Document:

Credit Agreement

 EXHIBIT 10.44 
  

  
 CREDIT AGREEMENT 
  
 By and Between 
  
 BROWN BROTHERS HARRIMAN & CO. 
  
 and 
  
 NEOSE TECHNOLOGIES, INC. 
  
 Dated as of January 30, 2004 
  

 THIS CREDIT AGREEMENT, dated as of January 30, 2004, is between BROWN BROTHERS HARRIMAN & CO.,
a private bank organized as a partnership (“Bank”), and NEOSE TECHNOLOGIES, INC., a Delaware corporation (“Borrower”). 
  
 W I T N E S S E T H: 
  
 Bank and Borrower, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, hereby agree as follows:

  
 ARTICLE 1. 
 DEFINITIONS AND ACCOUNTING TERMS 
  
 Section 1.1 Certain Defined Terms. 
  
 As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined): 
  
 “Affiliate” of any Person means any other Person (i) which directly or indirectly controls, is controlled by or is under common control with such Person, (ii) which directly or indirectly beneficially owns or holds ten
percent (10%) or more of any class of voting stock of such Person, or (iii) ten percent (10%) or more of any class of voting stock of which is directly or indirectly beneficially owned or held by such Person. 
  
 “As-Offered Fixed Rate” means a fixed rate
of interest quoted by Bank for fixed periods which Bank may offer from time to time. 
  
 “As-Offered Fixed Rate Term” means each period of approximately ninety (90) days commencing on the first day of each
Fiscal Quarter, or such other period of time as Bank may offer in its sole discretion. 
  
 “Base Rate” means a fluctuating rate per annum equal to the rate of interest established by Bank in Philadelphia,
Pennsylvania from time to time as its “base rate” charged by Bank to commercial borrowers in the United States. The Base Rate is determined from time to time by the Bank as a means of pricing some loans to its borrowers. The Base Rate is
not tied to any external rate of interest or index, and does not necessarily reflect the lowest rate of interest actually charged by the Bank to any particular class or category of customers. If and when the Base Rate changes, the rate of interest
with respect to any advance to which the Base Rate applies will change automatically without notice to Borrower, effective on the date of any such change. There are no required minimum interest periods for advances bearing interest at the Base Rate.

  
 “Bond Acquisition” means the
early redemption of the Series A Bonds and the reissuance thereof by the MCIDA to the Bank, or any transaction of similar effect. 
  
 “Bond Transaction” has the meaning set forth in Section 2.1 hereof. 

 “Business Day” means a day other than a Saturday, Sunday or other day on
which banks are authorized or required to close under the laws of the Commonwealth of Pennsylvania. 
  
 “Capital Lease” means (a) any lease for property (real, personal or mixed) under which Borrower is the lessee and which,
in accordance with GAAP, is or should be capitalized on the books of Borrower; and (b) any loan or other financing the proceeds of which are used or are to be used for the acquisition of equipment to be used in Borrower’s business. 

 
 “Change of Control” is deemed to occur
if a Person is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, except that a person shall be deemed to be the “beneficial owner” of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than thirty-five percent (35%) of the total voting power of all outstanding shares of capital stock having ordinary
power to vote in the election of directors of Borrower. 
  
 “Closing” means the time of the initial execution and delivery of this Agreement and the making of the Loan. 
  

“Collateral” has the meaning set forth in Section 3.1(e) hereof. 
  
 “Computer Software” means all computer
applications software, owned or licensed by Borrower, whether for general business usage or specific, unique-to-the-business usage, and all computer operating, security or programming software, owned or licensed by Borrower. 
  
 “Copyrights” means registered copyrights,
copyright applications and registered copyrights. 
  
 “Credit Obligation” has the meaning set forth in Section 6.1(g) hereof. 
  
 “Disclosure Schedule” means the disclosure schedule prepared and signed by Borrower and attached hereto as Exhibit
D setting forth certain information with respect to Borrower. 
  
 “Environmental Laws” means all provisions of laws, statutes, ordinances, rules, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards (having the force
and effect of law) promulgated by any governmental authority concerning health, safety and protection of, or regulation of the discharge of substances into, the environment. 
  
 “Event of Default” has the meaning set forth in Section 6.1 hereof. 
  
 “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended, and any regulations issued thereunder by the PBGC or the U.S. Department of Labor. 
  

 - 2 - 

 “ERISA Affiliate” means any trade or business, whether or not
incorporated, which together with Borrowers would be treated as a single employer under Section 4001 of ERISA. 
  
 “Financial Assets” means all cash, cash equivalents, savings deposits, bank accounts, investment accounts, certificates
of deposit, time deposits, money market accounts and marketable securities belonging to Borrower. 
  
 “Fiscal Quarter” means any of the quarterly accounting periods of Borrower. 
  
 “Fiscal Year” of Borrower means each
twelve-month period ending December 31. 
  
 “GAAP” means generally accepted accounting principles and practices applied on a consistent basis. 
  
 “GE Equipment” means any and all equipment, whether now owned or hereafter acquired by Borrower and constituting
Permitted Indebtedness hereunder, financed by General Electric Capital Corporation (“GE”) and upon which GE maintains a lien. The GE Equipment owned by Borrower as of the date of Closing is listed on the Disclosure Schedule. 
  
 “Initial Advance” means the portion of the
Term Loan to be advanced to Borrower at Closing, as more fully described in Section 2.2.(b) herein. 
  
 “Intangibles” means, at a particular date, all assets of Borrower that would be classified as intangible assets in
accordance with GAAP. 
  
 “Intellectual
Property” means, collectively: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all Patents; (b) all Trademarks, trade dress, logos, trade name, fictitious names,
brand names, brand marks, domain names and corporate names, together with all transactions, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in
connection therewith; (c) all copyrightable works, all Copyrights, and all applications, registrations, and renewals in connection therewith; (d) all mask works and all applications, registrations, and renewals in connection therewith; (e) all trade
secrets (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs drawings and specifications); (f) all Computer Software (including, but not limited
to data, source codes, object codes, specifications and related documentation); (g) all other proprietary rights; and (h) all copies and tangible embodiments thereof (in whatever form or medium); in each case, which property is owned or controlled
by Borrower and is used in and is necessary for the operation of Borrower’s business. 
  
 “Interest Payment Date” means March 31, June 30, September 30 and December 31 of each year, commencing March 31, 2004.

  

 - 3 - 

 “LIBOR” means the London inter-bank offered rate for the applicable
LIBOR Term, determined by Bank by reference to market reporting services available to Bank and other banks and financial institutions. 
  
 “LIBOR Term” means each period of approximately ninety (90) days commencing on the first day of each Fiscal Quarter.

  
 “Liquidity” means all
Financial Assets in the control, custody and/or possession of Bank. 
  
 “Loan Account” has the meaning set forth in Section 2.3(f) hereof. 
  
 “Loan” has the meaning set forth in Section 2.1 hereof. 
  
 “Loan Documents” means this Agreement, the Note, the Mortgage, the Security Agreement, and
all other documents, agreements, instruments, certificates and notices at any time delivered by any Person (other than Bank) in connection with any of the foregoing, as same may be amended, modified or supplemented from time to time. 
  
 “MCIDA” means the Montgomery County
(Pennsylvania) Industrial Development Authority, a body corporate and politic and a public instrumentality of the Commonwealth of Pennsylvania. 
  
 “MCIDA Bonds” means those certain (i)Montgomery County Industrial Development Authority Variable Rate Demand Revenue
Bonds (Neose Technologies, Inc. Project) Series A of 1997 in the amount of $1,000,000 (the “Series A Bonds”), and (ii) Montgomery County Industrial Development Authority Federally Taxable Variable Rate Demand Revenue Bonds (Neose
Technologies, Inc. Project) Series B of 1997 in the amount of $8,400,000 (the “Series B Bonds”). 
  
 “Mortgage” means the Open-End Mortgage and Security agreement dated of even date herewith from Borrower, as mortgagor, to
Bank, as mortgagee, with respect to the real property located at 102 Witmer Road, Horsham, Pennsylvania. 
  
 “Mortgaged Property” means the real property of Borrower which is subject to the lien of the Mortgage. 
  
 “Multiemployer Plan” means a Plan described
in Section 4001(a)(3) of ERISA which covers employees of Borrower or of an ERISA Affiliate. 
  
 “Note” means the Term Loan Note. 
  
 “Patents” means all letters patent and pending applications for patents of the United
States and all countries foreign thereto, including regional patents, certificates of invention and utility models, rights of license or otherwise to or under letters patent, certificates of intention and utility models which have been opened for
public inspection and all reissues, divisions, continuations and extensions thereof. 
  

 - 4 - 

 “PBGC” means the Pension Benefit Guaranty Corporation, or any
governmental agency or instrumentality succeeding to the functions thereof. 
  
 “Permitted Indebtedness” means all types of borrowings permitted pursuant to Section 5.11(c). 
  
 “Permitted Liens” means: 
  
 (1) liens and security interests granted in favor of Bank; 
  
 (2) the lien in favor of the Series A Bonds and, subject to Section 3.2 (a) herein, the Series B Bonds; 
  
 (3) utility, access or other easements and rights of way, restrictions and
exceptions which do not materially impair the operation or value thereof; 
  
 (4) deposits under workers’ compensation, unemployment and social security or similar laws, or to secure performance of bids, tenders, contracts (other than for the repayment of borrowed money) or leases to
secure indemnity, performance or similar bonds in the ordinary course of business; 
  
 (5) liens imposed by law (whether or not inchoate), such as carriers’, warehousemen’s, materialmen’s or mechanics’ liens, incurred in good faith in the ordinary course of business, and which are
not delinquent, and liens arising out of a judgment or award with respect to which an appeal is being prosecuted, a stay of execution pending such appeal having been secured or applied for and not denied or rendered ineffective; 
  
 (6) liens for taxes, assessments or governmental charges or levies on
property if the same shall not at the time be delinquent, or are being contested in good faith and by appropriate proceedings; 
  
 (7) the existing security interests in, and Capital Leases with respect to, equipment listed on the Disclosure Schedule with reference to the definition
of “Permitted Liens”; 
  
 (8) those encumbrances or
interests listed on Schedule B to the title insurance policy delivered to Bank in accordance with Section 3.1(h) hereof; 
  
 (9) future security interests in, and Capital Leases with respect to, equipment securing indebtedness permitted pursuant to Section 5.11(c) hereof; and

  
 (10) future liens and security interests granted in favor of
Borrower’s landlords, which liens secure leasehold improvements financed by such landlords, but only to the extent such liens are limited to the improvements and fixtures financed by such landlords. 
  
 “Person” means an individual, corporation,
limited liability company, association, partnership, business, joint venture, trust estate, unincorporated organization, government or any agency or political subdivision thereof, or any other entity. 
  

 - 5 - 

 “Plan” means any plan maintained by Borrower or by an ERISA Affiliate.

  
 “Prohibited Transaction”
means any non-exempt transaction set forth in Section 406 of ERISA or Section 4975 of the Internal Revenue Code. 
  
 “Reportable Event” means any of the events set forth in Section 4043 of ERISA. 
  
 “Second Advance” means the portion of the
Term Loan to be advanced to Borrower subsequent to Closing pursuant to the terms and conditions of this Agreement, as more fully described in Section 2.2(b) herein. 
  
 “Securities Laws” means the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended, and all of the rules and regulations promulgated under both such acts. 
  
 “Security Agreement” means the General Security Agreement dated of even date herewith, from Borrower to Bank. 

 
 “Term Loan” has the meaning set forth in
Section 2.1 hereof. 
  
 “Term Loan
Note” means the Note described in Section 2.2(b) hereof. 
  
 “Third Advance” means an additional advance to Borrower of $1,000,000, which advance shall be made only if the Bond Acquisition is not completed on or before March 31, 2004 (as more fully described in
Section 3.3 herein), and the consequential increase of the Term Loan hereunder to $9,000,000 in the aggregate. 
  
 “Total Debt” means, as applied to Borrower, the sum of all indebtedness for borrowed money (including, without
limitation, Capital Lease obligations, subordinated debt and unreimbursed drawings under letters of credit), or any other monetary obligation evidenced by a note, bond, debenture or other similar agreement or instrument of Borrower. 
  
 “Trademarks” means registered trademarks,
registered service marks, trademark and service mark applications, and unregistered trademarks and service marks. 
  

 - 6 - 

 Section 1.2 Accounting Terms. 
  
 All accounting terms not specifically defined herein shall be construed, and
all financial data submitted pursuant to this Agreement shall be prepared, in accordance with GAAP applied in a manner consistent with the application of GAAP in the preparation of the financial statements mentioned in Section 4.4. 
  
 ARTICLE 2. 
 THE TERM LOAN 
  
 Section 2.1 The Loan. 
  
 Subject to the terms and conditions hereinafter provided, Bank agrees to extend credit to Borrower in the form of a term loan (the “Term Loan”) in the amount of up to $9,000,000, but no less than $8,000,000, which shall be
advanced to Borrower for the purpose of repaying certain outstanding indebtedness of Borrower, to fund new leasehold improvements, and for other general corporate purposes; provided however, that, if the Third Advance is not made pursuant to the
terms hereof, the Term Loan shall be in the amount of $8,000,000. The Term Loan is sometimes referred to herein as the “Loan.” For the avoidance of doubt, the parties acknowledge and agree that this Agreement, the Note and Security
Agreement, and the extension of the Term Loan pursuant thereto, constitute the first part of a two-part (or three-part, as applicable) transaction between Bank and Borrower, the second part of which (the “Bond Transaction”) shall be
completed following the Closing Date, as more fully described in Section 3.2 herein. 
  
 Section 2.2 Term Loan. 
  
 (a) Term Loan. Bank shall lend to Borrower pursuant to the Term Loan the aggregate sum of (i) $9,000,000, if the Third Advance is made or (ii) $8,000,000, if the Third Advance is not made. 
  
 (b) Advances. At Closing, subject to satisfaction of the terms and
conditions set forth in this Agreement, Bank shall make an Initial Advance of $6,200,000 to Borrower under the Term Loan. Bank shall make a Second Advance of $1,800,000 to Borrower under the Term Loan subsequent to Closing upon satisfaction of the
conditions set forth in this Agreement. It is expressly understood and covenanted by Borrower that the Second Advance will be consummated, and all conditions precedent with respect thereto be satisfied, on or before March 1, 2004. As more fully
described in Section 3.3 herein, if the Bond Transaction has not been completed on or before March 31, 2004, Bank shall make the Third Advance of $1,000,000 to Borrower under the Term Loan upon satisfaction of the conditions set forth in Section 3.3
of this Agreement. 
  
 (c) Term Loan Note. The indebtedness
of Borrower in respect of the Term Loan shall be evidenced by the Term Loan Note executed by Borrower in favor of Bank in the form attached hereto as Exhibit A. 
  
 (d) Interest. The outstanding principal amount of the Term Loan Note shall bear interest at Borrower’s option,
at: (1) the As-Offered Fixed Rate; or (2) LIBOR plus 3.00% 
  

 - 7 - 

 (provided, however, that if Borrower fails to maintain Liquidity of at least $18,000,000, based on
Bank’s determination (in its sole discretion), then option (2) shall be LIBOR plus 3.50%). Borrower shall provide Bank with telephonic notice prior to the initial advance of the Term Loan and, if applicable, not less than 2 Business Days prior
to the last day of each LIBOR Term or As-Offered Fixed Rate Term, as the case may be, of Borrower’s selection of a rate option and term, which telephonic notice shall be promptly confirmed in writing. In the absence of such notice, the interest
rate on the Term Loan Note shall continue at the LIBOR rate as provided herein, or, in the event a LIBOR rate is not available, the Base Rate plus 0.50% (or, if Borrower’s Liquidity is less than $18,000,000, the Base Rate plus
1.00%). Interest shall be due and payable to Bank quarterly on each Interest Payment Date. 
  
 (e) Maturity. The principal of the Term Loan Note shall be paid in 36 equal quarterly installments of (a) $250,000 if the Third Advance is made, or (b) $222,222.22 if the Third Advance is not made, on March 31,
June 30, September 30 and December 31 of each year, commencing on March 31, 2005, subject to the prepayment provision contained herein. 
  
 (f) Optional Prepayments. The principal of the Term Loan Note, with respect to an As-Offered Fixed Rate Loan, may be prepaid in whole or in part
(but if in part only in amounts of $100,000 or integral multiples of $25,000 in excess thereof) at any time, by Borrower upon three Business Days’ written notice to Bank, which prepayment shall be subject to a prepayment premium in an amount to
be determined by Bank. The principal of the Term Loan Note, with respect to a LIBOR-based interest rate Loan or a Base Rate-based interest rate Loan, as the case may be, may be prepaid in whole or in part (but if in part only in amounts of $100,000
or integral multiples of $25,000 in excess thereof) at the end of the applicable LIBOR Term or term of a Base Rate-based interest rate Loan, by Borrower upon three Business Days’ written notice to Bank. In the event of the prepayment of any
portion of the Term Loan Note during any period in which the Term Loan Note shall bear interest at a LIBOR-based interest rate prior to the end of the applicable LIBOR Term, Borrower shall pay to Bank, concurrently therewith, a “breakage
fee” equal to the excess, if any, of (i) the amount of interest which otherwise would have accrued on the principal amount so repaid for the period from the date of such repayment to the last day of the LIBOR Term for such amount at the
applicable rate of interest for such amount provided for herein, over (ii) the interest component of the amount Bank would have bid in the London interbank market for Dollar deposits of leading lenders and amounts comparable to such principal amount
and with maturities comparable to such period (it being conclusively presumed for such purpose that Bank shall have purchased funds at the applicable LIBOR corresponding to such principal for the applicable LIBOR Term). No partial prepayment shall
reduce Borrower’s obligation to make principal payments next becoming due under the Term Loan Note, but shall reduce such principal payment obligations in reverse order of due date. 
  
 Section 2.3 Other Provisions. 
  
 (a) Interest on the Note shall be calculated based upon a 360-day year for the actual number of days elapsed. 
  
 (b) Whenever any payment to be made hereunder or under the Note shall be
stated to be due on a day that is not a Business Day, such payment may be made on the next 
  

 - 8 - 

 succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of
interest hereunder or under the Note, as the case may be. 
  
 (c)
In connection with the Loan provided hereunder, Borrower shall (1) pay to Bank at the Closing a closing fee equal to one-quarter of one percent of the Loan (the “Closing Fee”); (2) pay or reimburse Bank at the Closing (upon
presentation by Bank to Borrower of reasonably detailed supporting documentation) for the reasonable costs and expenses of Bank in connection with the preparation, execution, issuance and delivery of this Agreement and the other instruments and
documents to be delivered hereunder including, but not limited to, (i) reasonable fees and out-of-pocket expenses and disbursements of Bank and Bank’s counsel; (3) pay or reimburse Bank for all title insurance premiums and other filing fees
incurred by it in connection with obtaining or securing the Bank’s interest in the Collateral; (4) pay or reimburse Bank for all real estate evaluation and appraisal fees in connection with this Agreement; and (5) pay or reimburse Bank on
demand for the reasonable costs and expenses, if any, of Bank in connection with any amendments to this Agreement and the Note and the enforcement of this Agreement and the Note (including the reasonable fees and out-of-pocket expenses of
Bank’s counsel with respect thereto). All of the foregoing fees and expenses will be due and payable to Bank regardless of whether this Agreement and the transactions contemplated thereby are consummated. 
  
 (d) Payment by Borrower of all amounts due hereunder shall be made by debit
of a deposit account of Borrower maintained with Bank, as Bank may from time to time request. 
  
 (e) Notwithstanding any provision herein to the contrary, during any period in which an Event of Default shall have occurred and is continuing hereunder, interest shall accrue on the outstanding principal of the Note
at a rate per annum equal to the then interest rate applicable to the Loan pursuant to Section 2.2(c) hereof plus 2% (the “Default Rate”). 
  
 (f) Bank shall open and maintain on its books a loan account (the “Loan Account”) with respect to repayments, prepayments, the
computation and payment of interest and fees and the computation and final payment of all other amounts due and sums paid to Bank under this Agreement and the Note. Unless Borrower objects in writing to the information contained in a statement
delivered to Borrower by Bank regarding the Loan Account within thirty (30) days of receipt of such statement, the information contained in such statement and in the Loan Account will, absent manifest error, be conclusive and binding on Borrower as
to the amount at any time due to Bank from Borrower under this Agreement and the Note. 
  
 ARTICLE 3. 
 CONDITIONS OF LOAN 
  
 Section 3.1 Conditions Precedent to Loan and Initial Advance. 
  
 The obligation of Bank to make the Loan and the Initial Advance is subject
to the conditions precedent that Bank shall have received at or before the Closing, all of the following, in form and substance satisfactory to Bank: 
  
 (a) A copy, certified in writing by the Secretary or an Assistant Secretary of Borrower, of (1) resolutions of the Board of Directors of Borrower
evidencing approval of this 
  

 - 9 - 

 Agreement, the Note, the Mortgage, the Security Agreement, and other matters contemplated hereby and, (2) each document
evidencing any other necessary corporate action and any required approvals from governmental authorities with respect to this Agreement, the Note, the Mortgage, the Security Agreement, and other matters contemplated hereby. 
  
 (b) An opinion or opinions of counsel for Borrower in form and substance
satisfactory to Bank. 
  
 (c) A written certificate by the
Secretary or an Assistant Secretary of Borrower, confirming the names and signatures of the officers of Borrower authorized to sign this Agreement, the Note, the Mortgage, the Security Agreement, and the other documents or certificates of Borrower
to be executed and delivered pursuant hereto. Bank may conclusively rely on, and be protected in acting upon, such certificate until it shall receive a further certificate by the Secretary or an Assistant Secretary of Borrower amending the prior
certificate. 
  
 (d) The Note, duly executed on behalf of
Borrower. 
  
 (e) The Security Agreement granting to Bank a
security interest in substantially all of the real and personal property owned by Borrower, including accounts, goods (including inventory, equipment other than (x) the GE Equipment, and (y) equipment financed pursuant to Section 5.11(c) hereof, and
fixtures), general intangibles (excluding Intellectual Property), chattel paper, documents and instruments, books and records, letters of credit and letter of credit rights, tort claims, insurance claims, and all other rights to payment not included
in the foregoing, whether now owned or hereafter acquired, and all proceeds thereof, all as more particularly described in the Security Agreement (collectively, the “Collateral”). 
  
 (f) Results of UCC, tax lien, judgment and litigation searches on Borrower
and, if applicable, releases and/or termination statements terminating, or other evidence satisfactory to Bank of the termination of, all liens and security interests relating to the Collateral. 
  
 (g) Authorization to file UCC-1 financing statements with respect to the
Collateral. 
  
 (h) The Mortgage, together with a lender’s
policy of title insurance with respect to the Mortgaged Property, in form satisfactory to Bank, insuring the lien thereof, in an amount not less than $8,000,000, subject only to liens of the Prior Mortgages (as defined in the Mortgage). 

 
 (i) ACORD 25 and ACORD 27 certificates of insurance or other evidence of
Borrower’s insurance coverage as required by Section 5.3 hereof and by the provisions of the Mortgage and the Security Agreement. 
  
 (j) Payment to Bank of the Closing Fee and all other fees and expenses payable to Bank pursuant to and in connection with this Agreement. For the
avoidance of doubt, fees and expenses payable to Bank with respect to the Bond Transaction shall not be required to be paid on the Closing Date. 
  

 - 10 - 

 (k) An appraisal with respect to the Mortgaged Property, performed by an appraiser and in form and
substance satisfactory to Bank. 
  
 (l) Borrower’s business
and financial projections for Fiscal Year 2004 in form and substance reasonably satisfactory to Bank in its sole discretion. 
  
 (m) Certified copies of the Certificate of Incorporation and bylaws (and all amendments thereto) of Borrower, and certificates of good standing of
Borrower, evidencing its good standing as a corporation under the laws of its jurisdiction of incorporation and jurisdictions where Borrower is duly qualified to conduct business. 
  
 (n) Such other certificates, instruments, agreements, approvals and opinions as Bank may reasonably require. 
  
 Section 3.2 Conditions Precedent to Second Advance. 

 
 The obligation of Bank to make the Second Advance (and the Third Advance,
if the conditions precedent set forth in Section 3.3 are satisfied) under the Loan is subject to the further conditions precedent that: 
  
 (a) The representations and warranties contained in Article IV hereof shall be accurate on and as of the date of disbursement of the Second Advance (or
the Third Advance, if applicable) as though made on and as of such date; 
  
 (b) No Event of Default shall have occurred and be continuing or will result from the making of the Second Advance (or the Third Advance, if applicable), and no event shall have occurred and be continuing that with
notice or lapse of time or both would, if unremedied, be an Event of Default; and 
  
 (c) No material adverse change, as determined by Bank in its reasonable discretion, shall have occurred since the date of this Agreement in the financial condition, results of operation or business prospects of
Borrower. 
  
 (d) Concurrent with the Second Advance the early
redemption of the Series B Bonds in full by the Borrower shall be consummated in accordance with the applicable MCIDA Bond documents, which shall have occurred on or before March 1, 2004. Borrower shall deliver to the Bank evidence of consummation
of such redemption, along with a policy of title insurance insuring the Mortgage as a second mortgage lien subject only to the prior mortgage lien of Jefferson Bank with respect to the Series A Bonds in the original principal amount of $1,000,000,
which title insurance policy shall be acceptable to the Bank in all respects in the sole discretion of the Bank, and any other documentation as the Bank may reasonably request. 
  

 - 11 - 

 (e) The Bank shall have received such additional documents or instruments, and such additional approvals
and opinions as the Bank may request, under the terms of this Agreement, the other Loan Documents or otherwise. 
  
 The request for, and acceptance of, the Second Advance (or the Third Advance, if applicable) by Borrower shall be deemed a representation and warranty by
Borrower that each of the conditions specified in this subsection has been satisfied. 
  
 Section 3.3 Condition Subsequent to Loan. 
  
 Borrower agrees, as a condition subsequent hereunder, that it shall use its best efforts to consummate the Bond Acquisition on or before February 29, 2004. In the event the Bond Acquisition does not occur on or before
February 29, 2004, Bank will extend the date for performance by Borrower until March 31, 2004; provided, Borrower is using, and is continuing to use, its best efforts with respect thereto. If the Bond Transaction does not occur on or before such
extended date of March 31, 2004, the Borrower shall borrow and the Bank shall make to Borrower, the Third Advance, subject to the satisfaction of each of the conditions precedent set forth in Section 3.2 (a), (b), (c), and (e) herein (which
conditions precedent shall be deemed applicable to the Third Advance and shall be satisfied prior to the Bank’s funding thereof). 
  
 ARTICLE 4. 
 REPRESENTATIONS AND
WARRANTIES 
  
 Borrower represents and warrants to Bank as
follows: 
  
 Section 4.1 Existence; Authority.

  
 Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. Borrower has all requisite corporate power and authority, corporate and otherwise, to conduct its business and to own its properties and is duly qualified as a foreign
corporation in good standing in all jurisdictions in which its failure so to qualify could have a material adverse effect on its financial condition, operations or business prospects. Borrower does not have any subsidiaries or affiliates, or in the
past five years has not used any trade or other fictitious names. 
  
 Section 4.2 Authorization. 
  
 The
execution, delivery and performance by Borrower of this Agreement, the Note, the Mortgage and the Security Agreement have been duly authorized by all necessary corporate action, and do not and will not violate any current provision of any government
regulation or statute material to the on-going operation of Borrower’s business or of the charter or by-laws of Borrower or result in a breach of, or constitute a default under any indenture, instrument or other material agreement to which
Borrower is a party or by which it or its properties may be bound or affected, or result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of
Borrower, other than as contemplated by the Mortgage and the Security Agreement. 
  

 - 12 - 

 Section 4.3 Validity of Agreement, Note and Security Agreement. 
  
 This Agreement constitutes, and the Note, the Mortgage, the Security
Agreement and the other Loan Documents to which Borrower is a party, when duly executed and delivered will constitute, valid and legally binding obligations of Borrower, enforceable in accordance with their terms, except as such enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. 
  
 Section 4.4 Financial Information. 
  
 The financial statements of Borrower furnished to Bank were prepared in accordance with GAAP, consistently applied, and fairly and accurately present the
financial condition of Borrower as of the dates and for the periods therein indicated. Except as set forth on the Disclosure Schedule, there has been no material adverse change in the financial condition and results of operations or business
prospects of Borrower from those shown in the most recent of such financial statements. 
  
 Section 4.5 Litigation. 
  
 There are no actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against Borrower or any of its properties before any court or governmental department, commission, board, bureau, agency or instrumentality
(domestic or foreign) that, if determined adversely to Borrower, would have a material adverse effect on the financial condition, operations or business prospects of Borrower. 
  
 Section 4.6 Contingent Liabilities. 
  
 Except as set forth on the Disclosure Schedule, there are no suretyship agreements, guarantees or, to the best knowledge of
Borrower, other contingent liabilities of Borrower that are not disclosed on the financial statements mentioned in Section 4.4. 
  
 Section 4.7 Investment Company Act. 
  
 Borrower is not an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the
Investment Company Act of 1940, as amended. 
  
 Section 4.8
Federal Reserve Regulations. 
  
 No indebtedness that
is required to be, or will be, reduced or retired from the proceeds of the Loans was incurred for the purpose of purchasing or carrying any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve
System (12 C.F.R. 221, as amended), and Borrower does not own or have any present intention to acquire any such margin stock. Borrower is not engaged in, nor does it have as one of its substantial activities, the business of extending or obtaining
credit for the purpose of purchasing or carrying margin stock, and no proceeds of the Loan have been or will be used for such purpose or for the purpose of purchasing or carrying any such margin stock. 
  

 - 13 - 

 Section 4.9 Taxes. 
  
 Borrower has filed or has caused to be filed all tax returns and reports required by law to be filed, and all taxes,
assessments and other governmental charges (other than those presently payable without penalty or interest and those for which the sanctions, penalties and interest resulting from a failure to timely make payment would not have, individually or in
the aggregate, a material adverse effect on the financial condition, operations or business prospects of Borrower) upon it or any of its assets or income which are due and payable, have been paid, except as set forth on the Disclosure Schedule. Any
charges, accruals and reserves on Borrower’s books with respect to federal income taxes for all fiscal periods to date are considered adequate. There is no unpaid assessment against Borrower for additional federal income tax for any fiscal
period (or any basis for a material unpaid assessment) known to Borrower. 
  
 Section 4.10 Title; Encumbrances. 
  
 Borrower has good and indefeasible title to all of its properties and assets that it purports to own. Neither the Collateral nor the Mortgaged Property is, nor upon the making of the Loan will be, subject to any lien,
encumbrance or security interest (other than the Permitted Liens) except in favor of Bank under the Mortgage and the Security Agreement. Borrower has not agreed with any entity (other than Bank) not to pledge, encumber or otherwise grant a lien or
security interest upon its properties or assets except for such assets as comprise collateral for or are otherwise subject to a Capital Lease, or except as may otherwise be prohibited by the documents entered into among the parties relating to the
MCIDA Bonds. 
  
 Section 4.11 Consents. 

 
 No authorization, consent, approval, license, exemption by or filing or
registration with any court or governmental department, commission, board (including the Board of Governors of the Federal Reserve System), bureau, agency or instrumentality is or will be necessary for the valid execution, delivery or performance by
Borrower of this Agreement, the Note, or the Security Agreement. 
  
 Section 4.12 Compliance with Laws. 
  
 Except to the extent that the failure to so comply would not have a material adverse effect, individually or in the aggregate, on the financial condition, operations or business prospects of Borrower: (a) Borrower is in compliance with all
laws, regulations and other requirements pertaining to its business; and (b) Borrower has not, within the past three (3) years, received any notice or formal or, to Borrower’s knowledge, any informal complaint or claim alleging that Borrower
has failed to comply with any law, regulation or other requirement pertaining to its business, except (with respect to this clause (b)) as set forth on the Disclosure Schedule. 
  
 Section 4.13 Environmental Laws. 
  
 Borrower is in compliance, in all material respects, with all Environmental Laws (as defined below), including, without
limitation, all Environmental Laws in jurisdictions in which 
  

 - 14 - 

 Borrower owns or operates, or has owned or operated, a facility or site, stores Collateral, arranges or has arranged for
disposal or treatment of hazardous substances, solid waste or other waste, accepts or has accepted for transport any hazardous substances, solid waste or other wastes or holds or has held any interest in real property or otherwise. Except as set
forth on the Disclosure Schedule: (a) no litigation, action or overt investigation arising under, relating to or in connection with any Environmental Law is pending or, to the best knowledge of Borrower, threatened; and (b) to the best knowledge of
Borrower, no proceeding, inquiry, request for information or administrative action is either pending or threatened; against Borrower, any real property in which Borrower holds or has held an interest or any past or present operation of Borrower. No
release, threatened release or disposal of hazardous waste or substances, solid waste or other wastes is occurring, or to the best knowledge of Borrower, has occurred, on, under or to any real property in which Borrower holds any interest or
performs any of its operations, in violation of any Environmental Law. 
  
 Section 4.14 ERISA. 
  
 Except as would
not have a material adverse effect, individually or in the aggregate, on the financial condition, operations or business prospects of Borrower, Borrower is in compliance with all applicable provisions of ERISA, and no Prohibited Transaction has
occurred and is continuing with respect to any Plan. Neither the Borrower nor any ERISA Affiliate maintains or has ever maintained a Plan subject to Title IV of ERISA or Section 412 of the Code, or is or has been a contributing employer with respect
to any Multiemployer Plan. 
  
 Section 4.15
Indebtedness. 
  
 Borrower is not liable to any Person
for indebtedness for money borrowed other than as disclosed to Bank in the Disclosure Schedule. 
  
 Section 4.16 Information; No Untrue Statement. 
  
 All information heretofore furnished by Borrower to Bank in writing for purposes of or in connection with this Agreement or the Note or the borrowing
contemplated hereby or thereby is true and accurate in all material respects or, in the case of projections, based upon reasonable estimates, on the date as of which such information is stated or certified. No representation or warranty contained
herein or in any certificate or other document furnished by Borrower pursuant to this Agreement contains any untrue statement of material fact or omits to state a material fact necessary to make such representation or warranty not misleading in
light of the circumstances under which it was made. 
  
 Section
4.17 Agreements and Orders. 
  
 Borrower is not in
default in the performance of any agreement or instrument to which it is a party or by which its properties are bound, or with respect to any order, writ, injunction, or decree of any court or governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, except to the extent that such default would not have a material adverse effect on the financial condition, results of operations or business prospects of Borrower. 
  

 - 15 - 

 Section 4.18 Operation of Business. 
  
 Borrower possesses (i) all material licenses, permits and other governmental
authorizations, and (ii) all material franchises and Intellectual Property rights, or rights in any of the foregoing, adequate for the conduct of its business as now conducted and presently proposed to be conducted, without conflict with the
material rights or claimed rights of others, except to the extent same is permitted under applicable law. 
  
 Section 4.19 Perfection of Liens. 
  
 The Bank, upon filing of the UCC-1 financing statement with the Secretary of State of the State of Delaware, and recording of the Mortgage with the Office
of the Montgomery County, Pennsylvania Recorder of Deeds, each prepared in connection with this Agreement, will have filed of record financing statements and other documents or lien instruments in all places as are necessary to perfect the security
interests, liens, and other encumbrances granted by this Agreement, the Mortgage or the Security Agreement, and no further action (including the filing or recording of any documents or instrument, other than the periodic filing of UCC-3 continuation
statements) is or will be necessary in order to establish, perfect or maintain the security interests, liens, and other encumbrances granted or confirmed by this Agreement, the Mortgage or the Security Agreement. 
  
 Section 4.20 Securities Laws. 
  
 All registration statements, reports, definitive proxy statements and other
filings of Borrower did comply, as of their respective filing dates, in all material respects with the requirements of all applicable Securities Laws, and did not contain any untrue statement of a material fact, or fail to state a material fact
required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, as of their respective filing dates. 
  
 Section 4.21 Other Agreements. 
  
 Borrower is not a party to any indenture, loan or credit agreement, or to
any lease or other agreement or instrument, or subject to any charter or corporate restriction, which could have a material adverse effect on its business, properties, assets, or condition, financial or otherwise, or adversely effect its ability to
materially perform its obligations under this Agreement, or the other Loan Documents to which it is a party. 
  
 Section 4.22 Labor Disputes and Casualties. 
  
 Borrower is not affected by any fire, explosion, accident, strike, lockout, or other labor dispute, drought, storm, hail, earthquake, embargo, act of
public enemy, or other casualty (whether or not covered by insurance) which materially and adversely affects its business, properties, assets, or condition, financial or otherwise, or its ability to perform its obligations under this Agreement, or
the other Loan Documents to which it is a party. 
  

 - 16 - 

 Section 4.23 Intellectual Property. 
  
 (a) The Borrower has ownership or license or legal right to use all
Intellectual Property other than Intellectual Property generally available on commercial terms from other sources. All material licenses or other material agreements under which (i) the Borrower is granted rights in Intellectual Property, other than
Intellectual Property generally available on commercial terms from other sources, and (ii) the Borrower has granted rights to others in Intellectual Property owned or licensed by the Borrower, are, to the knowledge of the Borrower, in full force and
effect and, to the knowledge of the Borrower, there is no material default by the Borrower thereunder. The Borrower believes it has taken all steps required in accordance with sound business practice and business judgment to establish and preserve
its ownership of or rights to all material Intellectual Property. To the knowledge of the Borrower, the present business, activities and products of the Borrower do not infringe any intellectual property of any other person, except where such
infringement would not have a material averse effect on the financial condition, results of operations or business prospects of Borrower. To the knowledge of the Borrower, the Borrower is not making unauthorized use of any confidential information
or trade secrets of any Person. Neither the Borrower nor, to the knowledge of the Borrower, any of its employees has any agreements or arrangements with any Persons other than the Borrower related to confidential information or trade secrets of such
persons other than such agreements that would not materially restrict the Borrower from conducting its business as currently conducted. 
  
 (b) None of the Intellectual Property has been pledged as security or collateral for any indebtedness of Borrower. 
  
 (c) None of Borrower’s agreements covering its Intellectual Property
licensed to third parties, or covering its Intellectual Property being co-developed with or used by third parties, provides any such third party, upon a default by Borrower under such agreement, with (A) the right to acquire, use or foreclose upon
such Intellectual Property without payment to Borrower of fair value with respect thereto (except to the extent that the existence of such right would not have a material adverse effect on the financial conditions, operations or business prospects
of Borrower), or (B) any right or remedy other than a limited ability to use such Intellectual Property within the limited field of use which is the subject of such agreement. 
  
 Section 4.24 Further Assurances. 
  
 At any time and from time to time, upon the written request of Bank and at the sole expense of Borrower, Borrower shall
promptly and duly execute and deliver any and all such further instruments and documents and take such further action as Bank may reasonably deem desirable (a) to obtain the full benefits of this Agreement and the other Loan Documents, (b) to
protect, preserve and maintain Bank’s rights in any Collateral or Additional Collateral, or (c) to enable Bank to exercise all or any of the rights and powers herein granted. 
  

 - 17 - 

 ARTICLE 5. 
 COVENANTS OF BORROWER 
  
 So long as any amount due Bank hereunder remains unpaid, unless Bank shall otherwise consent in writing: 
  
 Section 5.1 Books and Records; Financial Statements and Other Information. 
  
 Borrower covenants that it shall keep proper books of record and account in which full, true and correct entries will be
made of all dealings or transactions of or in relation to the business and financial affairs of Borrower, in accordance with GAAP. Borrower shall furnish to Bank the following: 
  
 (a) promptly upon the filing, distribution or receipt thereof, copies of (i) all reports (including, without limitation,
Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q), registration statements and definitive proxy statements filed by Borrower with the Securities and Exchange Commission (the “SEC”) (or any successor thereto) or any
securities exchange, (ii) copies of all reports, proxy statements, financial statements, and management letters distributed by Borrower to its shareholders or the financial community in general, and (iii) copies of any reports submitted to Borrower
by independent accountants in connection with any annual, interim or special audit; 
  
 (b) within ninety (90) days after the last day of each Fiscal Year of Borrower, (i) a copy of Borrower’s annual financial statements prepared in accordance with GAAP, which shall be accompanied by an unqualified
audit report of Borrower’s certified public accountants, and (ii) a letter of an authorized officer of Borrower to the effect that to the best of his or her knowledge, no event has occurred which constitutes or would, with the passage of time
or the giving of notice or both, constitute an Event of Default hereunder, or otherwise describing any such event known to such officer; 
  
 (c) within forty-five (45) days after the last day of each of the first three Fiscal Quarter, (i) a copy of Borrower’s unaudited financial statements
for such Fiscal Quarter and for the Fiscal Year to date (including a comparison to the corresponding period from the prior Fiscal Year), including a balance sheet, income statement and statement of cash flows, and (ii) a letter of an authorized
officer of Borrower to the effect that, in the opinion of such officer (A) such unaudited financial statements have been prepared in accordance with GAAP and reflect a fair presentation of Borrower’s financial position and results of operation
of Borrower, for such Fiscal Quarter and the Fiscal Year to date, and (B) no event has occurred which constitutes or would, with the passage of time or the giving of notice or both, constitute an Event of Default hereunder, or otherwise describing
any such event known to such officer; 
  
 (d) within forty (40)
days after the last day of each month (other than any month in which the end of a Fiscal Quarter or Fiscal Year falls), (i) a copy of Borrower’s unaudited financial statements for such month and for the Fiscal Year to date (including a
comparison to the corresponding period from the prior Fiscal Year), including a balance sheet and income statement, and (ii) a letter of an authorized officer of Borrower to the effect that, in the opinion of such officer (A) such unaudited
financial statements reflect in all material respects Borrower’s financial position and results of operation of Borrower, for such month and the Fiscal Year to date, and (B) no event has occurred which constitutes or would, with the passage of
time or the giving of notice or both, constitute an Event of Default hereunder, or otherwise describing any such event known to such officer; 
  

 - 18 - 

 (e) as soon as practicable, but in any event within five (5) days after Borrower becomes aware of the
occurrence of any event that would cause a material adverse change in the business, business prospects, properties or financial condition of Borrower, a written statement by an executive officer, setting forth the details of such material adverse
change, and the action which is proposed to be taken with respect thereto; 
  
 (f) as soon as practicable, but in any event within five (5) days of the time Borrower becomes aware thereof (or should have become so aware with the exercise of reasonable diligence), notice of the institution of, or
of any material adverse development with respect to, any suit or proceeding, against Borrower in which the amount of damages which is sought, or which in Borrower’s reasonable opinion may be at controversy, shall exceed $100,000; 
  
 (g) as soon as possible, but in any event within five (5) days after Borrower
becomes aware thereof (or should have become so aware with the exercise of reasonable diligence), notice of the occurrence of any Event of Default or of any act, omission, thing or condition which upon the giving of notice or lapse of time, or both,
would or might constitute an Event of Default, which notice shall describe the Event of Default or other act, omission, thing or condition in question and shall set forth in detail what action Borrower proposes to take with respect thereto;

  
 (h) as soon as possible, but in any event within five (5) days
after Borrower becomes aware thereof (or should have become so aware with the exercise of reasonable diligence), notice of the occurrence of any Reportable Event or Prohibited Transaction with respect to any Plan if such Reportable Event or
Prohibited Transaction could reasonably be expected to have a material adverse effect on the financial condition, operations or business prospects of Borrower; and 
  
 (i) upon request, or within a reasonable time thereafter, such other information concerning Borrower and its operations and
financial condition and results as Bank may reasonably request. 
  
 All such reports, registration statements, definitive proxy statements and other filings of Borrower with the SEC will comply, as of their respective filing dates, in all material respects with the requirements of all applicable Securities
Laws, and will not contain any untrue statement of a material fact, or fail to state a material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made,
not misleading, as of their respective filing dates. 
  
 Section 5.2 Payment of Taxes and Claims. 
  
 Borrower will pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or profits before any penalty or interest accrues thereon,
and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums which have become due and payable 
  

 - 19 - 

 and which by law have or might become a lien upon any of its properties or assets, provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor and, if the
filing of a bond or other indemnity is necessary to avoid the creation of a lien against any of the assets of Borrower, such bond shall have been filed or indemnity provided. 
  
 Section 5.3 Insurance. 
  
 (a) Borrower shall (i) keep its property and business insured against fire and other hazards (so-called “all risk”
coverage) in amounts and with companies reasonably satisfactory to Bank, or the amount necessary to avoid any co-insurance penalty, which policy shall name Bank as loss payee as its interest may appear, (ii) maintain public liability coverage
against claims for personal injuries, death or property damage in an amount deemed reasonable by Bank, which policy shall name Bank as an additional insured as its interest may appear, and (iii) maintain all worker’s compensation, employment or
similar insurance as may be required by applicable law. All such property insurance shall contain an endorsement identifying Bank as lienholder, lender loss payee and mortgagee, and providing for a minimum of thirty (30) days’ written
cancellation notice to Bank. In any event, Borrower’s obligation to carry such insurance may only be brought within the coverage of a so-called blanket or umbrella policy or policies of insurance carried and maintained by Borrower if and only
if the coverage afforded Bank will not be limited, reduced or diminished by reason of the use of a blanket or umbrella policy of insurance. 
  
 (b) Borrower agrees to deliver copies of all of the aforesaid insurance policies to Bank. 
  
 (c) In the event of any material loss or damage to the Collateral, Borrower shall give prompt (and, in any event, within
five (5) days of such occurrence) written notice to Bank and to its insurers of such loss or damage and shall properly file its proofs of loss with said insurers. 
  
 (d) In the event the whole or materially all of the Collateral (including the Mortgaged Property) shall be destroyed or
damaged, Bank shall have the right to collect the proceeds of any insurance and to retain and apply such proceeds, at its election, to the reduction of the Loan, in inverse order of maturity, and any other amounts due and owing under the Loan
Documents, or to restoration, repair, replacement, rebuilding or alteration (herein sometimes collectively called the “Restoration”) of the Collateral (including the Mortgaged Property). In the event the whole or materially all of
the Mortgaged Property shall be taken in condemnation proceedings or by agreement between Borrower and Bank and the condemning authority, Bank shall apply such award or proceeds thereof first to payment of the Loan, in inverse order of maturity, and
any other amounts due and owing under the Loan Documents, and any balance then remaining shall be paid to Borrower. For the purposes of this Section 5.3, “materially all of the Mortgaged Property” shall be deemed to have been damaged,
destroyed or taken if the portion of the Mortgaged Property not so damaged, destroyed or taken cannot be repaired or reconstructed so as to constitute a complete structure and facility usable in substantially the manner as prior to the damage,
destruction or taking. 
  

 - 20 - 

 (e) So long as no Event of Default has occurred, in the event of partial destruction of the Collateral
(including the Mortgaged Property) or partial condemnation of the Mortgaged Property, all of the proceeds or awards shall be collected and held by Bank, and shall be applied by Bank, in its sole discretion, to the repayment of the Loan, in the
inverse order of maturity, and any other amounts due and owing under the Loan Documents, with any proceeds then remaining being paid to Borrower, or to the payment of the Restoration. Upon the written request of Borrower, Bank shall apply such
proceeds or awards to the payment of the Restoration as the Restoration progresses, so long as: 
  
 (i) Such proceeds are, in Bank’s reasonable judgment, sufficient to cover the cost of such Restoration or, if insufficient, Borrower
deposits with Bank the amount of any such deficiency, 
  
 (ii) Borrower shall deliver to Bank contracts, plans and specifications for the Restoration which are satisfactory to Bank, 
  
 (iii) the work for which payment is requested has been done in a good and workmanlike manner and Borrower presents evidence satisfactory
to Bank of amounts owed or paid by Borrower for completed Restoration work, 
  
 (iv) The Collateral (including the Mortgaged Property), after such Restoration is or will be, in the reasonable judgment of Bank, of an economic value not less than that of such Collateral prior to the casualty or
condemnation (Bank has the right, but not the obligation, to perform an appraisal on the Collateral in order to determine its economic value), and 
  
 (v) Borrower shall comply with such further conditions in connection with the use of such proceeds or award as Bank may reasonably
request. 
  
 Any balance remaining in the hands of Bank after
payment of such Restoration shall be retained by Bank and applied to the payment of the Loan, in the inverse order of maturity, and any other amounts due and owing under the Loan Documents. 
  

 - 21 - 

 (f) Notwithstanding the foregoing provisions of this Section 5.3 regarding insurance or condemnation
proceeds, if no Event of Default has occurred, and if such proceeds do not exceed $1,000,000.00, and if the undamaged or uncondemned portion of the Collateral (including the Mortgaged Property) can be continuously used during the Restoration period
as a complete structure and operating facility in substantially the same manner as prior to the damage, Borrower shall have the right to collect the insurance or condemnation proceeds and apply them to the Restoration. 
  
 (g) No damage, destruction or condemnation of the Collateral (including the
Mortgaged Property) nor any application of insurance or condemnation proceeds to the payment of the Loan, and any other amounts due and owing under the Loan Documents, shall postpone or reduce the amount of any of the current installments of
principal or interest becoming due under the Loan, and any other amounts due and owing under the Loan Documents, which shall continue to be made in accordance with the terms of the Loan until the Loan, all interest due thereunder and any other
amounts due and owing under the Loan Documents are paid in full. 
  
 (h) Borrower, as of the date hereof has, and shall maintain, in full force and effect business interruption insurance in the coverage amount of at least $5,000,000. 
  
 (i) The provisions of this Section shall be in addition to any similar requirements set forth in the Security Agreement and
the Mortgage. 
  
 Section 5.4 Maintenance of Properties.

  
 Borrower will maintain or cause to be maintained its
properties in good repair, working order and condition and make or cause to be made all appropriate and proper repairs, renewals, replacements, additions and improvements thereto. Borrower shall install and maintain its equipment and systems in
compliance in all material respects with any requirement imposed under any governmental regulations, permits, or licenses or under agreements affecting Borrower. Borrower shall maintain, preserve and protect, and, when necessary, renew, all
Intellectual Property, except where the failure to do any of the foregoing would not have a material adverse effect, individually or in the aggregate, upon the financial condition, results of operation or business prospects of Borrower. 

 

 - 22 - 

 Section 5.5 Inspection. 
  
 (a) Upon reasonable notice Borrower will allow any representative of Bank to visit and inspect any of its properties, to
examine the books of account and other records and files of Borrower (including, without limitation, the financial statements (audited and unaudited, to the extent prepared) and information with respect to Borrower), to make copies thereof;
provided, prior to an Event of Default such visits, inspections and examinations shall be limited to four (4) times in any calendar year. 
  
 (b) Borrower will allow Bank to discuss the affairs, business, finances and accounts of Borrower with its management, personnel and accountants, all at
such reasonable times (and to the extent feasible, during ordinary business hours) and as often as Bank may reasonably request. 
  
 Section 5.6 Change in Organizational Documents; Maintenance of Existence. 
  
 Borrower will not amend, or consent to, any amendment or supplement to, its certificate of incorporation or other
organization document which amendment or supplement would reasonably be expected to adversely affect the rights or interests of the Bank hereunder. Borrower shall preserve and maintain its corporate existence and good standing in its jurisdiction of
incorporation, and qualify and remain qualified as a foreign corporation in each jurisdiction in which such failure to so qualify would reasonably be expected to have a materially adverse effect on the Borrower’s business operations or the
Collateral. 
  
 Section 5.7 Subsidiaries.

  
 Borrower will not form or acquire any subsidiary without
the written consent of Bank, which consent shall not be unreasonably withheld. 
  
 Section 5.8 Compliance with Laws. 
  
 Borrower shall comply with all applicable laws, regulations and other requirements pertaining to its business, including, without limitation, all Environmental Laws and Securities Laws, except to the extent that the
failure to so comply would not have a material adverse effect, individually or in the aggregate, on the financial condition, operations or business prospects of Borrower. 
  
 Section 5.9 Federal Reserve Regulations. 
  
 No proceeds of the Loans shall be used by Borrower, directly or indirectly to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin stock. Borrower will not, directly or indirectly, otherwise take or permit to be taken any action which would result in the Loans or the carrying out of any of the other
transactions contemplated by this Agreement, being violative of Regulation T (12 C.F.R. 220, as amended), Regulation U (12 C.F.R. 221, as amended), Regulation X (12 C.F.R. 224, as amended), or any other regulation of the Board of Governors of the
Federal Reserve System. 
  

 - 23 - 

 Section 5.10 ERISA. 
  
 Except as would not have a material adverse effect, individually or in the aggregate, on the financial condition, operations
or business prospects of Borrower, Borrower shall comply in all material respects with all applicable provisions of ERISA with respect to each Plan as to which Borrower has any liability, including minimum funding requirements, and shall not (i)
allow any Prohibited Transaction to occur with respect to any such Plan, (ii) allow any Reportable Event to occur with respect to any such Plan subject to Title IV of ERISA which would cause the PBGC to institute proceedings under Section 4042 of
ERISA, (iii) withdraw from any such Plan subject to Title IV of ERISA or initiate steps to do so, or (iv) take any steps to terminate any such Plan subject to Title IV of ERISA. 
  
 Section 5.11 Additional Negative Covenants. 
  
 So long as any part of the Loan remains unpaid, Borrower shall not, without the written consent of Bank: 
  
 (a) Corporate Transactions. (1) Merge or consolidate with any other
corporation, partnership, trust or other entity, (2) sell, lease, license, transfer or otherwise dispose of any of its assets other than (A) in the ordinary course of business, or (B) if outside the ordinary course of business, where the cost of
such assets exceeds $100,000, or (3) directly or through any entity consolidated with Borrower for financial reporting purposes, purchase (A) any assets other than in the ordinary course of business; or (B) where the purchase price of such assets
exceeds $100,000. 
  
 (b) Nature of Business. Make any
material change in the nature of its business as conducted at the time of the Closing. 
  
 (c) Borrowings. Create, incur, assume, guarantee, endorse, or otherwise become liable for, or permit to exist any direct or contingent obligation for borrowed money (including obligations under Capital Leases),
except: 
  
 (1) obligations with respect to the Note, this
Agreement and the other Loan Documents; 
  
 (2) any other
indebtedness to Bank; 
  
 (3) the indebtedness described in the
Disclosure Schedule; 
  
 (4) Capital Lease obligations or
purchase money equipment financings; provided, however, that, where such obligation or financing to any one entity is in an amount greater than $250,000.00, the lender asserting any security interest therein executes and delivers to
Bank an intercreditor agreement substantially in the form attached hereto as Exhibit C, satisfactory to Bank in its reasonable discretion; and 
  
 (5) other existing and future indebtedness, to Borrower’s vendors providing extended terms for payment, not to exceed $500,000 in the aggregate;
which obligations, when taken in the aggregate, shall not exceed $22,000,000. 
  

 - 24 - 

 (d) Guarantees. Assume, guarantee, endorse, or otherwise become directly or contingently liable
for the indebtedness of any other Person. 
  
 (e)
Encumbrances. Either (i) enter into an agreement with any entity (other than Bank) not to pledge, encumber or otherwise grant a lien or security interest upon any of its property or assets, or (ii) create, incur, assume or suffer to exist any
mortgage, lien, security interest, restriction or encumbrance with respect to any of its property or assets, including, but not limited to, the Collateral, the Mortgaged Property, the Intellectual Property and the Liquidity, other than Permitted
Liens: 
  
 (f) Loans and Investments. Acquire or retain,
except as set forth in the Disclosure Schedule, any debt or equity interest in, or make any loan or advance to or other investment in, any Person other than (1) the investment of Borrower’s cash for temporary periods in the ordinary course of
business and in accordance with prudent cash management policies, and (2) normal advances in the ordinary course of business to officers and employees in connection with their duties. 
  
 (g) Restricted Payments. Directly or indirectly, declare, order, pay, make or set apart any sum or property for any
dividend or other distribution with respect to its capital stock. 
  
 (h) Leasebacks. Directly or indirectly sell or otherwise transfer, in one or more related transactions, any property (whether real, personal or mixed) and thereafter rent or lease such transferred property or substantially identical
property. 
  
 (i) Transactions with Affiliates. Directly or
indirectly, engage in any transaction, other than issuances with respect to equity interests in the Borrower, with an Affiliate of Borrower on terms that are less favorable to Borrower than those which might be obtained at the time from Persons
which are not an Affiliate of Borrower. 
  
 (j) Fiscal
Year. Change its Fiscal Year. 
  
 Section 5.12
Liquidity; Additional Collateral; Grant of Security Interest. 
  
 Within 14 days after the Second Advance, Borrower shall have deposited all of its Financial Assets, other than $100,000, in account(s) maintained by the Bank and/or its affiliates. Thereafter, Borrower shall keep and
maintain all of its Financial Assets, other than $100,000, in an account or accounts with the Bank and/or its affiliates except as may be necessary to fund the Borrower’s business, or as otherwise consented to in writing by Bank. At any time on
or after the fourth anniversary date of Closing, or if Borrower fails to maintain Liquidity of at least $22,000,000 (based on Bank’s determination in its sole discretion), Bank may require, in its sole discretion, that Borrower obtain and
deliver to Bank a standby letter of credit within ten (10) days of Bank’s request thereof, issued by a bank reasonably acceptable to Bank in its sole discretion, substantially in the form attached hereto as Exhibit B, in the outstanding
principal amount of the Loan as additional collateral (“Additional Collateral”). Bank shall be permitted 
  

 - 25 - 

 to make partial draws upon the Additional Collateral for payments of principal and interest. Borrower hereby creates and
grants to Bank and its affiliates a security interest in and lien upon the Liquidity, provided that such security interest and lien shall attach and become perfected (a) upon the earlier of (i) Bank’s receipt of notice from a Person that
has provided Capital Lease financing to Borrower, which notice evidences such Person’s commencement of, or intention to commence, foreclosure or other action against the Borrower or such equipment, or (ii) commencement by a Person that has
provided Capital Lease financing to Borrower of foreclosure or other action against the Borrower or the financed equipment; or (b) if, for any reason, Borrower does not obtain and deliver to Bank the Additional Collateral as provided herein, and
further provided that such security interest and lien shall be limited to an amount equal to the outstanding balance of the Loan at the time of such attachment and perfection, and all other amounts due and payable under this Agreement.
Borrower hereby authorizes Bank to file and record, and agrees and covenants that it will execute and deliver to Bank, any and all such UCC financing statements, agreements, documents, instruments and/or certificates necessary for the perfection of
such security interest and lien. 
  
 Section 5.13 Updates to
Disclosure Schedule. 
  
 Following the Closing and prior
to the Second and (if applicable) Third Advances, Borrower shall be permitted to amend and update the Disclosure Schedule to reflect any events occurring after the Closing and permitted under the terms of the Loan Documents that, if not reflected,
would cause the Disclosure Schedule to be materially incorrect; provided that no such change constitutes a default or Event of Default thereunder, Borrower shall make any such amendment (and notify Bank of same) promptly after becoming aware of the
need therefore, and such amended Disclosure Schedule shall be incorporated as part of this Agreement and shall replace the Disclosure Schedule then existing. 
  
 Section 5.14 Copies of Documents Evidencing Permitted Indebtedness. 
  
 Borrower agrees to deliver to Bank copies of all documents evidencing any Permitted Indebtedness incurred by Borrower
subsequent to the date of Closing within ten (10) days after consummation of the transaction giving rise to such Permitted Indebtedness. 
  
 ARTICLE 6. 
 DEFAULT 

 
 Section 6.1 Events of Default. 
  
 Each of the following shall be an event of default (“Event of
Default”): 
  
 (a) Failure to pay when due any
installment of the principal of or interest on the Note; or 
  
 (b) Failure to pay any other fee, expense or other payment due hereunder within five (5) business days after demand is made; or 
  

 - 26 - 

 (c) Failure to observe or perform any other term, covenant, condition or agreement set forth in this
Agreement (excluding Section 5.12 hereof), where Borrower does not cure such failure within ten (10) business days after notice from Bank; or 
  
 (d) The occurrence of any default under the Mortgage, Security Agreement, or any other Loan Document after the expiration of any applicable grace or cure
period; or 
  
 (e) Borrower shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking position by any such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or 
  
 (f) An involuntary case or other proceeding shall be commenced against
Borrower seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days; or an order for relief shall be entered against Borrower or
any subsidiary of Borrower under the Federal bankruptcy laws as now or hereafter in effect; or 
  
 (g) If any Change of Control shall occur; or 
  
 (h) If Borrower shall fail to pay any obligation for the payment of borrowed money or the installment purchase price of property or on account of a lease of property (a “Credit Obligation”) owing by
it, or any interest or premium thereon, when due, whether such Credit Obligation shall become due by scheduled maturity, by required prepayment, by acceleration, by demand or otherwise, or Borrower shall fail to perform any term, covenant or
agreement on its part to be performed under any agreement or instrument evidencing or securing or relating to any such Credit Obligation when required to be performed, if the effect of such failure is to accelerate, or to permit the holder or
holders of such Credit Obligation in excess of $250,000 to accelerate, the maturity of such Credit Obligation, whether or not such failure to perform shall be waived by the holder or holders of such Credit Obligation, unless such waiver has the
effect of terminating the right of such holder or holders to accelerate the maturity of such Credit Obligation as a result of such failure; or 
  
 (i) If any representation or warranty by or on behalf of Borrower made herein or in any report, certificate, financial statement or other instrument
delivered to Bank shall prove to be false or misleading in any material respect when made; or 
  
 (j) If any default shall occur with respect to any other indebtedness of Borrower to Bank in excess of $25,000, subject to Borrower’s right to notice and opportunity to cure, if any, under the instruments which
evidence or secure such indebtedness; or 
  

 - 27 - 

 (k) The occurrence of any material adverse change in the business, financial condition, results of
operations or business prospects of Borrower, as determined by Bank in its sole discretion; or 
  
 (l) Failure of Borrower to maintain its Financial Assets (other than $100,000) at all times in an account(s) with the Bank and/or its affiliates; or 
  
 (m) A judgment or lien (with respect to which full adequate insurance is not maintained) in excess of $250,000 (individually
or in the aggregate) is entered against Borrower, or the property of Borrower becomes subject to any attachment, garnishment, levy or lien; or 
  
 (n) Borrower dissolves, liquidates or ceases to conduct operations, or prepares or attempts to do any of the foregoing; or 
  
 (o) Borrower ceases to operate its business at its pilot plant located in its
102 Witmer Road, Horsham, Pennsylvania facility due to the failure of Borrower to be in compliance with applicable laws, regulations and specifications of the United States Food and Drug Administration or any other relevant governmental regulatory
agency or authority. 
  
 ARTICLE 7. 
 REMEDIES; ACCELERATION 
  
 If any Event of Default shall occur and be continuing, Bank may, by written notice to Borrower, (a) declare the entire unpaid principal amount of the
Loan, all interest accrued and unpaid thereon and all other amounts payable hereunder to be forthwith due and payable, whereupon the Note, all such accrued interest and all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower; (b) exercise its rights under the Mortgage and the Security Agreement; and (c) exercise all of the rights and remedies of a secured
party under the Uniform Commercial Code or any other applicable law or agreement with respect to all Collateral and Additional Collateral then held for the Loan. Notwithstanding the foregoing, the entire unpaid principal amount of the Loan, together
with all interest accrued and unpaid thereon and all other amounts payable hereunder shall be immediately due and payable hereunder, without notice, upon the occurrence of an Event of Default described in Sections 6.1(e) and (f) above. 

 
 Bank shall have no obligation to marshal any Collateral or Additional
Collateral or to seek recourse against or satisfaction of any of the liabilities hereunder from one source before seeking recourse against or satisfaction from another source. The net cash proceeds resulting from Bank’s exercise of any of its
rights and remedies hereunder, including any and all collections (after deducting all of Bank’s expenses related thereto), shall be applied by Bank on account of Borrower’s liabilities hereunder in such order as Bank shall elect in its
sole discretion, whether due or to become due. Borrower shall remain liable to Bank for any deficiencies. All of Bank’s remedies hereunder and under the other Loan Documents shall be cumulative, may be exercised simultaneously against any
Collateral and any Additional Collateral and in such order as Bank may deem desirable, and are not intended to be exhaustive. 
  

 - 28 - 

 ARTICLE 8. 
 MISCELLANEOUS 
  
 Section 8.1 No Waiver; Cumulative Remedies. 
  
 No failure or delay on the part of Bank or Borrower in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy hereunder. No waiver of any provision hereof shall be effective unless the same shall be in writing and signed by Bank and Borrower. 
  
 Section 8.2 Set-Off. 
  
 Upon the occurrence and during the continuance of an Event of Default, Bank
shall have the right, in addition to all other rights and remedies available to Bank, without prior notice to Borrower, to apply toward and set-off against and apply to the then unpaid balance of the Loan and any other amounts due and owing under
the Loan Documents any items or funds held by Bank, any and all deposits (whether general or special, time or demand, matured or unmatured, fixed or contingent, liquidated or unliquidated) and Financial Assets now or hereafter maintained by Borrower
for its own account with Bank, and any other indebtedness at any time held or owing by Bank to or for the credit or the account of Borrower. Bank is hereby authorized to charge any such account or indebtedness for any amounts then due to Bank. Such
right of set-off shall exist whether or not Bank shall have made any demand under this Agreement, the Note or any other Loan Document. Borrower hereby confirms the Bank’s right of set-off, and nothing in this Agreement shall be deemed any
waiver or prohibition of such right of set-off. 
  
 Section 8.3
Indemnification. 
  
 Borrower covenants and agrees, at
its expense, to pay and to indemnify and save Bank, its partners, employees and agents, and their successors and/or assigns (collectively, the “Indemnified Parties”) harmless of, from and against, any and all claims, damages,
demands, expenses, liabilities, and losses of every kind, character and nature asserted by or on behalf of any Person (including Bank) arising out of, resulting from or in any way connected with the Loan, or the negotiation, execution, delivery and
performance of this Agreement or any of the other Loan Documents, except for any claim, damage, demand, expense, liability or loss arising out of the Indemnified Parties’ own gross negligence or willful misconduct. 
  
 In case any action shall be brought against the Indemnified Parties based
upon any of the above and in respect to which indemnity may be sought against Borrower, the party involved may request in writing that Borrower assume the defense thereof, including the employment of counsel satisfactory to such party, the payment
of all reasonable costs and expenses and the right to negotiate and consent to settlement. Any one or more of the Indemnified Parties shall have the right to employ separate counsel in any such action, to participate in defense thereof and Borrower
shall assume the payment of all reasonable costs and expenses with respect thereto. Borrower shall not be authorized to settle any such action on behalf of Bank without the prior written consent of Bank, which consent shall not be unreasonably
withheld. Borrower shall not be liable for any settlement of any such action effected without its consent, but if settled with the 
  

 - 29 - 

 consent of Borrower or if there be a final judgment for the plaintiff in any such action, Borrower agrees to indemnify
and hold harmless the Indemnified Parties from and against any loss or liability by reason of such settlement or judgment. 
  
 Any provision herein or elsewhere to the contrary notwithstanding, this Section 8.3 shall survive the termination of this Agreement. 
  
 Section 8.4 Notices. 
  
 Unless this Agreement specifically provides otherwise, all notices and other
communications that this Agreement requires or permits either party to give to the other shall be in writing and shall be given to such party at its address or telecopy number specified on the signature pages of this Agreement or at such other
address or telecopy number as shall be designated by such party in a notice to the other party complying with the terms of this Section 8.4. Unless this Agreement specifically provides otherwise, all notices and other communications will be
effective (a) if given by mail, when received, (b) if given by telecopy, when such telecopy is transmitted to the appropriate telecopy number and the sender receives confirmation of transmission during normal business hours, or (c) if given by any
other means, when delivered at the appropriate address, except that notices from Borrower to Bank pursuant to any of the provisions of Article II hereof shall not be effective until received by Bank. 
  
 Section 8.5 Governing Law. 
  
 This Agreement, the Note and the obligations arising under the Loan
Documents shall be in all respects governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania applicable to contracts made and performed in that Commonwealth, without regard to the principles of
conflicts of laws. 
  
 Section 8.6 Savings.

  
 Notwithstanding anything else herein to the contrary, it
is the intent of Borrower and Bank to at all times comply with the usury and all other laws relating to the Loan now or hereafter in effect. It is agreed that the aggregate of all interest and other charges constituting interest or adjudicated to
constitute interest and contracted for, chargeable, or receivable in connection with the Loan shall under no circumstances exceed the maximum amount allowable by law. If the applicable laws are ever revised or judicially interpreted so as to render
usurious any amount called for hereunder, or contracted for, charged, chargeable, received or receivable with respect to the Loan, or if holder’s exercise of the option therein contained to accelerate the maturity of the Loan or any part
thereof results in Borrower’s having paid any interest in excess of that permitted by applicable law, then all excess amounts collected by holder will be credited on the principal balance of the Loan (or, if the Loan has been paid in full,
refunded to Borrower), and those provisions will immediately be deemed reformed and the amounts thereafter collectible will be reduced, without the necessity of the execution of any new documents, so as to comply with the then applicable law, but so
as to permit the recovery of the fullest amount of interest otherwise called for in respect of the Loan. If the maturity of the Loan is accelerated, then earned interest may never include more than the maximum amount of interest permitted by
applicable law from the date of each advance hereunder until paid. Specifically, but without in 
  

 - 30 - 

 any way limiting the generality of the foregoing, if from any circumstances whatsoever fulfillment of any provision
hereof of or any document, instrument or other agreement contemplated hereby, at the time performance of such provision is due, would cause the interest contracted for, charged, chargeable, received or receivable with respect to the Loan to exceed
the amount permitted by applicable law, then notwithstanding anything to the contrary contained herein or therein, Borrower will only be required to pay to the holder, as interest, an amount equal to the lesser of the amounts payable hereunder or
under any such document, instrument or other agreement and the highest amount permitted by applicable law. In determining whether the amount of interest contracted for, charged, chargeable, received or receivable with respect to the Loan, or any
other agreements between Borrower and Bank would ever exceed the amount permitted by applicable law, all sums paid or agreed to be paid to the holder for the use, forbearance, or retention of the indebtedness of Borrower to Bank will, to the extent
possible under applicable law, be amortized, prorated, allocated, and spread throughout the full term thereof until payment in full. The provisions of this paragraph control all agreements between Borrower and Bank with respect to the transactions
contemplated hereby. 
  
 Section 8.7 Judicial
Proceedings. 
  
 (a) Borrower consents and agrees that
any judicial proceedings relating in any way to this Agreement may be brought in any court of competent jurisdiction in the Commonwealth of Pennsylvania or in the United States District Court for the Eastern District of Pennsylvania. Borrower hereby
accepts, for itself and its properties, the non-exclusive jurisdiction of such courts, agrees to be bound by any judgments rendered by them in connection with this Agreement, and will not move to transfer any such proceeding to any different court.
Borrower waives the defense of forum non conveniens in any such action or proceeding. 
  
 (b) Service of process in any proceeding arising out of or relating to this Agreement may be made by any means permitted by the applicable rules of court as then in force, or may be made by any form of mail requiring
a signed receipt. 
  
 (c) Nothing herein shall limit the right of
Bank to bring proceedings against Borrower in the courts of any other jurisdiction or be deemed to constitute a consent to jurisdiction by any party hereto as to Persons not parties to this Agreement or as to matters not relating to this Agreement.

  
 (d) WAIVER OF JURY TRIAL. EACH OF BORROWER AND BANK
HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. BORROWER FURTHER ACKNOWLEDGES AND AGREES THAT WAIVER OF JURY TRIAL IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT BANK WOULD NOT HAVE AGREED
TO MAKE ANY LOAN (INCLUDING ANY ADVANCE) OR ACCEPT THIS AGREEMENT OR ANY NOTE WITHOUT SUCH AGREEMENT. 
  
 (e) CONFESSION OF JUDGMENT. BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS BANK, BY ITS ATTORNEY OR BY THE PROTHONOTARY OR CLERK OF ANY COURT
OF RECORD IN COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON 
  

 - 31 - 

 THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT, TO APPEAR FOR BORROWER AND CONFESS AND ENTER JUDGMENT
AGAINST BORROWER IN FAVOR OF BANK IN ANY JURISDICTION WHERE BORROWER OR ANY OF ITS PROPERTY IS LOCATED FOR THE AMOUNT OF ALL OBLIGATIONS AND OTHER SUMS DUE OR TO BECOME DUE BY BORROWER TO BANK UNDER THIS AGREEMENT, TOGETHER WITH COSTS OF SUIT AND
WITH ACTUAL COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITH OR WITHOUT DECLARATION, WITHOUT STAY OF EXECUTION AND WITH RELEASE OF ALL ERRORS AND THE RIGHT TO ISSUE EXECUTION FORTHWITH, AND FOR DOING SO THIS AGREEMENT OR A COPY HEREOF
VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT. BORROWER HEREBY WAIVES ALL RELIEF FROM ANY APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE
THEREOF, AND JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS DUE AND OWING HEREUNDER ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED. 
  
 BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS BANK, BY ITS ATTORNEY OR
BY THE PROTHONOTARY OR CLERK OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR AT ANY TIME THEREAFTER, TO APPEAR FOR BORROWER, AS WELL AS FOR ANY
PERSONS CLAIMING UNDER, BY OR THROUGH BORROWER, IN AN ACTION OR ACTIONS FOR REPLEVIN OR OTHER APPROPRIATE ACTION AGAINST BORROWER TO CONFESS AND ENTER JUDGMENT AGAINST BORROWER, FOR RECOVERY OF POSSESSION OF ANY OR ALL OF THE MORTGAGED PROPERTY
AND/OR THE PROCEEDS THEREOF, TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITHOUT THE NECESSITY OF FILING ANY BOND AND WITHOUT STAY OF EXECUTION OR APPEAL AND WITH RELEASE OF ALL ERRORS AND FOR DOING
SO THIS AGREEMENT OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT, WHEREUPON A JUDGMENT AND/OR WRIT OF POSSESSION AND/OR REPLEVIN OR OTHER APPROPRIATE PROCESS TO OBTAIN POSSESSION OF SUCH MORTGAGED PROPERTY MAY BE ISSUED
FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDING WHATSOEVER. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, AND JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS
DUE AND OWING HEREUNDER ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED. 
  

 - 32 - 

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

							
	 NEOSE TECHNOLOGIES, INC.
	 	 Address:
	 	 102 Witmer Road

	 	 	 	 	 	 	 Horsham, PA 19044

				
	 By:
	 	 /s/ C. Boyd Clarke

	 	 Attention:
 Facsimile:
	 	 General Counsel
 (215) 315-9100

	 Name:
	 	 C. Boyd Clarke
	 	 
	 Title:
	 	 President and CEO
	 	 	 	 
			
	 BROWN BROTHERS HARRIMAN & CO.
	 	 Address:
	 	 1531 Walnut Street

	 	 	 	 	 	 	 Philadelphia, PA 19102

				
	 By:
	 	 /s/ J. Clark O’Donoghue

	 	 Attention:
 Facsimile:
	 	 J. Clark O’Donoghue
 (215) 864-3989

	 Name:
	 	 J. Clark O’Donoghue
	 	 
	 Title:
	 	 Managing Director
	 	 	 	 

  

 - 33 - 

 EXHIBIT A 
  
 Form of Term Loan Note 
  

			
	$8,000,000	  	January      , 2004
	 	  	 Philadelphia, Pennsylvania

  
 NEOSE TECHNOLOGIES,
INC., a Delaware corporation (the “Borrower”), for value received, hereby promises to pay to the order of BROWN BROTHERS HARRIMAN & CO. (the “Bank”) the principal amount of EIGHT MILLION DOLLARS ($8,000,000) on the dates and
in the principal amounts provided in the Credit Agreement referred to below. The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding at the rate and on such dates as provided in the Credit
Agreement. All such principal and interest shall be payable in lawful money of the United States of America in same day funds at the office of the Bank. 
  
 This Note is the Term Loan Note referred to in the Credit Agreement dated of even date herewith (the “Credit Agreement”) between the Borrower
and the Bank, and is entitled to the benefits thereof. Capitalized terms used but not defined herein have the meanings specified in the Credit Agreement. 
  
 The Bank is hereby authorized by the Borrower to endorse on the schedule (or a continuation thereof) attached hereto, the date and amount of each payment
or prepayment of principal of the Term Loan received by the Bank, provided that any failure by the Bank to make any such endorsement or any error therein shall not affect the obligations of the Borrower under the Credit Agreement or this Note in
respect of the Term Loan evidenced hereby. This Note is subject to prepayment and its maturity is subject to acceleration upon the terms provided in the Credit Agreement. 
  
 The Borrower hereby waives presentment, demand, protect or notice of any kind in connection with this Note. 
  
 THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF PENNSYLVANIA. 
  
 THE BORROWER HEREBY
IRREVOCABLY AUTHORIZES AND EMPOWERS THE BANK, BY ITS ATTORNEY OR BY THE PROTHONOTARY OR CLERK OF ANY COURT OF RECORD THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE AND DURING THE CONTINUATION OF
AN EVENT OF DEFAULT, TO APPEAR FOR THE BORROWER AND CONFESS AND ENTER JUDGMENT AGAINST THE BORROWER IN FAVOR OF THE LENDER IN ANY JURISDICTION WHERE THE BORROWER OR ANY OF ITS PROPERTY IS LOCATED FOR THE AMOUNT OF ALL OBLIGATIONS AND OTHER SUMS DUE
OR TO BECOME DUE BY THE BORROWER TO THE BANK UNDER THIS NOTE, TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITH OR WITHOUT DECLARATION, WITHOUT STAY OF EXECUTION AND WITH RELEASE OF ALL ERRORS AND
THE 

 RIGHT TO ISSUE EXECUTION FORTHWITH, AND FOR DOING SO THIS NOTE OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT
WARRANT. THE BORROWER HEREBY WAIVES ALL RELIEF FROM ANY APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, AND JUDGMENT MAY BE CONFESSED AS
AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS DUE AND OWING HEREUNDER ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED. 
  

THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS THE BANK, BY ITS ATTORNEY OR BY THE PROTHONOTARY OR CLERK OF ANY COURT OF RECORD IN THE
COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR AT ANY TIME THEREAFTER, TO APPEAR FOR THE BORROWER, AS WELL AS FOR ANY PERSONS CLAIMING UNDER, BY OR THROUGH THE BORROWER, IN
AN ACTION OR ACTIONS FOR REPLEVIN OR OTHER APPROPRIATE ACTION AGAINST THE BORROWER TO CONFESS AND ENTER JUDGMENT AGAINST THE BORROWER, FOR RECOVERY OF POSSESSION OF ANY OR ALL OF THE MORTAGED PROPERTY AND/OR THE PROCEEDS THEREOF, TOGETHER WITH COSTS
OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITHOUT THE NECESSITY OF FILING ANY BOND AND WITHOUT STAY OF EXECUTION OR APPEAL AND WITH RELEASE OF ALL ERRORS AND FOR DOING SO THIS NOTE OR A COPY HEREOF VERIFIED BY
AFFIDAVIT SHALL BE SUFFICIENT WARRANT, WHEREUPON A JUDGMENT AND/OR WRIT OF POSSESSION AND/OR REPLEVIN OR OTHER APPROPRIATE PROCESS TO OBTAIN POSSESSION OF SUCH MORTGAGED PROPERTY MAY BE ISSUED FORTHWITH, WITHOUT ANY PRIOR WRIT OR PROCEEDING
WHATSOEVER. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, AND JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS DUE AND OWING HEREUNDER ARE FULLY PAID,
PERFORMED, DISCHARGED AND SATISFIED. 
  
 THE BORROWER ACKNOWLEDGES
THAT THE BORROWER HAS WAIVED THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ON THIS NOTE. 
  

	
	 NEOSE TECHNOLOGIES, INC.

	
	 By:

	 Name:

	 Title:

 Schedule to Term Loan Note 
  
 Payment Schedule 

 EXHIBIT B 
  
 Form of Standby Letter of Credit 

 EXHIBIT C 
  
 Form of Intercreditor Agreement 

  
 EXHIBIT D 
  
 Disclosure Schedule 
  

					
	1.	  	 Definitions
	  	 GE Equipment

			
	2.	  	 Section 4.6
	  	 Contingent Liabilities

			
	3.	  	 Section 4.9
	  	 Taxes

			
	4.	  	 Section 4.12
	  	 Compliance with Laws

			
	5.	  	 Section 4.13
	  	 Environmental Laws

			
	6.	  	 Section 4.15
	  	 Indebtedness

			
	7.	  	 Section 4.23
	  	 Intellectual PropertyGeneral Security Agreement

 EXHIBIT 10.45 
  
 GENERAL SECURITY AGREEMENT 
  
 THIS GENERAL SECURITY AGREEMENT, dated as of January 30, 2004, is made by NEOSE TECHNOLOGIES, INC., a Delaware corporation (“Obligor”),
to BROWN BROTHERS HARRIMAN & CO., a private bank organized as a partnership (the “Secured Party”). 
  
 SECTION 1. Grant of Security Interest. 
  
 Obligor hereby grants to Secured Party a security interest in all of Obligor’s right, title and interest in and to the following property of Obligor,
whether now owned or hereafter arising or acquired (collectively, the “Collateral”): 
  
 (a) accounts, general intangibles, chattel paper, and instruments (collectively, the “Receivables”); 
  
 (b) inventory; 
  
 (c) documents; 
  
 (d) equipment (whether or not constituting fixtures); 
  
 (e) letter of credit rights; 
  
 (f) supporting obligations; and 
  
 (g) to the extent not otherwise included in the original collateral described above, all proceeds and products of any of the foregoing. 
  
 Notwithstanding the foregoing, the Collateral shall not include: (a)
Obligor’s Intellectual Property or Liquidity, as such terms are defined in that certain Credit Agreement (the “Credit Agreement”), dated as of the date hereof, by and between Obligor and Secured Party, except as otherwise
provided in the Credit Agreement; and (b) any equipment financed by any third party which constitutes Permitted Indebtedness under the Credit Agreement, to the extent such financing arrangements preclude liens in favor of any other person or entity.

  
 Obligor represents and warrants that it is the sole owner of
the Collateral and has the legal right to grant to Secured Party a security interest therein, and that the Collateral is free and clear of all other liens, security interests and encumbrances, other than the Permitted Liens (as such term is defined
in the Credit Agreement). 
  
 SECTION 2. Security for
Liabilities. 
  
 This Agreement secures the payment and
performance of all indebtedness, obligations, and liabilities of every kind and nature (whether primary or secondary, direct or indirect, absolute or contingent, sole, joint, or several, secured or unsecured, similar or dissimilar, or related or
unrelated), heretofore, now, or hereafter contracted or acquired, of Obligor to Secured Party (collectively, the “Liabilities”). 

 SECTION 3. Obligor Remains Liable. 
  
 Anything herein to the contrary notwithstanding, (a) Obligor shall remain liable under its contracts and agreements included
in the Collateral to the extent set forth therein to perform all of Obligor’s duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Secured Party of any of the rights hereunder
shall not release Obligor from any of its duties or obligations under its contracts and agreements included in the Collateral, and (c) Secured Party shall not have any obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Secured Party be obligated to perform any of the obligations or duties of Obligor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder. 
  
 SECTION 4. Further Assurances. 
  
 (a) Obligor agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Secured Party may reasonably request, in order to perfect and protect any security interest granted or purported to
be granted hereby or to enable Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, Obligor will: (i) upon request by Secured Party, mark
conspicuously each item of chattel paper included in its Receivables and each of its records pertaining to any of the Collateral, with a legend, in form and substance satisfactory to Secured Party, indicating that such chattel paper or Collateral is
subject to the security interest granted hereby; (ii) if any of its Receivables shall be evidenced by a promissory note or other instrument, deliver and pledge to Secured Party hereunder such note or instrument duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance satisfactory to Secured Party; (iii) authorize Secured Party to file such financing or continuation statements, or amendments thereto, and such other instruments or notices,
as may be necessary or desirable, or as Secured Party may request, in order to perfect and preserve the security interests granted hereby; (iv) to the extent that any Collateral consists of letter-of-credit rights, cause the issuer of each
underlying letter of credit to consent to the assignment to Secured Party; (v) to the extent that any Collateral is in the possession of a third party, join with Secured Party in notifying the third party of Secured Party’s security interest
and in obtaining an acknowledgement from the third party that it is holding such Collateral for the benefit of Secured Party; and (vi) at any time that Secured Party so reasonably requests, work with Secured Party to set up such lock boxes and
segregated accounts as Secured Party may request in order to better perfect the security interest created hereunder in proceeds. 
  
 (b) Obligor hereby authorizes Secured Party to file one or more financing or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of Obligor where permitted by law. A carbon, photographic, or other reproduction of this Agreement or any part thereof shall be sufficient as a financing statement where permitted by law. 
  

 - 2 - 

 (c) Obligor will furnish to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the Collateral as Secured Party may request, all in reasonable detail. 
  
 (d) Obligor shall not reincorporate or reorganize itself under the laws of any jurisdiction other than the jurisdiction in which it is incorporated or
organized as of the date hereof, and shall not change its organizational structure under such jurisdiction if such action would, in the judgment of Secured Party, require filing under the Uniform Commercial Code, as adopted, in a different
jurisdiction in order to maintain perfection of the security interest granted hereby, without the prior written consent of Secured Party. 
  
 (e) Obligor shall not change its corporate name without providing Secured Party at least thirty (30) days’ prior written notice. 
  
 SECTION 5. Insurance. 
  
 Obligor shall, at its own expense, (i) keep its property and business
insured against fire and other hazards (so-called “all risk” coverage) in amounts and with companies reasonably satisfactory to Secured Party, or the amount necessary to avoid any co-insurance penalty, which policy shall name Secured Party
as loss payee as its interest may appear, (ii) maintain public liability coverage against claims for personal injuries, death or property damage in an amount deemed reasonable by Secured Party, which policy shall name Secured Party as an additional
insured as its interest may appear, and (iii) maintain all worker’s compensation, employment or similar insurance as may be required by applicable law. All such property insurance shall contain an endorsement identifying Secured Party as
lienholder, lender loss payee and mortgagee, and providing for a minimum of thirty (30) days’ written cancellation notice to Secured Party. In any event, Obligor’s obligation to carry such insurance may only be brought within the coverage
of a so-called blanket or umbrella policy or policies of insurance carried and maintained by Obligor if and only if the coverage afforded Secured Party will not be limited, reduced or diminished by reason of the use of a blanket or umbrella policy
of insurance. Obligor shall deliver to Secured Party original or duplicate policies of insurance maintained pursuant hereto and, as often as Secured Party may reasonably request, a report of a reputable insurance broker with respect to such
insurance. 
  
 SECTION 6. Representations and Warranties.

  
 Obligor represents and warrants to Secured Party that:

  
 (a) Obligor has all requisite rights, powers and authority to
execute and deliver this Agreement and to carry out the transactions contemplated hereby, including, but not limited to, rights in and the power to transfer the Collateral free and clear of all claims, liens, security interests and other
encumbrances or restrictions, other than the Permitted Liens. The execution, delivery and performance of this Agreement by Obligor has been duly authorized by all requisite corporate action, and this Agreement has been duly executed and delivered by
Obligor and constitutes its valid and binding obligation, enforceable against Obligor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, moratorium, reorganization and other similar laws relating to or
affecting the enforcement of creditors’ rights 
  

 - 3 - 

 generally, and except that the availability of specific performance, injunctive relief or other equitable remedies is
subject to the discretion of the court before which any such proceeding may be brought. 
  
 (b) The execution, delivery and performance of this Agreement by Obligor will not violate any provision of law, any rule or regulation of any governmental authority, or any judgment, decree or order of any court
binding on Obligor, and will not conflict with or result in any breach of any of the terms, conditions or provisions of, or constitute a default under, or, except as expressly provided herein, result in the creation of any lien, security interest,
charge or encumbrance upon any of its properties, assets or outstanding stock under its Certificate of Incorporation or By-Laws or any indenture, mortgage, lease, agreement or other instrument to which Obligor is a party or by which it or any of its
properties is bound. 
  
 (c) Obligor’s chief executive office
is located at the place indicated on Schedule 1 hereto and Obligor’s books and records are and will be maintained at such location. Schedule 1 hereto lists each other location where Obligor maintains a place of business. All of
the Collateral constituting goods is located at the places indicated on Schedule 1 hereto. Obligor is the record owner or lessee (as indicated on Schedule 1) of the real property where such Collateral is located, with the exception of
the storage and warehouse facility of Pierce Leahy Archives located at 2500 Henderson Drive, Sharon Hill, PA. Obligor’s exact legal name and place of incorporation or legal formation is as indicated in the heading to this Agreement. Obligor has
no trade names and has not used any name other than its actual corporate name for the preceding five years. No entity has merged into Obligor or been acquired by Obligor within the past five years. The federal tax identification number and state
organizational identification number, if any, of Obligor is as set forth on Schedule 1 hereto. 
  
 SECTION 7. Certain Covenants as to Inventory and Equipment. 
  
 Obligor shall: 
  
 (a) Cause its equipment to be maintained and preserved in the same condition, repair, and working order as when new, ordinary wear and tear excepted, and,
in the case of any material loss or damage to any of its equipment, as quickly as practicable after the occurrence thereof, make or cause to be made all repairs, replacements, and other improvements in connection therewith which are necessary or
desirable to such end, in the reasonable business judgment of Obligor. 
  
 (b) Pay promptly when due all property and other taxes, assessments, and governmental charges or levies imposed upon it or any of its inventory or equipment, and all claims (including claims for labor, services, materials and supplies) for
sums which by law have or might become a lien upon any of its inventory and equipment. 
  
 (c) After the occurrence and during the continuance of an Event of Default (as hereinafter defined), receive in trust for the benefit of Secured Party all amounts and proceeds received or collected by such Obligor in
respect of its inventory and equipment, segregate such amounts and proceeds from other funds of such Obligor, and forthwith pay such amounts and proceeds over to Secured Party in the same form as so received (with any necessary endorsement) to be
held as cash collateral and applied as provided in Section 15(b). 
  

 - 4 - 

 (d) Notify Secured Party in the event of material loss or damage to the Collateral or of any material
adverse change in Obligor’s business, financial condition or the Collateral, or of any other occurrences which could materially and adversely affect the security of Secured Party. 
  
 SECTION 8. Certain Covenants as to Receivables. 
  
 (a) Upon the occurrence and during the continuance of an Event of Default, from time to time upon request, Obligor shall
provide Secured Party with (i) schedules describing all accounts, (ii) additional schedules describing other Receivables, and (iii) specific written assignments to Secured Party of any of its Receivables. Any failure to execute or deliver any
schedule or assignment shall not, however, affect or limit any security interest or other right of Secured Party in and to any Receivable. Upon the occurrence and during the continuance of an Event of Default, at Secured Party’s request,
Obligor shall also furnish to Secured Party copies of invoices to customers and shipping and delivery receipts or warehouse receipts relating thereto, as well as such other documents and instruments as Secured Party may reasonably request in
connection with any Receivable. 
  
 (b) Upon the occurrence and
during the continuance of an Event of Default, Obligor shall promptly notify Secured Party of all returns, repossessions and recoveries of goods covered by the Receivables and of all claims asserted with respect thereto. Each such notification shall
be accompanied by a statement describing the relevant goods and the location thereof. Upon the occurrence and during the continuance of an Event of Default, Obligor shall not settle or adjust any dispute or claim, grant any discount, credit or
allowance, or accept any return of merchandise except in the ordinary course of business. Upon the occurrence and during the continuance of an Event of Default, when Obligor receives collateral of any kind by reason of transactions between itself
and its customers or account debtors, it will hold the same on Secured Party’s behalf, subject to Secured Party’s instructions, as property forming part of the Receivables. 
  
 (c) Upon the occurrence and during the continuance of an Event of Default, Secured Party shall have the right from time to
time to communicate directly with account debtors and obligors on the Receivables and to do test verifications of the Receivables. 
  
 (d) Obligor shall promptly notify Secured Party if any of its accounts arise out of contracts with the United States or any agency or instrumentality
thereof, and execute any instruments and take any steps required by Secured Party in order that all moneys due and to become due under such contracts shall be assigned to Secured Party in accordance with the requirements of, and notice given to the
Government under the Federal Assignment of Claims Act. 
  

 - 5 - 

 SECTION 9. Transfers and Other Liens. 
  
 Obligor shall not: 
  
 (a) Sell, assign (by operation of law or otherwise), or otherwise dispose of
any of the Collateral except (1) in the ordinary course of business or (2) if outside the ordinary course of business, where the cost of such Collateral does not exceed $100,000. 
  
 (b) Create, permit or suffer to exist any lien, security interest, or other charge or encumbrance upon or with respect to
any of the Collateral, other than Permitted Liens as provided for in the Credit Agreement. 
  
 SECTION 10. Secured Party Appointed Attorney-in-Fact. 
  
 Obligor hereby irrevocably appoints Secured Party as its attorney-in-fact, with full authority in the place and stead of Obligor and in the name of Obligor, Secured Party, or otherwise, from time to time in Secured
Party’s discretion to take any action and to execute any instrument which Secured Party may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation: 
  
 (a) to authorize the filing of and/or sign in the name and on behalf of
Obligor any financing statements or other papers required under Section 4; 
  
 (b) subject to the terms of the Credit Agreement and that certain open-end mortgage and security agreement (the “Mortgage”), dated as of the date hereof, by and between Obligor and Secured Party, to
obtain and adjust insurance required to be paid to Secured Party pursuant to Section 5; 
  
 (c) following the occurrence and during the continuance of an Event of Default; 
  
 1. to ask, demand, collect, sue for, recover, compound, receive, and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral; 
  
 2. to
receive, indorse, and collect any drafts or other instruments, documents, and chattel paper in connection with subsection (b) or (c) above; and 
  
 3. to file any claims or take any action or institute any proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of Secured Party with respect to any of the Collateral. 
  
 Obligor hereby ratifies and approves all acts of Secured Party as such attorney-in-fact taken in compliance with this Section 10. Secured Party shall not,
in its capacity as such attorney-in-fact, be liable for any acts or omissions, nor for any error in judgment or mistake of fact or law, but only for gross negligence or willful misconduct as determined by a court of competent jurisdiction in a
final, nonappealable judgment. This power, being coupled with an interest, is irrevocable until all Liabilities have been fully satisfied and until Secured Party is no longer committed to allow additional Liabilities to be incurred. Any amounts
received or collected by Secured Party in its capacity as such attorney-in-fact and in compliance with this Section 10 shall be held as cash collateral and applied as provided in Section 15(b). 
  

 - 6 - 

 SECTION 11. Secured Party May Perform. 
  
 If Obligor fails to perform any agreement contained herein, Secured Party
may itself perform, or cause performance of, such agreement, and the expenses of Secured Party incurred in connection therewith shall be payable by Obligor under Section 16(b). 
  
 SECTION 12. Secured Party’s Duties. 
  
 The powers conferred on Secured Party hereunder are solely to protect its interest in the Collateral and shall not impose
any duty to exercise any such powers. Except for the safe custody of any Collateral in its possession and the accounting for moneys actually received by it hereunder, Secured Party shall not have any duty as to any Collateral or as to the taking of
any necessary steps to preserve rights against any parties or any other rights pertaining to any Collateral. Without limiting the generality of the foregoing, Secured Party has no obligation to clean-up or otherwise prepare the Collateral for sale.

  
 SECTION 13. Inspection Rights. 
  
 Secured Party at all times shall have access to inspect, audit, and make
extracts from all of Obligor’s records, files, and books of account relating to the Collateral and to examine and inspect inventory and other Collateral owned by Obligor; provided, prior to an Event of Default, such access, examination and
inspection shall be limited to four (4) times in any calendar year, shall be during regular business hours, and shall be upon five (5) days’ prior notice to Obligor. Obligor shall, at Secured Party’s request, take all steps necessary to
facilitate such inspection. Obligor shall deliver any document or instrument necessary for Secured Party to obtain records from any service bureau maintaining records for Obligor. 
  
 SECTION 14. Default. 
  
 “Event of Default” means subject to any applicable period of grace or cure, (i) nonpayment of any of the Liabilities when due (whether at
stated maturity or upon demand, acceleration of maturity or otherwise), (ii) any other default with respect to the Liabilities, (iii) any other failure by Obligor to perform any of its obligations under this Agreement, the Credit Agreement or any
other Loan Document evidencing or securing any of the Liabilities, or (iv) any breach of any representation or warranty made by Obligor in connection with the transactions contemplated by this Agreement, the Credit Agreement or any other Loan
Document evidencing or securing any of the Liabilities. 
  
 SECTION 15. Remedies. 
  
 If any Event of Default
shall have occurred and be continuing: 
  
 (a) Secured Party may
exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party on default under the Uniform Commercial Code (the “Code”) and
other applicable laws and agreements, as they may be amended from time to time, and also may (i) require Obligor to, and Obligor hereby agrees that it will at its expense and upon request of Secured Party forthwith, assemble the tangible Collateral
as directed by Secured Party and make it 
  

 - 7 - 

 available to Secured Party at a place or places to be designated by Secured Party which are reasonably convenient to
Secured Party and Obligor and (ii) without notice except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Secured Party’s offices or elsewhere, for cash, on credit, or for
future delivery, and upon such other terms as Secured Party may deem commercially reasonable. Obligor agrees that, to the extent notice of sale shall be required by law, at least five (5) Business Days’ notice to Obligor of the time and place
of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. Secured Party shall not be obligated to make any sale of the Collateral regardless of notice of sale having been given. Secured Party
may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. 
  
 (b) All cash proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral may, in the discretion of Secured Party, be held by Secured Party (without interest) as collateral for, and/or then or at any time thereafter applied (after payment of any
amounts payable to Secured Party pursuant to Section 16) in whole or in part by Secured Party against, all or any part of the Liabilities in such order as Secured Party shall elect. Any surplus of such cash or cash proceeds held by Secured Party and
remaining after payment in full of all the Liabilities shall be paid over to Obligor or to whosoever may be lawfully entitled to receive such surplus. Obligor shall be liable to Secured Party for any deficiency amount. 
  
 (c) Secured Party may comply with any applicable law in connection with a
disposition of Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Secured Party may sell the Collateral without giving any warranties and may specifically disclaim such
warranties. If Secured Party sells any of the Collateral on credit, Obligor will only be credited with payments actually made by the purchaser. 
  
 SECTION 16. Indemnity and Expenses. 
  
 (a) Obligor agrees to indemnify Secured Party (including any partner, officer, employee, director or agent of Secured Party) from and against any and all
claims, losses, and liabilities arising out of or resulting from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses, or liabilities resulting from Secured Party’s gross negligence or willful
misconduct as determined by a court of competent jurisdiction in a final, nonappealable judgment. 
  
 (b) Obligor will upon demand pay to Secured Party the amount of any and all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which Secured Party may incur in connection with (i) the preparation, administration and amendment of this Agreement, (ii) the custody, preservation, use, or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of Secured Party hereunder, or (iv) the failure by Obligor to perform or observe any of the provisions hereof. 
  

 - 8 - 

 SECTION 17. Amendments, Indulgences, Etc. 
  
 No amendment or waiver of any provision of this Agreement nor consent to any
departure by Obligor here from shall in any event be effective unless the same shall be in writing and signed by Secured Party and Obligor, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose
for which given. No failure or delay on the part of Secured Party in the exercise of any right, power, or remedy under this Agreement shall constitute a waiver thereof, or prevent the exercise thereof in that or any other instance. No remedy or
right herein conferred upon, or reserved to Secured Party is intended to be to the exclusion of any other remedy or right, but each and every such remedy or right shall be cumulative and shall be in addition to every other remedy or right given
hereunder or under any other contract or under law. 
  
 SECTION
18. Notices. 
  
 All notices, requests and demands to or
upon the respective parties hereto shall be deemed to have been given or made, (a) if delivered by hand against receipt, on the date of such delivery, or (b) if deposited in the mails, postage prepaid, registered or certified mail, return receipt
requested, on the third day following the date of postmark, addressed as follows or to such other address as may be hereafter designated in writing by the respective parties hereto: 
  
 If to Obligor: 
  
 Neose Technologies, Inc. 
 102 Witmer Road 
 Horsham, PA 19044 
 Attention: General Counsel 
 Facsimile: (215) 315-9100 
  
 With
a copy to: 
  
 Pepper Hamilton LLP 
 3000 Two Logan Square 
 18th & Arch Streets 
 Philadelphia, PA 19103 
 Attention: Barry M. Abelson, Esquire 
 Facsimile: (215) 981-4750 
  
 If to Secured Party: 
  
 Brown Brothers Harriman & Co. 
 1531 Walnut Street 
 Philadelphia, PA 19102 
 Attention: J. Clark O’Donoghue 
 Facsimile: (215) 864-3989 
  

 - 9 - 

 With a copy to: 
  

Stradley, Ronon, Stevens & Young, LLP 
 2600 One Commerce Square 
 Philadelphia, PA 19103 
 Attention: Dean M. Schwartz, Esquire 
 Facsimile: (215) 564-8120 
  
 SECTION 19. Continuing Security Interest; etc. 
  
 This Agreement shall create a continuing security interest in the Collateral and shall (a) be binding upon Obligor and its successors and assigns and (b) inure to the benefit of Secured Party and its successors and assigns. The execution
and delivery of this Agreement shall in no manner impair or affect any other security (by endorsement or otherwise) for the payment or performance of the Liabilities and no security taken hereafter as security for payment or performance of the
Liabilities shall impair in any manner or affect this Agreement or the security interest granted hereby, all such present and future additional security to be considered as one general, continuing security. Any of the Collateral may be released from
this Agreement without altering, varying, or diminishing in any way this Agreement or the security interest granted hereby as to the Collateral not expressly released, and this Agreement and such security interest shall continue in full force and
effect as to all of the Collateral not expressly released. 
  
 SECTION 20. Governing Law; Consent to Jurisdiction; etc. 
  
 This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to its conflicts of laws principles. Obligor consents to the jurisdiction of the
courts of Pennsylvania and of the courts of the United States sitting in Pennsylvania in any litigation concerning this Agreement, and Obligor waives any objection based on venue or inconvenient forum. Each of Obligor and Secured Party waives any
right to trial by jury in any litigation involving this Agreement. Unless otherwise defined herein, terms defined in the Code as in effect in Pennsylvania on the date hereof (including the terms “accounts,” “general intangibles,”
“chattel paper,” “instruments,” “inventory,” “documents,” “equipment,” “fixtures,” “investment property,” “deposit accounts,” “letter of credit rights,”
“supporting obligations,” “proceeds,” and “products”) are used herein as therein defined as of such date. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. 
  
 SECTION 21. Severability. 
  
 The provisions of this Agreement are independent of and separable from each other, and no such provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other such provision may be invalid or unenforceable in whole or in part. 
  
 SECTION 22. Waiver of Jury Trial; Confession of Judgment. 
  

WAIVER OF JURY TRIAL. EACH OBLIGOR AND SECURED PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION 

 

 - 10 - 

 OR PROCEEDING. OBLIGOR FURTHER ACKNOWLEDGES AND AGREES THAT WAIVER OF JURY TRIAL IS A SPECIFIC AND MATERIAL ASPECT OF
THIS AGREEMENT AND THAT SECURED PARTY WOULD NOT HAVE AGREED TO MAKE ANY LOAN OR ACCEPT THIS AGREEMENT OR ANY NOTE WITHOUT SUCH AGREEMENT. 
  
 CONFESSION OF JUDGMENT. OBLIGOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS SECURED PARTY, BY ITS ATTORNEY OR BY THE PROTHONOTARY OR CLERK OF ANY
COURT OF RECORD IN COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF DEFAULT, TO APPEAR FOR OBLIGOR AND CONFESS AND ENTER JUDGMENT AGAINST OBLIGOR IN FAVOR OF
SECURED PARTY IN ANY JURISDICTION WHERE OBLIGOR OR ANY OF ITS PROPERTY IS LOCATED FOR THE AMOUNT OF ALL OBLIGATIONS AND OTHER SUMS DUE OR TO BECOME DUE BY OBLIGOR TO SECURED PARTY UNDER THIS AGREEMENT, TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL
COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITH OR WITHOUT DECLARATION, WITHOUT STAY OF EXECUTION AND WITH RELEASE OF ALL ERRORS AND THE RIGHT TO ISSUE EXECUTION FORTHWITH, AND FOR DOING SO THIS AGREEMENT OR A COPY HEREOF VERIFIED BY
AFFIDAVIT SHALL BE SUFFICIENT WARRANT. OBLIGOR HEREBY WAIVES ALL RELIEF FROM ANY APPRAISEMENT, STAY OR EXEMPTION LAWS OF ANY STATE NOW IN FORCE OR HEREAFTER ENACTED. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, AND
JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS DUE AND OWING HEREUNDER ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED. 
  

 - 11 - 

 OBLIGOR HEREBY IRREVOCABLY AUTHORIZES AND EMPOWERS SECURED PARTY, BY ITS ATTORNEY OR BY THE PROTHONOTARY
OR CLERK OF ANY COURT OF RECORD IN THE COMMONWEALTH OF PENNSYLVANIA OR IN ANY JURISDICTION WHERE PERMITTED BY LAW, UPON THE OCCURRENCE OF AN EVENT OF DEFAULT, OR AT ANY TIME THEREAFTER, TO APPEAR FOR OBLIGOR, AS WELL AS FOR ANY PERSONS CLAIMING
UNDER, BY OR THROUGH OBLIGOR, IN AN ACTION OR ACTIONS FOR REPLEVIN OR OTHER APPROPRIATE ACTION AGAINST OBLIGOR TO CONFESS AND ENTER JUDGMENT AGAINST OBLIGOR, FOR RECOVERY OF POSSESSION OF ANY OR ALL OF THE MORTGAGED PROPERTY AND/OR THE PROCEEDS
THEREOF, TOGETHER WITH COSTS OF SUIT AND WITH ACTUAL COLLECTION COSTS (INCLUDING ATTORNEYS’ FEES), WITHOUT THE NECESSITY OF FILING ANY BOND AND WITHOUT STAY OF EXECUTION OR APPEAL AND WITH RELEASE OF ALL ERRORS AND FOR DOING SO THIS AGREEMENT
OR A COPY HEREOF VERIFIED BY AFFIDAVIT SHALL BE SUFFICIENT WARRANT, WHEREUPON A JUDGMENT AND/OR WRIT OF POSSESSION AND/OR REPLEVIN OR OTHER APPROPRIATE PROCESS TO OBTAIN POSSESSION OF SUCH MORTGAGED PROPERTY MAY BE ISSUED FORTHWITH, WITHOUT ANY
PRIOR WRIT OR PROCEEDING WHATSOEVER. THIS AUTHORITY AND POWER SHALL NOT BE EXHAUSTED BY ANY EXERCISE THEREOF, AND JUDGMENT MAY BE CONFESSED AS AFORESAID FROM TIME TO TIME AS OFTEN AS THERE IS OCCASION THEREFOR UNTIL ALL SUMS DUE AND OWING HEREUNDER
ARE FULLY PAID, PERFORMED, DISCHARGED AND SATISFIED. 
  

 - 12 - 

 IN WITNESS WHEREOF, Obligor, intending to be legally bound, has executed or caused the execution of this
Agreement, under seal, as of the date first above written. 
  

					
	 NEOSE TECHNOLOGIES, INC.

		
	 By:
	 	 /s/ C. Boyd Clarke

	 	 	 Name:
	 	 C. Boyd Clarke

	 	 	 Title:
	 	 President and CEO

	
	 BROWN BROTHERS HARRIMAN & CO.

		
	 By:
	 	 /s/ J. Clarke O’Donoghue

	 	 	 Name:
	 	 J. Clark O’Donoghue

	 	 	 Title:
	 	 Managing Director

  

 - 13 - 

 Schedule 1 
 to 
 General Security Agreement 
  

			
	Legal Name of Obligor:	  	Neose Technologies, Inc.
		
	Jurisdiction of Formation:	  	Delaware
		
	 Pennsylvania Corporate
 Tax Identification No.:
	  	6529-840
		
	FEIN:	  	13-3549286
		
	Chief Executive Office:	  	 102 Witmer Road
 Horsham, PA 19044 (owned
location)

		
	Other Collateral Locations:	  	 201 Witmer Road
 Horsham, PA 19044 (leased
location)

		
	 	  	102 Rock Road
	 	  	Horsham, PA 19044 (leased location)

  

 - 14 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00061-of-00352.parquet"}]]