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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

BIORELIANCE CORPORATION
(Exact name of the registrant as specified in its charter)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES [X] NO [ ]

As of October 31, 2003, 8,377,542 shares of registrant’s common stock, par value $.01 per share, were outstanding.

The accompanying notes are an integral part of these consolidated financial statements.

BioReliance Corporation (the Corporation) is a contract service organization that provides testing and development, and manufacturing services for biologics and other biomedical products to biotechnology and pharmaceutical companies worldwide.

The consolidated financial statements include the accounts of BioReliance Corporation and its subsidiaries, including Q-One Biotech Group Ltd. (Q-One Biotech) from September 23, 2003, when the Corporation acquired all of Q-One Biotech’s outstanding shares, through September 30, 2003.

The accompanying interim financial statements are unaudited and have been prepared by the Corporation pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements, and therefore these consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and related notes thereto, included in the Corporation’s Annual Report on Form 10-K. In the opinion of management, the unaudited consolidated financial statements for the three month and nine month periods ended September 30, 2002 and 2003 include all normal and recurring adjustments that are necessary for a fair presentation of the results of the interim period. The results of operations for the three month and nine month periods ended September 30, 2003 are not necessarily indicative of the results for the entire year ending December 31, 2003.

On September 23, 2003, the Corporation acquired Q-One Biotech, a privately-held company based in Glasgow, Scotland pursuant to (i) a Share Purchase Agreement, dated August 12, 2003, among BioReliance Corporation, BioReliance (Glasgow) Limited and the sellers named therein (relating to the acquisition of shares of Q-One Biotech) and (ii) a Share Purchase Agreement, dated August 12, 2003, among BioReliance Corporation, BioReliance (Glasgow) Limited and the sellers named therein (relating to the acquisition of shares of Satron Management Services (Technology) Limited, which provides management services to Q-One Biotech) (collectively, the “Share Purchase Agreements”). Q-One Biotech provides safety testing and process validation services and contract manufacturing to the biopharmaceutical industry. Q-One Biotech’s services have included safety testing of biopharmaceuticals, human blood products, vaccines, transgenics and gene therapy products. Q-One Biotech’s primary facilities are located in Glasgow, Scotland and Worcester, Massachusetts.

Under the terms of the Share Purchase Agreements, the Corporation purchased all of the outstanding capital stock of Q-One Biotech for an aggregate purchase price of approximately £42.0 million ($69.4 million) in cash, subject to post-closing adjustments and excluding transaction costs. Pending the determination of the post-closing adjustments, £1.5 million ($2.5 million) has been placed in escrow and is not included in the purchase price allocation below.

The Corporation funded the purchase price of the acquisition, excluding transaction costs, with approximately $48.2 million of borrowings under a new senior secured credit facility with Bank of America, N.A. as administrative agent, security trustee and letter of credit issuer and Banc of America Securities LLC as the sole lead arranger and sole book manager. The Corporation funded the remainder of the purchase price with approximately $21.2 million of existing cash resources. The Corporation funded the transaction costs with approximately $1.4 million of existing cash resources. The Corporation expects to incur additional transaction costs in the fourth quarter.

The purchase price allocation for Q-One Biotech has not been completed; however, it is expected to be finalized by the end of 2003. The preliminary allocation of the purchase price as of September 23, 2003 is as follows (in thousands):

In connection with the purchase, the Corporation issued Floating Rate Guaranteed Unsecured Loan Notes (Loan Notes) in the amount of £6,182,974 ($10,290,324 at September 30, 2003) to a former shareholder of Q-One Biotech. The Loan Notes mature on September 23, 2006.

In consideration for Clydesdale Bank’s guarantee, the Corporation deposited an amount equal to the principal amount of the Loan Notes with Clydesdale Bank. Amounts outstanding on the Loan Notes accrue interest in an amount equal to interest the Corporation earns on the cash deposited in Clydesdale Bank. The cash deposit is recorded as restricted cash on the Corporation’s balance sheet as of September 30, 2003.

Corporation Debt consisted of the following amounts as of December 31, 2002 and September 30, 2003:

The Corporation entered into a credit agreement, dated August 12, 2003, with the Corporation and BioReliance (Glasgow) Ltd. as borrowers, certain subsidiaries of the Corporation as guarantors, Bank of America, N.A. as administrative agent, security trustee and letter of credit issuer, the lenders party thereto, and Banc of America Securities LLC as the sole lead arranger and sole book manager. Under the Credit Agreement, the Corporation may borrow up to $60.0 million to finance the acquisition of Q-One Biotech, for general corporate purposes, including working capital and capital expenditures, and to refinance existing indebtedness. The Credit Facility consists of a $15.0 million revolving credit facility, a $35.0 million domestic term loan and a $10.0 million foreign term loan (together, the “Credit Facility”). The Corporation borrowed approximately $48.2 million to fund a portion of the purchase price paid in the Q-One Biotech acquisition, including a $3.2 million revolving loan and $45.0 million in term loans. The Corporation is required to make quarterly payments under the term loans beginning on December 31, 2003. Amounts due under the term loans will become due and payable in full on September 30, 2008. Final amounts due under the revolving credit facility will become due and payable in full on September 30, 2006.

The Credit Facility includes negative covenants including, among others, those restricting the Corporation’s ability to incur liens on its assets, pay dividends, make investments, and incur additional indebtedness. The Credit Facility also contains customary financial covenants including, among others, those that require the Corporation to maintain a maximum leverage ratio, a minimum fixed charge coverage ratio and a minimum net worth. The Credit Facility includes customary events of default including, among other things, the Corporation’s failure to pay the principal or interest of any loan or letter of credit under the Credit Facility, a default or event of default of any other agreement involving indebtedness, insolvency by the Corporation or any of its subsidiaries, and change in control of the Corporation (as defined in the Credit Agreement). Specifically the Corporation is required to:

	•		Maintain consolidated net worth of at least the sum of (i) 85% of consolidated net worth of the consolidated group as of the initial funding date (after giving proforma effect to the acquisition of Q-One Biotech), plus (ii) as of the end of each quarter of the Corporation, commencing with the quarter ending December 31, 2003, an amount equal to 75% of Consolidated Net Income (but not less than zero) for such quarter, such increases to be cumulative, plus an amount equal to 100% of the net cash proceeds from all equity transactions after the closing date.

	•		Maintain a consolidated leverage ratio (the ratio of consolidated funded debt to consolidated EBITDA) as of the end of any quarter of the Corporation of no greater than 2.50 to 1.00. Consolidated funded debt excludes funded debt relating to the Loan Notes. EBITDA is defined as consolidated net income, interest expense, income taxes, depreciation and amortization, and non-cash expense for stock options. EBITDA will be calculated based on the four previous consecutive quarters.

	•		Maintain a consolidated fixed charge coverage ratio (ratio of the sum of consolidated EBITDAR less cash taxes paid, less consolidated capital expenditures to consolidated fixed charges) as of the end of any quarter of the Corporation of at least 1.25 to 1.00. Consolidated fixed charges are defined as the sum of the cash portion of consolidated interest expense, rent and lease expense, consolidated scheduled funded debt payments, and dividends and other distributions paid on the Corporation's capital stock. Consolidated EBITDAR is EBITDA plus rent and lease expense. EBITDAR and consolidated fixed charges will be calculated based on the four previous quarters.

Interest on the Credit Facility is calculated using the applicable Euro Currency Rate or Base Rate plus an Applicable Rate Adjustment (the Rate Adjustment). The Rate Adjustment is variable based on the ratio of total funded debt under the facility to the Corporation’s EBITDA. This ratio will be calculated and reported to the lenders quarterly. The interest rate at September 30, 2003 was 4.63%, which includes a 3.5% Rate Adjustment.

In November 2003, the Corporation entered into a new interest rate swap whereby the variable interest rate portion of $28.0 million of the domestic loan was effectively converted into debt with a fixed rate of 3.21% per annum. The swap expires in September 2008.

In November 2003, the Corporation entered into a cross-currency interest rate swap whereby the $8.0 million of the foreign term loan and its variable interest rate portion was effectively converted into a fixed rate United Kingdom Pound Sterling note with a fixed rate of 5.30% per annum. The swap expires in September 2008.

The Corporation entered into a security agreement on September 22, 2003, whereby the Corporation, and certain of its subsidiaries have granted a security interest in all personal property currently owned or subsequently acquired to Bank of America, N.A. as administrative agent for the lenders as security for their obligations under the Credit Agreement.

The Corporation entered into a pledge agreement on September 22, 2003, whereby the Corporation, and certain of its subsidiaries have granted a security interest in (1) 100% of the capital stock of each domestic subsidiary of the Corporation, (2) 65% of the issued and outstanding shares of capital stock entitled to vote of each foreign subsidiary and (3) 100% of the issued and outstanding Capital Stock not entitled to vote of each foreign subsidiary of the Corporation to Bank of America, N.A. as administrative agent for the lenders as security for their obligations under the Credit Agreement.

The aggregate maturities on long-term debt less capital leases and the interest rate swap agreement as of September 30, 2003 are due as follows (in thousands):

The Corporation calculates earnings per share (EPS) on both a basic and diluted basis. Dilutive securities are excluded from the computation in periods in which they have an anti-dilutive effect. Net income available to common stockholders and common equivalent stockholders is equal to net income for all periods presented.

The following table represents reconciliations between the weighted average common stock outstanding used in basic EPS and the weighted average common and common equivalent shares outstanding used in diluted EPS for each of the periods presented (in thousands):

Summarized financial information concerning the Corporation’s reportable segments for the three months and nine months ended September 30 is shown in the following table (in thousands):

Summarized financial information concerning the Corporation’s revenue and gross profit by geographic region for the three months and nine months ended September 30 is shown in the following table (in thousands):

The Corporation has stock-based compensation plans, described more fully in Note 5 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2002. Effective January 1, 2003, BioReliance adopted FASB Statement No. 148 (FAS 148), “Accounting for Stock-Based Compensation — Transition and Disclosure.” FAS 148 amends FASB Statement No. 123 (FAS 123), “Accounting for Stock-Based Compensation,” to provide, among other things, prominent disclosure of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. As permitted by FAS 123 and amended by FAS 148, the Corporation has chosen to continue accounting for stock options at their intrinsic value. Accordingly, no compensation expense has been recognized for its stock option compensation plans. To determine fair value under FAS 123, the Corporation used the Black-Scholes option-pricing model and the following respective weighted average assumptions for the three and nine months ended September 30, 2002 and 2003:

Had the fair value method of accounting been applied to the Corporation’s stock option plans utilizing the valuation method currently recognized, the impact would have been as follows:

On March 5, 2003, the Corporation’s Board of Directors authorized the repurchase of up to 500,000 shares of the Corporation’s common stock over the following two years. The repurchase is being funded using the Corporation’s working capital. During the nine months ended September 30, 2003, the Corporation repurchased 190,242 shares for $3,501,000. The Corporation did not repurchase any shares during the three months ended September 30, 2003.

The Corporation leases facilities and equipment under noncancelable operating leases that expire at various dates through 2024. Future minimum lease payments as of September 30, 2003 under operating leases were as follows (in thousands):

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements made in this Report on Form 10-Q are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, which generally are not historical in nature, and may contain the words “believe”, “anticipate”, “expect”, “estimate”, “project”, “will be”, “will continue”, “will likely result”, or similar words or phrases. Forward-looking statements in this Report on Form 10-Q include, among others, statements regarding:

	•		the anticipated growth of revenue and improvement in profit margins,

	•		the anticipated growth of revenue to exceed cost increases related to the Corporation’s U.S. manufacturing facility,

	•		the anticipated growth of revenue in connection with the integration of Q-One Biotech, which the Corporation acquired on September 23, 2003,

	•		the Corporation’s ability to use additional capacity in its manufacturing facilities, including those facilities acquired in connection with the acquisition of Q-One Biotech,

	•		the anticipated increase in selling, general and administrative expenses and the hiring of new employees,

	•		the Corporation’s ability to maintain selling, general and administrative expenses as a percentage of revenue near or below 20%,

	•		the Corporation’s ability to maintain research and development expenses and tax rates at constant levels,

	•		the Corporation’s ability to fund its operations, capital expenditures, and interest and principal payments on debt for 2003 with existing cash, cash flows from operations and its line of credit,

	•		the Corporation’s expansion plans.

Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. The risks and uncertainties are detailed from time to time in reports filed by BioReliance with the Securities and Exchange Commission, including in its Form 10-K filed on March 31, 2003.

The Corporation undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements since new risk factors emerge from time to time and it is not possible for management to predict all such risk factors, or to assess the impact of all such risk factors on the Corporation’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

The following discussion and analysis of the Corporation’s financial condition and results of operations should be read in conjunction with the Corporation’s consolidated financial statements and related notes thereto included elsewhere in this Form 10-Q.

The Corporation is a leading contract service organization providing, testing, development and manufacturing services for biologics and other biomedical products to pharmaceutical companies worldwide. The Corporation believes that it is the largest provider of outsourcing services focused on the expanding biologics sector of the pharmaceutical industry. During the quarter ended September 30, 2003, the Corporation continued to work with clients on the development of global multi-year arrangements, such as those announced in 2002. The Corporation also continued to contribute to bioterrorism defense through the work performed in both operating segments on the smallpox vaccine contracts. The Corporation believes that the services provided under some of its key relationships, the benefits that have been provided by what the Corporation believes is a growing market, and the increasing recognition of BioReliance as a service provider of choice continues to have a positive effect on the Corporation’s results of operations.

On September 23, 2003, the Corporation acquired Q-One Biotech, a privately-held company based in Glasgow, Scotland, pursuant to (i) a Share Purchase Agreement, dated August 12, 2003, among BioReliance Corporation, BioReliance (Glasgow) Limited and the sellers named therein (relating to the acquisition of shares of Q-One Biotech) and (ii) a Share Purchase Agreement, dated August 12, 2003, among BioReliance Corporation, BioReliance (Glasgow) Limited and the sellers named therein (relating to the acquisition of shares of Satron Management Services (Technology) Limited) (collectively, the “Share Purchase Agreements”). Q-One Biotech provides safety testing and process validation services and contract manufacturing to the biopharmaceutical industry. Q-One Biotech’s services have included safety testing of biopharmaceuticals, human blood products, vaccines, transgenics and gene therapy products. Q-One Biotech’s primary facilities are located in Glasgow, Scotland and Worcester, Massachusetts.

Under the terms of the Share Purchase Agreements, the Corporation purchased all of the outstanding capital stock of Q-One Biotech for an aggregate purchase price of approximately £42 million ($69.4 million) in cash, subject to post-closing adjustments and excluding transaction costs. Pending the determination of the post-closing adjustments, £1.5 million ($2.5 million) has been placed in escrow and is not included in the purchase allocation below.

For the three months ended September 30, 2003, the Corporation had revenue of $24.3 million, an increase of 13% over revenue of $21.6 million for the three months ended September 30, 2002. Earnings per share for the three months ended September 30, 2003 were $0.53 (diluted) compared with $0.36 (diluted) for the three months ended September 30, 2002.

For the nine months ended September 30, 2003, the Corporation had revenue of $68.6 million, an increase of 12% over revenue of $61.3 million for the nine months ended September 30, 2002. Earnings per share for the nine months ended September 30, 2003 were $1.15 (diluted) compared with $0.91 (diluted) for the nine months ended September 30, 2002.

Continuing increases in orders fueled revenue growth in both of the Corporation’s segments and both geographic regions for the three months and nine months ended September 30, 2003. The acquisition of Q-One Biotech also contributed to the increase in revenue by including five business days of activity into the Corporation’s consolidated results. These higher revenues also drove higher gross profits in both geographic regions for the three months and nine months ended September 30, 2003. Cost increases hampered gross margins in U.S. and U.K. testing and development while margins in other business units, particularly European manufacturing, improved due largely to the revenue growth. Although selling, general, and administrative costs increased, as a percentage of sales these costs decreased to 19% and 20% for the three months and nine months ended September 30, 2003, respectively, as a result of continued programs to control expenses. Income tax rates for the three months and nine months ended September 30, 2003 remained constant at 37%, in line with the Corporation’s historical rates.

The following table shows a comparison of revenue by operating segment for the three months and nine months ended September 30, 2002 and 2003:

The increase in testing and development revenue for the three months and nine months ended September 30, 2003 is due primarily to the continued increase in new orders, and, to a lesser extent, the revenue reported by Q-One Biotech. The new orders continue to include those arising from global arrangements with some of the Corporation’s major clients. The increase in U.K. testing and development revenue is primarily a result of the Q-One acquisition. This increase was partially offset by a decrease in other testing and development revenue in the U.K. for the three months ended September 30, 2003. European testing and development revenue continues to be impacted by client delays in some projects.

The increase in manufacturing revenue for the three and nine months ended September 30, 2003 represents increases in both the U.S. and Europe. European increases are attributable to increases in both U.K. and German facilities. Both European facilities benefited from increased orders and German revenue benefited from improvements in throughput efficiencies. The U.S. manufacturing revenue improvement was primarily due to an increase in revenue derived from the Corporation’s smallpox vaccine contract.

Approximately 25% and 24%, respectively, of the Corporation’s manufacturing revenue for the three months and nine months ended September 30, 2003 resulted from work performed under the Corporation’s smallpox vaccine contracts. Approximately 9% of the Corporation’s total revenue for the three months and nine months ended September 30, 2003 resulted from work performed under these smallpox vaccine contracts.

The following table shows a comparison of revenue by geographic region for the three months ended September 30, 2002 and 2003:

The increase in revenue generated in the United States for the three months and nine months ended September 30, 2003 resulted from increases in orders, which fueled increased revenue in both biologics testing and in toxicology services. As previously mentioned, U.S. manufacturing revenue increased for the three and nine months ended September 30, 2003. Revenue generated in the U.S. for the nine months ended September 30, 2002 includes an adjustment resulting in additional revenue of approximately $380,000 relating to long-term contracts.

The increase in revenue generated in Europe for the three months ended September 30, 2003 reflects an increase in revenue generated in the Corporation’s German facilities and the impact of revenue generated by Q-One Biotech discussed above. The increase in revenue generated in Europe for the nine months ended September 30, 2003 is the result of increases in revenue generated in both the Corporation’s U.K. and German facilities as a result of an increase in orders and the impact of the Q-One acquisition. The Corporation continues to benefit from increased penetration into the growing European biopharmaceutical market. As the German facility continues to run near capacity, revenue fluctuations in that facility are primarily attributable to incremental improvement in throughput efficiencies and different pricing structures among contracts.

The Corporation expects that testing and development revenue will continue to increase in both the U.S. and Europe in the foreseeable future, and that U.S. manufacturing revenue will increase with the Corporation’s commercial contracts, as well as with additional service offerings in the U.S. manufacturing facility. There can be no assurance that such expectations will prove to be correct. The Corporation expects European revenue to continue to grow more rapidly than revenue in the U.S. with the integration of Q-One Biotech, increased global capacity and more rapid growth of European markets than U.S. markets.

The following table compares gross profit and gross margin by operating segment for the three months and nine months ended September 30, 2002 and 2003:

The decrease in the testing and development gross margin for the three months ended September 30, 2003 is a result of decreased margins in both the U.S. and in Europe. The increased gross profit generated in the U.K. was partially offset by a decreased profit in the U.S. Increased costs primarily related to direct material and labor related costs in the U.S. and Europe and increased facilities costs also impacted gross profits in the U.S.

For the nine months ended September 30, 2003, gross margins decreased in both the U.S. and the U.K. resulting from a decrease in the gross profit generated by testing and development in the U.K., only partially offset by increases in the gross profit generated by U.S. testing and development. The gross profit was impacted by the increase in expenses discussed above.

Manufacturing gross margin for the three months and nine months ended September 30, 2003 improved, representing improvements in both the U.S. and Europe manufacturing. Gross profits in Europe increased and losses generated in the U.S. decreased for both the three months and nine months ended September 30, 2003. The throughput efficiencies and pricing structures mentioned earlier allowed European manufacturing revenues to grow at a much faster rate than cost of sales, thus resulting in increased margin. However, increased direct materials and labor related costs contributed to a decrease in U.S. manufacturing gross profit.

The following table compares gross profit and gross margin by geographic region for the three months and six months ended June 30, 2002 and 2003:

For the three months ended September 30, 2003 the decrease in U.S. gross margin resulted from a decrease in margins generated from testing and development partially offset by a decrease in the losses generated in U.S. manufacturing. U.S. margins were affected by the timing of higher margin work, the temporary interruption of the Lab animal health testing business driven by the cessation of simian serum imports for SARS infected regions, and the continued losses generated by U.S. manufacturing. Additionally, the decrease in margins was a result of the cost increases discussed above.

The decrease in U.S. gross margin for the nine months ended September 30, 2003 reflects a decrease in both U.S. manufacturing and U.S. testing and development margins. Testing and development gross profit decreased while the loss generated by U.S. manufacturing decreased. The decreased profit for testing and development was affected by the increased costs discussed above.

The decrease in European gross margins for the three and nine months ended September 30, 2003 is attributable to decreases outpacing in both the European testing and development and manufacturing margins. While increased cost of sales in Europe negatively impacted gross profit, European revenue increased at a much faster rate than its related cost of sales, thus significantly increasing gross profit in Europe. The U.S. testing and development business includes several units with relatively lower margins, which are not part of the U.K. testing and development business.

The Corporation expects future revenue growth to exceed cost increases related to its U.S. manufacturing facility, thereby improving gross margins. However, the build-out and validation of this facility has demanded and will continue to demand considerable time and resources, and there are high fixed costs related to the facility. This facility will likely constrain earnings for the Corporation at least for the foreseeable future. Management cannot predict when, if ever, the facility will generate profits.

The Corporation expects margins in the testing and development segment, both in the U.S. and Europe, to improve moderately with the integration of Q-One Biotech and the realization of economies of scale in the foreseeable future.

The following table shows a comparison of operating expenses, other than cost of sales, for the three months and nine months ended September 30, 2002 and 2003:

Selling, general and administrative (SG&A) expenses increased for the three months and nine months ended September 30, 2003 due primarily to increases in insurance, labor, and fringe costs. These increases were partially offset by a reduction in the Corporation’s bad debt expense and legal fees and the capitalization of internal costs for information systems implementation. SG&A expenses are expected to increase as the Corporation hires additional administrative staff, continues to integrate the operations of Q-One Biotech, implements additional applications and enhancements for its information systems and makes additional investments for technical sales support and marketing infrastructure, including investments for developing manufacturing business in the U.S.

As a percentage of revenue, SG&A expenses decreased slightly to 19% and 20% for the three months and nine months ended September 30, 2003 from 20% and 21% for the three months and nine months ended September 30, 2002. The decrease is principally attributable to increased revenues, continued programs to control expenses, and the successful integration of past enhancements and expansion in sales, marketing and information systems. The Corporation believes it can maintain SG&A as a percentage of revenue near or below 20% for the foreseeable future.

Research and development expenses represent the investment of internal resources to develop new methods and tests to support the Corporation’s services. These expenses have remained relatively constant as the Corporation continues to focus on the development of tests that can be delivered to clients in a relatively short period. The Corporation expects these expenses to remain near these levels for the foreseeable future.

The following table shows a comparison of other expenses (income) and income taxes for the three months and nine months ended September 30, 2002 and 2003:

The Corporation’s net other income was $1.6 million for the three months ended September 30, 2003 compared to net other expense of $65,000 for the three months ended September 30, 2002. For the nine months ended September 30, 2003, the Corporation recorded net other income of $1.6 million compared to net other expense of $120,000 for the nine months ended September 30, 2002. These changes were primarily due to foreign currency translation gains. Other income for the three and nine months ended September 30, 2003 includes $1.9 million related to a change in the U.S. dollar immediately following the acquisition of Q-One Biotech. The Corporation has recently established currency hedge positions that reduce or largely eliminate its exposure to further gain and losses of this magnitude.

For the three months and nine months ended September 30, 2003, the income tax rate remained constant and is in line with the Corporation’s long-term historical rates, excluding 2001. The Corporation expects tax rates to remain at current levels for the remainder of 2003 and into the foreseeable future. However, since the Corporation has international operations in jurisdictions with different rates, its effective tax rate may vary from quarter to quarter due to changes in the distribution of its pre-tax earnings, among other factors.

The Corporation has funded its business through existing cash, cash flows from operations, long-term bank loans and capital leases. At September 30, 2003, the Corporation had unrestricted cash and cash equivalents of $17.1 million, compared to $37.7 million at December 31, 2002. The reduction is the result of funds used for the acquisition of Q-One Biotech.

The Corporation generated cash flows from operations of $10.2 million for the nine months ended September 30, 2003, compared to $12.4 million for the nine months ended September 30, 2002.

Changes in current assets and liabilities used cash of $2.7 million for the nine months ended September 30, 2003 primarily due to an increase in other current assets and reduction in customer advances and accrued compensation and benefits, partially offset by an increase in accounts payable and a decrease in accounts receivable. Those changes are, to a degree, seasonal in nature. Changes in current assets and liabilities used cash of $0.3 million for the nine months ended September 30, 2002 primarily due to an increase in other current assets and decreases in accrued employee compensation and benefits and accounts payable, partially offset an increase in other accrued liabilities.

The Corporation used $3.5 million of cash for the nine months ended September 30, 2003 to repurchase 190,242 shares of its common stock, which the Corporation now holds as treasury stock under a stock repurchase program. The Corporation implemented this repurchase program in March 2003 and may repurchase up to 500,000 shares over two years. These shares are available for reissuance in connection with any lawful purposes. There were no such repurchases during the nine months ended September 30, 2002.

Working capital decreased to $15.1 million at September 30, 2003 from $42.2 million at December 31, 2002 as a result of a decrease in current assets and an increase in current liabilities. The decrease in current assets was due to a decrease in cash partially offset by other changes. The increase in current liabilities was primarily a result of an increase in the current portion of long-term debt.

The Corporation believes that its existing cash and cash equivalents of $17.1 million at September 30, 2003, cash flows from operations, and available borrowings under new credit agreement will provide sufficient liquidity to meet the Corporation’s operating plan, planned capital expenditures, and interest and principal payments on the Corporation’s debt for 2003 and the foreseeable future.

A decrease in demand for the Corporation’s services could reduce operating cash flows, but would also decrease the need for any capital expansion. The key factors that could affect the Corporation’s sources of cash include the following:

	•		the Corporation’s ability to generate orders for new contracts;

	•		the Corporation’s ability to successfully integrate the operations of Q-One Biotech;

	•		the ability of the Corporation to utilize its facilities, particularly the U.S. manufacturing facility;

	•		the size and growth of the overall markets for biopharmaceuticals;

	•		the economies in the U.S. and Europe; and,

	•		the required interest and principal payments due under the Corporation’s loan agreements.

These and other factors are more fully described in the “Risk Factors” section in the Corporation’s Form 10-K filed on March 31, 2003. Additionally, a significant deterioration in the Corporation’s financial performance and ratios could accelerate the maturity of principal outstanding under the Corporation’s loans.

The Corporation leases facilities and equipment under operating leases that expire at various dates through 2024. As of September 30, 2003, the Corporation is required to make future noncancelable lease payments totaling approximately $34.0 million under these leases.

The Corporation’s U.S. manufacturing facility in Rockville, Maryland has been operational since late 2000. The Corporation leases this facility under three capital leases that require it to make net noncancelable lease payments totaling approximately $9.3 million through 2034. The Corporation has also guaranteed indebtedness related to the construction of this facility of approximately $4.0 million at September 30, 2003. A portion of the lease payments is equivalent to the interest and principal due on the indebtedness.

Under an interest rate swap with respect to one of these capital leases, the variable interest rate portion of the indebtedness was effectively converted into debt with a fixed rate of 6.14% per annum. This swap expires on November 1, 2009. Amounts paid or received under the interest rate swap are recognized as interest income or expense in the periods in which they accrued and are recorded in the same category as that arising from the indebtedness. As a result of a decrease in the variable interest rate, for the three months and nine months ended September 30, 2003, the Corporation recorded $54,000 and $159,000, respectively, of additional interest expense related to this interest rate swap. For the three and nine months ended September 30, 2002, the Corporation recorded additional interest expense of $47,000 and $144,000, respectively. In accordance with the Statement of Financial Accounting Standard (FAS) 133, the Corporation adjusted the liability for the change in the fair value of this swap from $653,000 at December 31, 2002 to $608,000 at September 30, 2003. The corresponding amount is reflected in other comprehensive income, as the Corporation has met the criteria of FAS 133 to record the contract as a cash flow hedge. This hedge will be extinguished with the lease obligation to which it pertains.

The Corporation accounts for the leases and subleases of its U.S. manufacturing facility as capital leases. The assets underlying the capital leases are included with the Corporation’s owned property and equipment at September 30, 2003. Property and equipment, net of accumulated depreciation and amortization, at September 30, 2003 included approximately $6.9 million related to these capital leases. The related obligation of $6.2 million is included in the Corporation’s liabilities at September 30, 2003.

The Corporation also leases land for one of its facilities and certain office equipment under terms that require the leases to be accounted for as capital leases. At September 30, 2003, property and equipment, net of accumulated depreciation and amortization, included $2.0 million related to these capital leases. The related lease obligation of $0.4 million is included in the Corporation’s liabilities at September 30, 2003.

The Corporation entered into a Credit Agreement, dated August 12, 2003, with the Corporation and BioReliance (Glasgow) Ltd. as borrowers, certain subsidiaries of the Corporation as guarantors, Bank of America, N.A. as administrative agent, security trustee and letter of credit issuer, the lenders party thereto, and Banc of America Securities LLC as the sole lead arranger and sole book manager (the “Credit Agreement”), under the credit agreement, the Corporation may borrow up to $60 million for general corporate purposes, including working capital and capital expenditures, refinance existing indebtedness and finance the acquisition of Q-One Biotech. The credit facility consists of a $15 million revolving credit facility, a $35 million domestic term loan and a $10 million foreign term loan. The Corporation borrowed approximately $48.2 million to fund a portion of the purchase price paid in the Q-One Biotech acquisition, including a $3.2 million revolving loan and $45.0 million in term loans. Final

amounts due under the revolving credit facility will become due and payable in full on September 30, 2006. The Corporation is required to make quarterly payments under the term loans beginning on December 31, 2003. Amounts due under the term loans will become due and payable in full on September 30, 2008.

The credit facility includes negative covenants including, among others, those restricting the Corporation’s ability to incur liens on its assets, pay dividends, make investments, and incur additional indebtedness. The credit facility also contains customary financial covenants including, among others, those that require the Corporation to maintain a maximum leverage ratio, a minimum fixed charge coverage ratio and a minimum net worth. The credit facility includes customary events of default including, among other things, the Corporation’s failure to pay the principal or interest of any loan or letter of credit under the credit facility, a default or event of default of any other agreement involving indebtedness, insolvency by the Corporation or any of its subsidiaries, and change in control of the Corporation (as defined in the Credit Agreement). Specifically the Corporation is required to:

	•		Maintain consolidated net worth of at least the sum of (i) 85% of consolidated net worth of the consolidated group as of the initial funding date (after giving proforma effect to the acquisition of Q-One Biotech), plus (ii) as of the end of each quarter of the Corporation, commencing with the quarter ending December 31, 2003, an amount equal to 75% of Consolidated Net Income (but not less than zero) for such quarter, such increases to be cumulative, plus an amount equal to 100% of the net cash proceeds from all equity transactions after the closing date.

	•		Maintain a consolidated leverage ratio (the ratio of consolidated funded debt to consolidated EBITDA) as of the end of any quarter of the Corporation of no greater than 2.50 to 1.00. Consolidated funded debt excludes funded debt relating to the Loan Notes. EBITDA is defined as consolidated net income, interest expense, income taxes, depreciation and amortization, and non-cash expense for stock options. EBITDA will be calculated based on the four previous consecutive quarters.

	•		Maintain a consolidated fixed charge coverage ratio (ratio of the sum of consolidated EBITDAR less cash taxes paid, less consolidated capital expenditures to consolidated fixed charges) as of the end of any quarter of the Corporation of at least 1.25 to 1.00. Consolidated fixed charges are defined as the sum of the cash portion of consolidated interest expense, rent and lease expense, consolidated scheduled funded debt payments, and dividends and other distributions paid on the Corporation's capital stock. Consolidated EBITDAR is EBITDA plus rent and lease expense. EBITDAR and consolidated fixed charges will be calculated based on the four previous quarters.

Interest on the credit facility is calculated using the applicable Euro Current Rate of Base Rate plus an Applicable Rate Adjustment (the Rate Adjustment). The Rate Adjustment is variable based on the ratio of total funded debt under the facility to the Corporation’s EBITDA. This ratio will be calculated and reported to the lenders quarterly. Interest at September 30, 2003 was 4.63%, which rate includes a 3.5% Rate Adjustment.

In connection with the purchase, the Corporation issued Floating Rate Guaranteed unsecured Loan Notes in the amount of £6,182,974 ($10,290,324 at September 30, 2003) to a former shareholder of Q-One Biotech. The loan notes mature on September 23, 2006.

In consideration for Clydesdale Bank’s guarantee, the Corporation deposited an amount equal to the principal amount of the Loan Notes with Clydesdale Bank. Amounts outstanding on the Loan Notes accrue interest in an amount equal to the interest the Corporation earns on the cash deposited in Clydesdale Bank. The cash is recorded as restricted cash on the Corporation’s balance sheet as of September 30, 2003.

The Corporation entered into a Security Agreement, on September 22, 2003, whereby the Corporation, and certain of its subsidiaries have granted a security interest in all personal property currently owned or subsequently acquired to Bank of America, N.A. as administrative agent for the lenders as security for their obligations under the Credit Agreement.

The Corporation entered into a Pledge Agreement on September 22, 2003, whereby the Corporation, and certain of its subsidiaries have granted a security interest in (1) 100% of the capital stock of each domestic subsidiary of the Corporation, (2) 65% of the issued and outstanding shares of capital stock entitled to vote of each foreign subsidiary and (3) 100% of the issued and outstanding Capital Stock not entitled to vote of each foreign subsidiary of the Corporation to Bank of America, N.A. as administrative agent for the lenders as security for their obligations under the Credit Agreement.

The Corporation has a mortgage loan of $4.3 million from Bank of America with a maturity date of November 30, 2009 that was used to finance the construction of one of its facilities in Rockville, Maryland. In addition to a principal payment of $10,576 per month, the mortgage loan bears interest at the London Inter-Bank Offering Rate (LIBOR) plus the applicable LIBOR Rate Additional Percentage (LIBOR Rate Option). The LIBOR Rate Option ranges from 1.0% to 2.15% depending on the Corporation achieving certain funded debt to EBITDA ratios. At September 30, 2003, the applicable interest rate on the mortgage loan was 1.12% and the LIBOR Rate Option was 1.40%. At September 30, 2003, approximately $2.1 million was outstanding on the mortgage loan.

Under an interest rate swap, the variable interest rate portion of the mortgage loan was effectively converted into debt with a fixed rate of 6.14% per annum. This swap expires November 1, 2009. Amounts paid or received under the interest rate swap are recognized as interest income or expensed in the periods in which they accrued and are recorded in the same category as that arising from the mortgage loan. As a result of a decrease in the variable interest rate, for the three months and nine months ended September 30, 2003, the Corporation recorded $26,000 and $78,000, respectively, of additional interest expense related to the interest rate swap. For the three and nine months ended September 30, 2002, the Corporation recorded additional interest expense of $24,000 and $73,000, respectively. In accordance with FAS 133, the Corporation adjusted the liability for the change in the fair value of this swap from $306,000 at December 31, 2002 to $280,000 at September 30, 2003. The corresponding amount is reflected in other comprehensive income, as the Corporation has met the criteria of FAS 133 to record the contract as a cash flow hedge. This hedge will be extinguished with the mortgage loan to which it pertains.

The Corporation’s mortgage loan and the guaranteed indebtedness related to the construction of the U.S. manufacturing facilities are cross collateralized and are secured by a deed of trust on one of the Corporation’s laboratory facilities in Rockville, Maryland. The agreements require the Corporation to

comply with financial and restrictive covenants, including fixed charge coverage and funded debt to EBITDA ratios. Specifically, the Corporation is required to:

	•		Maintain a ratio of total funded indebtedness to EBITDA not greater than 3.50 to 1.00 as of the end of each fiscal quarter, calculated on the preceding four-quarter period. EBITDA is defined as earnings before interest, taxes, depreciation and amortization.

	•		Maintain a fixed charge coverage ratio as of the end of each quarter of at least 1.25 to 1.00. This ratio is determined by dividing EBITDA by the sum of interest expense and current maturities of long-term debt and capital leases.

The Corporation has a $3.0 million loan from the Department of Business and Economic Development, a department of the State of Maryland. The Corporation is required to use the proceeds to expand and relocate its activities in Rockville, Maryland. The loan requires quarterly principal payments of $107,143 plus accrued interest and matures on June 30, 2006. The loan bears interest at rates from 0.0% to 7.5% based on the Corporation’s achieving specific employment levels through 2005. The current interest rate is 0.0%. The terms of the loan contain annual reporting requirements, including the reporting of employment data. At September 30, 2003, approximately $1.2 million was outstanding on the loan.

At September 30, 2003, the Corporation was in compliance with all covenants under its loan agreements.

During the nine months ended September 30, 2003 and 2002, the Corporation invested $8.7 million and $5.0 million, respectively, for capital expenditures. These capital expenditures were primarily for leasehold improvements, investments in information systems and investments in new equipment.

Estimated capital expenditures for the remainder of 2003 include capacity expansions in newly acquired U.S. testing and development operations and U.K. manufacturing operations. The Corporation’s plans also include additional investments in information systems, as well as in normal equipment replacements.

The Corporation expects to fund its growth and its planned capital expenditures from existing cash and cash flows from operations, but may also enter into arrangements for bank borrowings and leases or other financing from third party sources, to the extent that funds are available on favorable terms and conditions. While the Corporation remains confident that expansion of its capacity will contribute to growth, there can be no assurance that such expansion will be fully utilized or that funding for the plans will meet with the Corporation’s expectations.

Although the Corporation has no final agreements or arrangements in place with respect to any future acquisition, there may be acquisition or other growth opportunities and the Corporation may, from time to time, seek to obtain funds from public or private issuances of equity or debt securities on a strategic basis. There can be no assurances that such financing will be available on terms acceptable to the Corporation.

The accounts of the Corporation’s international subsidiaries are measured using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated into United States dollars at period-end exchange rates, and revenue and expense accounts are translated at average monthly exchange rates. Net exchange gains and losses resulting from these translations are excluded from net income and are accumulated in a separate component of stockholders’ equity. Transaction gains and losses that arise from some intercompany transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. For the three months and nine months ended September 30, 2003, the Corporation recorded $1.7 million of foreign currency transaction gains arising from a change in the value of the dollar since the acquisition of Q-One Biotech. The Corporation recorded $13,000 and $0.7 million in net translation exchange gains for the three months and nine months ended September 30, 2003, respectively, compared to $0.1 million and $0.7 million for the three months and nine months ended September 30, 2002, respectively. In November 2003, the Corporation entered into a cross-currency interest rate swap whereby the $8.0 million of the foreign term loan and its variable interest rate portion was effectively converted into a fixed rate United Kingdom Pound Sterling note with a fixed rate of 5.30% per annum. The swap expires in September 2008.

Since the revenues and expenses of the Corporation’s international operations generally are denominated in local currencies, exchange rate fluctuations between such local currencies and the United States dollar will subject the Corporation to currency translation risk with respect to the reported results of its international operations as well as to other risks sometimes associated with international operations. The Corporation derived 21% and 20% of its revenue for the three months ended September 30, 2003 and 2002, respectively, and 20% and 18% of its revenue for the nine months ended September 30, 2003 and 2002, respectively from services performed in the United Kingdom and Germany. The Corporation expects that the percentage of revenues derived outside the United States will increase in the fourth quarter of 2003 and in 2004 as a result of its acquisition of Q-One Biotech. In addition, the Corporation may be subject to currency risk when the Corporation’s service contracts are denominated in a currency other than the currency in which the Corporation incurs expenses related to such contracts.

The Corporation may experience fluctuations in financial results from the Corporation’s operations outside the United States, and the Corporation may not be able, contractually or otherwise, to reduce the currency risks associated with its operations. At the present time, the Corporation uses a cross-currency interest rate swap to manage or control foreign currency with respect to $8.0 million of its $10.0 million foreign term loan. While the Corporation may use additional financial instruments in the future, these financial instruments may not be successful in managing or controlling foreign currency risk.

The Corporation is exposed to credit market risk from adverse changes in interest rates and foreign currency exchange rates.

The Corporation is exposed to interest rate risk primarily through its investments in cash equivalents. The Corporation’s investment policy stipulates investment in short-term, low-risk instruments. At September 30, 2003, the Corporation had $17.1 million in cash and cash equivalents. If interest rates fall, floating rate securities may generate less interest income. The Corporation does not believe that it is exposed to any material interest rate risk as a result of its investments in cash equivalents.

At September 30, 2003, the Corporation had total debt of $69.2 million, most of which bore interest at a variable interest rate. In November 2003, the Corporation entered into interest rate swaps to convert the variable interest rate into a fixed rate for $28.0 million of the domestic loan and, separately, entered into a cross-currency interest rate swap to convert the variable interest rate into a fixed rate for $8.0 million of the $10.0 million foreign term loan.

The Corporation’s international operations are subject to foreign exchange rate fluctuations. The Corporation derived 21% and 20% of its revenue for the three and nine months ended September 30, 2003, respectively, from services performed in the United Kingdom and Germany. The Corporation has not hedged its foreign currency exposure to date except for the cross-currency interest rate swap discussed above. Management expects that the Corporation’s exposure to foreign currency rate fluctuations will increase with the consideration of Q-One Biotech’s results. See “Foreign Currency” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a more detailed discussion of our foreign currency risks and exposures.

The Corporation’s Chief Executive Officer and Chief Financial Officer evaluated the Corporation’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2003, the Corporation’s disclosure controls and procedures were (1) designed to ensure that material information relating to the Corporation, including its consolidated subsidiaries, is made known to the Corporation’s Chief Executive Officer and Chief Financial Officer by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that the information required to be disclosed by the Corporation in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

As of September 30, 2003, the Corporation had used approximately $32.2 million of the net proceeds from its initial public offering toward planning and construction for manufacturing expansion, purchases of laboratory equipment and information systems hardware and software, debt repayments and the acquisition of Q-One Biotech. The Corporation has now used all of its net proceeds from its initial public offerings.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

John L. Coker
Senior Vice President, Finance and Administration,
Chief Financial Officer, Treasurer and Secretary
(Principal Financial and Accounting Officer)

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this “Agreement”), and the parties would not otherwise enter into any Transactions.

(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement.

(ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement.

(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement.

(b) Change of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries.

      (i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless
          such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue
          authority, then in effect. If a party is so required to deduct or withhold, then that party (“X”) will:—

(2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;

(3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and

(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:—

(A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

(B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law.

(1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.

Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:—

(i) Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing;

(ii) Powers. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance;

(iii) No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

(iv) Consents. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and

(v) Obligations Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

(b) Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true.

Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party: —

(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs: —

(i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;

(iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.

(c) Comply with Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated,

organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an “Event of Default”) with respect to such party: —

(i) Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party;

(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party;

(1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed;

(2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or

(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document;

(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated;

(v) Default under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf);

(vi) Cross Default. If “Cross Default” is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however

described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or

(viii) Merger Without Assumption. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—

(1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or

(2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event

Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:—

(i) Illegality. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):—

(1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or

(2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction;

(ii) Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii);

(iv) Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

(v) Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default.

(a) Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(i) Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require.

(ii) Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist.

If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party’s policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed.

(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event.

(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or

(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then

continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions.

(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing.

(ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

(i) Statement. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation.

(ii) Payment Date. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs. the following provisions shall apply based on the parties’ election in the Schedule of a payment measure, either “Market Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off.

(i) Events of Default. If the Early Termination Date results from an Event of Default:—

(1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.

(2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in respect of this Agreement.

(3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the

Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party.

(ii) Termination Events. If the Early Termination Date results from a Termination Event:—

(1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions.

(A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount (“X”) and the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and

(B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because “Automatic Early Termination” applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv) Pre-Estimate. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses.

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:—

(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into this Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term “rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency.

(c ) Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made.

(a) Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

(i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

(ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement.

(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into.

(b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation.

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document

to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection.

(a) Effectiveness. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:—

(i) if in writing and delivered in person or by courier, on the date it is delivered;

(iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender’s facsimile machine);

(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or

(v) if sent by electronic messaging system, on the date that electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it.

(a) Governing Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement (“Proceedings”), each party irrevocably:—

(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and

(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any

reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law.

(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, “control” of any entity or person means ownership of a majority of the voting power of the entity or person.

(a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and(d) in all other cases, the Termination Rate.

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent.

“Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the “Replacement Transaction”) that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have

been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.

“Non-default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount.

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default.

“Reference Market-makers” means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction.

“Set-off” means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and

(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result.

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market

value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document.

BANK OF AMERICA, N.A.
(“Party A”)
and
BIORELIANCE (GLASGOW) LIMITED
(“Party B”)


(a)		*“Specified Entity”* means in relation to Party A for the purpose of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(iv):

		None;

		*“Specified Entity”* means in relation to Party B for the purpose of Sections 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(iv):

		Any Affiliate of Party B.

(b)		*“Specified Transaction”* will have the meaning specified in Section 14 but shall also include any transaction with respect to the forward sale or delivery of any security.

(c)		The *“Cross-Default”* provisions of Section 5(a)(vi) (as amended in Part 5(i)) will apply to Party A and will apply to Party B.

In connection therewith, “Specified Indebtedness” will not have the meaning specified in Section 14, and such definition shall be replaced by the following: “any obligation in respect of the payment of moneys (whether present or future, contingent or otherwise, as principal or surety or otherwise), except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business.”

“Threshold Amount” means with respect to Party A an amount equal to three percent (3%) of the Shareholders’ Equity of Bank of America Corporation and with respect to Party B, $1,000,000.

With respect to Party B, any default (howsoever defined) under the Credit Agreement shall be an Event of Default under this Agreement.

“Credit Agreement” means the Credit Agreement dated as of August 12, 2003 among BioReliance Corporation and BioReliance (Glasgow) Limited, as Borrowers, the Guarantors, as defined therein, the Lenders, party thereto, and Bank of America, N.A., as Administrative Agent, Security Trustee and L/C Issuer, (as amended, restated, extended, supplemented or otherwise modified in writing from time to time).

“Shareholders’ Equity” means with respect to an entity, at any time, the sum (as shown in the most recent annual audited financial statements of such entity) of (i) its capital stock (including preferred stock) outstanding, taken at par value, (ii) its capital surplus and (iii) its retained earnings, minus (iv) treasury stock, each to be determined in accordance with generally accepted accounting principles.


(a)		*Payer Tax Representations.* For the purpose of Section 3(e) of this Agreement, Party A and Party B will make the following representation:-

		It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (x) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (y) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other


		party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (z) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (y) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b)		*Payee Tax Representations.* For the purpose of Section 3(f) of this Agreement, Party A and Party B will make the following representations specified below, if any:-

Party A is a national banking association created or organized under the laws of the United States of America and the federal taxpayer identification number is 94-1687665.

Party B is a private limited company created or organized under the laws of the Scotland and the federal taxpayer identification number is .

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents:


Party required to		Date by	Covered by Section
deliver document	Form/Document/Certificate	which to be delivered	3(d) Representation

Party A	Annual Report of Bank of	To be made available	Yes
	America Corporation	on
	containing audited,	www.bankofamerica.com
	consolidated financial	/investor/ as soon
	statements certified by	as available and in
	independent certified	any event within 120
	public accountants and	days after the end
	prepared in accordance	of each fiscal year
	with generally accepted	of Party A
	accounting principles in
	the country in which
	such party is organized

Party B	Annual Report of Party B	As soon as available	Yes
	and of any Credit	and in any event
	Support Provider thereof	within 90 days after
	containing audited,	the end of each
	consolidated financial	fiscal year of Party
	statements certified by	B and of the Credit
	independent certified	Support Provider
	public accountants and
	prepared in accordance
	with generally accepted
	accounting principles in
	the country in which
	such party and such
	Credit Support Provider
	is organized

Party A	Quarterly Financial	To be made available	Yes
	Statements of Bank of	on
	America Corporation	www.bankofamerica.com
	thereof containing	/investor/ as soon
	unaudited, consolidated	as available and in
	financial statements of	any event within 120
	such party's fiscal	days after the end
	quarter prepared in	of each fiscal year
	accordance with	of Party A
	generally accepted
	accounting principles in
	the country in which
	such party is organized


Party required to		Date by	Covered by Section
deliver document	Form/Document/Certificate	which to be delivered	3(d) Representation

Party B	Quarterly Financial	As soon as available	Yes
	Statements of Party B	and in any event
	and any Credit Support	within 30 days after
	Provider thereof	the end of each
	containing unaudited,	fiscal quarter of
	consolidated financial	Party B and of the
	statements of such	Credit Support
	party's fiscal quarter	Provider
	prepared in accordance
	with generally accepted
	accounting principles in
	the country in which
	such party and such
	Credit Support Provider
	is organized

Party A and Party B	Certified copies of all	Upon execution and	Yes
	corporate or partnership	delivery of this
	authorizations, as the	Agreement
	case may be, and any
	other documents with
	respect to the
	execution, delivery and
	performance of this
	Agreement and any Credit
	Support Document

Party A and Party B	Certificate of authority	Upon execution and	Yes
	and specimen signatures	delivery of this
	of individuals executing	Agreement and
	this Agreement any	thereafter upon
	Credit Support Document	request of the other
	and Confirmations	party


		with a copy to:

		Bank of America, N.A.
		100 N. Tryon St., NC1-007-13-01
		Charlotte, North Carolina 28255
		Attention: Capital Markets Documentation
		Facsimile: 704-386-4113

		Financial Statements for Party A must be sent to:-

		Bank of America, N.A.
		1101 Wootton Parkway
		Rockville, MD 20852
		Attention: Liz Shore, Senior Vice President
		Telephone: 301-517-3129
		Facsimile: 301-517-3120

		Address for notice or communications to Party B:

		BioReliance (Glasgow) Limited
		14920 Broschart Road
		Rockville, MD 20850-3349
		Attention: John Coker, Chief Financial Officer
		Telephone No.: (301) 610-2606
		Facsimile No.: (301) 251-0437


(b)		*Process Agent.* For the purpose of Section 13(c):

		Party A appoints as its Process Agent: Not applicable.

		Party B appoints as its Process Agent: Not applicable.

*(c)*		*Offices.* The provisions of Section 10(a) will apply to this Agreement.

(d)		*Multibranch Party.* For the purpose of Section 10 of this Agreement:-

		Party A is a Multibranch Party and may act through its Charlotte, North Carolina, Chicago, Illinois, San Francisco, California, New York, New York or London, England Office, or such other Office as may be agreed to by the parties in connection with a Transaction.

		Party B is not a Multibranch Party.

(e)		*Calculation Agent.* The Calculation Agent is Party A.

(f)		*Credit Support Document.* Details of any Credit Support Document:-

		Each of the following, as amended, supplemented, modified, renewed, replaced, consolidated, substituted or extended from time to time, is a “Credit Support Document”:

		In relation to Party B,

		the Collateral Documents, and the Guaranty, as such terms are defined in the Credit Agreement.


		Party B agrees that the security interests in collateral granted to Party A under the foregoing Credit Support Documents shall secure the obligations of Party B to Party A under this Agreement.

(g)		*Credit Support Provider.*

		Credit Support Provider means in relation to Party A:

		Not applicable.

		Credit Support Provider means in relation to Party B:

		Guarantors, as defined in the Credit Agreement.

(h)		*Governing Law.* This Agreement will be governed by and construed in accordance with the laws of the State of New York (without reference to its conflict of laws doctrine).

(i)		*Netting of Payments.* All amounts payable on the same date, in the same currency and in respect of the same Transaction shall be netted in accordance with Section 2(c) of this Agreement. The election contained in the last paragraph of Section 2(c) of this Agreement shall not apply for the purposes of this Agreement.

(j)		*“Affiliate”* will have the meaning specified in Section 14 of this Agreement.


(a)		*Set-off.* Any amount (the “Early Termination Amount”) payable to one party (the Payee) by the other party (the Payer) under Section 6(e), in circumstances where there is a Defaulting Party or one Affected Party in the case where a Termination Event under Section 5(b)(iv) or (v) has occurred, will, at the option of the party (“X”) other than the Defaulting Party or the Affected Party (and without prior notice to the Defaulting Party or the Affected Party), be reduced by its set-off against any amount(s) (the “Other Agreement Amount”) payable (whether at such time or in the future or upon the occurrence of a contingency) by the Payee to the Payer (irrespective of the currency, place of payment or booking office of the obligation) under any other agreement(s) between the Payee and the Payer or instrument(s) or undertaking(s) issued or executed by one party to, or in favor of, the other party (and the Other Agreement Amount will be discharged promptly and in all respects to the extent it is so set-off). X will give notice to the other party of any set-off effected under this Part 5(a).

		For this purpose, either the Early Termination Amount or the Other Agreement Amount (or the relevant portion of such amounts) may be converted by X into the currency in which the other is denominated at the rate of exchange at which such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.


		If an obligation is unascertained, X may in good faith estimate that obligation and set-off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained.

		Nothing in this Part 5(a) shall be effective to create a charge or other security interest. This Part 5(a) shall be without prejudice and in addition to any right of set-off, combination of accounts, lien or other right to which any party is at any time otherwise entitled (whether by operation of law, contract or otherwise).

(b)		*Delivery of Confirmations.* For each Transaction entered into hereunder, Party A shall promptly send to Party B a Confirmation via facsimile transmission. Party B agrees to respond to such Confirmation within two (2) Local Business Days, either confirming agreement thereto or requesting a correction of any error(s) contained therein. Failure by Party A to send a Confirmation or of Party B to respond within such period shall not affect the validity or enforceability of such Transaction. Absent manifest error, there shall be a presumption that the terms contained in such Confirmation are the terms of the Transaction.

(c)		*Recording of Conversations.* Each party to this Agreement acknowledges and agrees to the tape recording of conversations between trading and marketing personnel of the parties to this Agreement whether by one or other or both of the parties or their agents, and that any such tape recordings may be submitted in evidence in any Proceedings relating to the Agreement.

(d)		*Furnishing Specified Information.* Section 4(a)(iii) is hereby amended by inserting “promptly upon the earlier of (i)” in lieu of the word “upon” at the beginning thereof and inserting “or (ii) such party learning that the form or document is required” before the word “any” on the first line thereof.

(e)		*Notice by Facsimile Transmission.* Section 12(a) is hereby amended by deleting the parenthetical “(except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system)”.

(f)		Section 3(a) of this Agreement is amended by (i) deleting the word “and” at the end of clause (iv); (ii) deleting the period at the end of clause (v) and inserting therein “; and “ ; and (iii) by inserting the following additional representation:

“(vi) Eligible Contract Participant. Each party represents to the other party (which representation will be deemed to be repeated by each party on each date on which a Transaction is entered into) that it is an “eligible contract participant” as defined in Section 1a(12) of the U.S. Commodity Exchange Act, 7 U.S.C. Section 1a(12).”

(i) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. Further, such party has not received from the other party any assurance or guarantee as to the expected results of that Transaction.

(ii) Evaluation and Understanding.It is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the financial and other risks of that Transaction.

(iii) Status of Parties.The other party is not acting as an agent, fiduciary or advisor for it in respect of that Transaction.”

“provided, however, that notwithstanding the foregoing (but subject to any provision to the contrary contained in any such agreement or instrument), an Event of Default shall not occur under either (1) or (2) above if the default, event of default or other similar condition or event referred to in (1) or the failure to pay referred to in (2) is caused not (even in part) by the unavailability of funds but is caused solely due to a technical or administrative error which has been remedied within three Local Business Days after notice of such failure is given to the party.”


(j)		*Incorporation by Reference of Terms of Credit Agreement.* The covenants, terms and provisions of, including all representations and warranties of Party B contained in the Credit Agreement, as in effect as of the date of this Agreement, are hereby incorporated by reference in, and made part of, this Agreement to the same extent as if such covenants, terms, and provisions were set forth in full herein. Party B hereby agrees that, during the period commencing with the date of this Agreement through and including such date on which all of Party B’s obligations under this Agreement are fully performed, Party B will (a) observe, perform, and fulfill each and every such covenant, term, and provision applicable to Party B, as such covenants, terms, and provisions, may be amended from time to time after the date of this Agreement with the consent of Party A and (b) deliver to Party A at the address for notices to Party A provided in Part 4 each notice, document, certificate or other writing as Party B is obligated to furnish to any other party to the Credit Agreement. In the event the Credit Agreement terminates or becomes no longer binding on Party B prior to the termination of this Agreement, such covenants, terms,

1.		I have reviewed this report on Form 10-Q of BioReliance Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated Subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		[Omitted pursuant to SEC Release No. 33-8238];

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)		All significant deficiencies(s) and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

1.		I have reviewed this report on Form 10-Q of BioReliance Corporation;

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

	a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated Subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		[Omitted pursuant to SEC Release No. 33-8238];

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

	a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

/s/ John L. Coker
John L. Coker
Senior Vice President, Finance and Administration,
Chief Financial Officer, Secretary and Treasurer

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002

I, Capers W. McDonald, President and Chief Executive Officer of BioReliance Corporation (the Corporation), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that:

(1) the Quarterly Report on Form 10-Q of the Corporation for the period ended September 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Capers W. McDonald
Capers W. McDonald
President and Chief Executive Officer
November 14, 2003

Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of the Sarbanes-Oxley Act of 2002

I, John L. Coker, Vice President, Finance and Administration and Chief Financial Officer of BioReliance Corporation (the Corporation), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1350, that:

(1) the Quarterly Report on Form 10-Q of the Corporation for the period September 30, 2003, as filed with the Securities and Exchange Commission on the date hereof (the Report), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ John L. Coker
John L. Coker
Senior Vice President, Finance and Administration,
Chief Financial Officer, Secretary and Treasurer
November 14, 2003

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Delaware (State or other jurisdiction of incorporation or organization)		52-1541583 (I.R.S. Employer Identification No.)

14920 Broschart Road Rockville, Maryland (Address of principal executive offices)		20850 (Zip code)


			Page
			Number

PART I	FINANCIAL INFORMATION
	Item 1 — Financial Statements:
		Consolidated Balance Sheets as of December 31, 2002 and September 30, 2003 (Unaudited)		3
		Consolidated (Unaudited) Statements of Income for the Three and Nine Months Ended September 30, 2002 and 2003		4
		Consolidated (Unaudited) Statements of Cash Flows for the Three and Nine Months Ended September 30, 2002 and 2003		5
		Notes to Consolidated (Unaudited) Financial Statements		6
	Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			13
	Item 3 — Quantitative and Qualitative Disclosures About Market Risks			28
	Item 4 — Controls and Procedures			29
PART II	OTHER INFORMATION
	Item 1 — Legal Proceedings			30
	Item 2 — Changes in Securities and Use of Proceeds			30
	Item 3 — Defaults upon Senior Securities			30
	Item 4 — Submission of Matters to Vote of Security Holders			30
	Item 5 — Other Information			30
	Item 6 — Exhibits and Reports on Form 8-K			31
SIGNATURES				32
EXHIBIT INDEX				33


						September 30,
			December 31,			2003
			2002			(Unaudited)

Assets
Current assets:
	Cash and cash equivalents		$	37,739		$	17,081
	Accounts receivable, net			24,704			27,624
	Other current assets			2,988			7,231

		Total current assets		65,431			51,936
Property and equipment, net				41,148			53,143
Deposits and other assets				136			1,927
Restricted cash				—			10,290
Goodwill				—			60,050
Deferred income taxes				642			177

		Total assets	$	107,357		$	177,523

Liabilities and Stockholders’ Equity
Current liabilities:
	Current portion of long-term debt and capital lease obligations		$	918		$	9,977
	Accounts payable			2,872			5,423
	Accrued employee compensation and benefits			5,065			4,717
	Other accrued liabilities			4,656			8,252
	Customer advances			5,152			3,236
	Deferred income taxes			4,589			5,214

		Total current liabilities		23,252			36,819
Long-term debt and capital lease obligations				10,628			59,242

		Total liabilities		33,880			96,061

Stockholders’ equity:
	Preferred stock, $.01 par value: 6,900,000 shares authorized; no shares issued and outstanding			—			—
	Common stock, $.01 par value: 15,000,000 shares authorized; 8,485,722 and 8,541,925 shares issued and outstanding			85			85
	Additional paid-in capital			56,144			56,752
	Treasury stock, 0 and 190,242 shares at cost			—			(3,501	)
	Retained earnings			18,576			28,653
	Accumulated other comprehensive income			(1,328	)		(527	)

		Total stockholders’ equity		73,477			81,462

		Total liabilities and stockholders’ equity	$	107,357		$	177,523


			Three Months Ended						Nine Months Ended
			September 30,						September 30,

			2002			2003			2002			2003

Revenue			$	21,594		$	24,318		$	61,340		$	68,572
Expenses:
	Cost of sales			12,090			13,975			35,083			40,001
	Selling, general and administrative			4,215			4,507			12,736			13,534
	Research and development			225			206			681			634

		Total operating expenses		16,530			18,688			48,500			54,169

Income from operations				5,064			5,630			12,840			14,403

Other (income) expense:
	Interest income			(191	)		(184	)		(508	)		(572	)
	Interest expense			236			315			658			730
	Foreign currency transaction (gains) losses			9			(1,819	)		(176	)		(1,993	)
	Other expense			11			52			146			243

		Net other (income) expense		65			(1,636	)		120			(1,592	)

Income before income taxes				4,999			7,266			12,720			15,995
Income tax provision				1,825			2,689			4,643			5,918

Net income			$	3,174		$	4,577		$	8,077		$	10,077

Net income per share:
	Basic		$	0.38		$	0.55		$	0.96		$	1.20

	Diluted		$	0.36		$	0.53		$	0.91		$	1.15


					Nine Months Ended
					September 30,

					2002			2003

Cash flows from operating activities:
	Net income				$	8,077		$	10,077
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation				3,475			3,751
		Amortization expense				10			—
		Loss on disposal				136			120
		Deferred income taxes, net				914			1,090
		Changes in current assets and liabilities:
			Accounts receivable, net			161			184
			Other current assets			(1,368	)		(1,959	)
			Accounts payable			(521	)		1,329
			Accrued employee compensation and benefits			(1,468	)		(705	)
			Other accrued liabilities			2,353			1,313
			Customer advances			453			(2,874	)
		(Increase) decrease in deposits and other assets				135			(2,123	)

				Net cash provided by operating activities		12,357			10,203

Cash flows from investing activities:
		Increase in restricted cash				—			(10,290	)
		Payments for acquisition				—			(67,161	)
		Purchases of property and equipment				(5,021	)		(8,713	)
		Proceeds from the sale of property and equipment				124			—

				Net cash used in investing activities		(4,897	)		(86,164	)

Cash flows from financing activities:
		Proceeds from exercise of stock options				593			608
		Payments on debt and capital lease obligations				(700	)		(746	)
		Proceeds from borrowings				—			58,490
		Purchase of treasury stock				—			(3,501	)

				Net cash provided by (used in) financing activities		(107	)		54,851

Effect of exchange rate changes on cash and cash equivalents						919			452

Net increase (decrease) in cash and cash equivalents						8,272			(20,658	)
Cash and cash equivalents, beginning of period						27,536			37,739

Cash and cash equivalents, end of period					$	35,808		$	17,081


Current assets	$	4,929
Property, plant and equipment		7,134
Current liabilities		(3,772	)
Non-current liabilities		(753	)

Estimated fair value, net assets acquired		7,538
Goodwill and other intangibles acquired		59,623

Consideration, net of cash acquired	$	67,161


	2002			2003

	(In thousands)
Mortgage Loan	$	2,157		$	2,063
Capital Lease Obligations		6,930			6,600
State of Maryland Loan		1,500			1,179
Interest Rate Swap Agreement		959			887
Domestic Term Loan		—			35,000
Foreign Term Loan		—			10,000
Loan Notes		—			10,290
Line of Credit		—			3,200

Total debt		11,546			69,219
Less current portion		(918	)		(9,977	)

Long-term portion	$	10,628		$	59,242


Years ending December 31:
	2003	$	2,389
	2004		9,555
	2005		9,555
	2006		22,831
	2007		9,127
	Thereafter		8,273

	Total aggregate maturities	$	61,730


			Three Months					Nine Months
			Ended September 30,					Ended September 30,

			2002			2003		2002			2003

Revenue:
	Testing and Development		$	18,131		$	19,480	$	51,477		$	55,270
	Manufacturing			3,463			4,838		9,863			13,302

		Total	$	21,594		$	24,318	$	61,340		$	68,572

Gross Profit (Loss):
	Testing and Development		$	9,717		$	9,548	$	26,319		$	27,119
	Manufacturing			(213	)		795		(62	)		1,452

		Total	$	9,504		$	10,343	$	26,257		$	28,571


			10.1			International Swap Dealers Association, Inc. Master Agreement and Schedule, dated as of November 4, 2003, by and among Bank of America, N.A. and BioReliance (Glasgow) Limited

			31.1			Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

			31.2			Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

			32.1			Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

			32.2			Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


				On July 24, 2003, the Corporation furnished its earnings release for the quarter ended June 30, 2003 under Item 12 of Form 8-K.

				On August 26, 2003, the Corporation filed a Form 8-K to announce that it had entered into definitive agreements to acquire Q-One Biotech Group Limited and to announce that it had entered into a new senior secured credit facility, under Item 5 of Form 8-K.

				On October 8, 2003, the Corporation filed a Form 8-K to announce the closing of its acquisition of Q-One Biotech Group Limited, under Item 2 of Form 8-K, to announce the closing of its new senior secured credit facility, under Item 5 of Form 8-K, and to file the share purchase agreements and credit facility documents under Item 7 of Form 8-K.

				On October 23, 2003, the Corporation furnished its earnings release for the quarter ended September 30, 2003, under Item 12 of Form 8-K.


EXHIBIT NO.		DESCRIPTION

10.1		International Swap Dealers Association, Inc. Master Agreement and Schedule, dated as of November 4, 2003, by and among Bank of America, N.A. and BioReliance (Glasgow) Limited

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


	Bank of America, N.A.		BioReliance (Glasgow) Limited

	(Name of Party)		(Name of Party)

By:		By:

	Name: Roger H. Heintzelman		Name:
	Title: Principal		Title:
	Date:		Date:


(d)		The *“Credit Event Upon Merger”* provisions of Section 5(b)(iv)


(e)		The *“Automatic Early Termination”* provision of Section 6(a)


(f)		*Payments on Early Termination.* For the purpose of Section 6(e):-


(g)		*“Termination Currency”* means United States Dollars.

(h)		*Additional Termination Event* will apply.

		It shall be an Additional Termination Event hereunder, with respect to which Party B shall be the Affected Party, if for any reason either Party A’s obligation to lend under the Credit Agreement is terminated or Party A ceases to be a party to the Credit Agreement.


(a)		Tax forms, documents or certificates to be delivered are:


(a)		*Address for Notices.* For the purpose of Section 12(a) of this Agreement:-

		Address for notice or communications to Party A:

		Bank of America, N.A.
		Sears Tower
		233 South Wacker Drive, Suite 2800
		Chicago, IL 60606
		Attention: Swap Operations


(g)		Section 3 is revised so as to add the following Section (g) at the end thereof:

		“(g) *Relationship Between Parties.* Each party represents to the other party and will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):-


(h)		*Waiver of Right to Trial by Jury.* EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(i)		*Cross Default.* Section 5(a)(vi) of this Agreement is hereby amended adding the following after the semicolon at the end thereof:


		and provisions (other than those requiring payments in respect of amounts owed under the Credit Agreement) will remain in force and effect for purposes of this Agreement as though set forth in full herein until the date on which all of Party B’s obligations under this Agreement are fully performed, and this Agreement is terminated.


Accepted and agreed:

BANK OF AMERICA, N.A		BIORELIANCE (GLASGOW) LIMITED
Name: Roger H. Heintzelman		Name:
Title: Principal		Title: