Promissory Note

EMBREX, INC.

a North Carolina Corporation

/s/ Don T. Seaquist

/s/ Randall L. Marcuson

Don T. Seaquist, Secretary

Randall L. Marcuson

President & CEO

EX-10.2 4 dex102.htm PROMISSORY NOTE 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)

[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 6^th 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: