LOAN AGREEMENT

 

(a)

Company agrees to execute and deliver to WVEDA a negotiable Promissory Note payable to the order of WVEDA in the principal sum of $900,000.00 for a term of ten (10) years and bearing interest at the rate set out above, said Promissory Note to be substantially in the form set forth in Exhibit C attached hereto.

 

(b)

Company shall initially grant to WVEDA a sole first lien security interest, pursuant to the Uniform Commercial Code, on all equipment and machinery of the Company described in Exhibit A and all replacements, additions and improvements thereto and proceeds thereof, to secure WVEDA in the payment of the WVEDA Loan mentioned in paragraph (a) above, and upon the completion of the purchase, acquisition and installation of the Phase II Equipment, and the financing of a portion of the costs thereof by WVIJDC through the WVIJDC Loan, Company shall grant to WVEDA a first lien security interest, pursuant to the Uniform Commercial Code, shared on a pro rata basis with the WVIJDC Loan, on all equipment and machinery of the Company described in Exhibit A and Exhibit B and all replacements, additions and improvements thereto and proceeds thereof, to secure WVEDA in the payment of the WVEDA Loan mentioned in paragraph (a) above.

 

(c)

Company shall be in default hereunder upon failure to pay when due any amount payable hereunder or under the said Promissory Note or upon failure to observe or perform any of Company's other agreements contained herein as further provided in Section D below.

 

(d)

Company shall be in default hereunder upon failure to pay when due any amount payable under the WVIJDC Loan or upon failure to observe or perform any covenant or agreement with respect to the WVIJDC Loan.

 

(a)

Provide WVEDA with certified copies of the Company's corporate resolutions authorizing the Company's officers to execute this loan agreement, all notes and other documents described above, as well as other documents necessary to consummate the WVEDA Loan being made hereunder. All such documents shall be in the usual and customary form, and shall be satisfactory to counsel for WVEDA.

 

(b)

Furnish to WVEDA an opinion of its counsel, with current date, covering such matters incident to the transaction herein contemplated as may be requested in form and substance satisfactory to counsel for WVEDA.

 

(c)

Acknowledge that the WVEDA Loan will be for permanent financing only. In the event the Phase I Equipment includes construction or future delivery of equipment, the Phase I Equipment shall be paid for utilizing interim financing, with the WVEDA Loan closed and disbursed only at the completion of all proposed construction, purchase and placement of all Phase I Equipment in operating condition and acceptance by WVEDA.

 

(d)

Provide to WVEDA those certain items requested by WVEDA, including but not limited to the following:

 

(i)

Copies of bank documents, including but not limited to, loan agreement(s), deed(s) of trust, UCC financing statement(s), security agreement(s), and other documents relating to the Phase I Equipment;

 

(ii)

A Certificate of Good Standing for the Company from the office of the Delaware Secretary of State and a Certificate of Authority for the Company from the office of the West Virginia Secretary of State;

 

(iii)

A Certificate of Good Standing for the Company for unemployment coverage from the West Virginia Bureau of Employment Programs, Unemployment Compensation Division;

 

(viii)

Any other document related to the Phase I Equipment that WVEDA may request.

 

(a)

Company shall promptly give WVEDA notice of any unusual problems or developments affecting its business operations which may adversely affect: (i) its ability to repay such WVEDA Loan; and (ii) the collateral securing such WVEDA Loan.

 

(b)

Company shall pay and discharge or cause to be paid or discharged all tax claims relating to the collateral securing the WVEDA Loan being made hereunder, when due, except such as to which a bona fide dispute exists, and which are being contested in good faith.

 

(c)

Company shall maintain proper books of records and accounts in accordance with generally accepted accounting principles consistently applied, in which full, true and correct entries shall be made of all of its dealings and business affairs, and Company shall permit WVEDA or its authorized representatives, to inspect and audit its books of record and account at any reasonable time or times upon receiving a request with respect thereto. WVEDA personnel and all agents of WVEDA shall be authorized to enter upon the premises of Company and into any building thereon, whether permanent or temporary, jointly or separately, to carry out inspections. These inspections may be scheduled or unscheduled.

 

(i)

Promptly furnish WVEDA annual financial statements within 120 days of the end of Company's fiscal year, all in reasonable detail and prepared by an independent certified public accountant of recognized standing acceptable to WVEDA and whose certificate or opinion accompanying such financial statements is in form and substance acceptable to WVEDA;

 

(ii)

Refrain from declaring, or making, or incurring liability to make, any payment in cash or other assets either as dividends, including inter-company and related-company dividends, or other distributions upon any class of capital stock of Company, or purchase, retire, redeem or otherwise acquire for value any shares of any class of capital stock of Company, if any of the following circumstances are in existence at that time: (1) Company is in default of any financial covenant relating to the WVEDA Loan; (2) Company is in default or is unable to pay its current financial obligations under any financing document with any of its lenders; or (3) Company has failed to pay when due any governmental tax, charge, fee or assessment (subject to the absolute right of Company to in good faith challenge such tax, charge, fee or assessment). Any change in this requirement for dividends must be approved by WVEDA. Salaries or compensations of officers or owners will not be increased unless and all of Company's debts, including without limitation the WVEDA Loan, are paid to a current status;

 

(iii)

Not make any loans or advances to any officer, shareholder, director or employee, except for temporary advances in the ordinary course of business; and

 

(iv)

Cause all loans of shareholders, directors or officers to Company to be subordinated, both for collateral and repayment, to the WVEDA Loan, and payments thereon shall be deferred until the WVEDA Loan is paid in full.

 

(a)

Company shall conduct its business in a normal manner in the ordinary course of business and remain in business and employ persons from the general vicinity of Monongalia County, West Virginia. The WVEDA Loan shall be callable at the option of WVEDA should Company cease operations of the Project or if there is a Significant Curtailment of Operations at the Project. “Significant Curtailment of Operations” shall mean a condition at the Project location where employment (as measured in terms of man hours) for any calendar quarter is less than 50% of the average quarterly employment for the previous four quarters, unless such reduction is the result of causes wholly beyond the control of the Company.

 

(b)

At all times during the term of this Loan Agreement, Company shall, at its own expense, maintain adequate liability insurance in amounts and coverages satisfactory to WVEDA and keep or cause to be kept all property, real or personal, including without limitation the property described in Exhibit A and Exhibit B, fully insured against fire with extended coverage in an amount and with an insurance company or companies satisfactory to WVEDA and against other hazards, casualties and contingencies in such amounts and for such coverages and periods as may be required by WVEDA. All casualty insurance relating to the collateral for the WVEDA Loan shall name WVEDA as an additional insured and as loss payee, as its interest may appear, and providing for not less than thirty (30) days written notice to WVEDA of the cancellation of such policy or policies. Such casualty insurance policy or policies shall contain a “New York Standard Mortgage Clause,” or its equivalent. In the event of a failure or refusal of Company to agree with the insurance companies issuing such policies as to the amount and terms of any loss within sixty (60) days from such loss, WVEDA may negotiate with and settle said loss with such insurance company or companies, and neither WVEDA nor the insurance companies so involved shall, upon such settlement being made, be liable in any manner to Company. Company shall carry Workers' Compensation insurance and other insurance against other risks as are commonly insured against by companies in similar types of business, all in a manner satisfactory to WVEDA. Company shall purchase Federal Flood Insurance in amounts and coverage satisfactory to WVEDA if Company's county is designated as a flood prone area and the FIA map shows that Company's property is located within a special flood hazard area, which Federal Flood Insurance, if so required, shall name WVEDA as an additional insured and as loss payee, as its interest may appear.

 

(a)

Failure by the Company to pay any amounts required to be paid under this Loan Agreement at the times specified herein and such failure shall continue for a period of thirty (10 Per Amendment) days after the same has become due;

 

(b)

Failure by the Company to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Loan Agreement, other than as referred to in (a) above and (c) below, for a period of 30 days after written notice, specifying such failure, requesting that it be remedied and stating that it is a notice of default, has been given to the Company by the WVEDA, unless the WVEDA shall agree in writing to an extension of such time prior to its expiration;

 

(c)

The dissolution or liquidation of the Company or the commencement by the Company of a voluntary case under the United States Bankruptcy Code, as amended, or its failure promptly to lift or suspend any execution, garnishment or attachment of such consequence as will impair its ability to perform its obligations under this Loan Agreement, or the entry of an order for relief in respect of the Company under the United States Bankruptcy Code, as amended, or the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, or similar official of the Company or of any substantial part of its property, or an assignment by it or by any such guarantor for the benefit of creditors, or the entry by it into an agreement of composition with its creditors, or the filing of a petition applicable to the Company in any proceeding seeking its reorganization, liquidation, adjustment, composition or other arrangement instituted pursuant to any federal or state law; provided, however, that any such petition filed against the Company or not filed by the Company that is dismissed or stayed within thirty (10 per amendment) days of such filing shall not constitute an Event of Default so long as the Company gives written notice of such filing to the WVEDA;

 

(d)

Any warranty, representation or other statement by or on behalf of the Company contained in this Loan Agreement or in any instrument or certificate furnished in compliance with or in reference to this Loan Agreement is false or misleading in any material respect, or failure by the Company to perform or observe any condition or covenant contained in any such document for a period of 30 days after compliance with the notice and request provisions of paragraph D.l.(b) above;

 

(e)

The Company shall fail to pay when due any amount payable under the WVIJDC Loan or shall fail to observe or perform any covenant or agreement with respect to the WVIJDC Loan;

 

(f)

The Phase II Equipment has not been purchased, acquired and installed, and/or the WVIJDC Loan has not been closed on May 1, 2011, or

 

(a)

(i) The WVEDA may exercise any right, power or remedy permitted to it by law, and shall have in particular, without limiting the generality of the foregoing, the right to declare the entire amount of the WVEDA Loan (if not then due and payable) to be due and payable immediately, and upon any such declaration the entire amount of the WVEDA Loan shall become and be immediately due and payable, anything in this Loan Agreement contained to the contrary notwithstanding. The Company shall forthwith pay to the WVEDA such amounts.

 

(b)

The WVEDA may take any action or remedy specified in the Security Agreement dated as of the date hereof between the Company and the WVEDA.

 

(c)

The WVEDA may take whatever action at law or in equity may appear necessary or desirable to collect the payments and other amounts then due and thereafter to become due or to enforce performance and observance of any obligation, agreement or covenant of the Company under this Loan Agreement.

By:

By:

Equipment

Model #

Serial #

AB Sciex

ABI 5500 QTRAP LC/MS/MS

AU23751008

AB Sciex

HPLC/API 4000 Mass Spec (2 Units)

J1030110 & ###-###-####

Hitachi

Total Amino Acid Analyzer

2145-003

Vendor

Equipment

AB Sciex

HPLC/API 4000 related equipment

Thermo Fisher

Watson LIMS

Waters

Synapt G2 HDMS with UPLC

Total