Document:

Amendment No.1 to Credit Agreement

  EXHIBIT 10.9
 AMENDMENT NO. 1 TO CREDIT AGREEMENT
  
             THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT, is dated as of January 31, 2003 (this “Amendment”), among the following:
  

             (i)        STONERIDGE, INC., an Ohio corporation (herein, together with its successors and assigns, the
“Company”); 
 
  
               (ii)       the Foreign Subsidiary Borrowers party
to the Credit Agreement, as hereinafter defined;
 
  
              (iii)      the Lenders party to the Credit
Agreement; and
             (iv)      NATIONAL CITY BANK, a national banking association, as a Lender, the Collateral Agent and the
Administrative Agent under the Credit Agreement (in such latter capacity, the “Administrative Agent”).
 
  
            
PRELIMINARY STATEMENTS:
  
             (1)       The Company, the Foreign Subsidiary Borrowers, the Lenders and the
Administrative Agent are parties to the Credit Agreement, dated as of May 1, 2002 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein and not otherwise defined
herein having the meanings provided in the Credit Agreement).
  
             (2)       The parties hereto desire to modify
certain terms and provisions of the Credit Agreement, all as more fully set forth below.
  
             NOW, THEREFORE, the parties hereby agree as
follows:
  
             Section 1.        Amendments.
  
             1.1       Amendment to Section 9.12.  Section 9.12 of the Credit Agreement is hereby amended and restated in its entirety to read
as follows: 
  
               9.12.    Certain Leases.  The Company will not permit the aggregate payments (excluding
any property taxes, insurance or maintenance obligations paid by the Company and its Subsidiaries as additional rent or lease payments) by the Company and its Subsidiaries on a consolidated basis under agreements to rent or lease any real or
personal property for a period exceeding 12 months (including any renewal or similar option periods), other than any leases constituting Capital Leases, to exceed $10,000,000 during any fiscal year.
 
  
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            Section 2.     Representations and Warranties.   
  

          The Company represents and warrants as follows:  
  
           2.1.      Authorization and Validity of Amendment.  This Amendment has been duly authorized by all necessary corporate action on the part of the Company, has been duly executed and delivered by a duly
authorized officer of the Company, and constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms. 
  

          2.2.      Representations and Warranties.   The representations and warranties of the Credit Parties contained in the Credit
Agreement or in the other Credit Documents are true and correct in all material respects on and as of the Amendment Effective Date, as though made on and as of the Amendment Effective Date, except to the extent that such representations and
warranties expressly relate to an earlier specified date, in which case such representations and warranties are hereby reaffirmed as true and correct in all material respects as of the date when made. 
  

          2.3.      No Event of Default.  Upon giving effect to this Amendment, no Default or Event of Default exists or hereafter will begin to
exist. 
  
            2.4.     Compliance.  Each Credit Party is in full compliance with all covenants and agreements contained in
the Credit Agreement, as amended hereby, and the other Credit Documents to which it is a party.
  
            2.5.     No Claims. 
No Credit Party is aware of any claim or offset against, or defense or counterclaim to, any of its obligations or liabilities under the Credit Agreement or any other Credit Document.
  

          Section 3.    Ratifications.  
  
           Except as
expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed and shall continue in full force and effect.
  

          Section 4.     Binding Effect.   
  
             This Amendment shall become effective on the date first set forth above (the “Amendment Effective Date”), but with retroactive effect to December 31,
2002, subject to the satisfaction of the following conditions:
           (a)       the Company, each other Borrower (if any),
the Administrative Agent and the Required Lenders shall have delivered an executed counterpart of this Amendment to the Administrative Agent;
        (b)       the Company shall have caused each Subsidiary Guarantor to consent and agree to and acknowledge the terms of this Amendment;
 
 
  
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                (c)       the Company shall have paid all reasonable legal fees and expenses of the
Administrative Agent in connection with this Amendment and the documents executed in connection therewith; and 
 
  
              
(d)       the Company shall have provided such other items and shall have satisfied such other conditions as may be reasonably required by the Administrative Agent and the Lenders.
 
  

 Section 5.        Miscellaneous.  
 
  
            
5.1.      Survival of Representations and Warranties.  All representations and warranties made in this Amendment shall survive the execution and delivery of this Amendment, and no investigation by the
Administrative Agent or any Lender or any subsequent Loan or other Credit Event shall affect the representations and warranties or the right of the Administrative Agent or any Lender to rely upon them.
  
             5.2.      Reference to Credit Agreement.  The Credit Agreement and any and all other agreements, instruments or documentation now or
hereafter executed and delivered pursuant to the terms of the Credit Agreement as amended hereby, are hereby amended so that any reference therein to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.

 
             5.3.      Severability.  Any term or provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the term or provision so held to be invalid or unenforceable.
  
             5.4.      Applicable Law.  This Amendment shall be governed by and construed in accordance with the laws of the State of Ohio without
regard to conflicts of laws provisions.
  
             5.5.      Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.
  
             5.6.     
Entire Agreement.  This Amendment is specifically limited to the matters expressly set forth herein. This Amendment and all other instruments, agreements and documentation executed and delivered in connection with this Amendment embody
the final, entire agreement among the parties hereto with respect to the subject matter hereof and supersede any and all prior commitments, agreements, representations and understandings, whether written or oral, relating to the matters covered by
this Amendment, and may not be contradicted or varied by evidence of prior, contemporaneous or subsequent oral agreements or discussions of the parties hereto. There are no oral agreements among the parties hereto relating to the subject matter
hereof or any other subject matter relating to the Credit Agreement.  Except as set forth herein, the Credit Agreement shall remain in full force and effect and be unaffected hereby.
  
             5.7.      Waiver of Claims.  The Company, by signing below, hereby waives and releases Administrative Agent and each of the Lenders and
their respective directors, officers, employees,
  
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  attorneys, affiliates and subsidiaries from any and all claims, offsets, defenses and counterclaims of which the Company is aware, such waiver and release being with full knowledge and understanding
of the circumstances and effect thereof and after having consulted legal counsel with respect thereto.
  
           5.8.      Counterparts.  This Amendment may be executed by the parties hereto separately in one or more counterparts and by facsimile signature, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same agreement.
  
 [Remainder of page intentionally left blank.]
  
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            5.9. JURY TRIAL WAIVER. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.  EACH PARTY HERETO HEREBY (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
           IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the date first above written.
 

	  
 	  STONERIDGE, INC.
 
	  
 	  
 	   
 
	  
 	  By:
 	  /s/ KEVIN P. BAGBY
 
	  
 	  
 	 
 
	  
 	 Name:
 	  Kevin P. Bagby
 
	  
 	  
 	 
 
	  
 	  Title:
 	  Vice-President and Chief Financial Officer 
 
	  
 	  
 	 
 

	 	 
	  
 	  NATIONAL CITY BANK, 
     as a Lender and the Administrative Agent
 
	  
 	  
 	   
 
	  
 	  By:
 	  /s/ PATRICK M. PASTORE
 
	  
 	  
 	 
 
	  
 	 Name:
 	  Patrick M. Pastore
 
	  
 	  
 	 
 
	  
 	  Title:
 	  Senior Vice-President
 
	  
 	  
 	 
 

 [SIGNATURE PAGES OF OTHER LENDERS FOLLOW]
  
 5
  

 
 

  Signature Page to Amendment No. 1
  

	 Comerica Bank 	       	         	 AMMC CDO II, Limited 	 
	 
 			 
 	 
	 	   	 		      	  By:
 	   	American Money Management Corp.,
 As Collateral Manager 	  
	 	 	 						
	  By: 
 	 	 /s/ SARAH N. RIGGS 
 		 	By: 	 	/s/ DAVID P. MEYER 
 	
	  Name: 
 	 	 Sarah N. Riggs  
 		 	 Name: 
 	 	 David P. Meyer   
 	 
	  Title: 
 	 	 Account Officer   
 		 	 Title: 
 	 	Vice-President   
 	 
	 		 	 	 	 	
	 Deutsche Bank Trust Company Americas  
 		 	 	 	 	
	 	 	 			 	 	 	 
	  By: 
 	 	 /s/ M. A. ORLANDO   
 		 	 David L. Babson & Co., Inc.  
 	 
	  Name: 
 	 	 Marco Orlando   
 		 	    As collateral manager for: 
       D25 Mayplewood (Cayman) Limited  

      GIA-Long Term Pool 
       Newton CDO Ltd.   
       SSB Fund 1 	 
	  Title: 
 	 	 Director   
 		 	 
	 	 	 		 	 
	 Fifth Third Bank 		 	  	 	 	 
	 
 			 	 	 	 
	 	 	 			 	 	 	 
	  By: 
 	 	 /s/ C. S. HELMECI   
 		 	  By: 
 	 	 /s/ GLENN DUFFY  
  	 
	  Name: 
 	 	 C. S. Helmeci   
 		 	  Name: 
 	 	 Glenn Duffy  
 	 
	  Title: 
 	 	 Vice-President   
 		 	  Title: 
 	 	 Managing Director   
  	 
	 		 	 	 	 	 
	 U.S. Bank, N.A. 		 	 	 	Flagship CLO – 2001-1	 
	 
 			 
 	 
	 	 	 			 	 	 	 
	  By: 
 	 	 /s/ JOHN D. BARRETT  
 		 	  By: 
 	 	 /s/ MARK PELLETIER  
  	 
	  Name: 
 	 	 John D. Barrett   
 		 	  Name: 
 	 	 Mark Pelletier  
 	 
	  Title: 
 	 	 Senior Vice-President   
 		 	  Title: 
 	 	 Director  
 	 
	 		 	 	 	 	 
	 AMMC CDO I, Limited 		 	 Columbus Loan Funding Ltd. 	 
	 
 		 	 
 	 
	 By:  
 	 	American Money Management Corp., 
 As Collateral Manager  		 	By:   	 	Travelers Asset Management
 International Company, LLC 	
	 	 	 		 	 	 	 	 
	  By: 
 	 	 /s/ DAVID P. MEYER  
 		 	  By: 
 	 	 /s/ MATTHEW J. MCINERNY  
  	 
	  Name: 
 	 	 David P. Meyer  
 		 	  Name: 
 	 	 Matthew J. McInerny  
  	 
	  Title: 
 	 	 Vice-President  
 		 	  Title: 
 	 	 Investment Officer  
  	 

  
 Signature Page to Amendment No. 1 to
 the Credit Agreement dated as of May 1, 2002 by and among
 Stoneridge, Inc., 
 the Foreign Subsidiary Borrowers,
 the Lenders party thereto,
 and National City Bank, as the Administrative Agent

  Signature Page to Amendment No. 1

	 Citigroup Investments Corporate Loan Fund Inc.	       	         	 Endurance CLO I, Ltd.	 
	 
 			 
 	 
	By: 	   	Travelers Asset Management International
 Company, LLC 		      	  By:
 	   	ING Capital Advisors LLC, as
 Collateral Manager	  
	 	 	 						
	  By: 
 	 	 /s/ MATTHEW J. MCINERNY 
 		 	By: 	 	/s/ PHILIP C. ROBBINS 
 	
	  Name: 
 	 	Matthew J. McInerny  
 		 	 Name: 
 	 	 Philip C. Robbins   
 	 
	  Title: 
 	 	 Investment Officer      
 		 	 Title: 
 	 	Vice-President   
 	 
	 		 	 	 	 	
	 The Travelers Insurance Company 		 	 Nemean CLO, Ltd.  	 
	 
 			 
 	 
	 	 	 			By:	 	ING Capital Advisors LLC, as
 Investment Manager	 
	 	 	 			 	 	 	 
	  By: 
 	 	 /s/ MATTHEW J. MCINERNY   
 		 	  By: 
 	 	 /s/ PHILIP C. ROBBINS  
 
	 
	  Name: 
 	 	 Matthew J. McInerny   
 		 	  Name: 
 	 	 Philip C. Robbins   
 	 
	  Title: 
 	 	 Investment Officer         
 		 	  Title: 
 	 	 Vice-President      
  	 
	 		 	 	 	 	 
	 Archimedes Funding III, Ltd. 		 	 	 	ORYX CLO, Ltd.	 
	 
 			 
 	 
	By:	 	ING Capital Advisors LLC, as
 Collateral Manager 			By:	 	ING Capital Advisors LLC, as
 Collateral Manager	 
	 	 	 			 	 	 	 
	  By: 
 	 	 /s/ PHILIP C. ROBBINS 
 		 	  By: 
 	 	 /s/ PHILIP C. ROBBINS   
  	 
	  Name: 
 	 	Philip C. Robbins   
 		 	  Name: 
 	 	 Philip C. Robbins   
 	 
	  Title: 
 	 	 Vice-President   
 		 	  Title: 
 	 	 Vice-President     
 	 
	 		 	 	 	 	 
	 Archimedes Funding IV (Cayman), Ltd.		 	 Sequils-ING I (HBDGM), Ltd.	 
	 
 		 	 
 	 
	 By:  
 	 	ING Capital Advisors LLC, as
 Collateral Manager 		 	By:   	 	ING Capital Advisors LLC, as
 Collateral Manager 	
	 	 	 		 	 	 	 	 
	  By: 
 	 	 /s/ PHILIP C. ROBBINS  
 		 	  By: 
 	 	 /s/ PHILIP C. ROBBINS  
  	 
	  Name: 
 	 	 Philip C. Robbins  
 		 	  Name: 
 	 	 Philip C. Robbins  
  	 
	  Title: 
 	 	 Vice-President  
 		 	  Title: 
 	 	 Vice-President   
  	 

 Signature Page to Amendment No. 1 to
 the Credit Agreement dated as of May 1, 2002 by and among
 Stoneridge, Inc., 
 the Foreign Subsidiary Borrowers,
 the Lenders party thereto,
 and National City Bank, as the Administrative Agent

  Signature Page to Amendment No. 1

	 ING Prime Rate Trust	       	         
	 
 		
	  By: 
 	 	  ING Investments LLC, as
 Investment Manager
 		 
	 	 	 		
	  By: 
 	 	 /s/ MARK F. HAAK  
 		 
	  Name: 
 	 	 Mark F. Haak, CFA  
 		 
	  Title: 
 	 	 Vice-President   
 		 
	 	 	 
	 	 	 
	 ING Senior Income Fund	       	         
	 
 		
	  By: 
 	 	  ING Investments LLC, as
 Investment Manager
 		 
	 	 	 		
	  By: 
 	 	 /s/ MARK F. HAAK  
 		 
	  Name: 
 	 	 Mark F. Haak, CFA  
 		 
	  Title: 
 	 	 Vice-President   
 		 
	 	 	 
	 	 	 
	 ML CLO XII Pilgrim America (Cayman) Ltd.	       	         
	 
 		
	  By: 
 	 	  ING Investments LLC, as
 Investment Manager
 		 
	 	 	 		
	  By: 
 	 	 /s/ MARK F. HAAK  
 		 
	  Name: 
 	 	 Mark F. Haak, CFA  
 		 
	  Title: 
 	 	 Vice-President   
 		 

  
  
  
 Signature Page to Amendment No. 1 to
 the Credit Agreement
dated as of May 1, 2002 by and among
 Stoneridge, Inc.,
 the Foreign Subsidiary Borrowers,
 the Lenders party thereto,
and National City Bank, as the
Administrative Agent

  GUARANTOR ACKNOWLEDGMENT
          Each of the undersigned consents and agrees to and
acknowledges the terms of the foregoing Amendment No. 1 to the Credit Agreement.  Each of the undersigned specifically agrees to the waivers set forth in such agreement, including, but not limited to, the jury trial waiver. Each of the
undersigned further agrees that the obligations of the each of the undersigned pursuant to the Subsidiary Guaranty executed by each of the undersigned shall remain in full force and effect and be unaffected hereby.
          Each of the undersigned hereby waives and releases the Administrative Agent and the Lenders and the respective directors, officers, employees, attorneys, affiliates and subsidiaries of
the Administrative Agent and the Lenders from any and all claims, offsets, defenses and counterclaims of which the undersigned is aware, such waiver and release being with full knowledge and understanding of the circumstances and effect thereof and
after having consulted legal counsel with respect thereto.

	STONERIDGE CONTROL DEVICES, INC. 		 	STONERIDGE ELECTRONICS, INC. 
	 	 	 		 	 	 	 
	  By: 
 	 	 /s/ KEVIN P. BAGBY 
 		 	By: 	 	/s/ KEVIN P. BAGBY 
 
	  Name: 
 	 	Kevin P. Bagby  
 		 	 Name: 
 	 	 Kevin P. Bagby   
 
	  Title: 
 	 	Director 
 		 	 Title: 
 	 	Director   
 

  

  
  
 STONERIDGE, INC.
 as a Borrower
  
 THE FOREIGN SUBSIDIARY BORROWERS
 party thereto
 THE LENDERS NAMED THEREIN
 as Lenders
  
 NATIONAL CITY BANK
 as a Lender, a Joint Lead Arranger
 the Administrative Agent and the Collateral Agent
  
 DEUTSCHE BANK SECURITIES, INC.
 as a Joint Lead Arranger
  
 COMERICA BANK and
 PNC BANK, NATIONAL ASSOCIATION
 as the Co-Documentation  Agents
  
 ____________________
  
 AMENDMENT NO. 1
 dated as of January 31,
2003
 to
 the CREDIT AGREEMENT
  
 dated as of
  
 May 1, 2002
 _____________________<PAGE>

                                                                   EXHIBIT 10.41

                                 April 24, 1997

Mr. Joseph P. O'Dowd
78 E. 10/th/ Street #3207
St. Paul, Minnesota 55101

Dear Joseph:

     It is our pleasure to offer you employment with EMBREX as a Director of
Latin America and International Operations tentatively effective on June 2,
1997, contingent upon your submitting to and obtaining a negative result from a
chemical screening for drugs and alcohol. Please call Cathy Brown in Human
Resources to schedule the time and location of the drug testing. Your starting
compensation will be at the rate of $10,000 per month. You will be eligible for
up to 10% of your annual salary, as a bonus, based on individual performance and
overall company goals.

     Upon commencing employment at EMBREX, you will entitled to receive an
Incentive Stock Option for 16,000 (Sixteen Thousand) shares of EMBREX Common
Stock at an option price per share at fair market value on date of grant. These
options will vest equally over four years from the date of grant. This stock
option is subject to the approval and grant by the Compensation Committee of the
EMBREX Board of Directors at their next scheduled meeting.

     Regular, full-time employees of EMBREX are entitled to participate in all
company-sponsored benefit plans. Each plan has terms and conditions regarding
enrollment, which you must discuss with our Human Resources office on your first
day of employment. A booklet describing our current employee benefits and plan
highlights is enclosed for your information. Please review the medical, dental,
LTD and supplemental life plans and make your decision about which plans you
would desire to participate in. Please note in the benefits booklet, pg. 44, the
"pre-existing condition limitations"; If you have a pre-existing condition, we
recommend that you COBRA out on your current plan for six (6) months. Also
enclosed is an information package about our 401(k) retirement savings plan. You
are eligible to enroll on your first day of employment and will need to make
several decisions about your employee and employer investment options, even if
you elect not to participate. Please review the information, complete the
enrollment form and beneficiary designation (even if you elect not to
contribute) and bring to your orientation.

     Your orientation date is scheduled June 2, 1997 at 9:00 a.m. For your
orientation, you will need your authorization to work in the U.S. (driver's
license and social security card or passport), the full names, birth dates, and
social security numbers of any dependents, and a clean copy of your current
resume. You should also bring a copy of your current optical prescription (if
any), if you want prescription safety glasses.

     As a relocating employee, you will be entitled to reimbursement for actual
and reasonable expenses including:

     .    relocation of household effects to the Raleigh area with United Van
          Lines.
     .    reimbursement for costs of sale of old home or termination of lease;
     .    reimbursement for costs of the purchase of a new home (exclusive of
          mortgage points, association dues, prepaid items and lender "junk"
          fees);
     .    reimbursement for temporary living expenses (not to exceed 30 days); o
          reimbursement for one house hunting trip (not to exceed 7 days), and o
          gross-ups of federal and state taxes.

     You will also be entitled to a $2,000.00 incidental allowance, which is
fully taxable to you. You may submit a check request at any time during the
relocation process to receive this payment.

     Enclosed is a standard employment agreement, which describes an employee's
relationship with the Company. Item 4.3, which I want to emphasize, regards the
matter of compensation. We regard compensation (in all its forms) as a very
personal matter between employees and the Company. It should not be discussed
with other employees.

<PAGE>

     This letter and its enclosures constitute our initial employment offer and
is subject to Board Approval. After you have read them, you should obtain
answers to any remaining questions you may have. Please sign both copies of this
letter, retain one for your personal files and return one to the Company for our
records.

                                                        Sincerely yours,

                                                        /s/ Randall L. Marcuson
                                                        -----------------------
                                                        Randall L. Marcuson
                                                        President and CEO

Agreed and accepted:  /s/ Joseph P. O'Dowd              Date  5/23/1997
                     ----------------------                   ---------

<PAGE>

                              GENERAL PROVISIONS TO
                          EMPLOYMENT AGREEMENT BETWEEN
                                EMBREX, INC. AND
                                  Joseph O'Dowd
                            PERSONAL AND CONFIDENTIAL

1.   EMPLOYMENT

     EMBREX hereby employs Employee and Employee accepts such employment and
agrees to perform for EMBREX the duties described herein, faithfully and to the
best of his/her ability.

2.   TERM OF EMPLOYMENT

     Employee's employment hereunder shall commence on the effective date of
((EffectiveDate)) and shall continue at the pleasure of the Company. A
probationary period of 90 days shall be observed, so long as Employee is
performing at a satisfactory level. At the conclusion of probationary period,
Employee shall be given a performance evaluation.

3.   DUTIES

     Employee agrees to devote full time and attention to the business and
affairs of EMBREX, to use his/her best efforts to promote the interests of
EMBREX, to hold such offices in EMBREX to which elected or appointed, and to
perform such tasks, commensurate with the position, as are assigned by manager
or other designated individuals.

4.   COMPENSATION

     4.1 EMBREX will pay Employee, for services rendered hereunder, a salary
separately agreed to as noted in the cover letter, payable in equal monthly
installments. The Company will review this base salary on an annual basis and
will determine in its sole discretion whether to provide a merit increase to the
base salary.

     4.2 The parties hereto agree that Employee shall be entitled to participate
in all retirement, profit-sharing, compensation, insurance or other benefit
plans generally available to EMBREX employees which are presently in effect or
which may be established during the term hereof.

     4.3 The terms and conditions of employment (salary, equity and/or other
forms of compensation) are strictly a personal matter between Employee and the
Company and will be shared only with Employee's supervisors having salary
administration responsibility.

5.   EXPENSES

     Upon commencement of employment, Employee will be reimbursed by EMBREX for
all approved expenses which are reasonably incurred thereafter during the
performance of duties in furtherance of or in connection with the business of
EMBREX or its subsidiaries.

6.   FAMILY AND MEDICAL LEAVE

     Employee shall be entitled to the benefits provided by the Family and
Medical Leave Act of 1993, as amended (the "Act"), upon completing one year of
service as a regular, full-time employee. During any period in which Employee
does not qualify as an eligible employee or Employee exceeds the period of leave
authorized in the Act, EMBREX may, if it so elects, declare the Employee's
employment terminated on thirty (30) days notice given in accordance with the
provisions hereof.

7.   EMPLOYEE NOT TO WORK FOR OTHERS

     7.1 During the term of this Agreement, Employee agrees not to work for any
other business firm, whether competitive with EMBREX or not, without written
consent of ranking Administrative officer.

<PAGE>

     7.2 Upon termination of Employee's employment, until the second anniversary
of the date of such termination, Employee agrees that, regardless of the date or
cause of termination of employment or whether the termination shall be with or
without cause, (s)he will not, directly or indirectly, either as principal,
agent, officer, director, employee, or in any similar capacity, engage in or
perform consulting or any other services for, or have a financial interest in,
or own of record or beneficially five percent (5%) or more of any class of
equity security (or any class of securities convertible to an equity security),
in an entity which competes with any actual or planned product or service of
Embrex or is engaged in a research and/or development program intended to result
in a product or service competitive with an actual or planned product or service
of EMBREX.

8.   TECHNIQUES, DISCOVERIES, INVENTIONS

     8.1 Employee agrees that any and all sales of manufacturing techniques,
inventions, discoveries or improvements in the products or processes or the
merchandising thereof, of EMBREX, which Employee may create, devise, make,
discover, introduce, or invent while employed by EMBREX shall belong to and be
the sole property of EMBREX. Employee agrees promptly and fully to disclose the
same to EMBREX.

     8.2 It is recognized between EMBREX and Employee that EMBREX has acquired
and developed, and will continue to develop formulae, techniques, plans,
processes, procedures, devices and materials, and lists of customers and their
particular requirements which may pertain to many and varied products and
equipment, which are secret and confidential in character and are, and will
continue to be, of great and unique value to it, which are now and will continue
to be, used in its business (hereinafter referred to as "secret information").
Much of such secret information existing on the date hereof is known to
Employee, by reason of his/her position, and future secret information on EMBREX
will be disclosed to Employee, as required for proper performance of duties
hereunder and other duties as (s)he may have to EMBREX.

     8.3 Employee agrees that all such secret information heretofore or
hereafter received will be kept and maintained as confidential and in complete
secrecy, and Employee shall not disclose at any time, either orally or in
writing, or otherwise, in any manner, directly or indirectly, any knowledge or
information Employee has acquired or any trade secret relating to EMBREX or its
subsidiaries, with the exception of disclosure of such information: (i) to
employees of EMBREX who have a need to know it to properly carry out their
duties on behalf of EMBREX and (ii) in the ordinary course of EMBREX business to
customers, suppliers, subcontractors and parties similarly situated.

     8.4 Employee agrees that, while an employee of EMBREX and for two years
thereafter, at least fifteen days before release of publication of any
scientific paper or contributions to periodicals dealing with or making
reference to a subject of interest to EMBREX, Employee will make available to
EMBREX a copy of what is to be published.

9.   DELIVERY OF DATA

     Employee agrees to deliver to EMBREX promptly at the termination of
employment or at any other time EMBREX may request, all memoranda, notes,
records, sketches, plans, or other documents which are in Employee's possession
or under his/her control concerning costs, uses, application or purchases of
products made for or by EMBREX (or any subsidiary, affiliate, or licensee of
EMBREX) or any product, process, formula, or manufacturing method used,
developed, produced, or investigated by EMBREX (or any subsidiary, affiliate or
licensee of EMBREX), during his/her employment hereunder.

10.  INJUNCTIVE RELIEF

     Employee agrees that the remedy at law for any breach of the provisions of
paragraphs 7, 8, and/or 8 of this Agreement will be inadequate and that EMBREX
shall be entitled to injunctive relief in addition to any other remedy it might
have as so ordered by a Court.

11.  SEVERABILITY

     The provisions of paragraphs 7, 8, 9 and 10 are severable, and in the event
any portion or portions thereof are held to be invalid, such invalidity shall
not affect the validity of the remaining portion or portions.

12.  SEVERANCE

     If Employer terminates Employee's employment under this Agreement without
cause, then Employee shall be entitled to receive from Employer an amount equal
to six months of Employee's then current salary, payable in six equal monthly
installments, without interest, commencing one month after termination.

<PAGE>

13.  NOTICES

     All notices, requests, demands, and other communication hereunder shall be
in writing and shall be deemed to have been duly given if mailed by certified or
registered mail, return receipt requested, to the respective parties at their
addresses appearing above or their last known addresses.

14.  ASSIGNMENT

     The Agreement shall not be assignable by either party except pursuant to a
merger, consolidation or other reorganization of EMBREX.

15.  SUCCESSORS IN INTEREST

     This Agreement shall be binding on the parties hereto, their heirs,
executors, administrators, successors (whether by merger, consolidation, or
otherwise), and assigns. The parties hereby agree for themselves, their heirs,
executors, administrators, successors, and assigns, to execute any instruments
and to perform any acts which may be necessary or proper to carry out the
purposes of the Agreement, but the failure to execute such instruments will not
affect the rights of any party hereto or the obligations of any estate, as
provided in this Agreement.

16.  LAW OF THE AGREEMENT

     This Agreement shall be subject to and governed by the laws of the State of
North Carolina. The provisions of this Agreement are severable, and in the event
any portion or portions hereof are held to be invalid, such invalidity shall not
affect the validity of the remaining portion or portions. If any court or other
competent authority shall hold a portion of this Agreement invalid, unless
modified in a manner described by the court or competent authority, that portion
shall be deemed modified accordingly.

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