower to remedy the same; (ii) all material adverse changes with regard to the Equipment, and (iii) all litigation, proceedings and claims, either pending or threatened, relating to the Equipment or Lessee which could materially affect its financial condition.

 

(b)           Provide to the Lender annually, as soon as available, but in any event within 120 days after the close of its fiscal year, a full and complete signed copy of its annual financial report prepared in a manner reasonably acceptable to the Lender, which report shall include a balance sheet of Borrower as of the end of such year and statement of profit and loss of Borrower reflecting the results of its operations during such year.

 

(c)           Within 30 days after the request therefor, furnish to the Lender such additional information pertaining to the Loan or the Equipment as the Lender may reasonably request from time to time.

 

(d)           Obtain and keep in full force and effect, or cause to be obtained and kept in full force and effect, comprehensive general liability insurance with a combined single limit of not less than $1,000,000 per occurrence for bodily injury and property damage, naming the Lender as an additional insured. A copy of said policy shall be provided to the Lender annually.

 

(e)           Obtain and keep in full force and effect, or cause to be obtained and kept in full force and effect, hazard insurance covering loss or damage to the Equipment in an amount of not less than 100% of the replacement value thereof, as the same may exist from time to time, but in any event in such amounts as may be necessary to prevent application of coinsurance under the terms of the applicable policy, providing protection against all perils, including, without limitation, the classification of fire, lightning, extended coverage, sprinkler leakage and vandalism, and naming the Lender as an additional insured and loss payee.

 

(f)            Cause certificates evidencing the existence and amounts of the liability and hazard insurance required under this Section 5 to be delivered to the Lender. No such insurance policy shall be cancelable or subject to reduction in coverage except after 30 days prior written notice to the Lender. Borrower shall, within a reasonable time after the expiration of such insurance policies, furnish the Lender with certificates of insurance evidencing the renewal thereof.

 

(g)           Maintain, or cause to be maintained, proper Workers’ Compensation coverage for all of its employees and to post, or cause to be posted, a proper wage bond with the State of West Virginia with respect to such employees.

 

(h)           Perform and comply with all terms, conditions and provisions set forth in this Agreement and in all other Loan Documents mentioned herein in a timely manner.

 

{C1859844.1}

  

6

  

 

(i)           Borrower will take all necessary steps to preserve itself as a corporation, and will comply with all applicable laws, ordinances, orders, rules or regulations of any Governmental Authority (as hereinafter defined). As used herein, “Governmental Authority” means the United States, the States of Delaware and West Virginia, respectively, and any political subdivision and municipality thereof, and any agency, department, commission, board, bureau or instrumentality of any of them.

 

(j)            Permit the Lender or its designees at any reasonable time to examine and audit Borrower’s books, accounts and records, and make copies and memoranda of its books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including, without limitation, computer generated records and computer programs for the generation of such records) in the possession of a third party, then Borrower shall, upon request of the Lender, notify such party to permit the Lender free access to such records during normal business hours, and to provide the Lender with copies of any records it may request, all at Borrower’s expense.

 

(k)           Permit the Lender, the West Virginia Development Office, and designees or agents of each, the right, but the same shall be under no obligation, to inspect the Equipment, at any reasonable time.

 

(1)           Make, execute and deliver to the Lender such promissory notes, instruments, documents and other agreements as the Lender or its attorneys may reasonably request to evidence and secure the payment of the indebtedness and to create and perfect all liens described herein. Moreover, at the request of the Lender, Borrower will promptly and duly execute and deliver such additional documents and assurances and take such additional actions as may be necessary or desirable in order to correct any defect, error or omission which may at any time be discovered with respect to the Loan or to more effectively carry out the interest and purpose of this Agreement.

 

(m)          Acquire and maintain in good standing all permits, licenses, consents and approvals required under applicable federal, state or local statutes, ordinances, rules and regulations for the repair, use and ownership of the Equipment. Borrower shall also require any lessee(s) to acquire and maintain in good standing all permits, licenses, consents and approvals required under federal, state or local statutes, ordinances, rules and regulations for the use of the Equipment.

 

(n)           Provide to the West Virginia Development Office, on or before the 1st day of November of each year, a report showing the total number of permanent and part-time employees working at Borrower’s facilities in Morgantown, West Virginia, on the 30th day of September of such year and the aggregate total wages paid during the twelve month period ending on the 30th day of September of such year. This report shall be provided annually during the term of the Loan.

 

{C1859844.1}

  

7

  

 

(o)           Borrower will maintain the Equipment, or cause the Equipment to be maintained, in good repair and safe condition at all times and indemnify and defend and hold the Lender harmless from any and all claims relating to the Equipment.

 

(p)           If Borrower neglects or refuses to pay the costs, premium, liabilities or other charges with respect to, or otherwise fails to perform, its covenants hereunder, the Lender may do so, add the cost thereof to the indebtedness evidenced hereby and by the Note, and collect the same from Borrower on demand.

 

(q)           Perform and comply with all terms, conditions and provisions of the Lease applicable to Borrower in a timely manner.

 

6.        Negative Covenants. Borrower covenants and agrees that while any part of the Loan is outstanding, Borrower shall not:

 

(a)           Create, permit to be created or suffer to exist any security interests, liens or other encumbrances upon the Equipment without the prior written consent of the Lender (other than the security interest in the Equipment granted by Borrower to WVEDA);

 

(b)           Sell, assign, exchange, lease, transfer or otherwise dispose of any of the collateral for the Loan without the prior written consent of the Lender;

 

(c)           Furnish the Lender any certificate or other document containing any untrue statement of material fact or omitting a material fact necessary to make it not misleading in light of the circumstances under which it was furnished;

 

(d)           Amend any of its Organizational Documents without the prior written consent of Lender; or

 

(e)           Move the Equipment from Borrower’s facilities in Morgantown, West Virginia.

 

7.            Events of Default. The Loan shall, at the Lender’s option, become immediately due and payable without notice or demand upon the occurrence of any one or more of the following (herein, an “Event of Default”):

 

(a)           Borrower shall fail to pay as and when due any installment of principal or interest due on the Note or any portion thereof and such failure shall continue for a period of 10 days thereafter; or

 

(b)           Borrower shall fail to pay as and when due any installment of principal or interest due on, or shall otherwise be in default under, any other indebtedness or obligation owed to Lender (other than the indebtedness evidenced by the Note) or any other creditor of Borrower (including, without limitation, the WVEDA under the terms of the WVEDA Loan Documents); or

 

{C1859844.1}

  

8

  

 

(c)           Any representation or warranty made to the Lender herein or otherwise in connection with or to induce the making of the Loan shall prove, in any material respect, to have been false, incorrect or incomplete on the date when made; or

 

(d)           Borrower shall default in the performance of any agreement, obligation, covenant or condition contained in this Agreement or in any of the other Loan Documents (other than the default contemplated in Section 7(a) above), and such default shall not have been remedied within 30 days after written notice thereof is delivered to Borrower; or

 

(e)           Borrower shall (i) be dissolved or terminated, (ii) admit in writing its insolvency or its inability to discharge its obligations as they become due, (iii) adopt any resolution or take any other step in contemplation of bankruptcy, insolvency, receivership, liquidation, suspension or cessation of its business or the winding up of its affairs or in contemplation of any proceeding under any law for reorganization, debt adjustment, arrangement, composition, extension or debtor relief, or (iv) make any assignment for the benefit of creditors or commit any act of bankruptcy; or

 

(f)            There shall be filed or brought against Borrower and either (i) adjudicated adversely to it, or consented to or acquiesced in by it in any manner, or (ii) not dismissed within 30 days, any petition in bankruptcy or any insolvency, receivership, trusteeship, reorganization, debt adjustment, arrangement, composition, extension, debtor relief, dissolution, liquidation, winding up or any similar proceeding, or any proceeding in which its or his ability to discharge its or his obligations as they become due is in issue; or

 

(g)           Commencement of any proceeding involving the sale of the Equipment, whether by judicial proceeding, self-help, re-possession or any other method, by any creditor of Borrower (other than the Lender).

 

8.        Remedies.

 

Upon the occurrence of any Event of Default, then, automatically, at the option of the Lender, all of the outstanding balance of the Loan shall, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived, be forthwith due and payable, and the Lender may, immediately upon the expiration of any period of grace provided for in the Loan Documents, enforce payment of the Note and any other obligation herein or in any other Loan Document or otherwise pertaining to the Loan and exercise any and all other remedies granted to it herein, in the Loan Documents or at law or otherwise. The rights and remedies hereunder of the Lender are cumulative and not exclusive of any rights or remedies which it would otherwise have.

 

{C1859844.1}

  

9

  

 

9.        Miscellaneous  Provisions.  The parties agree to the following miscellaneous provisions:

 

(a)           This Agreement constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless made in writing and signed by the party or parties sought to be charged or bound by such alteration or amendment.

 

(b)           This Agreement shall be governed by and construed in accordance with the laws of the State of West Virginia.

 

(c)           BORROWER HEREBY IRREVOCABLY (1) AGREES THAT ANY SUIT, ACTION OR OTHER LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED OR SITTING IN KANAWHA COUNTY, WEST VIRGINIA, AND CONSENTS TO THE JURISDICTION OF SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, AND (2) WAIVES ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING OF COPIES OF SUCH PROCESS TO BORROWER AT ITS ADDRESS PROVIDED HEREIN PURSUANT HERETO. BORROWER AGREES THAT THE 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. ALL MAILINGS HEREUNDER SHALL BE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER OR THE COUNCIL TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

(d)           BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS, EXECUTED IN CONNECTION WITH THIS AGREEMENT, OR ANY TRANSACTION CONTEMPLATED BY ANY OF SUCH DOCUMENTS. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

 

(e)           Borrower agrees to pay upon demand, all reasonable and necessary costs and expenses incurred by the Lender in connection with the preparation and enforcement of this Agreement, all other Loan Documents and any amendments to such documents which may be made from time to time after the date hereof, including, but not limited to, reasonable attorneys’ fees and expenses, even if the Loan does not close. This includes the reasonable attorneys’ fees and legal expenses of the Lender, whether or not there is any lawsuit, including reasonable attorneys’ fees for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower, or an assigned third party, also will pay any court costs, in addition to all other sums provided by law.

 

{C1859844.1}

  

10

  

 

(f)            All notices to be given under this Agreement shall be in writing and shall be deemed sufficiently given when mailed by certified mail, return receipt requested, to the following addresses:

 

	
  

	
(1)

	
WEST VIRGINIA WATER DEVELOPMENT AUTHORITY

180 Association Drive

Charleston, West Virginia 25311

Attention: Director

 

	
  

	
(2)

	
WEST VIRGINIA INFRASTRUCTURE AND JOBS

DEVELOPMENT COUNCIL

180 Association Drive

Charleston, West Virginia 25311

Attention: Executive Secretary

 

	
  

	
(3)

	
PROTEA BIOSCIENCES, INC.

955 Hartman Road, Suite 210

Morgantown, West Virginia 26507-0188

Attention: President

 

All notice periods under this Agreement shall commence on the day following the date upon which such notice was sent to the addressee. Any change in the address for notice to a party shall be given in the same manner provided in this Section 9(f).

 

(g)           If a court of competent jurisdiction finds any provision of this Agreement to be invalid or unenforceable as to any person, entity or circumstance, such finding shall not render that provision invalid or unenforceable as to any other persons, entities or circumstances. If feasible, any such offending provision shall be deemed to be modified in order to comply with the limits of enforceability or validity; provided, however, that if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Agreement in all other respects shall remain valid and enforceable.

 

(h)           All warranties, representations, covenants and indemnities made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to the Lender in connection herewith shall be considered to have been relied upon by the Lender and will survive the making of the Loan and shall continue in full force and effect so long as the Note is outstanding and until payment in full of all of Borrower’s obligations hereunder and under the Loan Documents. The warranties, covenants and indemnities set forth in this Agreement may be assigned or otherwise transferred by the Lender to its successors and assigns and to any subsequent purchasers of all or any portion of any collateral securing the Loan by, through or under the Lender, without notice to or the consent of Borrower.

 

{C1859844.1}

  

11

  

 

(i)            The Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by the Lender. No delay or omission on the part of the Lender in exercising any right shall operate as a waiver of that right or any other right. A waiver by the Lender of a provision of this Agreement shall not prejudice or constitute a waiver of its right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by the Lender, nor any course of dealing between Lender and Borrower shall constitute a waiver of any rights of the Lender or of any obligations of Borrower. Whenever the consent of the Lender is required under this Agreement, the granting of such consent by the Lender in any instance shall not constitute continuing consent in subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of the Lender.

 

(j)            This Agreement shall be binding upon and shall inure to the benefit of the parties and their successors and assigns; provided, however, that Borrower may not sell, assign, convey or otherwise transfer any rights or obligations hereunder without the prior written consent of the Lender.

 

(k)           This Agreement shall continue in full force and effect so long as any part of the Loan remains outstanding or has not been fully and finally paid, performed or satisfied.

 

(1)           The Lender may sell, transfer or otherwise assign all of its right, title and interest in and to this Agreement and the Loan Documents without the consent of Borrower, but shall notify Borrower in writing of any such sale, transfer or assignment within 30 days after the occurrence thereof.

 

(m)          No inference shall be drawn in favor of or against any party because of their participation in the drafting of this Agreement or any of the other documents relating to the Loan.

 

(n)           Nothing in this Agreement, whether express or implied, shall be construed to give to any person other than the parties hereto any legal or equitable right, remedy or claim under or in respect of this Agreement, which is intended for the sole and exclusive benefit of the parties hereto.

 

(o)           Nothing herein shall be construed as creating or evidencing a joint venture by and among the Lender and Borrower in connection with the subject matter hereof.

 

{C1859844.1}

  

12

  

 

(p)           Borrower represents and warrants that no broker was involved either in procuring the Loan or in connection with the transactions contemplated hereby, and agrees to indemnify and save harmless the Lender from and against any and all claims for any brokerage fee or commission arising out of the making of the Loan or the transactions contemplated hereby.

 

(q)           Unless otherwise specified herein, all year-end financial statements and reports furnished to the Lender hereunder or under any other Loan Document shall be prepared in accordance with generally accepted accounting principles and practices consistently applied.

 

(r)            This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when so executed and delivered by the parties, constituting an original, but all such counterparts together, constituting one and the same instrument.

 

(s)           The Commitment Letter is incorporated herein by reference and the terms, conditions and covenants thereof are hereby made a part of this Agreement to the same extent and with the same effect as if they were fully set forth herein. This Agreement is intended to supplement the Commitment Letter and does not and is not intended to supersede the Commitment Letter, except that to the extent that any provision of the Commitment Letter conflicts with any provision of this Agreement, the provisions of this Agreement shall govern.

 

[Remainder of page left intentionally blank]

 

{C1859844.1}

  

13

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers duly authorized, all as of the date and year first above written.

 

	  	
WEST VIRGINIA WATER DEVELOPMENT

	  	
AUTHORITY, on behalf of the WEST VIRGINIA

	  	
INFRASTRUCTURE AND JOBS

	  	
DEVELOPMENT COUNCIL

	  	  	  	  
	  	
By:

	
/s/ [ILLEGIBLE]

	  	  	
Its:

	
Executive Director

	  	  
	  	
PROTEA BIOSCIENCES, INC.

	  	  
	  	
By:

	
 
/s/ Stephen Turner

	  	  	
Its:

	
CEO

 

{C1859844.1}

  

14

  

 

EXHIBIT A

 

LIST OF EQUIPMENT AND MACHINERY

 

	
Vendor

	  	
Equipment

	  	  	  
	
AB Sciex

	  	
ABI 5500 QTRAP LC/MS/MS — Model # 5500, Serial # AU23751008. [ Invoice # 400022349]

	  	  	  
	
AB Sciex

	  	
HPLC/API 4000 Mass Spec (2 Units) — Model # 4000, Serial Nos. J1030110 and J2480202. [Invoice # 400025969]

	  	  	  
	
Hitachi

	  	
Total Amino Acid Analyzer — Model # L-8900, Serial # 2145-003. [Invoice # 830152951

	  	  	  
	
AB Sciex

	  	
Transformer (HPLC/API 4000 related equipment) — Serial Nos. 27860523 and 27860524. [Invoice # 400026283]

	  	  	  
	
Thermo Fisher

	  	
Watson LIMS Software [Invoice # 01-77694]

	  	  	  
	
Waters

	  	
Synapt G2 HDMS 8k with UPLC (Serial # UCA229)

	  	  	  
	
AB Sciex

	  	
Hotfixes (HPLC/API related equipment/software) [Invoice # 400026481]

	  	  	  
	
AB Sciex

	  	
Pump, auto sampler, etc. (Invoice 400027024)

	  	  	  
	  	  	
Pumps: Model #LC-20AD (Serial #L20104853838, #L20104853839, #L20104853845 & #L20104853846)

	  	  	  
	  	  	
Autosamplers: Model #SIL-20AC HT (Serial #L20354855845 & #L20354855847)

	  	  	  
	  	  	
Communication modules: Model #CBM-20A (Serial #L20234852691 & #L20234852713)

	  	  	  
	  	  	
Column ovens: Model #CTO-20AC (Serial #L20214750719 & #L20214750722)

	  	  	  
	  	
  

	
Degassers: Model #DGO-20A3 (Serial #SSI-3-1745 & #SSI-3-1766)

 

{C1859844.1}INTERCREDITOR AGREEMENT

 

THIS INTERCREDITOR AGREEMENT (this “Agreement”) dated as of the 10th day of December, 2010 by and among the WEST VIRGINIA WATER DEVELOPMENT AUTHORITY (the “WVWDA”), a West Virginia public corporation acting on behalf of the WEST VIRGINIA INFRASTRUCTURE AND JOBS DEVELOPMENT COUNCIL (the “Infrastructure Council”; the Infrastructure Council and the WVWDA are hereinafter referred to collectively as the “Council”). WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY, a West Virginia public corporation (“WVEDA; WVEDA and the Council are hereinafter collectively referred to as the “Lenders”), and PROTEA BIOSCIENCES, INC., a Delaware corporation (“Borrower”).

 

WITNESSETH:

 

WHEREAS, contemporaneously herewith the Council has made a term loan to Borrower in the principal amount of $900,000 (the “WVIJDC Loan”) pursuant to that certain Loan Agreement of even date herewith between the Council and Borrower (the “WVIJDC Loan Agreement”), as evidenced by that certain Promissory Note of even date herewith executed by Borrower and made payable to Council in the principal amount of $900,000 (the “WVIJDC Note”); and

 

WHEREAS, Borrower has granted to the Council, as collateral for the repayment of the WVIJDC Loan, a security interest in certain personal property owned by Borrower, which property is more particularly described on Exhibit A attached hereto (collectively, the “Collateral”), pursuant to that certain Security Agreement of even date herewith executed by Borrower in favor of the Council (the “WVIJDC Security Agreement”); and

{C1859841.1}

 

  

WHEREAS, WVEDA has also made a term loan to Borrower in the principal amount of $900,000 (the “WVEDA Loan”) pursuant to that certain Loan Agreement dated October 21, 2010 between WVEDA and Borrower, as amended by the First Amendment thereto dated December 10, 2010 (the “WVEDA Loan Agreement”), which loan is evidenced by that certain Promissory Note dated October 21, 2010 executed by Borrower and made payable to WVEDA in the principal amount of $900,000 (the “WVEDA Note”) secured by a security interest in the Collateral pursuant to that certain Security Agreement dated October 21, 2010 executed by Borrower in favor of WVEDA, as amended by the Amended and Restated Security Agreement between said parties dated December 10, 2010 (the “WVEDA Security Agreement”); and

 

WHEREAS, the Lenders wish to set forth the relative priority, parity and dignity of the security interests which secure the WVIJDC Loan and WVEDA Loan, respectively.

 

NOW, THEREFORE, in consideration of the mutual premises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

1.           The security interests created by the WVIJDC Security Agreement and WVEDA Security Agreement (collectively, the “Security Agreements”) constitute first priority security interests that are equal and of parity in lien, right, priority and dignity at all times, insofar as such security interests secure the WVIJDC Loan and WVEDA Loan. The relative priorities of the Lenders' respective liens on the Collateral shall be as set forth in this Agreement, without regard to the actual time, order or method of filing, perfection or attachment of such security interests. This Agreement shall govern in all respects the interests of the Lenders in the Collateral and, to the extent contrary hereto, any prior agreements between the Lenders are hereby superseded and shall be of no further force and effect.

{C1859841.1}

2

  

 

2.           The Lenders hereby agree to cooperate in the filing of the Uniform Commercial Code financing statements relating to their respective security interests in the Collateral and shall, to the extent permitted by applicable law, cause all such documents to reflect that their interests in the Collateral are subject to the terms and conditions of this Agreement.

 

3.           In the event of an attachment, repossession, sale or other disposition of Borrower's right, title, interest and estate in the Collateral pursuant to either of the Security Agreements, all net sale proceeds or rentals shall be distributed to Lenders pro rata based on the ratio of the outstanding principal, accrued interest and other sums due and owing to each Lender for the loan secured by the WVEDA Security Agreement and the WVIJDC Security Agreement, respectively, to the total sum of all principal, accrued interest and other sums due and owing to Lenders under the WVEDA Loan and the WVIJDC Loan at the time of distribution of net proceeds from the liquidation of the Collateral, and the remainder of such net sale proceeds, if any, shall be distributed to the person or entities legally entitled thereto.

 

4.           Notwithstanding the provisions of Sections 1, 2 or 3 hereof, if one of the Lenders submits a credit bid at a foreclose sale (which bid is the successful bid), the credit bid net of sale costs will be credited against the WVEDA Note and the WVIJDC Note pro rata in the same manner as set forth in paragraph 3 and each Lender will acquire ownership in the Collateral, in part or in whole, purchased on such pro rata basis. For example, if at the time a disposition of the Collateral occurs, $200,000 is owed under the WVEDA Loan and $200,000 is owed under the WVIJDC Loan, the WVEDA credit bids $200,000, $100,000 will be credit against the WVEDA Loan, $100,000 will be credited against the WVIJDC Loan, WVEDA will acquire a one-half undivided interest in the Collateral (in part or in whole) and the WVIJDC will acquire a one-half undivided interest in the Collateral (in part or in whole) on account of the WVIJDC Loan. The other Lender shall reimburse the credit bidding Lender for its pro rata share of sale expenses.

{C1859841.1}

3

  

 

5.           The commencement of foreclosure, attachment, repossession, sale or other disposition of the Borrower's right, title and interest in and to the Collateral by a Lender shall obligate Lenders to commence and continue, simultaneously, such remedies with respect to the Collateral until every Lender's events of default have been resolved or all of the Collateral has been fully and completely liquidated.

 

6.           WVEDA and WVIJDC each agree to obtain the consent of the other Lender prior to the sale of any portion of the Collateral.

 

7.           An event of default under either the WVEDA Security Agreement or the WVIJDC Security Agreement shall constitute an event of default under both of the Security Agreements.

 

8.           In the event of a default under their respective loans to the Borrower and before exercising any of their respective rights under their respective security agreements, the Lenders shall cooperate in all ways reasonably possible to market and sell the Borrower's right, title and interest in the Collateral in a commercially reasonable manner. All expenses of sale under this Section 8 and all expenses incurred by either Lender shall be paid out of the proceeds of liquidation prior to any distribution to Lenders hereunder.

 

9.           Subject to 11 below, each Lender hereby appoints the other Lender to act as its agent to exercise and enforce all of such Lender's rights and remedies against any of the Collateral, and each Lender hereby accepts such appointment and agrees to distribute any proceeds received from the sale, liquidation, transfer or conveyance of any of the Collateral in accordance herewith.

{C1859841.1}

4

  

 

10.         Each Lender hereby agrees to give to the other Lender prompt written notice of the occurrence of an event of default under its respective Loan Agreement and Security Agreement.

 

11.         In the event that Borrower defaults in its obligations to Lenders or either of them, WVEDA shall exercise and enforce all rights and remedies of both Lenders against any of the Collateral, including, without limitation, the right to take or retake possession or control thereof, and to hold, prepare for sale, process, sell, lease, dispose of, or liquidate the same. The Council may exercise its rights and remedies against the Collateral only if (i) WVEDA refuses to take actions requested by the Council within thirty (30) days after the occurrence of an event of default, or does not act in a commercially reasonable manner in protecting its and the Council's interests in the Collateral, and (ii) the Council gives WVEDA at least ten (10) days prior written notice of its intent to proceed.

 

12.         Each Lender hereby waives any and all rights to affect or challenge the method or appropriateness of any action taken by the other Lender with respect to the Collateral, subject only to the requirement that in enforcing any rights with respect to or realizing upon the Collateral each Lender shall always act in a commercially reasonable manner.

 

13.         Each Lender shall give the other Lender a copy of any written notice it may give to Borrower (i) consenting to any action or failure to act by Borrower, or (ii) exercising or refraining from exercising any powers or rights which it may have under or in respect of any of the Security Agreement or its Loan Agreement with Borrower. Each Lender shall give the other Lender written notice prior to commencing a foreclosure sale of, or leasing, the Collateral and each will reasonably cooperate with the other to assure that so long as indebtedness remains outstanding under the WVIJDC Loan and the WVEDA Loan, any sales under their respective Security Agreements shall occur simultaneously.

{C1859841.1}

5

  

 

14.         Under no circumstances shall either of the Lenders accept or demand a pledge of any of Borrower's property which constitutes Collateral as collateral security for any other indebtedness of Borrower to such Lender, without first obtaining the prior written consent of the other Lender.

 

15.         (a)         Neither Lender shall be liable for any error of judgment or for any action taken or omitted to be taken, except for gross negligence or willful misconduct.

 

(b)          Without limitation of the generality of the foregoing, each Lender (1) may consult with legal counsel, independent public accountants and other experts selected by such Lender and shall not be liable for any action taken or omitted to be taken in good faith in accordance with the advice of such counsel, accountants or experts, (2) shall not be responsible for the performance or observance of any of the terms, covenants or conditions under its respective Loan Agreement and related Security Agreements, and (3) shall incur no liability hereunder or under its respective Loan Agreement or Security Agreements by acting upon any notice, consent, certificate or other instrument or writing believed by such Lender to be genuine and signed or sent by the proper party.

 

(c)         Notwithstanding any other provision of this Agreement to the contrary, the Lenders agree that each of them may grant an extension of time for payment or performance by the Borrower and make compromises and settlements with the Borrower without the consent of the other Lenders under this Agreement, and without affecting the validity and enforceability of this Agreement. In the event either of the Lenders grants an extension or makes a compromise or settlement, it shall give the other Lender notice within 20 business days of such accommodation.

{C1859841.1}

6

  

 

16.         Each Lender hereby agrees to execute and deliver such additional documents as may be reasonably requested by the other Lender to evidence or effectuate the terms hereof.

 

17.         The maximum principal amount of the WVIJDC Loan shall be $900,000, and the Council shall not make any future advances of principal under the WVIJDC Loan which would increase the outstanding aggregate balance of the WVIJDC Loan to an amount in excess of $900,000, without the advance written consent of WVEDA. The maximum principal amount of the WVEDA Loan shall be $900,000, and WVEDA shall not make any future advances of principal under the WVEDA Loan, which would increase the outstanding aggregate balance of the WVEDA Loan to an amount in excess of $900,000, without the advance written consent of the Council.

 

18.         Any notices, requests, demands or other communications required hereunder shall be effective when delivered by registered mail, postage prepaid, return receipt requested to the parties at the following addresses:

 

If to the Infrastructure Council:

West Virginia Infrastructure and

Jobs Development Council

180 Association Drive

Charleston, West Virginia 25311

Attention: Executive Secretary

{C1859841.1}

7

  

With a copy to:

West Virginia Water Development Authority

180 Association Drive

Charleston, West Virginia 25311-1571

Attention: Director

If to WVEDA:

West Virginia Economic Development Authority

160 Association Drive 

Charleston, West Virginia 25311-1217

Attention: Executive Director

If to Borrower:

Protea Biosciences, Inc.

955 Hartman Road, Suite 210

Morgantown, West Virginia 26507-0188

Attention: President

 

19.         This Agreement shall be governed by the laws of the State of West Virginia.

 

20.         This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Lenders may sell, assign, encumber or otherwise transfer all or any part of their respective interests in this Agreement without the consent of any other party to this Agreement, provided that each transferee of any of the notes evidencing the loans described herein (the “Notes”) is bound by the provisions of this Agreement. Each of the Lenders agrees that if any such Lender transfers any of the Notes held by it, or any part thereof, it will, prior to the closing of such transfer, provide the transferee with a copy of this Agreement and promptly after such closing shall notify the other Lender in writing of such transfer. The other Lender shall be entitled to assume conclusively that no such transfer has been made, unless and until such written notice is received. Each transferee of any of the Notes shall take such Notes or any part thereof subject to the provisions of this Agreement and to any notice given or other action taken hereunder prior to the receipt by the other Lender or written notice of such transfer.

{C1859841.1}

8

  

 

21.         This Agreement may not be amended, nor any provision modified or waived, except by a writing signed by all parties hereto. The provisions of this Agreement are severable, and if any of these provisions shall be held by any court of competent jurisdiction to be unenforceable, such holding shall not affect or impair any other provision hereof. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

22.         Notwithstanding any provision of this Agreement, nothing contained herein shall be construed to effect a subordination or change in lien position of either of the Lenders in favor of any entity which is not a party to this Agreement, it being the intent of the parties hereto to provide for shared first lien positions solely in favor of the Lenders and shall not be construed to subordinate the lien positions of either of the Lenders to that of any third party or to confer any other right or benefit upon any entity which is not a party to this Agreement. It is the intent of the Lenders that any intervening liens or security interests will not affect the rights of the Lenders as such would exist had this Agreement not been made.

 

23.         Neither the execution of this Agreement, nor any action taken by any of the Lenders pursuant hereto, is intended to be, nor shall it be construed to be, the formation of a partnership or joint venture by the Lenders.

{C1859841.1}

9

  

 

24.         Borrower has executed this Agreement solely to evidence its consent to the shared first lien positions among the Lenders and its agreement with the terms and conditions of Sections 4 and 7 hereof, and Borrower understands and agrees that this Agreement shall have no effect upon its obligations to the Lenders. Borrower shall not be entitled under any circumstance to rely upon the failure of any of the Lenders to comply with the terms of this Agreement, and nothing contained herein shall be deemed to authorize Borrower to take any action not permitted under the documents to which Borrower or Lenders are parties.

 

25.         This Agreement may be executed in two or more counterparts, each of which shall be an original, but all of which shall constitute but one Agreement.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.

	  	
WEST VIRGINIA WATER DEVELOPMENT

	  	
AUTHORITY, a West Virginia public corporation,

	  	
Acting on Behalf of WEST VIRGINIA

	  	
INFRASTRUCTURE AND JOBS

	  	
DEVELOPMENT

	  	
COUNCIL

	  	  
	  	
By:

	/s/ [ILLEGIBLE]
	  	  	
Its:

	
Executive Director

	  	  
	  	
WEST VIRGINIA ECONOMIC DEVELOPMENT

	  	
AUTHORITY

	  	  
	  	
By:

	/s/ David G. Warner
	  	  	
Its:

	
Executive Director

	  	  
	  	
PROTEA BIOSCIENCES, INC.

	  	  
	  	
By:

	/s/ Stephen Turner
	  	  	
Its:

	
CEO

{C1859841.1}

10

  

 

STATE OF WEST VIRGINIA,

 

COUNTY OF KANAWHA, TO-WIT:

 

The forgoing instrument was acknowledged before me this 8th day of December, 2010, by Chris E. Jarrett, the Exe. Dir. of the WEST VIRGINIA WATER DEVELOPMENT AUTHORITY, a West Virginia public corporation, acting on behalf of the WEST VIRGINIA INFRASTRUCTURE AND JOBS DEVELOPMENT COUNCIL, on behalf of said public corporation.

 

My commission expires December 21, 2017.

	

	
/s/ Barbara J. Pauley

	
NOTARY PUBLIC

 

 

STATE OF WEST VIRGINIA,

 

COUNTY OF KANAWHA, TO-WIT:

 

The forgoing instrument was acknowledged before me this 8th day of December, 2010, by David A Warner, the Executive Director of WEST VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY, a West Virginia public corporation, on behalf of said corporation.

 

My commission expires April 03, 2017.

	

	
/s/ Beverly S. Dolin

	
NOTARY PUBLIC

 

 

[SEAL]

{C1859841.1}

 

  

 

STATE OF WEST VIRGINIA,

 

COUNTY OF  Mon, TO-WIT:

 

The forgoing instrument was acknowledged before me this 9th day of December, 2010, by  Lauren B. Ferrell, the Customer Service  of  PROTEA BIOSCIENCES, INC., a Delaware corporation, on behalf of said corporation.

 

My commission expires  Sept. 12, 2018

	  	  	
/s/ Lauren B. Ferrell

	
[SEAL]

	

	
NOTARY PUBLIC

 

This instrument was prepared by: Charles W. Loeb, Jr., Jackson Kelly PLLC, P. O. Box 553, Charleston, West Virginia 25322.

{C1859841.1}

 

  

 

EXHIBIT A

 

LIST OF EQUIPMENT AND MACHINERY

 

	
Vendor

	  	
    Equipment

	 	 	 
	
AB Sciex

	  	
ABI 5500 QTRAP LC/MS/MS — Model # 5500, Serial # AU23751008. [Invoice # 400022349]

	 	 	 
	
AB Sciex

	  	
HPLC/API4000 Mass Spec (2 Units) — Model # 4000, Serial Nos. J1030110 and J2480202. [Invoice # 400025969]

	 	 	 
	
Hitachi

	  	
Total Amino Acid Analyzer — Model # L-8900, Serial # 2145-003. [Invoice # 83015295]

	 	 	 
	
AB Sciex

	  	
Transformer (HPLC/API 4000 related equipment) — Serial Nos. 27860523 and 27860524. [Invoice # 400026283]

	 	 	 
	
Thermo Fisher

	  	
Watson LIMS Software [Invoice # 01-77694]

	 	 	 
	
Waters

	  	
Synapt G2 HDMS 8k with UPLC (Serial # UCA229)

	 	 	 
	
AB Sciex

	  	
Hotfixes (HPLC/API related equipment/software) [Invoice # 400026481]

	 	 	 
	
AB Sciex

	  	
Pump, auto sampler, etc. (Invoice 400027024)

	  	  	  
	  	  	
Pumps: Model #LC-20AD (Serial #L20104853838, #L20104853839, #L20104853845 & #L20104853846)

	  	  	  
	  	  	
Autosamplers: Model #SIL-20AC HT (Serial #L20354855845 & #L20354855847)

	  	  	  
	  	  	
Communication modules: Model #CBM-20A (Serial #L20234852691 & #L20234852713)

	  	  	  
	  	  	
Column ovens: Model #CTO-20AC (Serial #L20214750719 & #L20214750722)

	  	  	  
	  	
  

	
Degassers: Model #DGO-20A3 (Serial #SSI-3-1745 & #SSI-3-1766)

{C1859841.1}

 

  

 

CERTIFICATE OF COMPLETION

 

The undersigned, Stephen Turner, President of Protea Biosciences, Inc., a Delaware corporation authorized to transact business in the State of West Virginia, hereby certifies to the West Virginia Water Development Authority, acting on behalf of the West Virginia Infrastructure and Jobs Development Council, in connection with its loan in the principal amount of Nine Hundred Thousand and 00/100 Dollars ($900,000.00) to Protea Biosciences, Inc. to assist it in financing the acquisition and installation of certain equipment, including without limitation the equipment described in Exhibit A attached hereto, to be located and operated in Monongalia County, West Virginia at 955 Hartman Run Road, Suite 210, Morgantown, West Virginia, that the acquisition and installation of said equipment have been completed as of the date of this Certificate, said equipment is fully operational and said equipment has been paid for in full by Protea Biosciences, Inc., all in accordance with the application submitted by Protea Biosciences, Inc. to the West Virginia Infrastructure and Jobs Development Council in connection with said loan.

Dated as of the 21st day of December, 2010.

	  	
/s/ Stephen Turner

	  	
Stephen Turner

STATE OF WEST VIRGINIA

COUNTY OF Monongalia, to-wit:

 

Subscribed and sworn before me this 21st day of December, 2010 by Stephen Turner, President of Protea Biosciences, Inc., a Delaware corporation.

My commission expires: September 14, 2005

	  	  	
/s/ Jesse L. Ayers II

	
[SEAL]

	

	
NOTARY PUBLIC

{C1923669.1}

 

  

 

EXHIBIT A

 

LIST OF EQUIPMENT AND MACHINERY

 

	
Vendor

	  	
Equipment

	 	 	 
	
AB Sciex

	  	
ABI 5500 QTRAP LC/MS/MS — Model # 5500, Serial # AU23751008. [Invoice # 400022349]

	 	 	 
	
AB Sciex

	  	
HPLC/API 4000 Mass Spec (2 Units) — Model # 4000, Serial Nos. J1030110 and J2480202. [Invoice # 400025969]

	 	 	 
	
Hitachi

	  	
Total Amino Acid Analyzer — Model # L-8900, Serial # 2145-003. [Invoice # 83015295]

	 	 	 
	
AB Sciex

	  	
Transformer (HPLC/API 4000 related equipment) — Serial Nos. 27860523 and 27860524. [Invoice # 400026283]

	 	 	 
	
Thermo Fisher

	  	
Watson LIMS Software [Invoice # 01-77694]

	 	 	 
	
Waters

	  	
Synapt G2 HDMS 8k with UPLC (Serial # UCA229)

	 	 	 
	
AB Sciex

	  	
Hotfixes (HPLC/API related equipment/software) [Invoice # 400026481]

	 	 	 
	
AB Sciex

	
  

	
Pump, auto sampler, etc. (Invoice 400027024)

	 	 	 
	  	  	
Pumps: Model #LC-20AD (Serial #L20104853838, #L20104853839, #L20104853845 & #L20104853846)

	 	 	 
	  	  	
Autosamplers: Model #SIL-20AC HT (Serial #L20354855845 & #L20354855847)

	 	 	 
	  	  	
Communication modules: Model #CBM-20A (Serial #L20234852691 & #L20234852713)

	 	 	 
	  	  	
Column ovens: Model #CTO-20AC (Serial #L20214750719 & #L20214750722)

	 	 	 
	  	  	
Degassers: Model #DGO-20A3 (Serial #SSI-3-1745 & #SSI-3-1766)

{C1923669.1}

 

  

 

CERTIFICATE OF EQUITY INJECTION

 

The undersigned, Stephen Turner, President of Protea Biosciences, Inc., a Delaware corporation authorized to transact business in the State of West Virginia, hereby certifies to the West Virginia Water Development Authority, acting on behalf of the West Virginia Infrastructure and Jobs Development Council, in connection with its loan in the principal amount of Nine Hundred Thousand and 00/100 Dollars ($900,000.00) to Protea Biosciences, Inc., that as of the date of this Certificate Protea Biosciences, Inc. has injected at least Two Hundred Ninety-Five Thousand Four Hundred Ninety-Six and 72/100 Dollars ($295,496.72) of its own funds into the development of the Project, as defined in the Loan Agreement, to be partially funded by such loan, as set forth in the application of Protea Biosciences, Inc. to the West Virginia Infrastructure and Jobs Development Council for such loan.

 

Dated as of the 21st day of December, 2010.

	  	
/s/ Stephen Turner

	  	
Stephen Turner

STATE OF WEST VIRGINIA

COUNTY OF Monongalia, to-wit:

 

Subscribed and sworn before me this 21st day of December, 2010 by Stephen Turner, President of Protea Biosciences, Inc., a Delaware corporation.

 

My commission expires: September 14, 2015.

	  	  	
/s/ Jesse L. Ayers II

	
[SEAL]

	

	
NOTARY PUBLIC

{C1923670.1}

 

  

 

CLOSING STATEMENT

Disbursement of

$900,000 Term Loan

By

West Virginia Water Development Authority, on behalf of the

West Virginia Infrastructure and Jobs Development Council

to

Protea Biosciences, Inc.

 

December 21, 2010

 

	

I.

	

Disbursement of Loan Proceeds due to Borrower (wire transfer instructions attached hereto as Exhibit A)

	 	$	900,000.00	 
	  	  	 	 	 	 
	
II.

	
Fees of Lender's and Borrower's Counsel and related Closing costs to be paid by Borrower with Funds other than Loan proceeds

	 	 	 	 
	  	  	 	 	 	 
	  	
TOTAL

	 	$	900,000.00	 

 

Reviewed and Approved as of:

 

December 21, 2010

	
WEST VIRGINIA WATER DEVELOPMENT

	  	
PROTEA BIOSCIENCES, INC.

	
AUTHORITY, acting on behalf of the West

	  	  
	
Virginia Infrastructure And Jobs Development

	  	  
	
Council

	  	  
	  	  	  
	
By:

	  	  	
By:

	
/s/ Stephen Turner

	  	
Title:

	  	
  

	  	
Title:

	
CEO

{C1925337.1}

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00194-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00194-of-00352.parquet"}]]