LOAN AGREEMENT

EXHIBIT 10.3

LOAN AGREEMENT

THIS LOAN AGREEMENT is made as of June 8, 2007 by and between EMERGENT BIODEFENSE OPERATIONS LANSING INC. (formerly Bioport Corporation), a Michigan corporation, of Lansing, Michigan ( “Borrower” ), and FIFTH THIRD BANK , a Michigan banking corporation, of Grand Rapids, Michigan ( “Lender” ).

Borrower has requested Lender to extend to it a revolving line of credit of up to Fifteen Million Dollars ($15,000,000). Lender is willing to extend the line of credit on the terms and subject to the conditions set forth in this Agreement.

Lender and Borrower agree as follows:

SECTION   1. DEFINITIONS.

In this Agreement:

“Affiliate of a Person” means any Person that now or in the future controls, is controlled by, or is under common control with, the Person.

“Agreement” means this Loan Agreement, as amended, including the schedules attached to this Loan Agreement.

“Capitalized Lease Obligation” means any obligation of Borrower to pay future rentals under a lease that, in accordance with GAAP, is required to be shown as a liability on Borrower’s balance sheet.

“Collateral” means any properties or assets of Borrower in or upon which Lender at any time holds a security interest, mortgage or other lien to secure any Lender Indebtedness.

“Collateral Document” means each security agreement, mortgage, pledge agreement, assignment, guaranty and every other agreement and document that has been or in the future is, or is required to be, given by Borrower or any third party to secure any Lender Indebtedness.

“Contamination” or “Contaminated” means, when used with reference to any real or personal property, that a Hazardous Substance is present on or in the property in an amount or level that exceeds any legal limit specified in any Environmental Law. “Contamination” or “Contaminated” shall not include latent, unexposed asbestos in any building located on any of the real property unless and until exposure that exceeds the foregoing legal limit occurs due to renovation or otherwise.

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A Person “ controls ” another Person if the Person has, directly or indirectly, the power to direct or cause the direction of the management or policies of the other Person.

“Default” means an event, condition or circumstance that, with the lapse of time or giving of notice (absent any permitted cure), would be an Event of Default.

“ EBI ” means Emergent BioSolutions Inc., a Delaware corporation.

“Environmental Law” means at any time any applicable federal, state, local or foreign law (including common law), ordinance, rule, regulation, permit, order or other requirement that then (1) regulates the quality of air, water, soil or other environmental media, (2) regulates the generation, management, transportation, treatment, storage, recycling or disposal of any waste, (3) protects public health, occupational safety and health, natural resources or the environment or (4) establishes liability for the investigation, removal or remediation of, or harm caused by, Contamination.

“ERISA” means the Employee Retirement Income Security Act of 1974, as now and in the future amended, together with all regulations issued under it.

“Event of Default” has the meaning specified in Section 9 of this Agreement.

“GAAP” means generally accepted accounting principles consistently applied.

“Government Contracts” has the meaning specified on Schedule D.

“Hazardous Substance” means at any time any substance or waste that is then regulated by or subject to any Environmental Law.

“Indebtedness” means indebtedness for borrowed money, indebtedness representing the deferred purchase price of property (excluding indebtedness under normal trade credit for property or services purchased in the normal course of operations), any obligation under a note payable or draft accepted representing an extension of credit, indebtedness (whether or not assumed) secured by a mortgage, security interest or other lien on property, and any Capitalized Lease Obligation.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of August 25, 2006, by and between HSBC Credit Realty Corporation (USA) and Lender, and acknowledged and consented to by Borrower and Emergent BioSolutions Inc.

“Lender Indebtedness” means any indebtedness, obligation or liability, of whatever type or nature, that Borrower now or in the future owes to Lender, including, without

limitation, all indebtedness and obligations under this Agreement and all Rate Management Obligations.

“Liabilities” means all liabilities that GAAP requires to be classified as liabilities on a balance sheet of Borrower.

“Loan” means any loan that Lender makes to Borrower under this Agreement.

“Loan Document” means this Agreement, each Revolving Credit Note and other promissory note that Borrower has given or in the future gives to Lender, each renewal, extension, and replacement of the note, each Collateral Document, each Rate Management Agreement and every other agreement, instrument and document that has been or in the future is signed or delivered in connection with this Agreement or in connection with any Lender Indebtedness.

“Material Adverse Effect” means any material adverse effect upon (1) the validity, performance or enforceability of any Loan Document, (2) any Government Contract, (3) the business operations of Borrower, (4) the ability of Borrower or any guarantor of any Lender Indebtedness to fulfill any obligation under any Loan Document or (5) the ability of Lender to take possession of, collect or otherwise realize upon any Collateral or other security for the Lender Indebtedness.

“Maturity” of an indebtedness or obligation means the time when that indebtedness or obligation has become due and payable, for whatever reason.

“Note” means the Revolving Credit Note, the Term Note and any other promissory note that Borrower has signed or in the future signs and that now or in the future evidences any Lender Indebtedness, including any renewals, extensions or modifications.

“Permitted Lien” means (1) a security interest, mortgage or other lien in favor of Lender (2) an existing security interest or lien described on Schedule   A attached to this Agreement (3) 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 on its books (4) 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 upon Borrower’s books in accordance with GAAP and if the lien does not jeopardize any Collateral and does not have a Material Adverse Effect, and (5) the HSBC Liens (as defined in the Intercreditor Agreement).

“Person” means an individual and a corporation, partnership, limited liability company, trust, association and any other entity.

“Plan” means an “employee pension benefit plan” with respect to which Borrower or any Affiliate is an “employer” or “party in interest,” as ERISA defines those terms.

“Rate Management Agreement” means any agreement, device or arrangement that provides for payments that 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 that confirm transactions under any such agreement, device or agreement, all whether now existing or arising in the future, and in each case as amended, modified or supplemented from time to time.

“Rate Management Obligation” means any obligation of Borrower to Lender or any affiliate of Fifth Third Bancorp, whether absolute, contingent or otherwise and whether the obligation now exists or is created or arises or is acquired or evidenced in the future and however it has been or is created, evidenced or acquired and however it has arisen or arises in the future, under or in connection with (1) any Rate Management Agreement or (2) any cancellation, buy-back, reversal, termination or assignment of any Rate Management Agreement, including any renewal, extension, modification or substitution of any such obligation.

“Revolving Credit Commitment” means at any given time an amount equal to the lesser of (1) $15,000,000 or (2) 75 percent of Borrower’s Eligible Accounts at that time.

“Revolving Credit Loans” has the meaning specified in Section   3.1 of this Agreement.

“Revolving Credit Note” has the meaning specified in Section   3.3 of this Agreement.

“Schedule” means a schedule attached to this Agreement.

“Subsidiary” of a Person means a corporation, limited liability company, limited partnership or other business entity that the Person controls.

“Term Loan” has the meaning specified in Section   4.1 of this Agreement.

“Term Loan Note” has the meaning specified in Section   4.2 of this Agreement.

SECTION   2. WARRANTIES AND REPRESENTATIONS .

Borrower represents and warrants to Lender, and agrees, as follows:

2.1           Borrower is a corporation duly organized, validly existing and in good standing under the laws of the state of Michigan. Borrower is duly qualified and authorized to do business, and is in good standing as a foreign corporation, in each jurisdiction in which the failure to be so qualified or authorized to do business could have a Material Adverse Effect.

2.2           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, non-compliance with which could reasonably be expected to have a Material Adverse Effect.

2.3           The balance sheets of Borrower as of December 31, 2004, December 31, 2005, and December 31, 2006 and the related statements of income, of retained earnings and of changes in financial position for the periods then ended, copies of all of which have been delivered to Lender, have been prepared in accordance with GAAP and present fairly the financial position of Borrower as of those dates and the results of its operations for those periods. Since the date of the most recent of those financial statements, there has not been any change in Borrower’s financial condition or operations that could have a Material Adverse Effect and that Borrower has not disclosed to Lender in writing.

2.4           Neither this Agreement nor any financial statement that Section   2.3 above refers to nor any other written statement that Borrower has furnished to Lender in connection with the negotiation of any Loan, contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained in this Agreement, the financial statement or other written statement not misleading. There is not any fact that Borrower has not disclosed to Lender in writing that has, or, to the best of the knowledge of the officers and directors of Borrower, in the future could have, a Material Adverse Effect.

2.5           Except as disclosed to Lender in writing, there is not any proceeding pending, or to the knowledge of the officers and directors of Borrower threatened, before any court, governmental authority or arbitration board or tribunal, against Borrower, that, if determined adversely to Borrower, could reasonably be expected to have a Material Adverse Effect. Borrower is not in default with respect to any order, judgment or decree of any court, governmental authority or arbitration board or tribunal.

2.6           Borrower has good and marketable title to all of the assets that it purports to own, including the assets that the financial statements referred to in Section   2.3 of this

Agreement describe, free and clear from all liens, encumbrances, security interests, claims, charges and restrictions, except Permitted Liens.

2.7           Borrower owns or controls all of the patents, trademarks, service marks, trade names, copyrights, licenses and rights that are necessary for the conduct of its business, without any conflict with the right of any other Person.

2.8           Borrower has full power and authority to sign, deliver and perform the Loan Documents; the signing, delivery and performance of the Loan Documents that Borrower has given or is required to give to Lender (1) have been duly authorized by appropriate action of Borrower, (2) will not violate the provisions of Borrower’s articles of incorporation or bylaws or other governing agreement or document 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; and the parties to the Loan Documents have properly signed and delivered them, and the Loan Documents are the valid and binding obligations of the parties to them and are enforceable 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.

2.9           Borrower has filed each tax return that it is required to file (after taking account of any properly filed, valid and effective extension) in any jurisdiction, and Borrower has paid each tax, assessment, fee and other governmental charge upon it or upon its assets, income or franchises before the time when its nonpayment could give rise to a lien or could have a Material Adverse Effect. Borrower does not know of any proposed additional tax assessment against it.

2.10         Borrower does not intend to carry or purchase any “margin security” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, 12 C.F.R. Chapter II.

2.11         No Plan has been terminated since the effective date of ERISA. No Plan is a “multi-employer plan” within the meaning of Section 3(37)(A) of ERISA. An “accumulated deficiency” (within the meaning of Section 412 of the Internal Revenue Code, as amended) or a “reportable event” (as defined in Title IV of ERISA) has not occurred with respect to any Plan. Neither Borrower nor any Affiliate has incurred any material liability to the Pension Benefit Guaranty Corporation ( “PBGC” ) or otherwise under ERISA. The PBGC has not started or threatened to start a proceeding against Borrower or any Affiliate under ERISA.

2.12         Borrower is not, and no person, firm or corporation that has “control” of Borrower is, an “executive officer,” “director” or “person who directly or indirectly, or in concert with one or more persons owns, controls or has the power to vote more than 10 percent of any class of voting securities” (within the meaning of 12 U.S.C. § 375(b) and

regulations issued under that section), of Lender, Fifth Third Bancorp ( “Bancorp” ) or any subsidiary of Bancorp.

2.13         All of Borrower’s real and personal property, and all operations and activities on it, are in compliance with all Environmental Laws, except for any noncompliance that could not reasonably be expected to have a Material Adverse Effect; and none of Borrower’s real or personal property is or will be (1) Contaminated or the site of the disposal or release of any Hazardous Substance (2) the source of any Contamination of any adjacent property or of any groundwater or surface water or (3) the source of any air emissions in excess of any legal limit or standard that is now or in the future in effect, to the extent that any of the foregoing could reasonably be expected to have a Material Adverse Effect.

2.14         Borrower has furnished to Lender a complete and correct copy of each Government Contract, including all amendments.

2.15         Borrower is not a party to a contract with an agency of the United States government other than the Government Contracts.

SECTION   3. REVOLVING LINE OF CREDIT .

3.1           Subject to satisfaction of the conditions precedent set forth in Section   10 of this Agreement, and as long as there shall not have occurred any Default or Event of Default, Lender shall extend to Borrower from time to time loans ( “Revolving Credit Loans” ) in amounts that shall not at any time in the aggregate exceed the Revolving Credit Commitment.

3.2           If the aggregate principal amount of the Revolving Credit Loans outstanding at any time exceeds the Revolving Credit Commitment, then Borrower shall immediately repay the amount of the Loans that is required to eliminate the excess.

3.3           All Revolving Credit Loans shall be evidenced by and payable with interest in accordance with the terms of the promissory note in the form of Schedule   B ( “Revolving Credit Note” ), which Borrower shall sign and deliver to Lender.

3.4           Each Revolving Credit Loan that meets the requirements of this Section 3 and the other provisions of this Agreement shall be made upon Borrower’s request.

3.5           Borrower shall have the right to prepay all Revolving Credit Loans, in whole or in part, at any time without penalty. Borrower may reborrow amounts that it prepays, subject to the other provisions of this Agreement.

3.6           Unless it is sooner terminated under Section   9 of this Agreement or Lender extends it in writing, Lender’s obligation to make or to renew Revolving Credit Loans shall

expire on May 15, 2008. If Lender extends it, then Lender’s obligation to make or to renew Revolving Credit Loans shall expire on the date stated in the extension. If Lender’s obligation to make or to renew Revolving Credit Loans expires, then the aggregate unpaid principal balance of all outstanding Revolving Credit Loans, together with all interest accrued on them, shall be payable in full on the expiration date.

SECTION   4. TERM LOAN .

4.1          On August 10, 2004, Lender made a term loan to Borrower in the principal amount of $2,400,000 ( “Term Loan” ).

4.2           The Term Loan is evidenced by and payable in accordance with a Term Note dated August 10, 2004, payable to Lender, that Borrower executed and delivered to Lender ( “Term Loan Note” ).

4.3           Nothing in this Agreement amends or modifies the Term Loan or the Term Loan Note.

SECTION   5. SECURITY .

To secure payment and performance of all Lender Indebtedness:

5.1           Borrower shall sign and deliver to Lender security agreements, in form and substance satisfactory to Lender, granting to Lender a valid first security interest in Borrower’s assets and properties described in Schedule   D .

5.2           Borrower shall sign and deliver to Lender all financing statements, assignments and other documents, agreements and instruments, in connection with the perfection or priority of Lender’s security interest in the Collateral, and shall take all further actions, that Lender reasonably requests in connection with the perfection or priority of that security interest.

SECTION   6 . AFFIRMATIVE COVENANTS .

From the date of this Agreement and until all Lender Indebtedness is fully paid and Lender does not have any obligation to extend loans or other credit facilities to Borrower, Borrower shall:

6.1           Furnish to Lender, within 120 days after the end of each of Borrower’s fiscal years, beginning with