Document:

exv10w30

 

Exhibit 10.30

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

016 — FTWM

Fifth Third Bank

Term Note

			
	OFFICER No. 04244
	 	NOTE No. 0904879830-                    
	$2,400,000.00
	 	August 10, 2004
	 
	 	(Effective Date)

     1. PROMISE TO PAY. On or before September 1, 2007 (the “Maturity Date”), the
undersigned, Bioport Corporation, a Michigan corporation located at 3500 North Martin Luther King
Jr. Boulevard, Lansing, Ingham County, Michigan 48906 (“Borrower”) for value received, hereby
promises to pay to the order of Fifth Third Bank (Western Michigan), a Michigan banking corporation
located at 111 Lyon Street, NW, Grand Rapids, Kent County, Michigan 49503 for itself and as agent
for any affiliate of Fifth Third Bancorp (together with its successors and assigns, the “Lender “)
the sum of Two Million Four Hundred Thousand and 00/100 Dollars ($2,400,000.00) (the “Borrowing”),
plus interest as provided herein, less such amounts as shall have been repaid in accordance with
this Note. The outstanding balance of this Note shall appear on a supplemental bank record and is
not necessarily the face amount of this Note, which record shall evidence the balance due pursuant
to this Note at any time. As used herein, “Local Time” means the time at the office of Lender
specified in this Note.

Principal and interest payments shall be initiated by Lender in accordance with the terms of this
Note from Borrower’s account through Billpayer 2000®. Borrower hereby authorizes Lender to initiate
such payments from Borrower’s account located at Fifth Third Bank, routing number [**] account
number [**]. Borrower acknowledges and agrees that use of BillPayer 2000® shall be governed by the
BillPayer 2000® Terms and Conditions, a copy of which Borrower acknowledges receipt. Borrower
further acknowledges and agrees to maintain payments hereunder through BillPayer 2000® throughout
the term of this Note. Each payment hereunder shall be applied first to advanced costs, charges and
fees, then to accrued interest, and then to principal.

Principal shall be due and payable in 36 monthly installments, twelve installments each in the
amount of $40,000.00 on the 1st day of each calendar month beginning on October 1, 2004; twelve
installments each in the amount of $53,334.00 on the 1st day of each calendar month beginning on
October 1, 2005; twelve installments each in the amount of $106,666.00 on the 1st day of each
calendar month beginning on October 1, 2006; provided that the entire principal balance, together
with all accrued and unpaid interest and any other charges, advances and fees, if any, outstanding
hereunder shall be due and payable in full on the earlier of the Maturity Date or upon acceleration
of the Note.

The principal sum outstanding shall bear interest at a floating rate per annum equal to 0.375% less
than the rate of interest per annum established from time to time by Fifth Third Bank at its
principal office as its “Prime Rate”, whether or not Fifth Third Bank shall at times lend to
Borrowers at lower rates of interest or, if there is no such prime rate, then such other rate as
may be published by Fifth Third Bank for a substitute for the prime rate (the “Interest Rate”) upon
at least ten (10) days prior written notice to Borrower. In the event of a change in said Prime
Rate, the Interest Rate shall be changed immediately to the percentage stated above less than such
new Prime Rate. Interest shall be calculated based on a 360-day year and charged for the actual
number of days elapsed, and shall be payable on the 1st day of each month beginning on October 1,
2004.

Notwithstanding any provision to the contrary in this Note, in no event shall the interest rate
charged on the Borrowing exceed the maximum rate of interest permitted under applicable state
and/or federal usury law. Any payment of interest that would be deemed unlawful under applicable
law for any reason shall be deemed received on account of, and will automatically be applied to
reduce, the principal sum outstanding and any other sums (other than interest) due and payable to
Lender under this Note, and the provisions hereof shall be deemed amended to provide for the
highest rate of interest permitted under applicable law.

     2. SECURITY AGREEMENT. To secure repayment of this Note and all other Obligations (as
defined below) together with all modifications, extensions and renewals thereof, Borrower hereby
grants Lender a continuing security interest in all right, title and interest of Borrower in and to
the following property, whether now owned or hereafter acquired (collectively, the “Collateral”):
The Enterprise Resource Planning System described on Schedule A hereto, together with all
replacements thereof, insurance or condemnation proceeds thereof, documents related to the
installation and operation thereof, all tort or other claims against third parties arising out of
damage thereto or destruction thereof, all property received

 

 

wholly or partly in trade or exchange therefore, all fixtures related to the installation and
operation thereof, all leases thereof, and all rents, revenues, issues, profits and proceeds
arising from the sale, lease, license, encumbrance, collection or any other temporary or permanent
disposition thereof, or any other interest therein.

Borrower also grants Lender a security interest in all of the Collateral as agent for all
affiliates of Fifth Third Bancorp for all Obligations of Borrower to such affiliates. Said security
interest shall not be enforced to the extent prohibited by the Truth in Lending Act as implemented
by Federal Reserve Regulation Z.

     3. USE OF PROCEEDS. Borrower certifies that the proceeds of this loan are to be used
for business purposes.

     4. NOTE PROCESSING FEE. Lender may charge, and Borrower agrees to pay on the above
Effective Date, a note processing fee in the amount of $3,000.00.

     5. REPRESENTATIONS AND WARRANTIES. Borrower hereby warrants and represents to Lender
the following:

     (a) Organization and Qualification. Borrower is duly organized, validly
existing and in good standing under the laws of the State of its incorporation, has the
power and authority to carry on its business and to enter into and perform all documents
relating to this loan transaction, and is qualified and licensed to do business in each
jurisdiction in which such qualification or licensing is required, except where the failure
to be so qualified would not have a material adverse effect on Borrower’s business. All
information provided to Lender with respect to Borrower and its operations is true and
correct.

     (b) Due Authorization. Borrower has full power and authority to sign, deliver
and perform the Loan Documents. The signing, delivery and performance of the Loan
Documents: (1) have been duly authorized by appropriate corporate action of Borrower, (2)
will not violate the provisions of Borrower’s articles of incorporation or bylaws or of any
law, rule, judgment, order, agreement or instrument to which Borrower is a party or by which
it is bound and (3) do not require any approval or consent of any public authority or other
third party, except for (i) consents and approvals that have been obtained prior to the date
hereof; or (ii) approvals or consents, the failure of which to obtain, individually or in
the aggregate, do not have a material adverse effect on Borrower and do not materially
impair the ability of the Borrower to perform its obligations under the Loan Documents.
The Borrower has properly signed and delivered the Loan Documents, and the Loan Documents
are the valid and binding obligations of the Borrower and are enforceable against the
Borrower in accordance with their terms, subject to laws of general application relating to
bankruptcy, insolvency and the relief of debtors and the rules of law governing specific
performance, injunctive relief and other equitable remedies.

     (c) Litigation. Except as disclosed in Schedule B, there are no suits
or proceedings pending or threatened against or affecting Borrower, and no proceedings
before any governmental body are pending or threatened against Borrower that if determined
adversely to Borrower would reasonably be expected to have a material adverse effect on the
Borrower’s business.

     (d) Business. Borrower has all requisite corporate power and authority and all
necessary licenses and permits to own and operate its properties and to carry on its
business as it now conducts it and as it contemplates that it will conduct it in the future.
Borrower is in compliance with all laws, rules and regulations that apply to Borrower, its
operations or its properties, except where any noncompliance would not have a material
adverse effect on Borrower’s business.

     (e) Licenses, etc.

     (i) Borrower owns, jointly owns, or has been licensed the right to use pursuant
to licenses that remain in full force and effect Intellectual Property sufficient to
operate its business substantially as it is presently being conducted.

     (ii) Except as disclosed in Schedule B, there is no action, suit or
proceeding pending against or, to the knowledge of the Borrower, threatened against
the Borrower (1) challenging the rights of the Borrower in any Intellectual Property
owned or used by Borrower or (2) alleging that products manufactured, used, imported
or sold by Borrower conflict with, misappropriate, infringe or violate the
Intellectual Property of any third party, except in each case for actions, suits or
proceedings the outcome of which individually or in the aggregate would not have a
material adverse effect on Borrower’s business.

 

 

     (f) Laws and Taxes. Borrower is in material compliance with all laws,
regulations, rulings, orders, injunctions, decrees, conditions or other requirements
applicable to or imposed upon Borrower by any law or by any governmental authority, court or
agency, except where any non-compliance would not have a material adverse effect on
Borrower’s business. Borrower has filed all required tax returns and reports that are now
required to be filed by it in connection with any federal, state and local tax, duty or
charge levied, assessed or imposed upon Borrower or its assets, including unemployment,
social security, and real estate taxes. Borrower has paid all taxes which are now due and
payable. No taxing authority has asserted or assessed any additional tax liabilities against
Borrower which are outstanding on this date, and Borrower has not filed for any extension of
time for the payment of any tax or the filing of any tax return or report.

     (g) Title. Borrower has good and marketable title to the assets reflected on
the most recent balance sheet submitted to Lender, free and clear from all liens and
encumbrances of any kind, except for (collectively, the “Permitted Liens”) (1) a security
interest, mortgage or other lien in favor of Lender (2) an existing security interest or
lien described on Schedule C attached to this Agreement, (3) the proposed mortgage, security
interest or lien on real property described on Scheduled C attached to this Agreement (4) a
lien for taxes that are not delinquent or, in a jurisdiction where payment of taxes is
abated during the period of any contest, being contested in good faith by appropriate
proceedings, if adequate reserves for it have been set aside under GAAP on Borrower’s books
and (5) an inchoate material men’s, mechanics’, workmen’s, repairmen’s or other like lien
arising in the ordinary course of business, if the obligation secured is not delinquent or
is being contested in good faith by appropriate proceedings, if adequate reserves for it
have been set aside under GAAP on Borrower’s books.

     (h) Subsidiaries and Partnerships. Except as set forth on Schedule D,
Borrower has no subsidiaries and is not a party to any partnership agreement or joint
venture agreement.

     6. AFFIRMATIVE COVENANTS. Borrower covenants with, and represents and warrants to,
Lender that, from and after the execution date of the Loan Documents until the Obligations are paid
and satisfied in full:

     (a) Financial Statements. Borrower shall maintain a standard and modern system
for accounting and shall furnish to Lender:

     (i) Within 20 days after the end of each month, a copy of Borrower’s internally
prepared unaudited consolidated financial statements for that month and for the year
to date in a form as is customarily prepared by Borrower, prepared and certified as
complete and correct, subject to changes resulting from year-end adjustments, by the
principal financial officer of Borrower;

     (ii) Within 20 days after the end of each calendar quarter, a copy of Borrower’s
accounts receivable aging report for that quarter and for the year to date in a form,
as is customarily prepared by Borrower, prepared and certified as complete and
correct, subject to changes resulting from year-end adjustments, by the principal
financial officer of Borrower;

     (iii) Within 120 days after the end of each fiscal year, a copy of Borrower’s
financial statements audited by a firm of independent certified public accountants
acceptable to Lender (which acceptance shall not be unreasonably withheld) and
accompanied by an audit opinion of such accountants without qualification;

     (iv) With the statements submitted above, a certificate signed by the principal
financial officer of Borrower, (i) stating he is familiar with all documents relating
to Lender and that no Event of Default specified herein, nor any event which upon
notice or lapse of time, or both would constitute such an Event of Default, has
occurred, or if any such condition or event existed or exists, specifying it and
describing what action Borrower has taken or proposes to take with respect thereto,
and (ii) setting forth, in summary form, figures showing the financial status of
Borrower in respect of the financial restrictions contained herein;

     (v) Immediately upon any executive officer of Borrower obtaining knowledge of
any condition or event which constitutes or, after notice or lapse of time or both,
would constitute an Event of Default, a certificate of such person specifying the
nature and period of the existence thereof, and what action Borrower has taken or is
taking or proposes to take in respect thereof;

All of the statements referred to in (i), (ii) and (iii) above shall be in conformance with
generally accepted accounting principles and give representatives of Lender access thereto
at all reasonable times, including permission to examine, copy and make abstracts from any
such books and records solely for the purpose of evaluating the status of the loan and such
other information which might be helpful to Lender in evaluating the status of the loans as
it may reasonably request from time to time.

 

 

With all financial statements delivered to Lender as provided in (i), (ii) and (iii) above,
Borrower shall deliver to Lender a Financial Statement Compliance Certificate in addition to
the other information set forth therein, which certifies the Borrower’s compliance with the
financial covenants set forth herein and that no Event of Default has occurred.

If at any time Borrower has any additional subsidiaries which have financial statements that
are required to be consolidated with those of Borrower under generally accepted accounting
principles, the financial statements required by subsections (i), (ii) and (iii) above shall
be the financial statements of Borrower and all such subsidiaries prepared on a consolidated
and consolidating basis.

     (b) Condition and Repair. Borrower shall maintain its equipment and all
Collateral used in the operation of its business in good repair and working order and shall
make all appropriate repairs, and replacements thereof.

     (c) Insurance. At its own cost, Borrower shall obtain and maintain insurance
against (a) loss, destruction or damage to its properties and business of the kinds and in
the amounts customarily insured against by corporations with established reputations engaged
in the same or similar business as Borrower and, in any event, sufficient to fully protect
Lender ‘s interest in the Collateral, and (b) insurance against public liability and third
party property damage of the kinds and in the amounts customarily insured against by
corporations with established reputations engaged in the same or similar business as
Borrower. All such policies shall (i) be issued by financially sound and reputable insurers,
(ii) name Lender as an additional insured and, where applicable, as loss payee under a
Lender loss payable endorsement satisfactory to Lender      , and (iii) shall provide for
thirty (30) days written notice to Lender before such policy is altered or canceled. All
of the insurance policies required hereby shall be evidenced by one or more Certificates of
Insurance delivered to Lender by Borrower on the Closing Date and at such other times as
Lender may request from time to time.

     (d) Taxes. Borrower shall pay when due all taxes, assessments and other
governmental charges imposed upon it or its assets, 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 by law might
be a lien or charge upon any of its assets, provided that (unless any material item or
property would be lost, forfeited or materially damaged as a result thereof) no such charge
or claim need be paid if it is being diligently contested in good faith, if Lender is
notified in advance of such contest and if Borrower establishes an adequate reserve or other
appropriate provision required by generally accepted accounting principles.

     (e) Compliance with Laws. Borrower shall comply with all federal, state and
local laws, regulations and orders applicable to Borrower or its assets including but not
limited to all Environmental Laws, in all respects material to Borrower’s business or assets
and shall immediately notify Lender of any violation of any rule, regulation, statute,
ordinance, order or law relating to the public health or the environment and of any
complaint or notifications received by Borrower regarding to any environmental or safety and
health rule, regulation, statute, ordinance or law. Borrower shall obtain and maintain any
and all licenses, permits, franchises, governmental authorizations and as may be required
from time to time by applicable law for the conduct of its business except where failure
would not have a material adverse effect on Borrower’s business.

     (f) Depositorv/Bankinq Services. Lender shall be a principal depository in
which Borrower’s funds are deposited, and a principal bank of account of Borrower, as long
as any Obligations are outstanding.

     (g) Other Amounts Deemed Loans. If Borrower fails to pay any tax, assessment,
governmental charge or levy or to maintain insurance within the time permitted or required
by this Note, or to discharge any Lien prohibited hereby, or to comply with any other
Obligation, Lender may, but shall not be obligated to, pay, satisfy, discharge or bond the
same for the account of Borrower. To the extent permitted by law and at the option of
Lender, all monies so paid by Lender on behalf of Borrower shall be deemed Obligations and
Borrower’s payments under this Note may be increased to provide for payment of such
Obligations plus interest thereon.

     (h) Further Assurances. Borrower shall execute, acknowledge and deliver, or
cause to be executed, acknowledged or delivered, any and all such further assurances and
other agreements or instruments, and take or cause to be taken all such other action, as
shall be reasonably necessary from time to time to give full effect to the Loan Documents
and the transactions contemplated thereby.

     7. DEFINITIONS. Certain capitalized terms have the meanings set forth on any exhibit
hereto, in the Security Agreement, if applicable, or any other Loan Document. All financial terms
used herein but not defined on the exhibits, in the Security Agreement, if applicable or any other
Loan Document have the meanings given to them by generally accepted

 

 

accounting principles. All other undefined terms have the meanings given to them in the
Uniform Commercial Code as adopted in the state whose law governs this instrument. The following
definitions are used herein:

     (a) “Affiliate” means, as to Borrower, (a) any person or entity which, directly or
indirectly, is in control of, is controlled by or is under common control with, Borrower, or
(b) any person who is a director, officer or employee (i) of Borrower or (ii) of any person
described in the preceding clause (a).

     (b) “Lien” means any security interest, mortgage, pledge, assignment, lien or other
encumbrance of any kind, including interests of vendors or lessors under conditional sale
contracts or capital leases, but shall exclude (a) a lien for taxes that are not delinquent
or, in a jurisdiction where payment of taxes is abated during the period of any contest,
being contested in good faith by appropriate proceedings, if adequate reserves for it have
been set aside under GAAP on Borrower’s books and (b) an inchoate material men’s,
mechanics’, workmen’s, repairmen’s or other like lien arising in the ordinary course of
business, if the obligation secured is not delinquent or is being contested in good faith by
appropriate proceedings, if adequate reserves for it have been set aside under GAAP on
Borrower’s books.

     (c) “Loan Documents” means any and all Rate Management Agreements and each and every
document or agreement executed by any party evidencing, guarantying or securing any of the
Obligations; and “Loan Document” means anyone of the Loan Documents.

     (d) “Obligation(s)” means all loans, advances, indebtedness and each and every other
obligation or liability of Borrower owed to each of Lender and/or any affiliate of Fifth
Third Bancorp, created pursuant to this Note, of every kind and description whether now
existing or hereafter arising and whether direct or indirect, primary or as guarantor or
surety, absolute or contingent, liquidated or unliquidated, matured or unmatured, whether or
not secured by additional collateral, and including, without limitation, all loans,
advances, indebtedness and each and every obligation or liability arising under this Note,
any and all Rate Management Obligations (as defined in the Loan Documents), all obligations
to perform or forbear from performing acts, and agreements, instruments and documents
evidencing, guarantying, securing or otherwise executed in connection with any of the
foregoing, together with any amendments, modifications and restatements thereof.

     (e) “Rate Management Agreement” means any agreement, device or arrangement providing
for payments which are related to fluctuations of interest rates, exchange rates, forward
rates, or equity prices, including, but not limited to, dollar-denominated or cross-
currency interest rate exchange agreements, forward currency exchange agreements, interest
rate cap or collar protection agreements, forward rate currency or interest rate options,
puts and warrants, and any agreement pertaining to equity derivative transactions (e.g.,
equity or equity index swaps, options, caps, floors, collars and forwards), including
without limitation any ISDA Master Agreement between Borrower and Lender or any affiliate of
Fifth Third Bancorp, and any schedules, confirmations and documents and other confirming
evidence between the parties confirming transactions thereunder, all whether now existing or
hereafter arising, and in each case as amended, modified or supplemented from time to time.

     (f) “Rate Management Obligations” means any and all obligations of Borrower to Lender
or any affiliate of Fifth Third Bancorp, whether absolute, contingent or otherwise and
howsoever and whensoever (whether now or hereafter) created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions therefore),
under or in connection with (i) any and all Rate Management Agreements, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any Rate Management
Agreement.

     8. EVENTS OF DEFAULT. Upon the occurrence of any of the following events (each, an
“Event of Default”) not cured within 30 days (unless some other cure period is provided below) from
written, notice of default, Lender may at its option declare this Note and all Obligations to be
fully due and payable in their aggregate amount, together with accrued interest and all prepayment
premiums, fees, and charges applicable thereto:

     (a) Any failure to make any payment when due of principal or accrued interest on this
Note or any other Obligation and such nonpayment remains uncured for a period of 10 days
following written notice thereof.

     (b) Any representation or warranty of Borrower set forth in this Note or in any
agreement, instrument, document, certificate or financial statement evidencing, guarantying,
securing or otherwise related to, this Note or any other Obligation shall be materially
inaccurate or misleading when made.

     (c) Borrower shall fail to observe or perform any other term or condition of this Note
or any other term or condition set forth in any agreement, instrument, document, certificate
or financial statement evidencing, guarantying or otherwise related to this Note or any
other Obligation, or Borrower shall otherwise default in the observance or performance of
any covenant or agreement set forth in any of the foregoing for a period of 30 days.

 

 

     (d) Any failure to submit to Lender current financial information upon request where
such failure is not cured within thirty (30) days following written notice.

     (e) The creation of any Lien (except for Permitted Liens) on, the institution of any
garnishment proceedings by attachment, levy or otherwise against, the entry of a final order
of judgment (following all appeals) against, or the seizure of, any of the property of
Borrower in an amount in excess of five million dollars ($5,000,000) which judgment seizure
or proceeding is not resolved in favor of Borrower within ninety (90) days thereafter.

     (f) In the judgment of Lender, any material adverse change occurs in the existing or
prospective financial condition of Borrower that may affect the ability of Borrower to repay
the Obligations, or the Lender deems itself insecure.

     (g) A commencement by the Borrower or any endorser or guarantor of the Obligations of a
voluntary case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect; or the entry of a decree or order for relief in respect of the Borrower
or any endorser or guarantor of the Obligations in a case under any such law or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official)
of the Borrower or any endorser or guarantor of the Obligations, or for substantially all of
the property of Borrower or any endorser or guarantor of the Obligations, or ordering the
wind-up or liquidation of the affairs of Borrower or any endorser or guarantor of the
Obligations; or the filing and pendency for 30 days without dismissal of a petition
initiating an involuntary case under any such bankruptcy, insolvency or similar law; or the
making by Borrower or any endorser or guarantor of the Obligations of any general assignment
for the benefit of creditors; or the failure of the Borrower or any endorser or guarantor of
the Obligations generally to pay its debts as such debts become due; or the taking of action
by the Borrower or any endorser or guarantor of the Obligations in furtherance of any of the
foregoing.

     (h) Nonpayment by the Borrower of any Rate Management Obligation when due or the breach
by the Borrower of any term, provision or condition contained in any Rate Management
Agreement in each case not cured within ten (10) days following written notice thereof.

     (i) Any sale, conveyance or transfer of any rights in the Collateral securing the
Obligations, or any destruction, loss or damage of or to a material portion of the
Collateral.

     9. REMEDIES. In addition to any other remedy permitted by law, Lender may at any time,
without notice, apply the Collateral to this Note or such other Obligations, whether due or not,
and Lender may, at its option, proceed to enforce and protect its rights by an action at law or in
equity or by any other appropriate proceedings; provided that this Note and the Obligations shall
be accelerated automatically and immediately if the Event of Default is a filing under the
Bankruptcy Code. Notwithstanding any other legal or equitable rights of Lender, Lender, in the
Event of Default, is (a) hereby irrevocably appointed and constituted attorney-in-fact, coupled
with an interest, with full power of substitution, to exercise all rights of ownership with respect
to the Collateral including, but not limited to, the right to collect all income or other
distributions arising therefrom; and (b) is hereby given full power to collect, sell, assign,
transfer and deliver all of said Collateral or any part thereof, or any substitutes therefore, or
any additions thereto, through any private or public sale without either demand or notice to
Borrower, or any advertisement, the same being hereby expressly waived, to the extent permitted by
law, at which sale Lender is authorized to purchase said property or any part thereof, free from
any right of redemption on the part of Borrower, which is hereby expressly waived and released. In
case of sale for any cause, after deducting all costs and expenses of every kind, Lender may apply,
as it shall deem proper, the residue of the proceeds of such sale toward the payment of anyone or
more or all of the Obligations of Borrower, whether due or not due, to Lender; after such
application and the return of any surplus, Borrower agrees to be and remains liable to Lender for
any and every deficiency after application as aforesaid upon this and any other Obligation.
Borrower shall pay all costs of collection incurred by Lender, including its reasonable attorney’s
fees, if this Note is referred to an attorney for collection, whether or not payment is obtained
before entry of judgment, which costs and fees are Obligations secured by the Collateral.

If this Note is placed in the hands of attorneys for collection or is collected through any legal
proceedings, Borrower promises and agrees to pay, in addition to the principal, interest and other
sums due and payable hereon, all costs of collecting or attempting to collect this Note, including
all reasonable attorneys’ fees and disbursements.

Lender’s rights and remedies hereunder are cumulative, and may be exercised together, separately,
and in any order. No delay on the part of Lender in the exercise of any such right or remedy
shall operate as a waiver. No single or partial exercise by Lender of any right or remedy shall
preclude any other further exercise of it or the exercise of any other right or remedy. No waiver
or indulgence by Lender of any Event of Default shall be effective unless in writing and signed by
Lender, nor shall a waiver on one occasion be construed as a waiver of any other occurrence in the
future.

 

 

     10. LATE PAYMENTS: DEFAULT RATE: FEES. If any payment is not paid when due (whether
by acceleration or otherwise) or within 10 days thereafter, undersigned agrees to pay to Lender a
late payment fee as provided for in any loan agreement or 5% of the payment amount, whichever is
greater with a minimum fee of $20.00. After an Event of Default, Borrower agrees to pay to Lender a
fixed charge of $25.00, or Borrower agrees that Lender may, without notice, increase the Interest
Rate by 6% (the “Default Rate”), whichever is greater. Lender may impose a non-sufficient funds fee
for any check that is presented for payment that is returned for any reason. In addition, Lender
may charge loan documentation fees as may be reasonably determined by the Lender.

     11. PREPAYMENT. Borrower may prepay all or part of this Note without penalty or
additional fees or charges, which prepaid amounts shall be applied to the amounts due in reverse
order of their due dates. Partial prepayments shall not excuse any subsequent payment due.

     12. ENTIRE AGREEMENT. Borrower agrees that there are no conditions or understandings
which are not expressed in this Note and the documents referred to herein.

     13. SEVERABILITY. The declaration of invalidity of any provision of this Note shall
not affect any part of the remainder of the provisions.

     14. ASSIGNMENT. Borrower agrees not to assign any of Borrower’s rights, remedies or
obligations described in this Note without the prior written consent of Lender, which consent may
be withheld in Lender’s sole discretion. Borrower agrees that Lender may assign some or all of its
rights and remedies described in this Note without notice to, or prior consent from, the Borrower.

     15. MODIFICATION’ WAIVER OF LENDER. The modification or waiver of any of Borrower’s
obligations or Lender’s rights under this Note must be contained in a writing signed by Lender.
Lender may perform Borrower’s obligations, or delay or fail to exercise any of its rights or
remedies, without causing a waiver of those obligations or rights. A waiver on one occasion shall
not constitute a waiver on another occasion. Borrower’s obligations under this Note shall not be
affected if Lender amends, compromises, exchanges, fails to exercise, impairs or releases the
Collateral or any other property securing the Obligations.

     16. WAIVER OF BORROWER. Demand, presentment, protest and notice of dishonor, notice of
protest and notice of default are hereby waived by Borrower, and any endorser or guarantor hereof.
Borrower, hereby waives all suretyship defenses including but not limited to all defenses based
upon impairment of Collateral and all suretyship defenses described in Section 3-605 of the Uniform
Commercial Code (the “UCC”). Such waiver is entered to the full extent permitted by Section 3- 605
(i) of the UCC.

     17. GOVERNING LAW CONSENT TO JURISDICTION. This Note is delivered in, is intended to
be performed in, will be construed and enforceable in accordance with and governed by the internal
laws of, the State of Michigan, without regard to principles of conflicts of law. Borrower agrees
that the state and federal courts in the County where the Lender is located shall have exclusive
jurisdiction over all matters arising out of this Note, and that service of process in any such
proceeding shall be effective if mailed to Borrower at the address set forth herein.

     18. JURY WAIVER. BORROWER, AND ANY ENDORSER OR GUARANTOR HEREOF, WAIVE THE RIGHT TO A
TRIAL BY JURY OF ANY MATTERS ARISING OUT OF THIS NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

	 	 	 	 	 
	 

	 	BORROWER:	 	 
	 
	 	 	 	 
	 	 	Bioport Corporation, a Michigan corporation
	 
	 	 	 	 
	 

	 	/s/ Michael A. Zamiara

	 

	 	(Authorized Signer)	 	 
	 
	 	 	 	 
	 	 	Michael A. Zamiara, Chief Financial Officer

	 

	 	(Print Name and Title)	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Scott Heibeck
	 	 
	 

	 	(Authorized Signer)	 	 
	 
	 	 	 	 
	 	 	Scott Heibeck, Associate Director of Finance

	 

	 	(Print Name and Title)	 	 

 

 

Schedule A

Description of Enterprise Resource Planning System

The Enterprise Resource Planning (ERP) System is system that integrates departments and functions
across the Organization and automates tasks involved in performing business processes. The ERP
system was licensed from SAP, the world’s largest enterprise software manufacturer, is supported
with specific hardware primarily purchased from Dell, and was implemented using Clarkston
Consulting Company.

 

 

Schedule B

Pending Litigation

1) Bates, et al., v. Rumsfeld, et al., Case No. 01CV00941, United States District Court for the
District of Columbia (filed May 2, 2001; dismissed May 30, 2002).

2) Doe #1, et al. v. Rumsfeld, et al., Case No. 1:03-CV-00707-EGS, United States District Court for
the District of Columbia (filed March 18, 2003; BioPort is not a party in this case).

3) Ammend, et. al. v. BioPort, Inc., et. al., Case No. 5:03-CV-031, United States District Court
for the Western District of Michigan (filed March 21, 2003); Rugo et. al. v. BioPort, Corporation,
et al., Case No. 1:01CV02190, United States District Court for the District of Columbia (filed
October 19, 2001, and subsequently dismissed without prejudice and refiled in the Western District
of Michigan as Ammend); Bonasse, et al. v. BioPort, et al., Case No. 02-CV-00880, United States
District Court for the District of Columbia (filed May 7, 2002, and subsequently dismissed without
prejudice and refiled in the Western District of Michigan as Ammend; Lahiff, et al. v. BioPort, et.
al., Case No. 02-CV-01945 United States District Court for the District of Columbia (filed October
2, 2002, and subsequently dismissed without prejudice and refiled in the Western District of
Michigan under Ammend).

4) Allaire, et al. v. BioPort Corporation, et al., Case No. 02-CV-00248 United States District
Court for the District of Columbia, (filed February 7, 2002, and subsequently transferred to the
United States District Court for the Western District of Michigan, Case No. 1:03CV254).

5) Fleming et. al v. BioPort, et. al., Case No. 3:03CV0581, United States District Court for the
Western District of Louisiana (filed March 27, 2003 and transferred to the Western District of
Michigan and consolidated with Ammend).

6) Suk v. BioPort Corporation, et al., Civil Action No. 03CV2610, United States District Court for
the District of New Jersey (filed May 30, 2003, and transferred to the Western District of Michigan
and consolidated with Ammend).

7) United States ex. rel. Dingle and Rempfer v. BioPort et al., Case No. 5:00-CV-124, United States
District Court for the Western District of Michigan (filed October 10, 2000; case dismissed June
18, 2003, on appeal to the United States Court of Appeal for the Sixth Circuit).

8) Counter, et al. v. Abbott Laboratories, et al., Case No. 15285 BHO1, Brazoria County, Texas
(filed May 7, 2001, dismissed on August 2, 2001); Reyna v American Home Products, Case No.
C-557-02-F, Hidalgo County, Texas (removed to the United States District Court for the Southern
District of Texas, Case No. M-02-366, on August 19, 2002); and Rosello v American Home Products,
Case No. C-1590-03-F, Hidalgo County, Texas (filed August 27, 2003 and removed to the United States
District Court for the Southern District of Texas, Case No. M-03-CV-259, on September 19, 2003)
(the plaintiffs in these cases all voluntarily dismissed BioPort).

9) Collins v. American Home Products, et al., Case No. 3:01CV979LN, United States District Court
for the Southern District of Mississippi (filed December 17, 2001; dismissed August 2, 2002; on
appeal to the United States Court of Appeals for the Fifth Circuit).

10) Stewart v. American Home Products, et. al., Case No. 3:02CV427LN, United States District Court
for the Southern District of Mississippi (filed May 1, 2002; dismissed August 2, 2002; on appeal to
the United States Court of Appeals for the Fifth Circuit).

11) Ray v. American Home Products, et. al., Case No. 2002-0276 CICI, Sunflower County, Mississippi
(filed December 31, 2002, and removed to United States District Court for the Northern District of
Mississippi, Case No. 4:03CV265PB on May 5, 2003, stay issued on October 10, 2003; and Case No.
4:03CV263PB on May 19, 2003, stay issued on December 1, 2003).

 

 

12) Alexander, as next friend, et al. v. American Home Products Corporation, et al., No. 2002-0761,
Sunflower County, Mississippi (filed December 31, 2002, and removed to United States District Court
for the Northern District of Mississippi, Case No. 4:03CV261EMB on May 19, 2003, stay issued on
December 1, 2003).

13) Alexander, et al. v. American Home Products Corporation, et al., No. 2002-0763, Sunflower
County, Mississippi (filed December 31, 2002, and removed to United States District Court for the
Northern District of Mississippi, Case No. 4:03CV262PB on May 19, 2003, stay issued on October 10,
2003).

14) Guyton, et al., v. American Home Products, et. al., Case No. 2002-0394, Madison County,
Mississippi (filed December 31, 2002, and removed to United States District Court for the Northern
District of Mississippi, Case No. 3:03CV704LN on May 19, 2003, stay issued on October 10, 2003).

15) Keys, et al., v. American Home Products, et. al., Case No. 2:03CV300PG, United States District
Court for the Southern District of Mississippi (filed May 19, 2003; stay issued on July 9, 2004).

16) Townsend, et al., v. American Home Products, et. al., Case No. 2:03-CV-302-PG,

United States District Court for the Southern District of Mississippi (filed May 19, 2003).

17) Del Rio, et al., v. American Home Products, et. al., Case No. 2:03-CV-301-PG, United States
District Court for the Southern District of Mississippi (filed May 19, 2003; stay issued on July 9,
2004).

18) Hutchenson, et al. v. American Home Products Corporation, et al., No. 2002-0765, Sunflower
County, Mississippi (filed December 31, 2002; removed to United States District Court for the
Northern District of Mississippi, Case No. 4:03CV264PB on May 20, 2003, stay issued on December 1,
2003).

19) King, as next friend, et al., v. American Home Products Corporation, et al., Case No. 2002-188,
Bolivar County, Mississippi (filed December 31, 2002, removed to United States District Court for
the Northern District of Mississippi, Case No. 2:03CV188PB on May 19, 2003, stay issued on November
28, 2003).

20) King, et al., v. American Home Products Corporation, et al., No. 2002-187, Bolivar County,
Mississippi (filed December 31, 2002; removed to United States District Court for the Northern
District of Mississippi, Case No. 2:03CV187PB on May 19, 2003, stay issued on November 28, 2003).

21) Schmuck v. Abbott Laboratories, et al., Case No. BC 2552268, Los Angeles, California (filed
August 1, 2001, and consolidated with Allen v. Abbott Laboratories, Case No. 02CC00108 Orange
County, California (filed April 26, 2002) and Werley v. Abbott Laboratories, Case No. 787422, San
Diego County, California (filed April 25, 2002)).

	22)	 	Cases filed in Madison County, Illinois:

	 	a)	 	Goodman v. Abbott Laboratories, et al., Case No 02-L-641 (filed May 7, 2002);
	 
	 	b)	 	Livi v. Abbott Labs, et al., Case No. 02-L-643 (filed April 30, 2002);
	 
	 	c)	 	Hornstein v. Abbott Laboratories, et al., Case No. 02-L-642 (filed May 7, 2002);
	 
	 	d)	 	Delghingaro v. Abbott Laboratories, Case No. 02-L-1344 (filed September 30, 2002);
	 
	 	e)	 	Gabor v. Abbott Laboratories, Case No. 02-L-1345 (filed September 30, 2002);
	 
	 	f)	 	Robinson v. Abbott Laboratories, Case No. 02-L-1346 (filed September 30, 2002);
	 
	 	g)	 	Howard v. Abbott Laboratories, Case No. 02-L-1487 (filed November 4, 2002);
	 
	 	h)	 	Trocke v. Abbott Laboratories, Case No. 02-L-1486 (filed November 4, 2002);
	 
	 	i)	 	Curia (Christopher) v. Abbott Laboratories, Case No. 02-L-1593 (filed December 2,
2002);
	 
	 	j)	 	Mahnke v. Abbott Laboratories, Case No. 02-L-1594 (filed December 12, 2002);
	 
	 	k)	 	Barkwell v. Abbott Laboratories, Case No. 02-L-845 (filed June 13, 2002);
	 
	 	l)	 	Choate v. Abbott Laboratories, Case No. 02-L-844 (filed June 13, 2002);
	 
	 	m)	 	Conrick v. Abbott Laboratories, Case No. 02-L-843 (filed June 13, 2002);
	 
	 	n)	 	Curia v. Abbott Laboratories, Case No. 02-L-842 (filed June 13, 2002);
	 
	 	o)	 	 Guinn v. Abbott Labs, Case No. 02-L-841 (filed June 13, 2002);
	 
	 	p)	 	Owczarzak v. Abbott Laboratories, Case No-L-840 (filed June 13, 2002);
	 
	 	q)	 	Thomason v. Abbott Labs, Case No. 02-L-896 (filed June 26, 2002);

 

 

	 	r)	 	Strohbeck v. Abott Laboratories, Case No. 03-L-93 (filed January 27, 2003);
	 
	 	s)	 	Kramer v. Abbott Labs, Case No. 03-L-670 (filed May 22, 2002);
	 
	 	t)	 	Zezulak v. Abbott Labs, Case No. 03-L-1175 (filed August 25, 2003);
	 
	 	u)	 	Spaetzel v. Abbott Labs, Case No. 03-L-1972 (filed December 5, 2003);
	 
	 	v)	 	Sexton v. Abbott Labs, Case No. 03-L-1971 (filed December 5, 2003);
	 
	 	w)	 	Weider v. Abbott Labs, Case No. 03-L-1559 (filed November 19, 2003);
	 
	 	x)	 	Weider (II) v. Abbott Labs, No. 04-L-181 (filed February 23, 2004);
	 
	 	y)	 	Fredericks v. Abbott Labs, Case No. 03-L-1037 (filed July 23, 2003);
	 
	 	z)	 	Vaselopulos v. Abbott Labs, No. 03-L-1176 (filed August 25, 2003);
	 
	 	aa)	 	Villareal v. Abbott Labs, Case No. 04-L-180 (filed February 23, 2004);
	 
	 	bb)	 	Peterman v. Abbott Labs, Case No. 04-L-0443 (filed April 1, 2004);
	 
	 	cc)	 	Sumner v. Abbott Labs, Case No. 04-L-442 (filed May 25, 2004);
	 
	 	dd)	 	Miller (Alan & Kimberly) v. Abbott Labs, et, al., Case No 04-L-443 (filed May 25, 2004);
	 
	 	ee)	 	Miller (II) v. Abbott Labs, Case No. 04-L-650 (filed June 18, 2004); and
	 
	 	Case filed in Cook County, Illinois:	 	 
	 
	 	ff)	 	Reilly v. Abbott Labs, Case No. 02-L-14697 (filed November 20, 2002).

22) Golbitz v. BioPort Corporation, et al., Case No. 02-07799, Court of Common Pleas of Montgomery
County, Pennsylvania (filed March 24, 2002; withdrawn May 10, 2002).

23) Johnson-Leva v. BioPort Corporation, Case No. 03-2183-NZ, Ingham County, Michigan, (filed
December 16, 2003).

24) Stevens v. Battelle Memorial Inst., et al., Case No. 010344XXCCAB, Palm Beach County, Florida
(removed to United States District Court for the Southern District of Florida, Case No. 04-CV-80253
on March 17, 2004).

25) BioPort Corporation v. Elan Pharmaceuticals, Inc. and Athena Neurosciences, Inc.
(cross-complainants Elan Pharmaceuticals, Inc. and Athena Neurosciences, Inc. v. BioPort
Corporation and The State of Michigan), Case No. CV 423886, County of San Mateo, California (filed
June 27, 2002).

26) 1997 Notice of Intent to Revoke issued by the U.S. Food and Drug Administration relating to a
1996 team biologics team inspection.

 

 

Schedule C

Permitted Liens

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Unpaid Principal and Interest	 	 	 	 
	Creditor	 	Description	 	as of June 30, 2004	 	 	Collateral	 
	State of Michigan
	 	Royalty Obligation	 	 	3,629,599	 	 	none
	State of Michigan
	 	Product Donation Obligation	 	 	2,236,880	 	 	none
	 
	 	Environmental Remediation	 	 	 	 	 	 	 	 
	State of Michigan
	 	Liability	 	 	317,051	 	 	none
	US Dept. of Defense
	 	FAV026 Obligation	 	 	970,205	 	 	none
	US Dept. of Defense
	 	Spare Parts Obligation	 	 	429,812	 	 	none
	Pitney Bowes
	 	Copiers & Fax Machines	 	 	103,900	 	 	copiers & equipment
	 
	 	Schedule Numbers:	 	 	 	 	 	 	 	 
	 
	 	5395546-314	 	 	 	 	 	 	 	 
	 
	 	5395546-315	 	 	 	 	 	 	 	 
	 
	 	5395546-316	 	 	 	 	 	 	 	 
	 
	 	5395546-317	 	 	 	 	 	 	 	 
	Ingersol
	 	Bobcat Operating Lease	 	 	14,215	 	 	Bobcat
	GMAC
	 	2002 Chevrolet Minivan	 	 	19,708	 	 	2002 Chevy
Minivan

	GMAC
	 	2001 Chevrolet Silverado	 	 	558	 	 	  2001 Chevy

Silverado
	Volkswagon USA
	 	2001 Volksagon Passat	 	 	13,816	 	 	2001 Passat
	GE Capital
	 	Copier Operating Leases	 	 	14,210	 	 	2 Copiers
	 
	 	ESOP Stock Repurchase	 	 	 	 	 	 	 	 
	BioPort Employees
	 	Obligation	 	 	900,061	 	 	none
	 
	 	Antex Building Operating	 	 	 	 	 	 	 	 
	Alexandria Real Estate
	 	Lease through 12/1/08	 	 	4,320,000	 	 	none
	 
	 	EWR Building Operating	 	 	 	 	 	 	 	 
	East West Resources
	 	Sublease through 7/31/05	 	 	143,000	 	 	none

Any and all covenants, restrictions and easements of record in the land records relating to the Real Property.

 

 

Real Property

Clinton County:

A parcel of land in the SE 1/4 of Section 32, T5N, R2W, Clinton County, Michigan and more
particularly described as beginning at the S1/4 corner of said section 32; thence N00° 12’30”W
2152.16 feet on the N-S 1/4 line of said section 32; thence S89° 57’16” E 683.94 feet to the
westerly Right-of-Way of Dewitt Road at a point 500.00 feet southerly of the E-W 1/4 line of said
section 32; thence on the westerly Right-of-Way of DeWitt Road for the next five calls; thence S04
03’50”E 112.68 feet; thence 299.44 feet on the arc of a curve to the left with a central angle of
23 26’19”, a radius of 731.99 feet and long chord bearing and distance of S15°47’00”E 297.36
feet; thence S27 30’10”E 927.69 feet; thence 356.62 feet on the arc of a curve to the right with a
central angle of 27 41’37”, a radius of 737.82 feet and a long chord bearing and distance of S13
39’21”E 353.16 feet; thence S00 11’27” W 30.40 feet; thence S88 07’13”W 171.96 feet; thence S17
13’15”W 128.78 feet; thence S02 36’04”W 161.34 feet; thence N89 59’39”W 420.93 feet; thence S00
06’07”E 267.69 feet to the south line of said section 32; thence N89 59’49”W 632.45 feet on the
south line of said section 32 to the N1/4 corner of section 5, T4N, R2W; thence S89 27’29”W 6.45
feet on the south line of said section 32 to the point of beginning, containing 46.94 acres, more
or less.

Ingham County:

A parcel of land in the NE 1/4 of section 5, T4N, R2W, Ingham County, Michigan and more
particularly described as commencing at the northeast corner of said section 5; thence N89°59’49”W
124.94 feet, on the north line of said section 5; thence S00°00’11”W 33.00 feet, to the point of
the beginning of this description; thence S33°12’59”W 315.33 feet; thence N53°08’14”W 101.37 feet;
thence S89°11’38”W 47.55 feet; thence S00°42’03”W 63.21 feet; thence S89°45’02”W 73.97 feet; thence
S00°59’58”W 106.92 feet; thence 132.16 feet, on the arc of a curve to the right with a central
angle of 33°53’13”, a radius of 223.46 feet, and a long chord bearing and distance of S22°22’16”W
130.25 feet; thence S59°26’51”W 14.65 feet; thence S77°08’54”W 92.93 feet; thence S88°34’58”W
131.49 feet; thence S01°57’43”E 41.46 feet; thence S88°02’17”W 153.47 feet; thence S01°57’43”E
132.00 feet; thence S88°02’17”W 351.61 feet; to the easterly right of way line of Logan Street;
thence N00°28’13”E 716.63 feet, to the southerly right of way line of Sheridan Road; thence
S89°59’49”E 1155.21 feet, on said right of way to the point of beginning, containing 12.56 acres,
more or less.

Frederick County:

Building 1 and associated proposed land condominium unit within that certain parcel of land known
as Lot 3 situate and lying in the Dudrow Business Park, Frederick, Maryland, containing
approximately 23.68 acres of land, more or less, and further shown and described as Lot 3 on that
certain subdivision plat entitled “LOTS 1 & 3, PARKLAND OUTLOT, AND REMAINDER, DUDROW BUSINESS
PARK” recorded among the Plat Records of Frederick County, Maryland at Plat Book 57, Page 10

 

 

Schedule D

Subsidiaries, Partnerships and Joint Ventures

BioPort Corporation presently holds 100% of the issued and outstanding capital stock of Antex
Biologics Inc., Antex Pharma Inc. and Advanced BioSolutions, Inc.

 

 

EXHIBIT A

Collateral Locations

3500 North Martin Luther King Jr. Boulevard, Lansing, MI 48906exv10w31

 

Exhibit 10.31

LOAN AGREEMENT 

     THIS LOAN AGREEMENT (this “Agreement”) is dated as of April 25th 2006, by
and among EMERGENT FREDERICK LLC, a Maryland limited liability company, which maintains its chief
executive office at 300 Professional Drive, Suite 100, Gaithersburg, Maryland 20879 (the
“Borrower”), and EMERGENT BIOSOLUTIONS INC., a Delaware corporation (the
“Guarantor”) and HSBC REALTY CREDIT CORPORATION (USA), a Delaware corporation (the
“Bank”).

     WHEREAS, the Borrower has applied to the Bank for a Loan of EIGHT MILLION FIVE HUNDRED
THOUSAND and No/100 Dollars ($8,500,000.00) (the “Loan”); and

     WHEREAS, the Loan will be of benefit to the Guarantor and the Guarantor desires to induce the
Bank to make the Loan by guaranteeing the payment of the Loan; and

     WHEREAS, the Bank is willing to make the Loan to the Borrower upon the terms and subject to
the conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the agreements, covenants and
conditions contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as follows;

SECTION 1. DEFINITIONS

     As used herein, the following terms, when initial capital letters are used, shall have the
respective meanings set forth below. In addition, all terms defined in the Maryland Uniform
Commercial Code shall have the meanings given therein unless otherwise defined herein.

     1.01 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings, unless the context otherwise requires:

     “Affiliate” shall mean (a) any entity in which the Borrower legally or beneficially
owns or holds, directly or indirectly, any capital stock, membership interest or other equity
interest; (b) any person or entity that is a partner in or member of the Borrower or a partnership
or limited liability company in which the Borrower is a partner, (c) any person that is a director,
officer, member, stockholder (legally or beneficially) or other affiliate of any of the foregoing
or of the Borrower; and (d) any person or entity that directly or indirectly controls, is under the
control of, or is under common control with, the Borrower, including, without limitation, any
person or entity that directly or indirectly has the right or power to direct the management or
policies of the Borrower and any person or entity whose management or policies the Borrower
directly or indirectly has the right or power to direct.

     “Collateral” shall mean the Property and assets of Borrower expressly described in the
Deed of Trust.

     “Deed of Trust” shall mean the Purchase Money Deed of Trust Assignment of Rents and
Leases and Security Agreement, of even date herewith, made and executed by the Borrower for

 

 

the benefit of the Bank, as amended, supplemented, restated or modified from time to time, to
secure the Note, which Deed of Trust, when recorded, shall create a first lien on the Property.

     “Environmental Laws” shall mean all federal, State and local laws, whether now or
hereafter enacted, and as amended from time to time, relating to pollution or protection of the
environment and the handling of Hazardous Materials; including, without limitation, laws relating
to emissions, discharges, releases or threatened releases of Hazardous Materials into the
environment (including, without limitation, ambient air, surface water, ground water or land), or
otherwise relating to the manufacture, generation, production, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials, and any and all
regulations, codes, plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.

     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor legislation, and all regulations, codes, orders, decrees,
judgments, injunctions, notices or demand letters issued, entered, promulgated or approved
thereunder.

     “Event of Default” shall mean any of the events specified in Section 6 hereof,
provided that any requirement for the giving of notice, the lapse of time, or both have been
satisfied.

     “GAAP” shall mean generally accepted accounting principles.

     “Guaranty” shall mean the Guaranty, of even date herewith, made and executed by the
Guarantor for the benefit of the Bank, as amended, supplemented, restated or modified from time to
time.

     “Hazardous Materials” shall mean any (i) hazardous, regulated and/or toxic chemicals,
materials, substances or wastes occurring in the air, water, soil or ground water or noise in, on,
over or under the Property or the improvements thereon, as defined by the Comprehensive
Environmental Response, Compensation, and Liability Act (Superfund or CERCLA), and the Superfund
Amendments and the Reauthorization Act of 1986 (SARA), 42 U.S.C. § 9601 et seq., the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq., the Resource Conservation and
Recovery Act (the Solid Waste Disposal Act or RCRA), 42 U.S.C. § 6901 et seq., the Federal Water
Pollution Control Act, (CWA), 33 U.S.C. § 1251 et seq., the Clean Air Act (CAA), 42 U.S.C. § 7401
et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq., the Safe Drinking Water Act, 42 U.S.C. § 300 ft.
seq. and the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.A. §136 et seq., the
Uranium Mill Tailings Radiation Control Act, 42 U.S.C. § 7901 et seq., the Occupational Safety and
Health Act, 29 U.S.C. § 655 et seq., the National Environmental Policy Act, 42 U.S.C. § 4321 et
seq., and the Noise Control Act, 42 U.S.C. § 4901 et seq., or comparable state statutes, as each
such statute may be amended from time to time, and/or as defined in regulations promulgated
thereunder; (ii) oil, petroleum products, and their by-products; (iii) any substance, the presence
of which is prohibited or controlled by any other applicable federal or state or local laws,
regulations, statutes or ordinances now in force or hereafter enacted relating to waste disposal or
environmental protection with respect to hazardous, toxic or other substances generated, produced,
leaked, released, spilled or disposed of at or from the Property;

2

 

(iv) any other substance which by law requires special handling in its collection, storage,
treatment or disposal including, but not limited to, asbestos or asbestos-containing material in
any form that could be friable, polychlorinated biphenyls (PCBs), was formaldehyde foam insulation
and lead-based paints, but mot including small quantities of such materials present on the Property
in retail containers, (v) Microbial Matter or infectious substances; (vi) underground or
above-ground storage tanks, whether empty or containing any substance, the presence of which on the
Property is prohibited by any federal, state or local authority; (vii) any substance that requires
special handling; and (viii) any other material or substance now or in the future defined as a
“hazardous substance,” “hazardous material,” hazardous waste,” “toxic substance,” “toxic
pollutant,” “contaminant,” or “pollutant” within the meaning of any Environmental Laws. “Microbial
Matter” shall mean the presence of fungi or bacterial matter (which is not normally found in the
environment) which reproduces through the release of spores or the splitting of cells, including,
but not limited to, mold, mildew and viruses, whether or not such Microbial Matter is living.

     “Lien” shall mean any mortgage, pledge, deed of trust, assignment, security
interest, encumbrance, hypothecation, lien, encroachment, reservation, right of way, easement,
covenant, condition, restriction or charge of any kind (including any conditional sale or other
title retention agreement, any financing lease having substantially the same economic effect as any
of the foregoing, and the filing of, or agreement to give, any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).

     “Loan Documents” shall mean the Note, this Agreement, the Guaranty, the Deed of Trust,
and any other agreement or document referred to herein or now or hereafter delivered and executed
by the Borrower and/or the Guarantor and/or the Bank in connection with the Loan contemplated
hereby, together with any and all revisions, amendments, restatements and modifications to,
replacements of and substitutions for, any of the foregoing.

     “Note” shall mean the promissory note of even date herewith executed by the Borrower
and consented to by the Guarantor to evidence the Loan, as amended, supplemented, restated,
replaced or modified from time to time.

     “Permitted Liens” shall mean: (a) Liens, if any, for taxes, front foot benefit
charges, assessments and other charges enumerated in Section 1.03(a) of the Deed of Trust, not yet
due or payable; (b) applicable building and zoning laws and regulations; (c) any mechanic’s,
artisan’s, materialman’s, landlord’s, carrier’s or other like Lien arising in the ordinary course
of business with respect to obligations which are not due; (d) any and all municipal and public
utility easements of record; (e) any Lien arising out of a judgment, order or award with respect to
which the Borrower shall in good faith be prosecuting diligently an appeal or proceeding for review
and with respect to which there shall be in effect a subsisting stay of execution pending such
appeal or proceeding for review, provided appropriate reserves therefor are established by the
Borrower in accordance with GAAP and provided such Lien is subordinate to any security interest of
the Bank in the property encumbered by such Lien; (f) any deposit of funds made in the ordinary
course of business to secure obligations of the Borrower under worker’s compensation laws,
unemployment insurance laws or similar legislation, to secure public or statutory obligations of
the Borrower, to secure surety, appeal or customs bonds in proceedings to which the Borrower is a
party, or to secure the Borrower’s performance in connection with bids, tenders, contracts (other
than contracts for the payment of money), leases or subleases made by the Borrower in the

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ordinary course of business; (g) any Lien set forth in the Commitment for Title Insurance No.
CTIC-05185 issued by Chicago Title Insurance Company, as updated to the date of this Agreement; (h)
any lease, sublease or agreement for occupancy or use for any part of the Property, so long as
those leases, subleases or agreements are subordinate to the Deed of Trust and have been approved
by the Bank; (i) a Lien in favor of the Bank; and (j) such other matters affecting title to the
Property as are approved by the Bank in writing;

     “Property” shall mean that certain real property and improvements thereof owned
by the Borrower and located at 7118 Geoffrey Way, Frederick, Maryland, as more particularly
described in the Deed of Trust.

     “Subsidiary” shall mean any corporation at least a majority of the outstanding voting
stock of which, now or in the future, is owned or controlled by the Borrower, directly or
indirectly, or through one or more intermediaries.

     1.02 Accounting Terms. As used in this Agreement and any of the other Loan Documents,
as well as in any certificate, report or other document made or delivered pursuant to or in
connection with this Agreement, accounting terms not defined herein and accounting terms only
partly defined herein shall have the respective meanings given to them under GAAP.

     1.03 Use of Defined Terns.  All terms defined in this Agreement shall have the
defined meanings when used in any of the other Loan Documents or in any certificate, report or
other document made or delivered pursuant to or in connection with this Agreement, unless the
context shall require otherwise.

SECTION 2. LOAN AND REPAYMENT

     2.01 Loan. Subject to the terms and conditions set forth herein, the Bank agrees to
lend to the Borrower, in a single advance to be made on or about the date hereof, the sum of Eight
Million Five Hundred Thousand and No/100 Dollars ($8,500,000.00).

     2.02 Note. The Borrower’s indebtedness to the Bank for the Loan together with
interest accrued thereon, shall be evidenced by the Note.

     2.03 Repayment of Loan. The Borrower shall repay the Loan, together with interest
accrued thereon, in accordance with the terms of the Note.

     2.04 Fees. As of the date hereof; the Borrower has paid to the Bank the commitment
fee of Eighty Five Thousand and No/100 Dollars ($85,000.00) for the Loan.

     SECTION 3. CONDITIONS PRECEDENT.

     The Bank shall have no obligation to make any advance under the Loan Documents unless and
until:

     3.01 Delivery of Documents. The Borrower shall have delivered to the Bank the
following:

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          (i) a certificate of good standing for the Borrower certified by the Secretary of State, or other
appropriate governmental authority, of the state of incorporation of the Borrower;

          (ii) a certificate of the Borrower, certifying as to attached copies of its certificate of
organization and operating agreement and the consent of its members authorizing the execution,
delivery and performance of the Loan Documents to which the Borrower is a party, the borrowings by
the Borrower hereunder, and the granting of the Liens contemplated by the Loan Documents, and
certifying as to the incumbency, authority and signatures of the manager(s) of the Borrower
authorized to sign the Loan Documents on behalf of the Borrower;

          (iii) a certificate of good standing for the Guarantor certified by the Secretary of State, or
other appropriate governmental authority, of the state of incorporation of the Guarantor and of the
Guarantor’s principal place of business;

          (iv) a certificate of the Guarantor, certifying as to attached copies of its certificate of
incorporation and bylaws and the resolutions of its Board of Directors authorizing the execution,
delivery and performance of the Loan Documents to which the Guarantor is a party, and certifying as
to the incumbency, authority and signatures of the officers of the Guarantor authorized to sign the
Loan Documents on behalf of the Guarantor;

          (v) the original Agreement executed by the Borrower and the Guarantor;

          (vi) the original Note executed by the Borrower and consented to by the Guarantor;

          (vii) the original Guaranty executed by the Guarantor;

          (viii) the original Deed of Trust executed by the Borrower;

          (ix) a written opinion of counsel to the Borrower and the Guarantor dated as of the date of
this Agreement and addressed to the Bank, which opinion must be, in form and content, satisfactory
to the Bank;

          (x) such financing statements or other documents which the Bank may reasonably request in
connection with the Collateral; evidence satisfactory to the Bank that all filings under the
Uniform Commercial Code or with any federal or state agency or department that the Bank or its
counsel deems necessary or desirable in connection with the creation and perfection of the security
interest granted hereunder have been effected; and such other evidence as the Bank may require that
confirms that, as a result of such filings, the Bank’s security interest in the Collateral is
consistent with the representation contained in this Agreement relating thereto;

          (xi) the insurance policies evidencing the insurance coverages required by the Deed of Trust
and this Agreement, together with proof of payment of the premiums for such insurance;

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          (xii) all fees payable to the Bank, including reasonable legal fees, commitment fees, administration
fees, etc.;

          (xiii) such executed agreements, notices or other documents in form and substance satisfactory
to the Bank in connection with the Bank’s control of any rights in any deposit accounts, electronic
chattel paper, investment property or letter of credit.

          (xiv) such other loan documents, agreements, consents, approvals, certificates, resolutions,
instruments, opinions and other documents and materials as listed on any closing checklist or as
the Bank may reasonably request.

     3.02 Compliance. The Borrower and the Guarantor shall have complied and shall then be
in compliance in all material respects with all material terms, covenants and conditions of this
Agreement.

     3.03 No Default. There shall exist no Event of Default (as hereinafter defined) and
no event which, upon notice or lapse of time or both, would constitute an Event of Default.

     3.04 Representations True. The representations and warranties contained in this
Agreement shall be true and correct in all material respects.

     3.05 No Material Adverse Change. There shall be no materially adverse change in the
total financial condition of the Borrower or the Guarantor, taken as a whole, from the financial
condition of the Borrower or the Guarantor, as the case may be, as set forth in the financial
statements furnished to the Bank pursuant to this Agreement or from the financial condition of the
Borrower or any Guarantor previously disclosed to the Bank in any other manner.

     3.06 Appraisal. The Bank shall have received, at the Borrower’s expense, an appraisal
for the Property showing that the amount of the Loan is no more than 75% of the fair market value
of the Property, and being otherwise satisfactory in form and substance to the Bank.

     3.07 Environmental. The Bank shall have received, at the Borrower’s expense,
environmental reports with respect to the Property which are satisfactory in form and substance to
the Bank.

SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce the Bank to enter into this Agreement, the Borrower, as to itself, and the
Guarantor, as to itself, represent, warrant and agree as of the date hereof and continuing so long
as any obligation of the Borrower and/or the Guarantor exists to the Bank under the Loan Documents
as follows:

     4.01 Corporate Status: Subsidiaries. The Borrower is a limited liability company,
duly organized and validly existing in the jurisdiction in which it is organized, has the power and
authority to own its properties and to carry on its business as currently conducted, and is duly
qualified to do business and is in good standing in each jurisdiction in which the transaction of
its business makes such qualification necessary. The Borrower has no subsidiaries other than those
previously disclosed to the Bank in writing.

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     4.02 Mergers and Consolidations. Except as previously disclosed to the Bank in
writing, no entity has merged into the Borrower or been consolidated with the Borrower, and the
business of the Borrower has not ever been conducted as a partnership or proprietorship in the
past.

     4.03 Purchase of Assets. Except as previously disclosed to the Bank in writing, no
entity has sold substantially all of its assets to the Borrower or sold assets to the Borrower
outside the ordinary course of such seller’s business or in a transaction subject to the bulk
transfer laws at any time in the past.

     4.04 Borrower’s and Guarantor’s Authority and Capacity. The Borrower and the
Guarantor have the full legal right, authority and capacity to execute, deliver and perform the
Loan Documents to which they are a party and to incur the obligations provided for therein. The
execution, delivery and performance of the Loan Documents and the obligations provided for therein
have been duly and validly authorized by all necessary corporate actions on the part of the
Borrower (all of which actions are in full force and effect), and do not and will not require any
consent or approval of the stockholders of the Borrower which has not been obtained.

     4.05 Binding Agreement of Borrower and the Guarantor. The Loan Documents are the
valid and legally binding obligations and agreements of the Borrower and of the Guarantor,
enforceable in accordance with their respective terms.

     4.06 No Conflicting Law and Agreements. The execution, delivery and performance by
the Borrower of the Loan Documents will not violate any provision of law, any order of any court or
government instrumentality or agency, any indenture, any loan or credit agreement or any other
material agreement, commitment, lease, contract, deed of trust, mortgage, note or other instrument
binding on the Borrower or affecting the Property, or be in conflict with, result in a breach of,
in any material respect, or constitute (with due notice, lapse of time, or both) a default (as
defined therein) under any such indenture, agreement, commitment, lease, contract, deed of trust,
mortgage, note or other instrument, or result in the creation or imposition of any Lien of any
nature whatsoever upon any of the Collateral, or result in or require the acceleration of any
indebtedness of the Borrower.

     4.07 Compliance with Laws. The Borrower is in compliance in all material respects
with any federal, State and local laws, rules and regulations including, but not limited to
Environmental Laws and the Fair Labor Standards Act. The Borrower and the Guarantor maintain all of
the necessary permits, licenses and certifications necessary for the operation of their businesses.
All of the foregoing are in full force and effect and not in known conflict with the rights of
others. The Borrower is not in breach of or default (as defined therein) under the provisions of
any of the foregoing, nor is there any event, fact, condition or circumstance which, with notice or
passage of time or both, would constitute or result in a conflict, breach, default or event of
default (as defined therein) under, any of the foregoing which, if not remedied within any
applicable grace or cure period could reasonably be expected to have a material adverse effect on
the Borrower.

     4.08 Taxes. The Borrower has filed or caused to be filed all Federal, state and local
income, excise, property and other tax returns which are required to be filed. All such returns are

7

 

true and correct in all material respects and the Borrower has paid or caused to be paid all taxes,
assessments, interest and penalties as shown on such returns or on any assessment received by them,
to the extent that such taxes have become due, including, but not limited to, all F.I.C.A. payments
and withholding taxes. The amounts reserved as a liability for income and other taxes payable in
the most recent financial statements of the Borrower provided to the Bank pursuant to this
Agreement are sufficient for the payment of all unpaid Federal, state, county and local income,
excise, property and other taxes, whether or not disputed, of the Borrower and the Guarantor
accrued for or applicable to the period and on the dates of such financial statements and all years
and periods prior thereto and for which the Borrower, any existing Subsidiary or the Guarantor may
be liable in its or their own right or as a transferee of the assets of, or as successor to, any
other person or entity.

     4.09 Financial Condition. The financial statements of the Borrower and the Guarantor
and other related information previously submitted to the Bank are true, complete and correct in
all material respects, fairly represent the financial condition of the Borrower and the Guarantor
and the result of their respective operations and transactions as of the dates and for the periods
of such statements and have been prepared in accordance with GAAP applied on a consistent basis
throughout the period involved. There are no liabilities, direct or indirect, fixed or contingent,
matured or unmatured, known to the Borrower or the Guarantor which are not reflected therein. There
has been no material adverse change in the business, operations, prospects, assets, properties or
condition (financial or otherwise) of the Borrower or the Guarantor, taken as a whole since the
date of said financial statements.

     4.10 Title To Properties. The Borrower has good, valid, insurable (in the case of
real property) and marketable title to all of their properties and assets including the Collateral
(whether real or personal, tangible or intangible) reflected on the financial statements referred
to in this Agreement, except for such properties and assets as have been disposed of since the date
of such financial statements as no longer used or useful in the conduct of their business or as
have been disposed of in the ordinary course of business, and all such properties and assets are
free and clear of all Liens except for Permitted Liens. None of the real property included in such
properties of the Borrower is subject to any covenant or other restriction preventing or limiting
the right of the record owner to convey or use it, all such real property has adequate rights of
ingress and egress, and all such real property has direct and unobstructed access to electric, gas,
water, sewer and telephone lines, all of which are adequate for the uses to which such property is
currently devoted.

     4.11 Litigation. Except as previously disclosed to the Bank in writing, there are no
actions, claims, suits or proceedings pending, or, to the knowledge of the Borrower, threatened or
reasonably anticipated against or affecting the Borrower at law or in equity including, without
limitation, under ERISA or any Environmental Laws or before or by any governmental instrumentality
or agency (domestic or foreign), commission, board, bureau, arbitrator or arbitration panel, and
there is no probable judgment, liability or award which may reasonably be expected to result in any
material adverse change in the business, operations, prospects, properties or assets or condition,
financial or otherwise, of the Borrower or the Guarantor. The Borrower is not in default with
respect to any judgment, order, writ, injunction, decree, rule, award or regulation of any court,
governmental instrumentality or agency, commission, board, bureau, or arbitrator or arbitration
panel.

8

 

     4.12 No Other Defaults. Except as previously disclosed to the Bank in writing, the
Borrower is not in default under any contract, agreement, commitment or other instrument which
default would have a material adverse effect on the business, properties or condition, financial or
otherwise, of the Borrower, or in the performance of any covenants or conditions respecting any of
their indebtedness. No holder of any indebtedness of the Borrower has given notice of any asserted
default thereunder. No liquidation or dissolution of the Borrower or the Guarantor and no
receivership, insolvency, bankruptcy, reorganization or other similar proceeding relative to the
Borrower or the Guarantor or their properties is pending or, to the knowledge of the Borrower or
the Guarantor, is threatened against them or any of them.

     4.13 ERISA. (a) The pension, profit sharing, savings, stock bonus and other deferred
compensation plans established and maintained by the Borrower, the Guarantor and any Commonly
Controlled Entity (as defined below) which are subject to the requirements of ERISA, if any, were
stated in their inception or have, since ERISA became effective with respect to such plans, been
amended and restated in a manner designed to qualify under the applicable requirements of ERISA and
the Internal Revenue Service Code of 1986, as amended (the “Code”); and subsequent to such
statement, or restatement, those plans and their related trusts have received favorable
determinations from the Internal Revenue Service holding that such plans and trusts so qualify; (b)
to the knowledge of the Borrower and the Guarantor, there is no current matter which would
materially adversely affect the qualified tax-exempt status of any pension, profit-sharing,
savings; stock bonus or other deferred compensation plan and their related trusts of either of the
Borrower or any Commonly Controlled Entity under the Code; (c) neither the Borrower, the Guarantor,
nor any Commonly Controlled Entity has incurred in connection with any such plan any “accumulated
funding deficiency” (as defined in Section 302 of ERISA or Section 412(a) of the Code) whether or
not waived; (d) there has been no “prohibited transaction” (within the meaning of Section 4975 of
the Code or Section 406 of ERISA) involving any such plan of the Borrower, the Guarantor, or any
Commonly Controlled Entity; (e) no “reportable event,” as defined by Title IV of ERISA, has
occurred with respect to any plan subject to the minimum funding requirements of Section 412 of the
Code maintained for employees of the Borrower or any Commonly Controlled Entity; (f) no
“multi-employer plan” (as defined in ERISA) to which either of the Borrower, the Guarantor or any
Commonly Controlled Entity has an obligation to contribute, has “terminated,” as that term is
defined in ERISA; (g) neither the Borrower, the Guarantor, nor any Commonly Controlled Entity has
withdrawn, in a “complete withdrawal” (as defined in ERISA), from any “multi-employer plan” to
which either the Borrower or such Commonly Controlled Entity had an obligation to contribute; (h)
neither the Borrower, the Guarantor nor any Commonly Controlled Entity has withdrawn, in a “partial
withdrawal” (as defined in ERISA), from any “multi-employer plan” to which either the Borrower, the
Guarantor or such Commonly Controlled Entity had an obligation to contribute; and (i) no
“multi-employer plan” to which either the Borrower, the Guarantor or any Commonly Controlled Entity
had an obligation to contribute is in “reorganization” (as defined in ERISA and the Code) nor has
notice been received from the administrator of any “multi-employer plan” to which either the
Borrower, the Guarantor, or any Commonly Controlled Entity bas an obligation to contribute that any
such plan will be placed in “reorganization.” For purposes of this Section, the term “Commonly
Controlled Entity’ means any corporation which is a member of a controlled group of corporations
(as defined for purposes of Section 414(6) of the Code) of which the Borrower is a member and any
trade or business (whether or not incorporated) which is under “common control” (as defined for
purposes of Section 414(c) of the Code) with the Borrower.

9

 

     4.14 Other Security Interests. The Borrower is the owner of the Collateral, free from
any Lien except a Permitted Lien.

     4.15 Franchises, Patents, Etc. Except as previously disclosed to the Bank in writing,
no franchises, licenses, trademarks, trade names, copyrights or patents are owned or licensed by,
or registered in the name of, or have been applied for by, the Borrower, and no such rights or
agreements we necessary to the conduct of the present business of the Borrower. The Borrower has no
knowledge of and has not received any notice to the effect that any product it manufactures or
sells, or any service it renders, or any process, method, know-how, trade secret, part or material
it employs in the manufacture of any product it makes or sells or any service it renders, or the
marketing or use by it or another of any such product or service, may infringe any trademark, trade
name, copyright, patent, trade secret or legally protectable right of any other person or entity.

     4.16 Approvals. No approval, consent or other action by any governmental
instrumentality or agency or any other person or entity, which approval, consent, or other action
has not been obtained or taken or which does not remain in effect as of the date hereof, is or will
be necessary to permit the valid execution, delivery and performance by the Borrower and the
Guarantor of the Loan Documents.

     4.17 Tradenames, Name Changes. Except as stated above or previously disclosed to the
Bank in writing, the Borrower utilizes no tradenames in the conduct of its business and has not
changed its name.

     4.18 Labor Relations. There are no strikes, work stoppages, material grievance
proceedings or other material controversies pending or, to the best of Borrower’s knowledge,
threatened between the Borrower and any employees engaged in the business of the Borrower or any
union or other collective bargaining unit representing such employees. The Borrower has complied
and is in compliance with all laws relating to the employment of labor, including, without
limitation, provisions relating to wages, hours, collective bargaining, occupational safety and
health, equal employment opportunities and the withholding of income taxes and social security
contributions, the non-compliance with which might materially adversely affect its business,
operations, prospects, assets, properties or condition (financial or otherwise).

SECTION 5. AFFIRMATIVE COVENANTS

     The Borrower, as to itself, and the Guarantor, as to itself, covenant and agree that, so long
as any of the Loan Documents shall remain in effect, or unless the Bank shall otherwise consent in
writing, they will:

     5.01 Payment of Loan. Comply with the terms and conditions for repayment of the Loan
in accordance with the terms of the Note and Guaranty.

     5.02 Financial Statements. Furnish to the Bank:

            (a) as soon as available but in no event more than one hundred twenty (120) days after the
last day of each fiscal year of the Borrower and the Guarantor, consolidated financial statements
of the Borrower and the Guarantor containing a balance sheet, a statement of

10

 

income and expenses and a statement of changes in financial condition as of the close of such
period, prepared in accordance with GAAP applied on a basis consistent with prior periods, showing
the financial condition of the Borrower and the Guarantor at the close of such year in form
reasonably satisfactory to the Bank and prepared and audited by Ernst & Young, or another
independent certified public accountant reasonably satisfactory to the Bank;

          (b) as soon as available but in no event more than forty five (45) days after the last day of
each quarter of each fiscal year of the Borrower and the Guarantor, consolidated financial
statements of the Borrower and the Guarantor containing a balance sheet, a statement of income and
expenses and a statement of changes in financial condition as of the close of such period, prepared
in accordance with GAAP applied on a basis consistent with prior periods, showing the financial
condition of the Borrower and the Guarantor at the close of such period, in form reasonably
satisfactory to the Bank;

          (c) in the event that a portion of the Property has been leased to third party, unaffiliated
tenants, as soon as available but in no event more than forty five (45) days after the last day of
each quarter of each fiscal year, a detailed budget and report of operating expenses for the
Property;

          (d) in the event that a portion of the Property has been leased to third party, unaffiliated
tenants, as soon as available but in no event more than forty five (45) days after the last day of
each fiscal year, projections for the Property for the following fiscal year;

          (e) promptly, and from time to time, such other information regarding the operation, business,
affairs and financial condition of the Borrower and the Guarantor as the Bank may reasonably
request, including, but not limited to interim financial statements including an income statement,
balance sheet, aging of accounts receivable and/or accounts payable;

          (f) within thirty (30) days after the last day of each of the quarters of each fiscal year of
the Borrower, a certificate of the chief financial officer of the Borrower (i) certifying that to
the best of his knowledge no Event of Default has occurred and is continuing or, if an Event of
Default has occurred and is continuing, a statement as to the nature thereof and the action which
is proposed to be taken with respect thereto and (ii) with computation demonstrating compliance
with the covenants contained in Sections 5.18 and 5.19; and

          (g) Borrower and Guarantor will use commercially reasonable efforts to cause its independent
certified public accountant who audited its financial statements to provide simultaneously with the
delivery of the annual financial statements a certificate acceptable to the Bank in its reasonable
discretion to the effect that, in making the examination necessary for the audit of such
statements, they have obtained no knowledge of any condition or event which constitutes a failure
to comply with the covenants contained in Sections 5.18 and 5.19 of this Agreement, or if such
accountants shall have obtained knowledge of any such condition or event, specify in such
certificate each such condition or event of which they have knowledge and the nature and status
thereof.

     The financial statements of the Borrower and the Guarantor delivered to the Bank pursuant to
this Section shall each be certified by the president or chief financial officer of the

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Borrower or the Guarantor, as the case may be, as to the authenticity, accuracy of integrity of the
representation contained therein and as having been prepared in accordance with GAAP applied on a
basis consistent with prior periods. Any such financial information provided to the Bank shall be
maintained by the Bank as confidential proprietary records. The Bank hereby acknowledges that the
Borrower may not have its own separate financial statements and shall be permitted to supply
financial statements consolidated with Guarantor’s financial statements.

     5.03 Maintaining Records: Access to Properties and Inspections. Maintain financial
records in accordance with GAAP consistently applied and permit any authorized representative
designated by the Bank to visit and inspect any of the properties of the Borrower or the Guarantor
(including, without limitation, their books of account, records, correspondence and other papers
and to make extracts therefrom) and to discuss their affairs, finances and accounts with their
respective officers and their respective independent certified public accountants or other parties
preparing statements for or on behalf of the Borrower or the Guarantor, subject to advance notice
and subject to safety limitations and legal limits of general applicability.

     5.04 Place of Business, Location of Records; Notices. Maintain their executive
offices and their records at their current locations. The Bank shall be entitled to rely upon the
foregoing unless it receives fourteen (14) days advance written notice of a change in such
executive offices or in such office where such records are kept.

     5.05 Maintenance of Business. (a) Maintain the corporate existence of the Borrower
and the Guarantor in good standing and in existence in the State of its original formation; and (b)
maintain and keep in full force and effect all licenses and permits necessary to the proper conduct
of the Borrower’s and the Guarantor’s business.

     5.06 Insurance. The Borrower shall maintain and pay for insurance covering such risks
and in such amounts and with such insurance companies as shall be satisfactory to the Bank, and
deliver the policies or certificates of all such insurance to the Bank with satisfactory lender’s
loss payable endorsements naming the Bank as loss payee; and maintain, with financially sound and
reputable insurers, insurance with respect to their properties and business against such casualties
and contingencies of such types (including personal injury and property damage liability insurance,
automobile liability insurance, product liability insurance, biomedical insurance, worker’s
compensation insurance, business interruption insurance, employee dishonesty insurance, and
directors’ and officers’ liability insurance) and in such amounts as is customary in the case of
persons or entities in the same or similar business. Each policy or insurance required hereunder
shall require the insurer to give not less than thirty (30) days prior written notice to the Bank
in the event of cancellation of such policy for any reason whatsoever, and shall provide that the
interest of the Bank thereunder shall not be impaired or invalidated by any act or neglect of the
Borrower or the owner of any of the insured property or by the occupation of the premises wherein
such property is located for purposes more hazardous than are permitted by such policy. If the
Borrower fails to provide and pay for such insurance, the Bank may, at the Borrower’s expense,
procure the same, but shall not be required to do so. The Borrower agrees to deliver to the Bank,
promptly as rendered, true copies of any reports made to any insurance company.

     5.07 Execution of Documents. At the reasonable request of the Bank, execute and
deliver such financing statements, documents and instruments including, but not limited to,

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written acknowledgments from any third party holding all or any portion of the Collateral that it
does so for the Bank’s benefit and any control agreements with respect to any investment property,
letter of-credit rights, deposit accounts or electronic chattel paper, and perform all other acts
as the Bank deems necessary or desirable, and pay, upon demand, all reasonable costs and expenses
(including reasonable attorneys’ fees and disbursements) incurred by the Bank in connection
therewith.

     5.08 Obligations and Taxes. Pay all indebtedness and obligations promptly and in
accordance with their terms, and pay and discharge promptly all taxes, assessments and governmental
charges or levies imposed upon them or in respect of their property and the Collateral, including,
but not limited to, all F.I.C.A. payments and withholding taxes, before the same shall become in
default, as well as all claims for labor, materials, and supplies or otherwise which, if unpaid,
might become a Lien upon such properties or any part thereof, provided, however,
that the Borrower and the Guarantor are not required hereby to pay and discharge or to cause to be
paid and discharged any such indebtedness, obligation, tax, assessment, charge, levy or claim so
long as the validity thereof shall be contested in good faith by appropriate proceedings and the
Borrower and the Guarantor shall set aside on their books reserves which are in conformity with
generally accepted accounting principles and which the Bank deems adequate with respect to any such
tax, assessment, charge, levy or claim so contested.

     5.09 Litigation Notice. Give the Bank prompt notice of any action, suit or proceeding
at law or in equity or by or before any governmental instrumentality or agency (domestic or
foreign), commission, board, bureau, arbitrator or arbitration panel which, if adversely
determined, could materially impair or affect the right of the Borrower to carry on its business
substantially as now conducted or could materially affect its respective business, operations,
prospects, properties, assets (including the Collateral) or condition, financial or otherwise, in
each case if in excess of $1,000,000,00.

     5.10 Notification Relating to Hazardous Materials. Immediately advise the Bank in
writing of (a) any and all enforcement, cleanup, remediation or removal, pursuant to any
governmental or regulatory actions instituted, completed or threatened pursuant to any applicable
federal, state, or local laws, ordinances or regulations relating to any Hazardous Materials
affecting the Property or the business operations of the Borrower, and (b) all claims made or
threatened by any third party against the Borrower relating to damages, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Materials. The Borrower shall immediately
notify the Bank of any remedial action taken by the Borrower with respect to the Property or the
business operations of the Borrower.

     5.11 Access Onto Property. Allow the appropriate agents and contractors of the Bank
to enter upon the Property for the purposes of conducting environmental investigations and audits
(including taking physical samples) and such other action deemed necessary by the Bank to insure
compliance by the Borrower with all Environmental Laws, subject to advance notice and subject to
safety limitations and legal limits of general applicability. The Borrower acknowledges that no
adequate remedy at law exists for a violation of this covenant and agrees that the Bank is entitled
to specific performance of its rights under this covenant, subject to advance notice and subject to
safety limitations and legal limits of general applicability. The right of access granted herein
shall continue until this Agreement is terminated

13

 

     5.12 Notice of Default; Material Adverse Change. Promptly notify the Bank of any
condition or event that constitutes, or with the running of time, the giving of notice, or both,
would constitute, an Event of Default, and promptly inform the Bank of any material adverse change
in the financial condition of the Borrower or of the Guarantor, as set forth in Section 6.11 below.

     5.13 Borrower’s Claims. Promptly notify the Bank in writing of any action or omission
of the Bank which the Borrower claims caused or may cause injury, loss or damage to the Borrower.
Failure of the Borrower to so notify the Bank of such claim to which it has knowledge within one
hundred eighty (180) days after the Borrower determines that it has such claim shall constitute a
waiver of such claim.

     5.14 Defense of Collateral. Defend the Collateral, and the Bank’s first and prior
security interest therein, against all claims and demands of all persons at anytime claiming the
same or any interest therein and pay, upon demand, all reasonable costs and expenses (including
reasonable attorneys’ fees and disbursements) incurred by the Bank in connection therewith.

     5.15 Use of Proceeds. Use the proceeds of the Loan solely for the purchase of the
Property or for any commercial purpose not violative of or inconsistent with any provision of this
Agreement or the Loan Documents.

     5.16 Compliance with Laws. Comply, in all material respects, with all federal, state
and local laws, rules and regulations including, but not limited to Environmental Laws and the Fair
Labor Standards Act applicable to its business, whether now in effect or hereafter enacted, and
upon request of the Bank, the Borrower will provide the Bank with such evidence of compliance as
the Bank may reasonably request.

     5.17 Hazardous Materials. With respect to all property owned, subleased, operated or
occupied by the Borrower, maintain and cause all operators, tenants, subtenants, licensees and
occupants of all such property to maintain such property free of all Hazardous Materials, other
than those Hazardous Materials used in compliance with all Environmental Laws and prevent all such
property from being used for the manufacture, generation, production, processing, distribution,
use, treatment, storage, disposal, transport or handling of any Hazardous Materials other than
those Hazardous Materials used in compliance with all Environmental Laws; and deliver to the Bank
copies of all reports prepared by any governmental authority, any environmental auditor or
engineer, or any other person, relating to or in connection with the Borrower’s compliance with any
Environmental Laws, unless the Borrower cannot obtain such reports or copies thereof.

SECTION 6. EVENTS OF DEFAULT

     The occurrence of any one or more of the following events shall constitute an Event of Default
hereunder (subject to any applicable notice and cure periods contained in the Loan Documents):

     6.01 Payments. Default shall be made in the payment of the principal of, or any
installment of principal of, or interest on, the Note, whether at the due date thereof, at a date
fixed for prepayment thereof, upon acceleration thereof or otherwise.

14

 

     6.02 Representations. Any representation or warranty made in or in connection with
any of the Loan Documents shall prove to have been false or misleading in any material respect when
made or deemed to have been made.

     6.03 Covenants. Default shall be made in the due observance or performance of any
covenant, condition or agreement on the part of the Borrower or the Guarantor pursuant to the terms
of any of the Loan Documents, and not already subject to a grace or cure period, and such default
shall continue unremedied for thirty (30) business days after notice to the Borrower and the
Guarantor thereof.

     6.04 (a) Voluntary Bankruptcy. Etc. The Borrower: (i) voluntarily is adjudicated as
bankrupt or insolvent, (ii) seeks or consents to the appointment of a receiver or trustee for
itself or for all or any part of its property, (iii) files a petition seeking relief under the
bankruptcy or similar laws of the United States or any state or any other competent jurisdiction,
(iv) makes a general assignment for the benefit of creditors, or (v) admits in writing its
inability to pay its debts as they mature.

             (b) Involuntary Bankruptcy. Etc. A court of competent jurisdiction enters an order,
judgment or decree appointing, without the consent of the Borrower, a receiver or trustee for
Borrower, for all or any part of its property, or a petition is filed against the Borrower seeking
relief under the bankruptcy or other similar laws of the United States or any state or other
competent jurisdiction, and such petition, order, judgment or decree shall remain in force
undischarged or unstayed for a period of 60 calendar days.

     6.05 Attachment. The issuance of any attachment or garnishment against the Borrower
or the Guarantor.

     6.06 Cross Default. The occurrence of (a) an uncured event of default (as defined
therein) under any of the Loan Documents, (b) any uncured event of default under (i) any promissory
note payable to the Bank under which the Borrower or the Guarantor is an obligor, or (ii) any other
agreement between the Borrower or the Guarantor and the Bank, or (c) an uncured event of default
(as defined therein) under any other indebtedness or liability for borrowed money of the Borrower
in an amount in excess of $1,000,000.00, if the effect of such default is to accelerate the
maturity of such evidence of indebtedness or liability or to permit the holder thereof to cause any
indebtedness to become due prior to its stated maturity and the Bank determines, in its discretion,
that such default impairs or prevents the Borrower from performing its obligations under the Loan
Documents.

     6.07 Judgment. Unless in the opinion of the Bank, adequately covered by insurance,
the entry of one or more final judgments, decrees or orders for the payment of money involving more
than $1,000,000.00 in the aggregate against the Borrower and all applicable periods for appeal have
terminated and such judgment or decree is not satisfied within sixty (60) days thereafter.

     6.08 Loss, Damage to Collateral. Loss, theft, damage, or destruction of any material
portion of the Collateral for which there is either no insurance coverage or for which, in the
opinion of the Bank, there is insufficient insurance coverage.

15

 

     6.09 Validity of Loan Documents. Any Loan Document shall, at any time after its
execution and delivery and for any reason, cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be contested by the
Borrower or the Guarantor, or the Borrower or the Guarantor shall deny it has any further liability
or obligation thereunder.

     6.10 Payments to Subordinated Creditors. The Borrower makes any payment on account of
indebtedness that has been subordinated to the Loan, other than payments specifically permitted by
the terms of such subordination or in the ordinary course of business.

     6.11 Material Adverse Change. There shall be no materially adverse change in the
total financial condition of the Borrower or the Guarantor, taken as a whole.

SECTION 7. RIGHTS AND REMEDIES

     7.01 Remedies. If any one or more Events of Default shall occur, then in each and
every such case, the Bank may at any time thereafter exercise and/or enforce any of the following
rights and remedies:

            (a) Acceleration. Declare the Note to be immediately due and payable, together with
accrued interest thereon, without presentment, demand, protest or notice of dishonor, all of which
the Borrower and the Guarantor hereby waive.

            (b) Possession and Collection (i) Take possession or control of, sell or otherwise
dispose of all of any part of the Collateral; (ii) endorse as the agent of the Borrower any chattel
paper, documents, or instruments forming all or any part of the Collateral; (iii) pay, purchase,
contest, or compromise any encumbrance, charge, or lien that, in the opinion of the Bank, appears
to be prior or superior to its Lien and pay all reasonable expenses incurred in connection
therewith; (iv) take any other action which the Bank deems necessary or desirable to protect and
realize upon its security interest in the Collateral; and (v) in addition to the foregoing, and not
in substitution therefor, exercise any one or more of the rights and remedies exercisable by the
Bank under other provisions of this Agreement, under the Note, under any of the other Loan
Documents, or provided by applicable law (including, without limitation, the Uniform Commercial
Code as in effect in Maryland) and may specifically disclaim any warranties of title or the like.
In taking possession of the Collateral the Bank may proceed without legal process, if this can be
done without breach of the peace. The Borrower waives any right it may have to require the Bank to
pursue any third person for payment of the Loan.

            (c) Receiver. Obtain appointment of a receiver for all or any of the Collateral, the
Borrower and the Guarantor hereby consenting to the appointment of such a receiver and each
agreeing not to oppose any such appointment. Any receiver so appointed shall have such powers as
may be conferred by the appointing authority including any or all of the powers, rights and
remedies which the Bank is authorized to exercise by the Loan Documents, and shall have the right
to incur such obligations and to issue such certificates therefor as the appointing authority shall
authorize.

16

 

            (d) Performance by Bank. Make such payment or perform any of the conditions,
covenants, terms, stipulations or agreements contained in this Agreement or any of the other Loan
Documents for the account and at the expense of the Borrower.

     7.02 Sales on Credit. If the Bank sells any of the Collateral upon credit, the
Borrower will be credited only with payments actually made by the purchaser, received by the Bank
and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, the Bank may resell the Collateral and the Borrower shall be credited with the proceeds
of the sale.

     7.03 Proceeds. Any proceeds of the collection of the Loan or of the sale or other
disposition of the Collateral will be applied by the Bank to the payment of fees and costs, and any
balance of such proceeds (if any) will be applied by the Bank to the payment of the remaining Loan
(whether then due or not), at such time or times and in such order and manner of application as the
Bank may from time to time in its sole discretion determine. If the sale or other disposition of
the Collateral fails to pay the Loan in full, the Borrower and the Guarantor shall remain jointly
and severally liable to the Bank for any deficiency.

     7.04 Notices. Any notices required under the Maryland Uniform Commercial Code with
respect to the sale or other disposition of the Collateral shall be deemed reasonable if mailed by
the Bank to the persons entitled thereto at their last known address at least ten (10) days prior
to disposition of the Collateral.

     7.05 Waiver of Jury Trial. THE BORROWER, THE GUARANTOR AND THE BANK HEREBY
VOLUNTARILY AND KNOWINGLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST THE OTHER ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN. THE BORROWER AND THE
GUARANTOR ACKNOWLEDGE THAT THEY HAVE BEEN INFORMED BY THE BANK THAT THE PROVISIONS OF THIS
PARAGRAPH CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE BANK HAS RELIED, IS RELYING AND WILL RELY
IN MAKING THE LOAN. THE BORROWER AND THE GUARANTOR HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT
OF THE BANK (INCLUDING ITS COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD
NOT, IN THE EVENT OF LITIGATION, ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL. THE BORROWER AND THE
GUARANTOR ACKNOWLEDGE THAT THEY HAVE CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTAND THE LEGAL
EFFECT OF THE PROVISIONS OF THIS PARAGRAPH.

     7.06 Cumulative Remedies. Each right, power and remedy of the Bank as provided for in
the Loan Documents, or now or hereafter existing at law or in equity or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to every other such right, power or
remedy, and the exercise or beginning of the exercise by the Bank of any one or more of such
rights; powers or remedies shall not preclude the simultaneous or later exercise by the Bank of any
or all other such rights, powers or remedies. The Bank may comply with any applicable state

17

 

or federal law requirements in connection with a disposition of the Collateral and compliance will
not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

     7.07 No Waiver. No failure or delay by the Bank in insisting upon the strict
performance of any term, condition, or covenant of the Loan Documents or in exercising any right,
power or remedy consequent upon an Event of Default shall constitute a waiver of any such term,
condition or covenant or of any such breach, or preclude the Bank from exercising any such right,
power or remedy at any later time or times. By accepting payment after the due date of any amount
payable under the Loan Documents, the Bank shall not be deemed to waive the right either to require
prompt payment when due of all other amounts payable under the Loan Documents, or to declare a
default for failure to effect such prompt payment of any such other amount.

SECTION 8. MISCELLANEOUS

     8.01 Survival. All covenants, agreements, representations and warranties made in this
Agreement and the Loan Documents shall survive the execution and delivery of the Note and shall
continue in full force and effect so long as the Note, or any of the other obligations under the
Loan Documents, or any renewal or extensions of the Note, is outstanding and unpaid.

     8.02 Notices. All notices, demands, instructions and other communications required or
permitted to be given to or made upon any party hereto shall be in writing, personally delivered or
sent by postage prepaid first class certified mail, return receipt requested, overnight courier or
by facsimile machine, and shall be deemed to be given on the day that such writing is delivered or
sent by facsimile machine or one (1) business day after such notice is sent by overnight courier or
three (3) business days after said notice is sent by certified mail. Unless otherwise specified in
a notice sent or delivered in accordance with the foregoing provisions of this paragraph, notices,
demands, instructions and other communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses indicated for such party below:

	 	 	 	 	 
	 

	 	Bank:
	 	HSBC Realty Credit Corporation (USA)
	 

	 	 	 	1130 Connecticut Avenue, N. W., 12th Floor
	 

	 	 	 	Washington, D. C. 20036
	 

	 	 	 	Attention: Jeffrey M. Henry, Vice President
	 

	 	 	 	Facsimile Number: (202) 496-8758
	 
	 	 	 	 
	 

	 	With Copy to:
	 	McGuireWoods LLP
	 

	 	 	 	1750 Tysons Boulevard, Suite 1800
	 

	 	 	 	McLean, Virginia 22102-3915
	 

	 	 	 	Attn: E. Kristen Moye, Attorney-at-Law
	 

	 	 	 	Telecopier: 703-712-5238

18

 

	 	 	 	 	 
	 

	 	Borrower and	 	 
	 

	 	Guarantor:
	 	Emergent Frederick LLC
	 

	 	 	 	Emergent Biosolutions Inc.
	 

	 	 	 	300 Professional Drive, Suite 100
	 

	 	 	 	Gaithersburg, MD 20879
	 

	 	 	 	Attn: Don Elsey, Vice President and
	 

	 	 	 	Attn: Legal Department
	 

	 	 	 	Facsimile Number: (301) 590-1252
	 
	 	 	 	 
	 

	 	With Copy to:
	 	Linowes and Blocher LLP
	 

	 	 	 	7200 Wisconsin Avenue, Suite 800
	 

	 	 	 	Bethesda, Maryland 20814
	 

	 	 	 	Attn: Richard Zeidman, Esquire
	 

	 	 	 	Facsimile Number: (301) 654-2801

or at such other address as the parties may have furnished to each other in writing, and shall be
deemed to be given on delivery or upon mailing.

     8.03 Costs and Expenses. The Borrower and the Guarantor shall bear any and all
reasonable fees, costs and expenses, of whatever kind and nature, including any taxes of any kind
and reasonable attorneys’ fees and disbursements, which the Bank may incur: (a) in connection with
the closing of the Loan, including, without limitation, the filing of public notices, the
preparation of the Loan Documents, the recording of the UCC financing statements, and the making of
title examinations, and in connection with any amendment of the Loan Documents; (b) in maintaining,
preserving, enforcing or foreclosing any pledge, lien, encumbrance or security interest granted
hereunder or in connection herewith, whether through judicial proceedings or otherwise; (c) in
conducting audits of the Borrower’s business and with respect to the Collateral; and (d) in
successfully defending or prosecuting any actions or proceedings arising out of or relating to
transactions with any one or more of the Borrower and the Guarantor. All such fees, costs and
expenses until paid shall be included in the Loan or deducted from any amount due the Borrower or
the Guarantor. The Borrower and the Guarantor agree that the attorneys retained by the Bank shall
represent only the interests of the Bank.

     8.04 Indemnification of Bank. The Borrower and the Guarantor shall protect and
indemnify the Bank from and against any and all demands, suits, losses, assessments, fines, claims,
damages, penalties, causes of action, costs or other expenses (including, without limitation,
reasonable attorneys’ fees and disbursements), imposed upon or incurred by or asserted against the
Bank or the directors, officers, agents or employees of the Bank, except those arising out of the
willful misconduct or gross negligence of the Bank, by reason of and including but not limited to
liability or damage resulting from: (a) any failure on the part of the Borrower to perform or
comply with any of the terms of this Agreement; (b) any action brought against the Bank attacking
the validity of this Agreement or any other Loan Document; and/or (c) actual or threatened damage
to the environment, agency costs of investigation, personal injury or death, or property damage,
due to a release or alleged release or Hazardous Materials, on or under the Property or arising
from the Borrower’s business operations or in the surface or ground water located on or under the
Property arising from the Borrower’s business operations,

19

 

or gaseous emissions from the Property or arising from the Borrower’s business operations resulting
from the use or existence of Hazardous Materials, whether such claim proves to be true or false.
The term “property damage” as used in this Section includes, but is not limited to, damage of any
real or personal property of the Borrower, the Bank, and of any third parties. Any amounts payable
to the Bank under this Section which are not paid within thirty (30) days after written demand
therefor by the Bank shall bear interest at the rate of interest in effect under the Note from the
date of such demand. In the event any action, suit or proceeding is brought against the Bank or the
directors, officers, agents or employees of the Bank by reason of any such occurrence, the
Borrower, upon the request of the Bank and at the Borrower’s expense, shall resist and defend such
action, suit or proceeding or cause the same to be resisted and defended by counsel designated by
the Borrower and approved by the Bank. Such obligations under this Section as shall have accrued at
the time of any termination of this Agreement shall survive any such termination.

     8.05 Reinstatement of Liens. If, at any time after payment in full by the Borrower of
the Loan and termination of the Bank’s Liens, any payments on the Loan previously made by the
Borrower or any other person must be disgorged by the Bank for any reason whatsoever (including,
without limitation, the insolvency, bankruptcy, or reorganization of the Borrower or such other
person), this Agreement and the Bank’s Liens granted hereunder shall be reinstated as to all
disgorged payments as though such payments had not been made, and the Borrower shall sign and
deliver to the Bank all documents and things necessary to reperfect all terminated Liens.

     8.06 Bank Disclosures. Upon the prior written consent of the Borrower (such consent
not to be unreasonable withheld or delayed), the Bank may issue press releases concerning, and
otherwise publicly announce or publicize, financings provided by the Bank to the Borrower. The
Borrower hereby authorizes the Bank to disclose to any subsidiary or affiliate of the Bank, to any
fiduciary institution (as “fiduciary institution” is defined in Subtitle 3 of Title 1 of the
Financial Institutions Article of the Annotated Code of Maryland, or any successor legislation) or
to any banking institution, credit union or savings and loan association organized under the laws
of any State, and hereby authorizes all subsidiaries and affiliates of the Bank, to disclose to the
Bank, the financial record of the Borrower (as “financial record” is defined in Subtitle 3 of Title
1 of the Financial Institutions Article of the Annotated Code of Maryland, or any successor
legislation).

     8.07 Participation. The Bank shall have the right to grant participations in the Loan
held by it to others at any time and from time to time, and the Bank may divulge to any such
participant or potential participant all information, reports, financial statements and documents
obtained in connection with this Agreement, the Note and any of the other Loan Documents or
otherwise.

     8.08 Change, etc. Neither this Agreement nor any term, condition, representation,
warranty, covenant or agreement contained herein may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against whom such change, waiver,
discharge or termination is sought.

     8.09 Governing Law. This Agreement, the Note and the other Loan Documents shall be
governed and construed in accordance with the laws of the State of Maryland (but not including the
choice of law rules thereof).

20

 

     8.10 Terms Binding. All of the terms, conditions, stipulations, warranties,
representations and covenants of this Agreement shall apply to and be binding upon and shall inure
to the benefit of the Borrower, the Guarantor and the Bank and each of their respective heirs,
executors, personal representatives, successors and assigns and all persons or entities who become
bound as a debtor under this Agreement, but neither the Borrower nor the Guarantor shall have the
right to assign this Agreement to any person or entity without the prior written consent of the
Bank.

     8.11 Invalidity of Certain Provisions. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be invalid or
unenforceable, the remainder of such term or provision or the application thereof to persons or
circumstances other than those as to which it is held invalid or unenforceable shall not be
affected thereby and shall be valid and enforceable to the fullest extent permitted by law.

     8.12 Merger Integration and Interpretation. The Loan Documents contain the entire
agreement of the parties with respect to the matters covered and the transactions contemplated
hereby and thereby, and no other agreement, statement or promise made by any such party, or by any
employee, officer, agent or attorney of any such party, which is not contained herein or therein,
shall be valid or binding. Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against the Bank or the Borrower, whether under any role of construction or
otherwise. On the contrary, this Agreement has been reviewed by each of the parties and its counsel
and shall be construed and interpreted according to the ordinary meaning of the words used so as to
accomplish the purposes and intentions of all parties hereto fairly.

     8.13 No Partnership; Control; Third Parties. This Agreement contemplates the
extension of credit by the Bank, in its capacity as a lender, to the Borrower, in its capacity as a
borrower, and for the payment of interest and repayment of principal by the Borrower to the Bank.
The relationship between the Bank and the Borrower is limited to that of creditor/secured party,
and debtor. The provisions herein for compliance with financial covenants, delivery of financial
statements, and other covenants are intended solely for the benefit of the Bank to protect its
interests as lender in assuring payments of interest and repayment of principal, and nothing
contained in this Agreement shall be construed as permitting or obligating the Bank to act as
financial or business advisor or consultant to the Borrower, as permitting or obligating the Bank
to control the Borrower, or to conduct the Borrower’s operations, as creating any fiduciary
obligation on the part of the Bank to the Borrower, as creating any joint venture, agency, or other
relationship between the parties other than as explicitly and specifically stated in this
Agreement. The Borrower acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and execution of this
Agreement and to obtain the advice of such counsel with respect to all matters contained herein,
including, without limitation, the provision herein relative to the waiver of trial by jury. The
Borrower further acknowledges that it is experienced with respect to financial and credit matters
and has made its own independent decision to apply to the Bank for credit and to execute and
deliver this Agreement. The terms and provisions of the Note and the Loan Documents are for the
benefit of the Borrower and the Bank, their respective successors, assigns, endorsees and
transferees and all persons claiming under or through them and no other person shall have any right
or cause of action or account thereof.

21

 

     8.14 Electronic Transmission of Data. The Bank, the Borrower and the Guarantor agree
that certain data related to the Loan (including confidential information, documents, applications
and reports) may be transmitted electronically, including transmission over the Internet. This data
may be transmitted to, received from or circulated among agents and representatives of the
Borrower, the Guarantor and/or the Bank and their affiliates and other persons involved with the
subject matter of this Agreement. The Borrower and the Guarantor acknowledge and agree that (a)
there are risks associated with the use of electronic transmission and that the Bank does not
control the method of transmittal or service providers, (b) the Bank has no obligation or
responsibility whatsoever and assumes no duty or obligation for the security, receipt or third
party interception of any such transmission, and (c) the Borrower and the Guarantor will release,
hold harmless and indemnify the Bank from any claim, damage or loss, including that arising in
whole or part from the Bank’s strict liability or sole, comparative or contributory negligence,
which is related to the electronic transmission of data.

     8.15 Gender etc. Whenever used herein, the singular shall include the plural, the
plural shall include the singular, and the use of the masculine, feminine or neuter gender shall
include all genders.

     8.16 Authority to File Financing Statements and Amendments. The Borrower hereby
authorizes the Bank to file Uniform Commercial Code Financing Statements describing the Collateral
without the Borrower’s signature thereon. After notice to the Borrower, the Bank is authorized to
file amendments without the Borrower’s signature thereon to any financing statements naming the
Bank as a secured party in order to add collateral or a debtor. The Borrower is not authorized to
file correction statements to financing statements.

     8.17 Heading. The section and subsection headings of this Agreement are for
convenience only, and shall not limit or otherwise affect any of the terms hereof.

     8.18 Counterparts. To facilitate execution, this Agreement may be executed in any
number of counterparts as may be required; and it shall not be necessary that the signatures of, or
on behalf of, each party, or that the signatures of all persons required to bind any party, appear
on each counterpart; but it shall be sufficient that the signature of, or on behalf of, each party,
or that the signatures of the persons required to bind any party, appear on one or more
counterparts. All counterparts shall collectively constitute a single agreement. It shall not be
necessary in making proof of this Agreement to produce or account for more than a number of
counterparts containing the respective signatures of, or on behalf of, all of the parties hereto.

(Signature Page Follows)

22

 

     IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed,
sealed and attested the day and year first above mentioned.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	EMERGENT FREDERICK LLC,
	 	 	a Maryland limited liability company
	 
	 	 	 	 	 	 
	  /s/ [Illegible]

	 	 By:
	 	/s/ Edward J. Arcuri
	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Edward J. Arcuri	 	 
	 

	 	Title:
	 	Executive Manager	 	 
	 
	 	 	 	 	 	 
	 	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 
	ATTEST:	 	EMERGENT BIOSOLUTIONS INC.
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	  /s/ [Illegible]

	 	 By:
	 	/s/ Edward J. Arcuri
	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Edward J. Arcuri	 	 
	 

	 	Title:
	 	EVP & COO	 	 
	 
	 	 	 	 	 	 
	 

	 	BANK:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	HSBC REALTY CREDIT CORPORATION (USA),
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey M. Henry
	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Jeffery M. Henry	 	 
	 

	 	Title:
	 	Vice President	 	 

23

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