Document:

Loan Agreement between Embrex and Branch Banking and Trust

 EXHIBIT 10.1 
  
 BB&T 
  
 LOAN AGREEMENT 
  

	 4310032897/00004

	Account Number

  
 This Loan Agreement (the
“Agreement”) is made this 6th day of August, 2003 by and between BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation (“Bank”), and: 
  
 Embrex, Inc., a North Carolina corporation (“Borrower”), having its chief executive office at Durham, North Carolina, and Embrex
Poultry Health, LLC, a North Carolina limited liability company (“Pledgor”), having its manager office at Durham, North Carolina. 
  
 The Borrower has applied to Bank for and the Bank has agreed to make, subject to the terms of this Agreement, the following loan (hereinafter referred to, singularly or
collectively, if more than one, as “Loan”): 
  
 Term Loan
(“Term Loan”) in the principal amount of $9,000,000.00 for the purpose of constructing and equipping a biological manufacturing plant for the production of InovocoxTM which shall be evidenced by the Borrower’s Promissory Note dated of even date herewith payable in 18 consecutive
monthly interest only installments followed by a repayment schedule of principal and interest beginning March 5, 2005 in the amount of $80,246.64 and shall bear interest at a rate as described more particularly in such note, the terms of which are
incorporated herein by reference. The Term Loan shall mature on February 5, 2015, when the entire unpaid principal balance then outstanding plus accrued interest thereon shall be paid in full. 
  
 Additional terms, conditions and covenants of this Agreement are described in Schedule CC,
and the Rider to Loan Agreement attached hereto, the terms of which are incorporated herein by reference. The promissory note evidencing the Term Loan is referred to herein as the “Note” and shall include all extensions, renewals,
modifications and substitutions thereof. The Term Loan shall be secured by the collateral described in the security documents described below. 
  
 Section 1 Conditions Precedent 
  
 The Bank shall not be obligated to make any disbursement of Loan proceeds until all of the following conditions have been satisfied by proper evidence, execution, and/or
delivery to the Bank of the following items in addition to this Agreement, all in form and substance satisfactory to the Bank and the Bank’s counsel in their sole discretion: 
  

	Note:	The Note evidencing the Loans [sic] duly executed by the Borrower. 

  
 Deed of Trust: The Deed of Trust in which Borrower or other owner thereof shall grant to a Trustee for the benefit of Bank a deed of trust lien on the specified
real property and improvements thereon (“Mortgaged Property”). 
  
 Title Insurance: A Standard ALTA mortgage policy from a company or companies approved by the Bank, providing coverage for the aggregate principal amount of the Note and insuring the appropriate lien priority of the Deed of Trust and
which shall not contain any title exceptions or policy exclusions not approved by the Bank and Bank’s counsel. 
  
 Survey: A certified copy of a recent survey of the Mortgaged Property prepared by a registered land surveyor or a civil engineer. 
  
 Flood Hazard Certification: Evidence satisfactory to Bank and Bank’s counsel as
to whether the Mortgaged Property is located within an area identified as having “special flood hazards” as such term is used in the Federal Flood Disaster Protection Act of 1973. 
  
 Environmental Audit Report: A favorable “Phase I” unedited environmental
audit covering the Mortgaged Property from an independent environmental engineering firm satisfactory to Bank which reflects that no hazardous waste, toxic substances, or other hazardous materials have contaminated the Mortgaged Property or, if the
Mortgaged Property has been so contaminated, that it has been satisfactorily cleaned up in accordance with all Environmental Laws. The Bank shall be fully authorized to discuss all aspects of the audit with the engineering firm. 
  
 Security Agreement: Security Agreement in which Borrower and any other owner (a
“Debtor”) of personal property collateral shall grant to Bank a first priority security interest in the personal property specified therein. (If Bank has or will have a security interest in any collateral which is inferior to the security
interest of another creditor, Borrower must fully disclose to Bank any and all prior security interests, and Bank must specifically approve any such security interest which will continue during the Loan.) 
  
 UCC Financing Statements: Acknowledged copies of UCC Financing Statements duly filed
in Borrower’s or other owner’s state of incorporation, organization or residence, and in all jurisdictions necessary, or in the opinion of the Bank desirable, to perfect the security interests granted in the Security Agreement(s), and
certified copies of Information Requests identifying all previous financing statements on record for the Borrower or other owner, as appropriate from all jurisdictions indicating that no security interest has previously been granted in any of the
collateral described in the Security Agreement(s), unless prior approval has been given by the Bank. 
  
 Authorization and Certificate: An Authorization and Certificate executed by each Debtor under which such Debtor authorizes Bank to file a UCC Financing Statement describing collateral owned by such
Debtor. 
  
 Commitment Fee: A commitment fee of $20,000 payable to
the Bank on the date of execution of the Loan Documents. 
  
 Corporate
Resolution: A Corporate Resolution duly adopted by the Board of Directors of the Borrower authorizing the execution, delivery, and performance of the Loan Documents on or in a form provided by or acceptable to Bank. 
  
 Articles of Incorporation: A copy of the Articles of Incorporation and all other
charter documents of the Borrower all filed with and certified by the Secretary of State of the State of the Borrower’s incorporation. 
  
 By-Laws: A copy of the By-Laws of the Borrower, certified by the Secretary of the Borrower as to their completeness and accuracy. 
  
 Certificate of Incumbency: A certificate of the Secretary of the Borrower certifying
the names and true signatures of the officers of the Borrower authorized to sign the Loan Documents. 
  
 Certificate of Existence: A certification of the Secretary of State (or other government authority) of the State of the Borrower’s Incorporation or Organization as to the existence or good standing of the
Borrower and its charter documents on file. 
  
 Opinion of Counsel: An
opinion of counsel for the Borrower satisfactory to the Bank and the Bank’s counsel. 
  
 Appraisal: Two (2) copies of an appraisal ordered by the Bank of the estimated market value of the real and/or personal property offered as collateral for the Loan(s) referenced herein. The appraisal(s) must be
addressed to the Bank and must conform to the Uniform Standards of Professional Appraisal Practice (“USPAP”) adopted by the Appraisal Standards Board of the Appraisal Foundation. Any deviation from the USPAP must be explained in the
appraisal(s). The appraiser(s) must be licensed and/or certified if required by applicable Federal Deposit Insurance Corporation regulations or state laws. 
  
 Additional Documents: Receipt by the Bank of other approvals, opinions, or documents as the Bank may reasonably request. 
  
 Section 2 Representations and Warranties 
  

	The	Borrower represents and warrants to Bank that: 

  
 2.01. Financial Statements. The balance sheet of the Borrower and its subsidiaries, if any, and the related Statements of Income and Retained
Earnings of the Borrower and its subsidiaries, the accompanying footnotes together with the accountant’s opinion thereon, and all other financial information previously furnished to the Bank, are true and correct in all material respects and
fairly reflect the financial condition of 

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 LOAN AGREEMENT 
  

 
the Borrower and its subsidiaries as of the dates thereof, including all contingent liabilities of every type, and the financial condition of the Borrower
and its subsidiaries as stated therein has not changed materially and adversely since the date thereof. 
  
 2.02. Name, Capacity and Standing. The Borrower’s exact legal name is correctly stated in the initial paragraph of the Agreement. If the
Borrower and/or any Guarantor is a corporation, general partnership, limited partnership, limited liability partnership, or limited liability company, each warrants and represents that it is duly organized and validly existing under the laws of its
respective state of incorporation or organization; that it and/or its subsidiaries, if any, are duly qualified and in good standing in every other state in which the nature of their business shall require such qualification, and are each duly
authorized by their board of directors, general partners or member/manager(s), respectively, to enter into and perform the obligations under the Loan Documents. 
  
 2.03. No Violation of Other Agreements. The execution of the Loan Documents, and the performance by the Borrower, by
any and all pledgors (whether the Borrower or other owners of collateral property securing payment of the Loan (hereinafter sometimes referred to as the “Pledgor”)) or by the Guarantor(s) thereunder will not violate any provision, as
applicable, of its articles of incorporation, by-laws, articles of organization, operating agreement, agreement of partnership, limited partnership or limited liability partnership, or, of any law, other agreement, indenture, note, or
other instrument binding upon the Borrower, Pledgor, or give cause for the acceleration of any of the respective obligations of the Borrower. 
  
 2.04. Authority. All authority from and approval by any federal, state, or local governmental body, commission or agency necessary to the making,
validity, or enforceability of this Agreement and the other Loan Documents has been obtained. 
  
 2.05. Asset Ownership. The Borrower has good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements furnished to the Bank, and all such properties and
assets are free and clear of mortgages, deeds of trust, pledges, liens, and all other encumbrances except as otherwise disclosed by such financial statements. In addition, each other owner of collateral has good and marketable title to such
collateral, free and clear of any liens, security interests and encumbrances, except as otherwise disclosed to Bank. 
  
 2.06. Discharge of Liens and Taxes. The Borrower and its subsidiaries, if any, and each Guarantor have filed, paid, and/or discharged all taxes or
other claims which are due and payable and which may become a lien on any of their respective properties or assets, excepting to the extent that such items are being appropriately contested in good faith and for which an adequate reserve (in an
amount reasonably acceptable to Bank) for the payment thereof is being maintained. 
  
 2.07. Regulation U. None of the Loan proceeds shall be used directly or indirectly for the purpose of purchasing or carrying any margin stock in violation of the provisions of Regulation U of the Board of
Governors of the Federal Reserve System. 
  
 2.08. ERISA.
Each employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), maintained by the Borrower or by any subsidiary of the Borrower or Guarantor(s) meets, as of the date hereof, the
minimum funding standards of Section 302 of ERISA, all applicable requirements of ERISA and of the Internal Revenue Code of 1986, as amended, and no “Reportable Event” nor “Prohibited Transaction” (as defined by ERISA) has
occurred with respect to any such plan. 
  
 2.09. Litigation.
There is no claim, action, suit or proceeding pending, threatened or reasonably anticipated before any court, commission, administrative agency, whether State or Federal, or arbitration which will materially adversely affect the financial
condition, operations, properties, or business of the Borrower or its subsidiaries, if any, or the Guarantor(s), or the ability of the Borrower or the Guarantor(s) to perform their obligations under the Loan Documents. 
  
 2.10. Other Agreements. The representations and warranties made by
Borrower to Bank in the other Loan Documents are true and correct in all material respects on the date hereof. 
  
 2.11. Binding and Enforceable. The Loan Documents, when executed, shall constitute valid and binding obligations of the Borrower and Guarantors,
respectively, the execution of such Loan Documents has been duly authorized by the parties thereto, and are enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting
creditors’ rights generally. 
  
 2.12. Commercial
Purpose. The Loan is not “consumer transactions”, as defined in the North Carolina Uniform Commercial Code, and none of the collateral was or will be purchased or held primarily for personal, family or household purposes. 

 

	Section	3 Affirmative Covenants 

  
 The Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations owed under the Loan
Documents, Borrower shall: 
  
 3.01. Maintain Existence and
Current Legal Form of Business. (a) Maintain its existence and good standing in the state of its incorporation or organization, (b) maintain its current legal form of business indicated above, and, (c), as applicable, qualify and remain
qualified as a foreign corporation, general partnership, limited partnership, limited liability partnership or limited liability company in each jurisdiction in which such qualification is required. 
  
 3.02. Maintain Records. Keep adequate records and books of account,
in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Borrower. 
  
 3.03. Maintain Properties. Maintain, keep, and preserve all of its properties (tangible and intangible) including the collateral necessary or
useful in the conduct of its business in good working order and condition, ordinary wear and tear and insured casualty excepted. 
  
 3.04. Conduct of Business. Continue to engage in an efficient, prudent, and economical manner in a business of the same general type as now
conducted. 
  
 3.05. Maintain Insurance. Maintain
insurance with financially sound and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business, and business interruption insurance if required
by Bank, which insurance may provide for reasonable deductible(s). The Bank shall be named as loss payee (Long Form) on all policies which apply to the Bank’s collateral, and the Borrower shall deliver certificates of insurance at closing
evidencing same. All such insurance policies shall provide, and the certificates shall state, that no policy will be terminated without 20 days prior written notice to Bank. 
  
 3.06. Comply With Laws. Comply in all respects with all applicable laws, rules, regulations, and orders including,
without limitation, paying before the delinquency of all taxes, assessments, and governmental charges imposed upon it or upon its property, and all Environmental Laws. 
  
 3.07. Right of Inspection. Permit the officers and authorized agents of the Bank, at any reasonable time or times in
the Bank’s sole discretion, to examine and make copies of the records and books of account of, to visit the properties of the Borrower, subject to Borrower’s reasonable security requirements, and to discuss such matters with any officers,
directors, managers, members or partners, limited or general of the Borrower and the Borrower’s independent accountant as the Bank deems necessary and proper. 
  
 3.08. Reporting Requirements. Furnish to the Bank: 
  
 Annual Financial Statements: As soon as available and not more than 120 days after the end of each fiscal year,
balance sheets, statements of income, and retained earnings for the period ended and a statement of changes in the financial position, all in reasonable detail, and all prepared in accordance with GAAP consistently applied. The annual financial
statements must be of the following quality or better: Audited. 
  
 Notice of Litigation: Promptly after the receipt by the Borrower, or by any Guarantor of which Borrower has knowledge, of notice or complaint of any action, suit, and proceeding before any court or administrative agency of any type
which, if determined adversely, could have a material adverse effect on the financial condition, properties, or operations of the Borrower or Guarantor, as appropriate. 
  
 Tax Returns: As soon as available each year, complete copies (including all schedules) of all state and federal tax
returns filed by Borrower. 
  

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 LOAN AGREEMENT 
  

 Notice of Default: Promptly upon discovery or knowledge thereof, notice of the existence of
any event of default under this Agreement or any other Loan Documents. 
  
 Other Information: Such other information as the Bank may from time to time reasonably request. 
  
 3.09. Deposit Accounts. Maintain substantially all of its demand deposit/operating accounts with the Bank. 
  
 3.10. Affirmative Covenants from other Loan Documents. All
affirmative covenants contained in any Deed of Trust, Security Agreement, Assignment of Leases and Rents, or other security document executed by the Borrower which are described in paragraph 2 hereof are hereby incorporated by reference herein.

  
 Section 4 Guarantor(s) Covenants Not Applicable 
  
 Section 5 Financial Covenants 
  
 The Borrower covenants and agrees that from the date hereof until payment in full of all
indebtedness and the performance of all obligations under the Loan Documents, the Borrower shall maintain the following financial covenants and ratios to be tested at fiscal yearend and, if the Bank elects, at the end of each fiscal quarter all in
accordance with GAAP unless otherwise specified: 
  
 Current
Ratio. A ratio of total current assets to total current liabilities of not less than 2.0 to 1.0. 
  
 Tangible Net Worth. A minimum tangible net worth of not less than $32,000,000. Tangible Net Worth is defined as net worth minus goodwill and other
intangible assets. 
  
 Debt to Tangible Net Worth. Maximum
of .85 to 1.0. 
  
 Cash Flow Coverage. Minimum of 2.0
times Debt Service. Cash Flow is defined as net profit after taxes, plus depreciation and amortization and interest minus dividends. Debt Service is defined as current maturities of long term debt plus interest expense.

  

	Section	6 Negative Covenants 

  
 The Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations under the Loan Documents, the Borrower shall not, without the prior written
consent of the Bank: 
  
 6.01. Liens. Create, incur,
assume, or suffer to exist any lien upon or with respect to any of Pledgor’s properties securing payment of the Loan, now owned or hereafter acquired, except: 
  

	 	a.	Liens and security interests in favor of the Bank; 

  

	 	b.	Liens for taxes not yet due and payable or otherwise being contested in good faith and for which appropriate reserves are maintained; 

  

	 	c.	Other liens imposed by law not yet due and payable, or otherwise being contested in good faith and for which appropriate reserves are maintained; 

  

	 	d.	Purchase money security interests on any property hereafter acquired, provided that such lien shall attach only to the property acquired. 

  
 6.02. Change of Legal Form of Business; Purchase of Assets. Change
Borrower’s name or the legal form of Borrower’s business as shown above, whether by merger, consolidation, conversion or otherwise, and Borrower shall not purchase all or substantially all of the assets or business of any Person without
prior notification to the Bank. 
  
 6.03. Disposition of
Assets. Sell, lease, or otherwise dispose of any of its assets or properties of the Pledgor except in the ordinary and usual course of its business. 
  
 6.04. Negative Covenants from other Loan Documents. All negative covenants contained in any Deed of Trust, Security Agreement, Assignment of Leases
or Rents, or other security document executed by the Borrower which are described in paragraph 2 hereof are hereby incorporated by reference herein. 
  
 Section 7 Hazardous Materials and Compliance with Environmental Laws 
  
 7.01. Investigation. Borrower hereby certifies that it has exercised due diligence to ascertain whether its real property, including without
limitation the Mortgaged Property, is or has been affected by the presence of asbestos, oil, petroleum or other hydrocarbons, urea formaldehyde, PCBs, hazardous or nuclear waste, toxic chemicals and substances, or other hazardous materials
(collectively, “Hazardous Materials”), as defined in applicable Environmental Laws. Borrower represents and warrants that based solely on such due diligence and its actual knowledge, there are no such Hazardous Materials contaminating its
real property, nor have any such materials been released on or stored on or improperly disposed of on its real property during its ownership, occupancy or operation thereof, except as disclosed in reports delivered to Bank. Borrower hereby agrees
that, except in strict compliance with applicable Environmental Laws, it shall not knowingly permit any release, storage or contamination as long as any indebtedness or obligations to Bank under the Loan Documents remains unpaid or unfulfilled. In
addition, Borrower does not have or use any underground storage tanks on any of its real property, including the Mortgaged Property which are not registered with the appropriate Federal and/or State agencies and which are not properly equipped and
maintained in accordance with all Environmental Laws. If requested by Bank, Borrower shall provide Bank with all necessary and reasonable assistance required for purposes of determining the existence of Hazardous Materials on the Mortgaged Property,
including allowing Bank access to the Mortgaged Property, and access to Borrower’s employees having knowledge of, and to files and records within Borrower’s control relating to the existence, storage, or release of Hazardous Materials on
the Mortgaged Property. 
  
 7.02. Compliance. Borrower
agrees to comply with all applicable Environmental Laws, including, without limitation, all those relating to Hazardous Materials. Borrower further agrees to provide Bank, and all appropriate Federal and State authorities, with immediate notice in
writing of any release of Hazardous Materials on the Mortgaged Property and to pursue diligently to completion all appropriate and/or required remedial action in the event of such release. 
  
 7.03. Remedial Action. Bank shall have the right, but not the
obligation, to undertake all or any part of such remedial action in the event of a release of Hazardous Materials on the Mortgaged Property after notice to Borrower and after giving the Borrower a reasonable opportunity to undertake such remedial
measures, and to add any expenditures so made to the principal indebtedness secured by the Deed(s) of Trust. Borrower agrees to indemnify and hold Bank harmless from any and all loss or liability arising out of any violation of the representations,
covenants, and obligations contained in this Section 7, or resulting from the recording of the Deed(s) of Trust. 
  
 Section 8 Events of Default 
  
 The following shall be “Events of Default” by Borrower or Pledgor: 
  
 8.01. The failure to make prompt payment of any installment of principal or interest on any of the Note(s) when due or payable and after passage of
applicable grace or cure period. 
  
 8.02. Should any
representation or warranty made in the Loan Documents prove to be false or misleading in any material respect. 
  
 8.03. Should any report, certificate, financial statement, or other document furnished prior to the execution of or pursuant to the terms of this
Agreement prove to be false or misleading in any material respect. 
  

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 LOAN AGREEMENT 
  

 8.04. Should the Borrower or Pledgor default on the performance of any other obligation of
indebtedness to Bank when due or in the performance of any obligation to Bank incurred in connection with money borrowed. 
  
 8.05. Should the Borrower or any Pledgor breach any covenant, condition, or agreement made under any of the Loan Documents, and such breach not be cured
during any applicable grace or cure period. 
  
 8.06. Should a
custodian be appointed for or take possession of any or all of the assets of the Borrower or Pledgor, or should the Borrower or Pledgor either voluntarily or involuntarily become subject to any insolvency proceeding, including becoming a debtor
under the United States Bankruptcy Code, any proceeding to dissolve the Borrower or Pledgor, any proceeding to have a receiver appointed, or should the Borrower or Pledgor make an assignment for the benefit of creditors, or should there be an
attachment, execution, or other judicial seizure of all or any portion of the Borrower’s or any Pledgor’s assets, including an action or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 30
days and any of the foregoing proceedings shall not be dismissed within 45 days of commencement. 
  
 8.07. Should final judgment for the payment of money be rendered against the Borrower or Pledgor which is not covered by insurance and shall remain
undischarged for a period of 30 days unless such judgment or execution thereon be effectively stayed. 
  
 8.08. Upon the death of, or termination of existence of, or dissolution of, any Borrower or Pledgor. 
  
 8.09. Should any lien or security interest granted to Bank to secure payment
of the Note(s) terminate, fail for any reason to have the priority agreed to by Bank on the date granted, or become unperfected or invalid for any reason. 
  
 Section 9 Remedies Upon Default 
  
 Upon the occurrence of any of the above listed Events of Default, the Bank may at any time thereafter, at its option, take any or all of the following actions, at the
same or at different times: 
  
 9.01. Declare the balance of the
Note to be immediately due and payable, both as to principal and interest, without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower and each Guarantor, and such balance shall accrue interest
at the Default Rate as provided herein until paid in full; 
  
 9.02. Require the Borrower or Guarantor to pledge additional collateral to the Bank from the Borrower’s or any Guarantor’s assets and properties, the acceptability and sufficiency of such collateral to be determined in the
Bank’s sole discretion; 
  
 9.03. Take immediate possession
of and foreclose upon any or all collateral which may be granted to the Bank as security for the indebtedness and obligations of Borrower or any Guarantor under the Loan Documents; 
  
 9.04. Exercise any and all other rights and remedies available to the Bank under the terms of the Loan Documents and
applicable law, including the North Carolina Uniform Commercial Code; 
  
 9.05. Any obligation of the Bank to advance funds to the Borrower or any other Person under the terms of under the Note(s) and all other obligations, if any, of the Bank under the Loan Documents shall immediately cease and terminate unless
and until Bank shall reinstate such obligation in writing. 
  
 Section 10
Miscellaneous Provisions 
  
 10.01. Definitions.

  
 “Default Rate” shall mean a
rate of interest equal to Bank’s Prime Rate plus five percent (5%) per annum (not to exceed the legal maximum rate) from and after the date of an Event of Default hereunder which shall apply, in the Bank’s sole discretion, to all sums
owing, including principal and interest, on such date. 
  
 “Environmental Laws” shall mean all federal and state laws and regulations which affect or may affect the Mortgaged Property, including without limitation the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the Sedimentation Pollution Control Act (N.C.G.S. Sections 113A-5 et seq.), the Hazardous Chemicals Right to Know Act (N.C.G.S. Sections 95-173 et. seq.), the Oil Pollution
and Hazardous Substances Control Act (N.C.G.S. Sections 143-215.75 et seq.), the North Carolina Solid Waste Management Act (N.C.G.S. Sections 130A-290 et seq.), and the Coastal Area Management Act (N.C.G.S. Sections 113-a-119 et seq.), as such laws
or regulations have been amended or may be amended. 
  
 “Loan Documents” shall mean this Agreement including any schedule attached hereto, the Note(s), the Deed(s) of Trust, the Mortgage(s), the Security Agreement(s), the Assignment(s) of Leases and Rents, all UCC Financing
Statements, the Guaranty Agreement(s), and all other documents, certificates, and instruments executed in connection therewith, and all renewals, extensions, modifications, substitutions, and replacements thereto and therefore. 
  
 “Person” shall mean an individual,
partnership, corporation, trust, unincorporated organization, limited liability company, limited liability partnership, association, joint venture, or a government agency or political subdivision thereof. 
  
 “GAAP” shall mean generally accepted
accounting principles as established by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants, as amended and supplemented from time to time. 
  
 “Prime Rate” shall mean the rate of interest per annum announced by the Bank from time to
time and adopted as its Prime Rate, which is one of several rate indexes employed by the Bank when extending credit, and may not necessarily be the Bank’s lowest lending rate. 
  
 10.02. Non-impairment. If any one or more provisions contained in the Loan Documents shall be held invalid, illegal,
or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby and shall otherwise remain in full force and effect. 
  
 10.03. Applicable Law. The Loan Documents shall be construed in
accordance with and governed by the laws of the State of North Carolina. 
  
 10.04. Waiver. Neither the failure or any delay on the part of the Bank in exercising any right, power or privilege granted in the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise of any other right, power, or privilege which may be provided by law. 
  
 10.05. Modification. No modification, amendment, or waiver of any provision of any of the Loan Documents shall be effective unless in writing and
signed by the Borrower and Bank. 
  
 10.06. Payment Amount
Adjustment. In the event that any Loan(s) referenced herein has a variable (floating) interest rate and the interest rate increases, Bank, at its sole discretion, may at any time adjust the Borrower’s payment amount(s) to prevent the amount
of interest accrued in a given period to exceed the periodic payment amount or to cause the Loan(s) to be repaid within the same period of time as originally agreed upon. 
  
 10.07. Stamps and Fees. The Borrower shall pay all federal or state stamps, taxes, or other fees or charges, if any
are payable or are determined to be payable by reason of the execution, delivery, or issuance of the Loan Documents or any security granted to the Bank; and the Borrower and Guarantor agree to indemnify and hold harmless the Bank against any and all
liability in respect thereof. 
  
 10.08. Attorneys’ Fees.
In the event the Borrower or any Pledgor or Guarantor shall default in any of its obligations hereunder and the Bank believes it necessary to employ an attorney to assist in the enforcement or collection of the indebtedness of the Borrower to
the Bank, to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event the Bank voluntarily or otherwise should become a party to any suit or legal proceeding (including a proceeding conducted under the
Bankruptcy Code), the Borrower and Guarantors agree to pay the reasonable attorneys’ fees of the Bank and all related costs of collection or enforcement that may be incurred by the Bank. The Borrower and Guarantor shall be liable for such
attorneys’ fees and costs whether or not any suit or proceeding is actually commenced. 
  
  

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 LOAN AGREEMENT 
  

 10.09. Bank Making Required Payments. In the event Borrower shall fail to maintain insurance,
pay taxes or assessments, costs and expenses which Borrower is, under any of the terms hereof or of any Loan Documents, required to pay, or fail to keep any of the properties and assets constituting collateral free from new security interests,
liens, or encumbrances, except as permitted herein, Bank may at its election make expenditures for any or all such purposes and the amounts expended together with interest thereon at the Default Rate, shall become immediately due and payable to
Bank, and shall have benefit of and be secured by the collateral; provided, however, the Bank shall be under no duty or obligation to make any such payments or expenditures. 
  
 10.10. Right of Offset. Any indebtedness owing from Bank to Borrower may be set off and applied by Bank on any
indebtedness or liability of Borrower to Bank, at any time and from time to time after maturity, whether by acceleration or otherwise, and without demand or notice to Borrower. Bank may sell participations in or make assignments of any Loan made
under this Agreement, and Borrower agrees that any such participant or assignee shall have the same right of setoff as is granted to the Bank herein. 
  
 10.11. UCC Authorization. Borrower authorizes Bank to file such UCC Financing Statements describing the collateral in any location deemed necessary
and appropriate by Bank. 
  
 10.12. Modification and Renewal
Fees. Bank may, at its option, charge any fees for modification, renewal, extension, or amendment of any terms of the Note(s) permitted by N.C.G.S.§ 24.1.1 in North Carolina, and as otherwise permitted by law if Borrower is located in
another state. 
  
 10.13. Conflicting Provisions. If
provisions of this Agreement shall conflict with any terms or provisions of any of the Note(s) or Security Agreement(s), the provisions of such Note(s) or Security Agreement(s), as appropriate, shall take priority over any provisions in this
Agreement. 
  
 10.14. Notices. Any notice permitted or
required by the provisions of this Agreement shall be deemed to have been given when delivered in writing to the City Executive or any Vice President of the Bank at its offices in Durham, North Carolina, and to the President of the Borrower at its
offices in Durham, North Carolina when sent by certified mail and return receipt requested. 
  
 10.15. Consent to Jurisdiction. Borrower hereby irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement may be instituted in the Superior Court in Forsyth County,
North Carolina, or the United States District Court for the Middle District of North Carolina, or in such other appropriate court and venue as Bank may choose in its sole discretion. Borrower consents to the jurisdiction of such courts and waives
any objection relating to the basis for personal or in rem jurisdiction or to venue which Borrower may now or hereafter have in any such legal action or proceedings. 
  
 10.16. Counterparts. This Agreement may be executed by one or more parties on any number of separate counterparts and
all of such counterparts taken together shall be deemed to constitute one and the same instrument. 
  
 10.17. Entire Agreement. The Loan Documents embody the entire agreement between Borrower and Bank with respect to the Loans, and there are no oral
or parol agreements existing between Bank and Borrower with respect to the Loans which are not expressly set forth in the Loan Documents. 
  
 10.18. Tangible Personal Property. The Borrower and the Pledgor agree that all equipment now or hereafter located on the Property and any other
equipment required in the Pledgor’s operations (specifically including, but not limited to, equipment acquired with the proceeds of the Loan) shall be owned by the Pledgor, rather than the Borrower. 
  
 10.19. Covenants Applicable to the Pledgor. The Pledgor agrees that
certain covenants applicable to the “Borrower” under the provisions of the Loan Agreement shall also apply to the Pledgor, an entity that is owned by the Borrower. Any covenant, representation or provision in this Loan Agreement that
relates to the real property and improvements owned by the Pledgor shall apply to the Pledgor and the Borrower. In addition, the Pledgor and the Borrower agree that the following sections of the Loan Agreement shall be applicable to the Pledgor, as
well as the Borrower. 
  

	 	a.	All of Section 2, with the following qualification as to Section 2.01: The Pledgor’s operations shall be reflected in the consolidated and consolidating financial statements of
the Borrower. 

  

	 	b.	All of Section 3, with the above-stated qualifications as to Section 3.08. 

  

	 	c.	All of Section 6.01, 6.03 and 6.04. 

  

	 	d.	All of Section 7. 

  

	 	e.	All of Section 8.03, 8.04, 8.05, 8.06, 8.07 and 8.08. The occurrence of the events described in the foregoing sections with respect to the Pledgor (subject to cure provisions set
out herein) shall constitute an event of default under the Loan Agreement. 

  
 Although the construction documents (construction contract, etc.) have been executed by the Borrower, those provisions of Schedule CC relating to the real property and improvements shall also [be] deemed to be
obligations of the Pledgor. 
  
 [SIGNATURES
ON FOLLOWING PAGES] 
  

 - 5 - 

 BB&T 
  
 LOAN AGREEMENT 
  

 SIGNATURE PAGE 
  
 IN WITNESS WHEREOF, the Bank, Borrower and Guarantor(s) have caused this Agreement to be duly
executed under seal all as of the date first above written. 
  
 Borrower is a Corporation: 
  

	 ATTEST:
	 	 	 	  

	 	 	 	 	Name of Corporation
				
	  

	 	 	 	By:	 	 See Attached Signature Page

	 	 	 	 	 	 	 Title:
	 	  

				
	 (SEAL)

	 	 	 	By:	 	  

	 	 	 	 	 	 	 Title:
	 	  

	
	Borrower is a Partnership, Limited Liability Company, or Limited Liability Partnership:
					
	 WITNESS:
	 	 	 	 	 	  

	 	(SEAL)
	 	 	 	 	 	 	 	 	Name of Partnership, LLC or LLP
					
	  

	 	 	 	By:	 	 See Attached Signature Page

	 	(SEAL)
	 	 	 	 	 	 	 	 	General Partner or Manager	 	 
					
	  

	 	 	 	By:	 	  

	 	(SEAL)
	 	 	 	 	 	 	 	 	General Partner or Manager
	  

	 	 	 	 	 	 
					
	  

	 	 	 	By:	 	  

	 	(SEAL)
	 	 	 	 	 	 	 	 	General Partner or Manager	 	 
			
	 WITNESS:
	 	 	 	BRANCH BANKING AND TRUST COMPANY
				
	  

	 	 	 	By:	 	 /s/ Margaret A. Brady

	 	 	 	 	 	 	 	 	Margaret A. Brady
	 	 	 	 	 	 	 Title:
	 	Vice President

  

 - 6 - 

	 	 	 	 	 EMBREX, INC.,
 a North Carolina corporation

				
	 Attest:
	 	 	 	 	 	 
				
	 /s/ Don T. Seaquist
	 	 	 	By:	 	 /s/ Randall L. Marcuson

	
	 	 	 	 	

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist personally came before me this day
and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate
seal, and attested by himself as its Secretary. 
  
 Witness my
hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah J. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL] 
  
  

 - 7 - 

	 	 	 EMBREX POULTRY HEALTH, LLC.,
 a North Carolina limited liability
 company (SEAL)

				
	 	 	 	 	 By:
	 	 EMBREX, INC.,
 a North Carolina corporation,
 its manager (SEAL)

	 	 	 	 	 	 	 	 	 
	 Attest:
	 	 	 	 	 	 
				
	 /s/ Don T. Seaquist
	 	 	 	 By:
	 	 /s/ Randall L. Marcuson

	
	 	 	 	 	

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

	 [CORPORATE SEAL]
	 	 	 	 	 	 

  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist
personally came before me this day and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation (the “Corporation”), Manger of Embrex Poultry Health, LLC, a North Carolina limited liability company (the
“Company”), and that, by authority duly given and (a) as the act of the Corporation and (b) as the act of the Company, the foregoing instrument was signed in the name of the Company and in the name of the Corporation by the
Corporation’s President, sealed with its corporate seal, and attested by himself as its Secretary. 
  
 Witness my hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah J. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL] 
  

 - 8 - 

 RIDER TO LOAN AGREEMENT 
  
 THIS RIDER TO LOAN AGREEMENT is attached to and shall be a part of that Loan Agreement dated August 6, 2003 with
attached Schedule CC thereto (collectively the “Loan Agreement”), between Embrex, Inc. (“Borrower”), Embrex Poultry Health, LLC (“Pledgor”) and BRANCH BANKING AND TRUST COMPANY (“Bank”). 
  
 1. (a) NOTICE AND RIGHT TO CURE WITH RESPECT TO NON-MONETARY DEFAULTS.
Notwithstanding any provision in the Deed of Trust, the Loan Agreement, the Assignment of Rents and Leases, or Note or other Documents to the contrary, in the event of a non-monetary default, Bank’s right, power and privilege to accelerate the
maturity of the indebtedness secured hereby shall be stayed until thirty (30) days from the first to occur of (i) the date that Borrower has knowledge of the default, or (ii) Borrower’s receipt of written notice of such non-monetary default
from Bank; provided, however, that Borrower shall have forty-five (45) days after the filing of any involuntary petition in bankruptcy against it to have such petition dismissed. 
  
 (b) NOTICE AND RIGHT TO CURE WITH RESPECT TO MONETARY DEFAULTS. Notwithstanding any provision in the Loan Agreement
to the contrary, in the event of a monetary default set forth in the Loan Agreement, the Note or other Documents, Bank’s right, power and privilege to accelerate the maturity of the Debt secured hereby shall be stayed until ten (10) days from
notice by Bank to Borrower of said monetary default. 
  
 (c)
EXCEPTIONS TO MONETARY AND NON-MONETARY NOTICE AND RIGHT TO CURE. Notwithstanding anything contained in paragraphs 2(a) and (b) of this Rider, or the Loan Agreement, the Deed of Trust, the Assignment of Rents and Leases, Note or other
Documents, in no event shall notice and right to cure be granted for the following specific events of default: 
  
 (i) any Event of Default arising from any report, certificate, financial statement, or other document furnished prior to the execution of
or pursuant to the terms of this Agreement, if same shall prove to be false or misleading in any material respect; 
  
 (ii) any Event of Default arising if a custodian shall be appointed for or take possession of any or all of the assets of the Borrower, or
should the Borrower either voluntarily or involuntarily become subject to any insolvency proceeding, any proceeding to dissolve the Borrower, any proceeding to have a receiver appointed, or should the Borrower make an assignment for the benefit of
creditors, or should there be an attachment, execution, or other judicial seizure of all or any portion of the Borrower’s assets, including an action or proceeding to seize any funds on deposit with Bank; 
  
 (iii) any Event of Default arising if the Borrower
voluntarily shall become a debtor (as such term is defined in the U.S. Bankruptcy Code); 
  
 (iv) any Event of Default consisting of a failure to repay the Debt at maturity; 
  
 (v) any Event of Default arising from Borrower commencing
the process of liquidation or dissolution of its charter, articles, agreement or other governing document, or if same is revoked; or if Borrower or any other obligor commences the process of dissolution or partition; or if Borrower or any guarantor
(if a trust) commences the process of termination or expires; 
  
 (vi) any Event of Default arising from the institution of any proceeding seeking the forfeiture of the Property or any portion thereof or any interest therein as a result of any criminal or quasi-criminal activity by
Borrower or any obligor, or any other person or entity so related to Borrower, obligors or the Property that the Property or any portion thereof or any interest therein might be forfeited on account of the activity or such person or entity; or

  
 (vii) any Event of Default arising from the
sale, conveyance, transfer or encumbrance of the Property or any part or interest therein, for real property collateral, and a bulk sale transfer to the extent that the indebtedness is secured by any personal or other tangible or intangible
property, all without the prior written consent of Bank, in its sole and absolute discretion. 
  
 2. ATTORNEYS’ FEES. Notwithstanding any other provision in the Note, the Deed of Trust, the Loan Agreement, Assignment of Rents and Leases or other Document, all legal fees shall be based on the actual
amount of time expended at the usual and customary hourly rates of attorneys and paralegals for time actually spent without giving effect to any statutory presumptions that may then be in effect. 
  
 IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals
to this Rider as of the date first written above. 
  

	 BORROWER:

	
	 See Attached Signature Page

	
	 PLEDGOR:

	
	 See Attached Signature Page

		
	 BANK
	 	 
	
	 BRANCH BANKING AND TRUST COMPANY

			
	By	 	 /s/ Margaret A. Brady
	 	 (SEAL)

	 	
	 	 
	 Title:
	 	 Margaret A. Brady, Vice President
	 	 

  

 - 9 - 

	 	 	 	 	 EMBREX, INC.,
 a North Carolina corporation

				
	 Attest:
	 	 	 	 	 	 
				
	 /s/ Don T. Seaquist
	 	 	 	By:	 	 /s/ Randall L. Marcuson

	
	 	 	 	 	

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist personally came before me this day
and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate
seal, and attested by himself as its Secretary. 
  
 Witness my
hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah J. Chase
	

	Notary Public

 My Commission Expires: 12/25/2007 
  
 [OFFICIAL SEAL] 
  

 - 10 - 

	 	 	 	 	 EMBREX POULTRY HEALTH, LLC.,
 a North Carolina limited liability
 company (SEAL)

					
	 	 	 	 	 	 	By:	 	 EMBREX, INC.,
 a North Carolina corporation,
 its manager (SEAL)

	 	 	 	 	 	 	 	 	 
	 Attest:
	 	 	 	 	 	 
				
	 /s/ Don T. Seaquist
	 	 	 	 By:
	 	 /s/ Randall L. Marcuson

	
	 	 	 	 	

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist
personally came before me this day and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation (the “Corporation”), Manger of Embrex Poultry Health, LLC, a North Carolina limited liability company (the
“Company”), and that, by authority duly given and (a) as the act of the Corporation and (b) as the act of the Company, the foregoing instrument was signed in the name of the Company and in the name of the Corporation by the
Corporation’s President, sealed with its corporate seal, and attested by himself as its Secretary. 
  
 Witness my hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah J. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL] 
  

 - 11 - 

 BB&T 
 SCHEDULE “CC” TO BB&T LOAN AGREEMENT 
  
 (Commercial/Residential Construction and/or Development Loan) 
  
 This Schedule “CC” is an attachment to and a part of the Loan Agreement (the “Loan Agreement”) dated August 6, 2003, between Branch Banking and Trust Company (“Bank”) and Embrex, Inc.
(“Borrower”) and Embrex Poultry Health, LLC (“Pledgor”). 
  
 CC.01. Definitions. In addition to the words and terms defined elsewhere in this Loan Agreement, the following terms shall have the following specified meanings: 
  

	 	(a)	“Borrower’s Equity” shall mean the cost of the Mortgaged Property plus the estimated cost of the Improvements, minus the amount of the Loan. 

 

	 	(b)	“Closing Date” shall mean the date as of which the Note is executed by the Borrower and the Bank. 

  

	 	(c)	“Completion Date” shall mean the date upon which the Bank has received evidence satisfactory to it that the Improvements have been completed in accordance with the
Construction Documents. Borrower hereby agrees that the Completion Date will occur not later than June 30, 2004. 

  

	 	(d)	“Construction Documents” shall mean the final plans, specifications, blueprints, and shop drawings for the construction of the Improvements prepared by or used by the
General Contractor and approved by the Bank, including such amendments thereto as may from time to time be made by Borrower and approved by the Bank. 

  

	 	(e)	“Deed of Trust” shall mean the deed of trust executed by the Borrower or other owner for the benefit of the Bank granting as collateral the Mortgaged Property.

  

	 	(f)	“Event of Default” shall mean any of the events of default listed in the Note or Deed of Trust, in Section 7 of the Loan Agreement, or in Section CC.07 of this Schedule
“CC.” 

  

	 	(g)	“General Contractor” shall mean the contractor(s), if any, who contracts with the Borrower to build or install the Improvements, and who shall be approved by Bank prior to
Borrower’s execution of any contract(s) therewith. 

  

	 	(h)	“Governmental Authorities” shall mean any governmental office, officer, or official (including health and environmental) whose consent or approval is required as a
prerequisite to the commencement or continuation of the construction of the Improvements or to the operation and occupancy of the Project or to the performance of any act or obligation or the observance of any agreement, provision, or condition of
whatsoever nature contained in the Loan Agreement. 

  

	 	(i)	“Improvements” shall mean all improvements now existing and to be constructed on the Mortgaged Property, including without limitation roads, utility lines, buildings,
fixtures and structures of any type. 

  

	 	(j)	“Loan” shall mean outstanding principal balance advanced by Bank to Borrower evidenced by the Note. 

  

	 	(k)	“Mortgaged Property” shall mean the real property and fixtures described in the Deed of Trust. 

  

	 	(l)	“Note” shall mean the promissory note of the Borrower dated as of the Closing Date payable to the order of the Bank in the principal amount of $9,000,000, and all
substitutions, replacements, extensions, modifications, or renewals thereof. 

  

	 	(m)	“Project” shall mean the Improvements and the Mortgaged Property collectively. 

  
 CC.02. Disbursements. Bank agrees that it will from time to time, so long as Borrower has not committed an Event of Default, beyond
any applicable grace or cure period, advance Loan proceeds to Borrower in accordance with the conditions of this Loan Agreement. 
  

	 	(a)	Disbursement Requests. Borrower will notify Bank of all Loan advance requests at least ten (10) business days prior to the requested advance date. Borrower will submit no
more than one (1) Loan disbursement request per calendar month unless otherwise approved by Bank. 

  

	 	(b)	Disbursement Amounts. Following a request by Borrower for a Loan advance, Bank shall determine the maximum amount of the advance. If the construction contract under which an
advance is requested provides for a retainage, Bank shall advance no more than the amount actually due to the General Contractor. The value of each completed portion of the Improvements at any time shall be determined by Bank in its sole discretion
and shall be binding on Borrower. The maximum amount which will be advanced shall be determined as follows: 

  

	 	x	Advances will be made on the basis of 100% of the value of the Land plus the Improvements which have been completed, based on the Construction Budget, minus the Borrower’s
Equity and any contingency reserve and retainages provided for in the Construction Budget, in the Bank’s discretion, upon satisfactory site inspection of the Project by an officer or representative of Bank and/or receipt by Bank of copies of
the General Contractor’s Application and Certificate for Payment, invoices representing costs incurred, and such other certificates as may be required by Bank. 

  

	 	(c)	Deposit of Disbursements. Bank shall make all Loan advances by deposit to Borrower’s demand deposit account with Bank, unless Bank deems it appropriate to make advances
by some other method. 

  

	 	(d)	Option to Pay Contractors. At its option, Bank may make advances directly to the General Contractor or any unpaid subcontractor, laborer, or material supplier which has
provided labor, services, or materials in connection with the construction of the Improvements, and the execution of this Loan Agreement shall hereby constitute an irrevocable direction and authorization of Bank by Borrower to so disburse Loan
funds. No further authorization from Borrower shall be necessary to warrant such direct advances, all of which shall be secured by the Deed of Trust as though fully made to Borrower, regardless of the disposition thereof by the General Contractor or
any subcontractor, laborer, or material supplier so paid. 

  
 CC.03. Conditions Precedent to Initial Disbursement. The Bank shall not be obligated to make the initial advance under this Loan until all of the conditions in Section 1 of the Loan Agreement have been satisfied and all of the
following conditions have been satisfied by proper evidence, execution, and/or delivery to Bank of the following items, all in form and substance satisfactory to Bank and Bank’s counsel, unless waived in writing by Bank: 
  

	 	(a)	Evidence of Zoning and Permits. Satisfactory evidence of the zoning designation for the Project, the permitted uses of the Project under such zoning designation, and
compliance by the Project and its intended uses with such zoning designation and with all other applicable regulations or rules of Governmental Authorities including without limitation a copy of any building permits and any other documents related
to compliance with requirements for density, land use, waste disposal, or continuation of construction. 

  

	 	(b)	Construction Documents. One set of the Construction Documents must be submitted to Bank prior to the Closing Date. 

  

	 	(c)	Construction Contracts. Copies of the construction contracts and architects contracts executed by the General Contractor and the architect, and copies of all other executed
contracts as may be required by Bank. 

  

	 	(d)	Construction Budget. A detailed breakdown of the cost of constructing the Improvements, including an itemization of nonconstruction and land costs, and a funding schedule for
all items (“Construction Budget”). 

  

	 	(e)	Construction Time Schedule. A detailed schedule of the dates by which construction of portions of the Improvements shall be completed. 

  

	 	(f)	Flood Insurance Policy. If Bank determines that the Mortgaged Property is located in an area having special flood hazards, a flood insurance policy for the insurable
Improvements naming Bank as mortgagee (loss payee) must be submitted to Bank. 

  

	 	(g)	Hazard/Liability/Builder’s Risk Insurance. An insurance policy covering hazards (not less than Loan), liabilities, and builder’s risks for an amount and from an
insurance company satisfactory to Bank, which shall name Bank as loss payee (Mortgagee’s long form). 

  

	 	(h)	Other Documents. Borrower will provide such other documents, certificates, or opinions as may be required by Bank. 

  

	 	(i)	No Event of Default. In addition to the conditions listed above, Borrower must not have committed nor suffered an Event of Default. 

  

	 	(j)	Evidence satisfactory to Bank of payment of Borrower’s Equity. 

  

 Page 1 of 5 

 BB&T 
 SCHEDULE “CC” TO BB&T LOAN AGREEMENT 
  
 (Commercial/Residential Construction and/or Development Loan) 
  

	 	(k)	Consents from General Contractor and architect to assignment to Bank of the construction contract and the architect’s contract. 

  
 CC.04. Conditions Precedent to Advances After Initial Disbursement. Bank shall not be
obligated to make any advances after the initial advance until all of the following conditions have been satisfied: 
  

	 	(a)	Each and every one of the conditions stated in Section CC.03 of this Schedule “CC.” 

  

	 	(b)	No lien, security interest, or other encumbrance shall have been permitted to attach to the Mortgaged Property except taxes for the current year and others specifically approved by
Bank, and Bank shall have received all released and waivers of liens from General Contractor or subcontractors as may be required by Bank. 

  

	 	(c)	Construction of the Improvements shall have been in accordance with the Construction Documents in a good and workmanlike manner, and the Improvements shall not have been materially
damaged, in Bank’s opinion, by fire, storm or otherwise. 

  

	 	(d)	There has been no change in the status of the title to the Mortgaged Property, and there are no survey exceptions not previously approved by Bank in writing. Bank may require title
insurance policy endorsement prior to any advance. 

  

	 	(e)	There has been no material adverse change in the financial condition of the Borrower. 

  

	 	(f)	A foundation survey, unless waived in writing by Bank, shall have been furnished within ten (10) days after the laying of the foundation of the Improvements, showing no encroachment
on any boundary line, easement, building setback line, or other restricted area. 

  

	 	(g)	All change orders or other material changes in the construction of the Improvements which differ from the Construction Documents and which increase the cost of any portion of the
Improvements by one percent (1%) or more over the cost estimated for that portion in the Construction Budget have been approved by Bank. 

  

	 	(h)	Bank is satisfied with the progress of construction, and in the opinion of Bank, the estimated remaining cost of the construction of the Improvements does not exceed the remaining
unadvanced principal balance of the Loan. 

  

	 	(i)	No Event of Default beyond any applicable grace or cure period has occurred and remains unremedied. 

  
 CC.05. Conditions Precedent to Final Advance. Bank shall not be obligated to make the final Loan advance until all of the following
conditions have been satisfied: 
  

	 	(a)	Each and every one of the conditions stated in Section CC.04 of this Schedule “CC.” 

  

	 	(b)	The Improvements have been fully completed in a good and workmanlike manner and in accordance with the Construction Documents, the Project has passed inspection by the architect and
the Construction Officer or another agent of Bank, and certificates of completion and occupancy have been issued by all appropriate Governmental Authorities. 

  

	 	(c)	If required by Bank, an “as built” survey of the Project. 

  

	 	(d)	The final Loan advance shall be made by Bank no more than twenty-one (21) days after the Completion Date. 

  
 CC.06. Additional Covenants and Agreements. In addition to the representations, warranties, covenants, and agreements contained in
Sections 2, 3, 4, and 5 of the Loan Agreement, the following covenants and agreements apply to the Loan: 
  

	 	(a)	Payment of Contractors. Borrower shall promptly advise Bank in writing if Borrower receives any notice, written or oral, from the General Contractor, any laborer,
subcontractor, or material furnisher to the effect the General Contractor or such laborer, subcontractor, or material furnisher has not been paid for any labor or materials furnished to or contained in the Project. 

  

	 	(b)	Compliance with Construction Documents. Borrower shall, upon demand of Bank, correct any defects in the Improvements or any departure from the Construction Documents not
approved by Bank. Except for changes which increases the cost of any portion of the Improvements by one percent (1%) or less over the cost estimated for that portion in the Construction Budget, Borrower shall not change, alter, or amend either the
Construction Documents or installation of the Improvements without the prior written consent of Bank, and will not permit any deviations by any contractor(s) from the Construction Documents. 

  

	 	(c)	Subcontractors. Borrower shall deliver to Bank, upon request, the names of persons or companies with whom the General Contractor has contracted or intends to contract for the
construction of the Improvements or for the furnishing of labor or materials therefor. 

  

	 	(d)	Inspection. Borrower shall permit Bank and its authorized agents to enter upon the Project during normal working hours as often as the Bank desires, for the purpose of
inspecting the construction of the improvements, and its books and records with respect to the Project. When requested, Borrower shall furnish to Bank detailed plans, shop drawings, and specifications which relate to the Improvements. Any failure by
Bank or its authorized agents to discover or to reject unsatisfactory or defective materials or workmanship shall not make Bank liable to Borrower or to any other person, nor shall any prior failure constitute a waiver of the Bank’s right to
subsequently reject any such workmanship or materials. 

  

	 	(e)	Fees and Expenses. Regardless of whether the Loan is made or all funds are advanced hereunder, Borrower agrees to pay all expenses incurred by Bank or by Borrower in order to
meet the Bank’s requirements in connection with the Loan, including without limitation commitment fees and renewal fees or deposits to Bank, appraisal fees, survey fees, recording fees, title insurance premiums, builder’s risk and other
insurance premiums, property taxes, intangible taxes, engineer’s or inspector’s fees (including agents of the Bank), and such reasonable legal fees incurred by Bank in connection with the making of the Loan and the enforcement of the
Bank’s rights hereunder. Bank may pay any such amounts and, if Borrower shall not reimburse Bank therefor, Bank may add same to the unpaid principal balance of the Loan. 

  

	 	(f)	Use of Loan Funds. Borrower shall use all Loan proceeds solely in payment of costs incurred in connection with acquiring, constructing the Improvements on, and developing the
Mortgaged Property, in accordance with the Construction Documents and the Construction Budget furnished by the Borrower. Borrower shall furnish, whenever requested, statements showing an itemization of all expenditures and unpaid invoices.

  

	 	(g)	Bonds. Bank shall have no obligation or liability in connection with any bonds, including performance or completion bonds, that may be obtained in order to develop the
Mortgaged Property. 

  

	 	(h)	Additional Documentation. At the request of Bank, Borrower shall perform any act or execute any additional documents required by Bank to secure the Loan, to confirm the first
priority lien of the Deed of Trust, to comply with this Loan Agreement, or to correct any error or defect in any one of the Loan Documents. 

  

	 	(i)	Deposits to Cover Deficiencies. If and whenever Bank shall determine and notify Borrower that the amount of unadvanced Loan proceeds is less than the amount required to fully
complete and pay for the Improvements and Bank shall demand that Borrower deposit with Bank an amount equal to such deficiency, as determined by Bank, Borrower shall comply with such demand within ten (10) days from the date thereof. The judgment
and determination of Bank in this regard shall be final and conclusive. 

  

	 	(j)	Termination of Contract with General Contractor. Borrower shall not, without the prior written approval of Bank, terminate or cancel any contract with the General Contractor
in connection with the construction of the Improvements. Borrower shall immediately notify Bank in writing of any additional or substitute contractor(s) with whom Borrower deals, and Bank has the right to require the submission of any additional
documentation regarding such contractor(s). 

  

	 	(k)	 Construction Officer. If checked here x, Bank will designate a construction officer (which may include an independent
architect in the Bank’s sole discretion, “Construction Officer”) whose duties will include but are not limited to the following: review of the Construction Documents and all proposed changes thereto; inspection of the Improvements for
basic conformity with the Construction Documents; determination of the accuracy of Borrower’s draw requests with regard to the percentage of the construction work completed; and 

  

 Page 2 of 5 

 BB&T 
 SCHEDULE “CC” TO BB&T LOAN AGREEMENT 
  
 (Commercial/Residential Construction and/or Development Loan) 
  

	 	 
determination that the funds not yet disbursed under the Note are sufficient to complete the Improvements in accordance with the Construction Documents.
Inspections by the Construction Officer shall not be building code compliance or quality inspections. 

  
 CC.07. Additional Events of Default. In addition to the Events of Default listed in Section 7 of the Loan Agreement and in the Note, each of the following shall
also constitute an Event of Default under the Loan Agreement after passage of any applicable grace or cure period: 
  

	 	(a)	Any material deviation from the Construction Documents without the prior written approval of the Bank. 

  

	 	(b)	The appearance of defective workmanship or unsatisfactory or unsuitable materials in the Improvements. 

  

	 	(c)	The appearance on any survey required hereunder of easements or encroachments which have occurred without the prior written approval of the Bank and which are not removed or
corrected within ten (10) business days after written notice thereof to Borrower. 

  

	 	(d)	Cessation of the work of construction prior to the Completion Date for a continuous period of ten (10) business days or more for causes other than those beyond the control of
Borrower (force majeure) and consented to in writing by Bank; or the failure of Borrower to complete all Improvements as required herein. 

  

	 	(e)	Borrower neglects, fails, or refuses to keep in full force and effect any permit or approval with respect to the construction, occupation, or use of the Project.

  

	 	(f)	Borrower neglects, fails, or refuses to keep in full force and effect the hazard, liability, or builder’s risk insurance required under this Loan Agreement.

  

	 	(g)	Any suit is filed against Borrower or Guarantor which, if adversely determined, could substantially impair the ability of Borrower or Guarantor to perform any of their obligations
under the Loan Documents and such suit is not dismissed within twenty (20) business days after the filing thereof. 

  

	 	(h)	Borrower fails to keep the Mortgaged Property free and clear of all encumbrances, liens, deeds of trust, security interests, and any and all secondary financing other than those
appearing in Bank’s title policy insuring the Deed of Trust, except as may be approved in writing by the Bank in advance. 

  

	 	(i)	The removal of any materials from the Mortgaged Property or the Improvements if said materials were funded by the Borrower’s Equity or by a Loan advance.

  

	 	(j)	Any sale, transfer, or conveyance of the Mortgaged Property or any portion thereof. 

  
 CC.08. Additional Rights and Remedies. In addition to the rights and remedies specified in the Loan Agreement, Bank shall have the
following rights and remedies: 
  

	 	(a)	Assignment/Completion of Construction. As additional security for the payment of the Loan, Borrower hereby assigns to Bank all of Borrower’s right, title, and interest
in contracts related to the construction of the Improvements, including without limitation the construction contract with the General Contractor, the architect’s contract, the Construction Documents, the permanent loan commitment, if any, and
any permits obtained, but this assignment shall not, in the absence of affirmative ratification of such contracts by Bank, be deemed to impose upon Bank any of the Borrower’s obligations under any such contract. Borrower hereby empowers and
appoints Bank its true and lawful attorney-in-fact, with full power of substitution in the premises to complete the Improvements in the name of Borrower. Borrower hereby empowers said attorney as follows: (1) to use any funds of Borrower, including
any funds which may remain unadvanced under the Loan, for the purpose of completing the Improvements in accordance with the Construction Documents; (2) to make such additions, changes, and corrections in the Construction Documents as shall be
necessary or desirable to complete the Improvements; (3) to employ such contractors, subcontractors, agents, architects, engineers, and inspectors as shall be required for said purposes; (4) to pay, settle, or compromise all existing bills and
claims which may be liens against Improvements, or as may be necessary or desirable in the sole discretion of the Bank for the completion of the Improvements or for clearance of title; (5) to take over and use all or any part of the labor,
materials, supplies, and equipment contracted for, or owned by, or under the control of Borrower; (6) to execute all applications and certificates in the name of Borrower which may be required by any of the contract documents; (7) to prosecute and
defend all actions or proceedings in connection with the Mortgaged Property or the construction of the Improvements and take such action and require such performance as Bank shall deem necessary under any performance or payment bond; and (8) to do
any and every act with respect to construction or completion of the Improvements or the closing of any permanent financing which Borrower might do in its own behalf including, without limitation, execution, acknowledgment, and delivery of all
instruments, documents, and papers in the name of Borrower as may be necessary or desirable in the sole discretion of Bank. It is further agreed that this power of attorney, which shall be deemed to be a power coupled with an interest, is
irrevocable. All sums so expended by Bank shall be deemed to have been advanced to Borrower pursuant to this Loan Agreement and secured by the Deed of Trust and the other Loan Documents. Borrower hereby assigns to Bank all sums unadvanced under the
Loan, such assignment to be effective only in case of acceleration of the Loan by Bank. 

  

	 	(b)	Disputes. Where disputes have arisen which, in the opinion of Bank, may endanger timely completion of the Improvements or fulfillment of any condition precedent or covenant
herein, Bank may agree to advance Loan funds for the account of Borrower without prejudice to Borrower’s rights, if any, to recover said funds from the party to whom paid. Such agreement or agreements may take the form which Bank in its
discretion deems proper, including without limitation agreements to indemnify (on behalf of Borrower and/or for Bank’s own account) any title insurer against possible assertion of lien claims. All sums paid or agreed to be paid pursuant to such
undertaking shall be for the account of Borrower, and Borrower agrees to reimburse Bank for any such payments made upon demand therefor, with interest at the rate applicable under the Note from the day of payment until the date of reimbursement.
Such payments are secured by the Deed of Trust and by the other applicable Loan Documents. 

  

	 	(c)	Remedies Cumulative/Nonwaiver. All remedies of Bank provided for herein or in the other Loan Documents are cumulative and shall be in addition to any and all other rights and
remedies provided for or available under the other Loan Documents, at law or in equity. The exercise of any right or remedy by Bank hereunder shall not in any way constitute a cure or waiver of default hereunder or under any of the applicable Loan
Documents, or invalidate any act done pursuant to any notice of default, or prejudice the Bank in the exercise of any of its rights hereunder or under the Loan Documents unless, in the exercise of said rights, Bank realized all amounts owed to it
under the Loan Documents. 

  

	 	(d)	No Liability of the Bank. Whether or not Bank elects to employ any or all remedies available to it upon an Event of Default, Bank shall not be liable for the construction of
or failure to construct, to complete, or to protect the Improvements, for payment of any expense incurred in connection with the exercise of any remedy available to Bank, or for the performance or nonperformance of any other obligation of Borrower.

  

	 	(e)	Security Interest. It is understood and agreed that Bank shall have and is hereby granted a lien on and a security interest in any and all now or later arising reserves,
deferred payments, advanced Loan proceeds, insurance refunds, insurance claims, deposit accounts held by Bank in Borrower’s name, impound accounts, refunds for overpayment of any kind, and any surplus of withheld funds resulting from the
invalidity of “stop notice” claims or the failure of claimants to prosecute their claims to judgment, to the extent the same arise out of or occur in connection with the construction of the Improvements, and such lien and security interest
shall constitute additional security for the Loan, and upon the occurrence of any Event or Default hereunder, Bank shall have and possess any and all remedies of a secured party provided by law with respect to enforcement of and recovery on its
security interest on such items and amounts. 

  

	 	(f)	 Assignment. It is expressly recognized and agreed that Bank may assign this Loan Agreement, the Note, the Deed of Trust, and any other Loan Documents to any
other person, firm, or legal entity, that all of the provisions thereof shall continue in full force and effect, and, in the event of such assignment, that Bank shall thereafter be relieved of all liability hereunder and any Loan advances made by
any assignee 

  

 Page 3 of 5 

 BB&T 
 SCHEDULE “CC” TO BB&T LOAN AGREEMENT 
  
 (Commercial/Residential Construction and/or Development Loan) 
  

	 	 
shall be deemed made in pursuance and not in modification hereof and shall be evidenced by the Note and secured by the Deed of Trust and any other Loan
Documents. 

  

	 	(g)	Publicity. Bank shall have the right to place upon the Mortgaged Property a sign or signs advertising the fact that financing is being provided by Bank.

  

	 	(h)	No Third Party Beneficiaries. This Loan Agreement is made and entered into for the sole protection and benefit of Bank and Borrower, their successors and assigns, and no
third person or persons shall have any right to action hereon or rights to the Loan funds at any time, nor shall Bank owe any duty whatsoever to any claimant for labor performed or material furnished in connection with the construction of the
Improvements, or to apply any undisbursed portion of the Loan to the Improvements, or to apply any undisbursed portion of the Loan to the payment of any such claim, or to exercise any right or power of Bank hereunder or arising from any default by
Borrower. 

  
 (SIGNATURES
ON FOLLOWING PAGE) 
  

 Page 4 of 5 

 BB&T 
 SCHEDULE “CC” TO BB&T LOAN AGREEMENT 
  
 (Commercial/Residential Construction and/or Development Loan) 
  

 SIGNATURE PAGE 
  
 IN WITNESS WHEREOF, the Bank, Borrower and Guarantor(s) have caused this Agreement to be duly
executed under seal all as of the date first above written. 
  
 Borrower is a Corporation: 
  

	 ATTEST:
	 	 	 	

	 	 	 	 	Name of Corporation
				
	  

	 	 	 	By:	 	 See Attached Signature Page

	 	 	 	 	 	 	 Title:
	 	  

	 (SEAL)

	 	 	 	By:	 	  

	 	 	 	 	 	 	 Title:
	 	  

  
 Borrower is a
Partnership, Limited Liability Company, or Limited Liability Partnership: 
  

	 WITNESS:
	 	 	 	  

	 	 (SEAL)

	 	 	 	 	Name of Partnership, LLC or LLP	 	 
					
	  

	 	 	 	By:	 	 See Attached Signature Page

	 	 (SEAL)

	 	 	 	 	 	 	General Partner or Manager      	 	 
					
	
  
	 	 	 	 By:
  
	 	  

	 	 (SEAL)

	 	 	 	 	 	 	General Partner or Manager
	
  

	 	 	 	 By:
  
	 	  

	 	 (SEAL)

	 	 	 	 	 	 	General Partner or Manager      	 	 

  

	 WITNESS:
	 	 	 	BRANCH BANKING AND TRUST COMPANY
				
	  

	 	 	 	By:	 	 /s/ Margaret A. Brady

	 	 	 	 	 	 	 	 	Margaret A. Brady
	 	 	 	 	 	 	 Title:
	 	Vice President
	 	 	 	 	 	 	 	

  

 Page 5 of 5 

	 	 	 	 	 EMBREX, INC.,
 a North Carolina corporation

	 Attest:
	 	 	 	 
				
	 /s/ Don T. Seaquist

	 	 	 	By:	 	 /s/ Randall L. Marcuson

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist personally came before me this day
and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate
seal, and attested by himself as its Secretary. 
  
 Witness my
hand and official seal, this the 6th day of August, 2003. 
  

	
	 /s/ Hannah J. Chase

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL] 
  

	 	 	 	 	 EMBREX POULTRY HEALTH, LLC.,
 a North Carolina limited liability
 company (SEAL)

				
	 	 	 	 	By:	 	 EMBREX, INC.,
 a North Carolina corporation,
 its manager (SEAL)

			
	 Attest:
	 	 	 	 
				
	 /s/ Don T. Seaquist

	 	 	 	By:	 	 /s/ Randall L. Marcuson

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE 
  
 I, Hannah J. Chase, a Notary Public of Orange County, State of North Carolina, do hereby certify that Don T. Seaquist personally came before me this day
and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation (the “Corporation”), Manger of Embrex Poultry Health, LLC, a North Carolina limited liability company (the “Company”), and that, by authority
duly given and (a) as the act of the Corporation and (b) as the act of the Company, the foregoing instrument was signed in the name of the Company and in the name of the Corporation by the Corporation’s President, sealed with its corporate
seal, and attested by himself as its Secretary. 
  
 Witness my
hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah J. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL]Promissory Note

 EXHIBIT 10.2 
  

	Borrower: Embrex, Inc.	  	 	  	 
	 Account Number: 4310032897
	  	 	  	Note Number: 00004
	 Address: 1040 SWABIA CT
 DURHAM NC 27703-8481
	  	BB&T	  	 DURHAM, North Carolina
 Date: August
6, 2003

	 	  	PROMISSORY NOTE	  	 

  
 THE UNDERSIGNED REPRESENTS THAT THE
LOAN EVIDENCED HEREBY IS BEING OBTAINED FOR BUSINESS/COMMERCIAL OR AGRICULTURAL PURPOSES. For value received, the undersigned, jointly and severally, if more than one, promises to pay to BRANCH BANKING AND TRUST COMPANY, a North Carolina
banking corporation (the “Bank”), or order, at any of Bank’s offices in the above referenced city (or such other place or places as may be hereafter be designated by Bank), the sum of NINE MILLION DOLLARS & 00/100 Dollars ($
9,000,000.00), in immediately available coin or currency of the United States of America. 
  

	 ̈	Borrower shall pay a prepayment penalty as set forth in the Prepayment Penalty Addendum attached hereto. 

  
 Interest shall accrue from the date hereof on the unpaid principal balance outstanding from time to time at the: 
  

	 ̈	Fixed rate of
                                       
      % per annum. 

  

	 ̈	Variable rate of the Bank’s Prime Rate plus                      %
per annum to be adjusted                              as the Bank’s Prime Rate changes. If
checked here  ̈, the interest rate will not exceed a(n)  ̈ fixed  ̈ average maximum rate of
                                 % or a  ̈ floating maximum rate of the greater of                      % or the
Bank’s Prime Rate; an t e interest rate will not decrease below a fixed minimum rate of
                             %. If an average maximum rate is specified, a determination of any
required reimbursement of interest by Bank will be made:  ̈ when Note is repaid in full by Borrower  ̈ annually beginning on
                                        .

  

	 ̈	Fixed rate of                  % per annum through
                                        
             which automatically converts on
                                        
         to a variable rate equal to the Bank’s Prime Rate plus                      % per
annum which shall be adjusted
                                        
                 as such Prime Rate changes. 

  

	x	The Adjusted LIBOR Rate, as Defined in the Attached Addendum to Promissory Note 

  
 Principal and interest are payable as follows 
  

	  
  ̈   
	 	  
 Principal (plus any accrued interest not otherwise scheduled herein) } is due in full at maturity on
    
 Principal plus accrued interest 

	 	 	 Payable in consecutive MONTHLY installments of
	  	  ̈    Principal
 x    Principal and Interest
	  	}	  	commencing on 3/5/05
	 	 	and continued on the same day of each calendar period thereafter, in 119 equal payments of $80,246.64, with one final payment of all remaining principal and accrued
interest due on 2/5/15.

  

	 ̈	ChoiceLine Payment Option: 2% of outstanding balance is payable monthly commencing on
                     and continuing on the same day of each month thereafter, with one final payment of all remaining principal and accrued
interest due on                                     .

  

	x	Accrued interest is payable MONTHLY commencing on 9/5/03 and continuing on the same day of each calendar period thereafter, with one final payment of all remaining interest due on
2/5/03 [sic] . 

  

	 ̈	Bank reserves the right in its sole discretion to adjust the fixed payment due hereunder
                                 on
                                 and continuing on the same day of each calendar
period thereafter, in order to maintain an amortization period of no more than              months from the date of this Note. Borrower understands the payment may increase if
interest rates increase. 

  

	 ̈	Prior to an event of default, Borrower may borrow, repay, and reborrow hereunder pursuant to the terms of the Loan Agreement, hereinafter defined. 

  

	 ̈	                                      
                                        
                                        
                                        
                                        
  . 

  

	 ̈	Borrower hereby authorizes Bank to automatically debit from its demand deposit or savings account(s) with Bank, any payment(s) due under this Note on the date(s) due.

  
 The undersigned shall pay to Bank a late fee in
the amount of four percent (4%) of any installment past due for fifteen (15) or more days. When any installment payment is past due for fifteen (15) or more days, subsequent payments shall first be applied to the past due balance. In addition, the
undersigned shall pay to Bank a returned payment fee if the undersigned or any other obligor hereon makes any payment at any time by check or other instrument, or by any electronic means, which is returned to Bank because of nonpayment due to
nonsufficient funds. 
  
 All interest shall be computed and
charged for the actual number of days elapsed on the basis of a year consisting of three hundred sixty (360) days. In the event periodic accruals of interest shall exceed any periodic fixed payment amount described above, the fixed payment amount
shall be immediately increased, or additional supplemental interest payments required on the same periodic basis as specified above (increased fixed payments or supplemental payments to be determined in the Bank’s sole discretion), in such
amounts and at such times as shall be necessary to pay all accruals of interest for the period and all accruals of unpaid interest from previous periods. Such adjustments to the fixed payment amount or supplemental payments shall remain in effect
for so long as the interest accruals shall exceed the original fixed payment amount and shall be further adjusted upward or downward to reflect changes in the variable interest rate; provided that unless elected otherwise above, the fixed payment
amount shall not be reduced below the original fixed payment amount. However, Bank shall have the right, in its sole discretion, to lower the fixed payment amount below the original payment amount. 
  
 This note (“NOTE”) is given by the undersigned in connection with
the following agreements (if any) between the undersigned and the Bank: 
  
 Deed(s) of Trust / Mortgage(s) granted in favor of Bank as beneficiary / mortgagee: 
  

	x	dated August 6, 2003 in the maximum principal amount of $ 9,000,000.00 granted by Embrex Poultry Health, LLC 

  

	 ̈	dated
                             in the maximum principal amount of $
                             granted by
                                       
  

  

 Security Agreement(s) granting a security interest to Bank: 
  

	x	dated August 6, 2003 given by Embrex Poultry Health, LLC 

  

	 ̈	dated
                                        
     given by
                                        
                                        
                                        
              
                                        
                                        
                                        
                                        
                                        
     

  

	 ̈	Securities Account Pledge and Security Agreement
dated                                       
         , executed by
                                        
                                        
                                        
                                        
                                        
    . 

  

	 ̈	  	Control Agreement(s) dated                     , covering	  	 ̈    Deposit Account(s)	  	 ̈    Investment Property
	 	  	 	  	 ̈    Letter of Credit Rights	  	 ̈    Electronlc Chattel Paper

  

	 ̈	Assignment of Certificate of Deposit, Security Agreement, and Power of Attorney (for Certificated Certificates of Deposit) dated
                     executed by
                                        
                                        
                                        
                                 

  

	 ̈	Pledge and Security Agreement for Publicly Traded Certificated Securities dated
                        , executed by
                                       
                                        
                                        
                                        
                                        
      

  

	 ̈	Assignment of Life Insurance Policy as Collateral dated
                                        
                            , executed by
                                       
                                        
                                        
                                        
                                        
       

  

	x	Loan Agreement dated August 6, 2003, executed by Borrower and  ̈
Guarantor(s). 

  

	x	Commitment Letter dated June 3, 2003 executed by Embrex, Inc. 

  
 All of the terms, conditions and covenants of the above described agreements (the “Agreements”) are expressly made a part of this Note by
reference in the same manner and with the same effect as if set forth herein at length and any holder of this Note is entitled to the benefits of and remedies provided in the Agreements and any other agreements by and between the undersigned and the
Bank. 
  
 No delay or omission on the part of the holder in
exercising any right hereunder shall operate as a waiver of such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or of any other right on any future
occasion. Every one of the undersigned and every endorser or guarantor of this note regardless of the time, order or place of signing waives presentment, demand, protest and notices of every kind and assents to any one or more extensions or
postponements of the time of payment or any other indulgences, to any substitutions, exchanges or releases of collateral if at any time there be available to the holder collateral for this note, and to the additions or releases of any other parties
or persons primarily or secondarily liable. 
  
 The failure to pay
any part of the principal or interest when due on this Note or to fully perform any covenant, obligation or warranty on this or on any other liability to the Bank by any one or more of the undersigned, by any affiliate of the undersigned (as defined
in 11 USC Section (101) (2)), or by any guarantor or surety of this Note (said affiliate, guarantor, or surety are herein called Obligor); or if any financial statement or other representation made to the Bank by any of the undersigned or any
Obligor shall be found to be materially incorrect or incomplete; or in the event of a default under any of the Agreements or any other obligation of any of the undersigned or any Obligor beyond any applicable grace or cure period; or in the event
the Bank demands that the undersigned secure or provide additional security for its obligations under this Note and security deemed adequate and sufficient by the Bank is not given when demanded if such collateral already serves as security for any
other loan by the Bank to the Obligor or Pledgor (as defined in Loan Agreement); or in the event one or more of the undersigned or any Obligor shall die, terminate its existence, allow the appointment of a receiver for any part of its property, make
an assignment for the benefit of creditors, or where a proceeding under bankruptcy or insolvency laws is initiated by or against any of the undersigned or any Obligor; or if there is an attachment, execution, or other judicial seizure of all or any
portion of the Borrower’s or any Obligor’s assets, including an action or proceeding to seize any funds on deposit with the Bank, and such seizure is not discharged within 20 days; or if final judgment for the payment of money in excess of
$250,000.00 shall be rendered against the Borrower or any Obligor which is not covered by insurance and shall remain undischarged for a period of 30 days unless such judgment or execution thereon is effectively stayed; or the termination of any
guaranty agreement given in connection with this Note, then any one of the same shall be a material default hereunder and this Note and other debts due the Bank by any one or more of undersigned shall immediately become due and payable at the option
of the Bank without notice or demand of any kind, which are hereby waived. From and after any event of default hereunder, interest shall accrue on the sum of the principal balance and accrued interest then outstanding at the variable rate equal to
the Bank’s Prime Rate plus 5% per annum (“Default Rate”) until such principal and interest have been paid in full, provided that such rate shall not exceed at any time the highest rate of interest permitted by the laws of the State of
North Carolina; and further provided that such rate shall also apply after judgement [sic]. In addition, upon default, the Bank may pursue its full legal remedies at law or equity, and the balance due hereunder may be charged against any obligation
of the Bank to any party including any Obligor. Bank shall not be obligated to accept any check, money order, or other payment instrument marked “payment in full” on any disputed amount due hereunder, and Bank expressly reserves the
right to reject all such payment instruments. Borrower agrees that tender of its check or other payment instrument so marked will not satisfy or discharge its obligation under this Note, disputed or otherwise, even if such check or payment
instrument is inadvertently processed by Bank unless in fact such payment is in fact sufficient to pay the amount due hereunder. 
  

 The term “Prime Rate,” if used herein, means the rate of interest per annum announced by the
Bank from time to time and adopted as its Prime Rate. The Prime Rate is one of several rate indexes employed by the Bank when extending credit, and not necessarily the lowest rate. Any change in the interest rate resulting from a change in the
Bank’s Prime Rate shall become effective as of the opening of business on the effective date of the change. If this Note is placed with an attorney for collection, the undersigned agrees to pay, in addition to principal, interest and late fees,
if any, all costs of collection, including but not limited to reasonable attorneys’ fees. All obligations of the undersigned and of any Obligor shall bind his heirs, executors, administrators, successors, and/or assigns. Use of the masculine
pronoun herein shall include the feminine and the neuter, and also the plural. If more than one party shall execute this Note, the term “undersigned” as used herein shall mean all the parties signing this Note and each of them, and all
such parties shall be jointly and severally obligated hereunder. Wherever possible, each provision of this Note shall be interpreted in such a manner to be effective and valid under applicable law, but if any provision of this Note shall be
prohibited by or invalid under such law, such provision shall be ineffective but only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note. All of the
undersigned hereby waive all exemptions and homestead laws. The proceeds of the loan evidenced by this Note may be paid to any one or more of the undersigned. 
  

From time to time the maturity date of this Note may be extended, or this Note may be renewed in whole or in part, or a new note of different form may
be substituted for this Note, or the rate of interest may be modified, or changes may be made in consideration of loan extensions, and the holder hereof, from time to time may waive or surrender, either in whole or in part any rights, guaranties,
secured interest, or liens, given for the benefit of the holder in connection with the payment and the securing the payment of this Note; but no such occurrence shall in any manner affect, limit, modify, or otherwise impair any rights, guaranties or
security of the holder not specifically waived, released, or surrendered in writing, nor shall the undersigned, or any obligor, either primarily or contingently, be released by reason of the occurrence of any such event. The holder hereof, from time
to time, shall have the unlimited right to release any person who might be liable hereon, and such release shall not affect or discharge the liability of any other person who is or might be liable hereon. No waivers and modifications shall be valid
unless in writing and signed by the Bank. The Bank may, at its option, charge any fees for the modification, renewal, extension, or amendment of any of the terms of the Note permitted by N.C.G.S. § 24-1.1. In case of a conflict between the
terms of this Note and the Loan Agreement or Commitment Letter issued in connection herewith, the priority of controlling terms shall be first this Note, then the Loan Agreement, and then the Commitment Letter. This Note shall be governed by and
construed in accordance with the laws of North Carolina. 
  

	 	 	CREDIT LIFE AND DISABILITY INSURANCE	 	N/A*

  
 Subject to certain underwriting
criteria and limitations, INDIVIDUAL BORROWERS AND ADDITIONAL CO-MAKERS HAVE THE RIGHT TO REQUEST CREDIT LIFE AND DISABILITY INSURANCE PROTECTION FOR THIS LOAN. One or two Borrowers/Co-makers may be covered by BB&T Credit Life Insurance and one
Borrower/Co-maker may be covered by BB&T Credit Disability Insurance. However, the purchase of credit life and credit disability insurance from the Bank is not a condition of obtaining this loan. 
  
 I, the undersigned, desire the credit insurance with the cost and terms described below and
promise to pay the premium of such insurance coverage. I understand that I may cancel this credit insurance at any time. I represent that, to the best of my knowledge, I am in good health and am insurable. 
  

	  ̈
	 	Product I : Complete the following:	  	 ̈	  	 Fidelity Security Insurance Company Flex Plan
 (Complete separate application)

  

	CREDIT LIFE INSURANCE	    	Effective
Date	    	Term
in Mos.	    	Amount
Financed	    	Interest
Rate	    	Credit Life
Premium
	  ̈
	  	Single	  	 ̈	  	Level	    	 	    	 	    	 	    	 	    	 
	  ̈
	  	Joint	  	 ̈	  	Decreasing	    	_______	    	________	    	$                	    	______	    	$                

  

	 CREDIT DISABILITY INSURANCE
 Effective Date
and Terms in Mos.
 Same as Credit Life Insurance Above
	  	Monthly Benefit Amount	    	Credit Disability Premium
			
	                                       
                                        
                                        
        
	  	$                                      
  	    	$                                      
  

  
 Credit Disability Insurance is subject
to a 14-day elimination period and a 60-month maximum benefit period. Only the Borrower or Co-Maker who signs the first line under “Signature(s) of Insured” is covered by Credit Disability Insurance. 
  

	Date of Birth	 	Signature(s) of Insured	 	Total Credit Life and Disability
Insurance Premium
			
	____________________________	 	____________________________	 	 
	 	 	Signature of Primary Insured	 	 
			
	____________________________	 	____________________________	 	$____________________________
	 	 	Signature of Primary Insured	 	 

  
 (SIGNATURE ON
FOLLOWING PAGE) 
  

 BB&T 
 PROMISSORY NOTE SIGNATURE PAGE 
  

	 Borrower: Embrex, Inc.
	  	 
	 Account Number: 4310032897
	  	Note Number: 00004
	 Note Amount: $ 9,000,000.00
	  	Date: August 6, 2003

  
 Notice of Right to Copy of
Appraisal: If a 1-4 family residential dwelling is pledged as collateral for this Note, you, the undersigned, have a right to a copy of the real estate appraisal report used in connection with your application for credit. If you wish to
receive a copy, please notify in writing the branch office where you applied for credit. You must forward your request to the Bank no later than 90 days after the date of this Note. In your request letter, please provide your name, mailing address,
appraised property address, the date of this Note, and the Account and Note Numbers shown on the front of this Note. 
  
 IN WITNESS WHEREOF, the undersigned, on the day and year first written above, has caused this note to be executed under seal. 
  
 If Borrower is a Corporation: 
  

	WITNESS:	  	 	 	 	  	SEE ATTACHED SIGNATURE PAGE
	 	 	 	 	

	  	 	 	 	  	 	 	NAME OF CORPORATION	 	 
						
	 	  	 	 	By:	  	 	 	 	 	(SEAL)
	
	 	 	 	 	 	 	
	 	 
						
	 	  	 	 	Title:	  	 	 	 	 	 
	 	 	 	 	 	 	 	
	 	 
	 	  	 	 	 	  	 	 	 	 	 
						
	 	  	 	 	By:	  	 	 	 	 	(SEAL)
	
	 	 	 	 	 	 	
	 	 
						
	 	  	 	 	Title:	  	 	 	 	 	 
	 	 	 	 	 	 	 	
	 	 

  
 If Borrower is a
Partnership, Limited Liability Company, Limited Liability Partnership or 
 Limited Liability Limited Partnership: 
  

	WITNESS:	  	 	 	 	  	 
	 	 	 	 	

	  	 	 	 	  	 	 	Name of Partnership, LLC, LLP or LLLP	 	 
						
	 	  	 	 	By:	  	 	 	 	 	(SEAL)
	
	 	 	 	 	 	 	
	 	 
						
	 	  	 	 	 	  	 	 	General Partner or Manager	 	 
	 	  	 	 	 	  	 	 	 	 	 
						
	 	  	 	 	By:	  	 	 	 	 	(SEAL)
	
	 	 	 	 	 	 	
	 	 
						
	 	  	 	 	 	  	 	 	General Partner or Manager	 	 
						
	 	  	 	 	 	  	 	 	 	 	 
						
	 	  	 	 	By:	  	 	 	 	 	(SEAL)
	
	 	 	 	 	 	 	
	 	 
	 	  	 	 	 	  	 	 	General Partner or Manager	 	 

  
 If Borrower is an
individual 
  

	WITNESS:	  	 	 	 	  	 	 	 	 	 
				
	 	  	 	 	 	 	(SEAL)
	
	 	 	
	 	 

  
 Additional Co-makers

  

	WITNESS:	  	 	 	 	  	 	 	 	 	 
				
	 	  	 	 	 	 	(SEAL)
	
	 	 	
	 	 
	 	  	 	 	 	  	 	 	 	 	 
	 	  	 	 	 	 	(SEAL)
	
	 	 	
	 	 
	 	  	 	 	 	  	 	 	 	 	 
	 	  	 	 	 	 	(SEAL)
	
	 	 	
	 	 
	 	  	 	 	 	  	 	 	 	 	 
	 	  	 	 	 	 	(SEAL)
	
	 	 	
	 	 

	 	 	 	 	 EMBREX, INC.
 a North Carolina
Corporation

	Attest:	 	 	 	 
				
	 /s/ Don T. Seaquist

	 	 	 	By:	 	 /s/ Randall L. Marcuson

	Don T. Seaquist, Secretary	 	 	 	 	 	 Randall L. Marcuson
 President &
CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE, 
  
 I, Hannah T. Chase, a Notary Public of Orange County, State of North
Carolina,. do hereby certify that Don T. Seaquist personally came before me this day and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the
foregoing instrument was signed in its name by its President, sealed with its corporate seal, and attested by himself as its Secretary. 
  
 Witness my hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah T. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL] 

 ATTACHMENT TO BB&T NOTE 
  
 Account Number: 4310032897 
  
 Note Number: 00004 
  
 Attachment of BB&T Promissory Note dated August 6, 2003 in the amount of $9,000,000 between Branch Banking & Trust Company, as Bank, and Embrex, Inc., as
Borrower. 
  

	I.	Repayment terms of this note are as follows: 

  
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
                                       
                                        
                                        
                                        
                                        
                                        
                    
  

	II.	Deed(s) of Trust granted in favor of Bank as beneficiary: 

  
  ̈    dated                                 
                                        
         in the maximum principal amount of $                  
                                        
                        
         granted by                           
                                        
                                        
                                        
                                        
                                        

  
  ̈    dated                                 
                                        
         in the maximum principal amount of $                  
                                        
                        
         granted by                           
                                        
                                        
                                        
                                        
                                        

  
  ̈    dated                                 
                                        
         in the maximum principal amount of $                  
                                        
                        
         granted by                           
                                        
                                        
                                        
                                        
                                        

  
  ̈    dated                                 
                                        
         in the maximum principal amount of $                  
                                        
                        
         granted by                           
                                        
                                        
                                        
                                        
                                        

  
  ̈    dated                                 
                                        
         in the maximum principal amount of $                  
                                        
                        
         granted by                           
                                        
                                        
                                        
                                        
                                        

  

	III.	Security Agreement(s) conveying a security interest in favor of Bank: 

  
  ̈    dated                                 
                                        
                                      given by
                                       
                                        
                                
                                      
                                        
                                        
                                        
                                        
                                        
                   
  
  ̈    dated                                 
                                        
                                      given by
                                       
                                        
                                
                                      
                                        
                                        
                                        
                                        
                                        
                   
  
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                                      given by
                                       
                                        
                                
                                      
                                        
                                        
                                        
                                        
                                        
                   
  
  ̈    dated                                 
                                        
                                      given by
                                       
                                        
                                
                                      
                                        
                                        
                                        
                                        
                                        
                   
  
  ̈    dated                                 
                                        
                                      given by
                                       
                                        
                                
                                      
                                        
                                        
                                        
                                        
                                        
                   
  

	IV.	Additional Agreements, Assignments, Pledges or other security instruments: 

  

	x	Environmental Certification and Indemnity Agreement dated August 6, 2003 executed by Embrex, Inc. and Embrex Poultry Health, LLC 

  

	x	Rider to Note and Deed of Trust dated August 6, 2003 executed by Embrex, Inc. and Embrex Poultry Health, LLC 

  
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	 	 	 	 	 EMBREX, INC.
 a North Carolina
Corporation

	 Attest:
	 	 	 	 
				
	 /s/ Don T. Seaquist

	 	 	 	By:	 	 /s/ Randall L. Marcuson

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH CAROLINA 
  
 COUNTY OF ORANGE, 
  
 I, Hannah T. Chase, a Notary Public of Orange County, State of North Carolina,. do hereby certify that Don T. Seaquist personally came before me this day
and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the foregoing instrument was signed in its name by its President, sealed with its corporate
seal, and attested by himself as its Secretary. 
  
 Witness my
hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah T. Chase
	

	Notary Public

  
  
 My Commission Expires: 12/25/2007 
  
 [OFFICIAL SEAL] 
  

 BB&T 
  
 ADDENDUM TO PROMISSORY NOTE 
  
 THIS ADDENDUM is hereby made a part of the Promissory Note dated August 6, 2003 from Embrex, Inc. (“Borrower”) payable to the order of Branch
Banking and Trust Company (“Bank”) in the principal amount of $ 9,000,000.00 (including all renewals, extensions, modifications and substitutions therefore, the “Note”). 
  
 I. DEFINITIONS 
  
 1.1 Adjusted LIBOR Rate means a rate of interest per annum equal to the sum obtained (rounded upwards, if necessary, to the next
higher 1/100th of 1.0%) by adding (i) 30-day LIBOR plus (ii) 1.65% per annum, which shall be adjusted monthly on the first day of each month for each LIBOR Interest Period. If the first day of any month falls on date when the Bank is closed, the
Adjusted LIBOR Rate shall be determined as of the last preceding business day. The Adjusted LIBOR Rate shall be adjusted for any change in the LIBOR Reserve Percentage so that Bank shall receive the same yield [sic]. If checked here  ̈ the interest rate will not exceed a(n)  ̈ fixed
 ̈ average maximum rate of              % and will not decrease below a
minimum rate of              %. If an average maximum rate is specified, a determination of the average interest rate assessed and a reimbursement by the Bank of interest paid in
excess of the maximum rate, if any, will be made on             . If the loan has been repaid prior to this date, no reimbursement will be made. 
  
 1.2 LIBOR means the average rate (rounded upward, if necessary, to the next higher 1
/100th of 1.0%) quoted in the Wall Street Journal (Credit Markets Section) or on Bloomberg Screen MMR2 on the determination date for deposits in U.S. Dollars offered in the London interbank market to five major European Banks, or if the above method
for determining LIBOR shall not be available, a rate determined by a substitute method of determination agreed on by Company and Bank; provided, if such agreement is not reached within a reasonable period of time (in Bank’s judgement [sic]), a
rate reasonably determined by Bank in its sole discretion as a rate being paid, as of the determination date, by first class banking organizations (as determined by Bank) in the London interbank market for U.S. Dollar deposits. 
  
 1.3 LIBOR Advance means any loan made by Bank to Borrower evidenced by this Note upon
which the Adjusted LIBOR Rate of interest shall apply. 
  
 1.4 LIBOR Interest
Period means a period of one calendar month as may be elected by the Borrower applicable to any LIBOR Advance which shall begin on first day of any month notwithstanding the maturity date of this Note; provided, however, that a LIBOR Interest
Period may be less than one calendar month in and only in the calendar month in which the Note originates or matures. 
  
 1.5 LIBOR Reserve Percentage means the maximum aggregate rate at which reserves (including, without limitation, any marginal supplemental or emergency reserves)
are required to be maintained under Regulation D by member banks of the Federal Reserve System with respect to dollar funding in the London interbank market. Without limiting the effect of the foregoing, the LIBOR Reserve Percentage shall reflect
any other reserves required to be maintained by such member banks by reason of any applicable regulatory change against (i) any category of liability which includes deposits by reference to which the Adjusted LIBOR Rate is to be determined or (ii),
any category of extensions of credit or other assets related to LIBOR. 
  
 1.6
Standard Advance means any loan made by Bank to Borrower evidenced by this Note upon which the Standard Rate shall apply. 
  
 1.7 Standard Rate means, for any day, a rate per annum (rounded upwards, if necessary, to the next 1 /100th of 1.0%) equal to the Bank’s announced Prime Rate
plus              % per annum, and each change in the Standard Rate shall be effective on the date any change in the Prime Rate is publicly announced as being effective. 

 

 II. LOANS BEARING ADJUSTED LIBOR RATE 
  
 2.1 Election of Adjusted LIBOR Rate. Borrower may elect to have the Adjusted LIBOR Rate apply to (i) the entire principal balance
outstanding of a term loan for any LIBOR Interest Period or (ii) all advances made to Borrower under a revolving line of credit for any LIBOR Interest Period. Not less than two (2) banking days prior to an initial election of a LIBOR Interest
Period, Borrower shall furnish written or telecopy notice to Bank of its election to have the Adjusted LIBOR Rate or the Standard Rate to apply on and after such date. If Bank has not received two (2) banking days prior notice from Borrower to the
contrary, the application rate last elected shall continue to apply. 
  
 2.2
Revolving Credit Advances. Subject to the terms, conditions, and limitations set forth in any loan agreement (or other document) between Borrower and Bank, advance may be made to Borrower under a revolving line of credit at any time during a
LIBOR Interest Period at the then existing Adjusted LIBOR Rate, and may be repaid at any time prior to the maturity of such line of credit. 
  
 2.3 Reaffirmation of Representations and Warranties. Each request for a LIBOR Advance shall constitute a reaffirmation of the representations and warranties set
forth in any loan agreement, this Note and the security documents executed by the Borrower in connection therewith (collectively “Loan Documents”), and that (i) Borrower is in compliance with all terms and conditions of the Loan Documents,
(ii) no event of default nor any event which with the giving of notice or passage of time, or both, has occurred under the Loan Documents and remains unremedied, and (iii) no part of the proceeds of any LIBOR Advance have or will be used by Borrower
or any affiliate of Borrower to purchase or carry margin stock, as defined in Regulation U of the Federal Reserve Board, nor will such proceeds be used for any purpose in violation of the provisions of Regulations G, T, U or X of the Federal Reserve
Board. 
  
 2.4 Obligation to Borrow. Each request for a LIBOR Advance shall
constitute an obligation of Borrower to borrow the requested LIBOR Advance. 
  
 2.5 Adiusted LIBOR Based Rate Protections. 
  
 (a)
Inability to Determine Rate. In the event that Bank shall have determined, which determination shall be final, conclusive and binding, that by reason of circumstances occurring after the date of this Note affecting the London interbank
market, adequate and fair means do not exist for ascertaining the LIBOR on the basis provided for in this Note, Bank shall give notice (by telephone confirmed in writing or by telecopy) to Borrower of such determination, whereupon (i) no LIBOR
Advance shall be made until Bank notifies Borrowers that the circumstances giving rise to such notice no longer exist, and (ii) any request by Borrowers for a LIBOR Advance shall be deemed to be a request for a Standard Advance. 
  
 (b) Illegality; Impracticability. In the event that Bank shall
determine, which determination shall be final, conclusive and binding, that the making maintaining or continuance of any portion of a LIBOR Advance (i) has become unlawful as a result of compliance by Bank with any law, treaty, government rule,
regulation, guideline or order (or would conflict with any of the same not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause Bank material hardship, as a
result of contingencies occurring after the date of this Note materially and adversely affect [sic] the London interbank market or Bank’s ability to make LIBOR Advances generally, then, and in any such event, Bank shall give notice (by
telephone confirmed in writing or by telecopy) to Borrower of such determination. Thereafter, (x) the obligation of Bank to make any LIBOR Advances or to convert any portion of the loan to a LIBOR Advance shall be suspended until such notice shall
be withdrawn by Bank, and (y) any request by Borrower for a LIBOR Advance shall be deemed to be a request for a Standard Advance. 
  

				
	 BORROWER:
	 	 	 	 	 	 
				
	 Individual(s):
	 	 	 	 	 	 Partnership or Limited Partnership;

				
	  

	 	 (SEAL)
	 	 	 	  

						
	  

	 	 (SEAL)
	 	 	 	 By
	 	  

	 	 (SEAL)

	 	 	 	 	 	 	 	 	General Partner	 	 
					
	 Corporation
	 	 	 	 	 	 Limited Liability Company
	 	 
	 SEE ATTACHED SIGNATURE PAGE
	 	 	 	 	 	 	 	 
	
	 	 	 	 	 	 	 	 
	 By
	 	  

	 	 	 	 By
	 	
	 	 (SEAL)

	 Title
	 	  

	 	 	 	 	 	Manager	 	 

  

	 	 	 	 	 EMBREX, INC.
 a North Carolina Corporation

	 Attest:
	 	 	 	 
				
	 /s/ Don T. Seaquist

	 	 	 	 By:
	 	 /s/ Randall L. Marcuson

	 Don T. Seaquist, Secretary
	 	 	 	 	 	 Randall L. Marcuson
 President & CEO

  
 [CORPORATE SEAL] 
  
 STATE OF NORTH
CAROLINA 
  
 COUNTY OF ORANGE, 
  
 I, Hannah T. Chase, a Notary Public of Orange County, State of North
Carolina,. do hereby certify that Don T. Seaquist personally came before me this day and acknowledged that he is Secretary of Embrex, Inc., a North Carolina corporation, and that, by authority duly given and as the act of the corporation, the
foregoing instrument was signed in its name by its President, sealed with its corporate seal, and attested by himself as its Secretary. 
  
 Witness my hand and official seal, this the 6th day of August, 2003. 
  

	
	/s/ Hannah T. Chase
	

	Notary Public

  
 My Commission Expires:
12/25/2007 
  
 [OFFICIAL SEAL]

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