Exhibit 10.8

 

SERVICES AGREEMENT

 

Services Agreement (this “Agreement”) made by and between ADVANCED AUTOMATION,
INC., hereafter referred to as “AA” and EMBREX, INC., hereinafter referred to as
“Embrex”.

 

RECITALS

 

Whereas, Embrex has contracted for services to be provided by AA because of AA’s
experience, skill and expertise in the automation & machinery industry; and

 

Whereas, AA is willing to provide the services in the manner described below;
now, therefore:

 

IT IS AGREED AS FOLLOWS:

 

1.   TERM. This Agreement shall govern the relationship of the parties since its
inception in calendar year 2001, and shall continue until terminated pursuant to
the terms and provisions of this Agreement as hereinafter provided.

 

2.   SCOPE OF ENGAGEMENT. AA agrees to provide services to Embrex on a scheduled
and coordinated basis for the purpose of supporting Embrex’s research and
development activities as to identifying, examining, testing, and prototyping of
possible approaches, concepts, devices, mechanisms, mechanical systems, and/or
automation systems potentially capable of handling, sampling and sorting of eggs
according to gender, or in connection with other process automation or machine
application problems or opportunities which Embrex might wish to address from
time to time during the term of this Agreement. The employees of AA responsible
for the above described activities will be identified to Embrex periodically
during the term of this Agreement, and said employees will plan, schedule, and
coordinate the work and services to be provided in concert with the designated
representatives and support personnel of Embrex.

 

3.   LOCATION FOR PERFORMANCE OF SERVICES. The employees of AA responsible for
carrying out the activities and performing the services described above will
office and work primarily out of AA’s facilities located in Greenville, South
Carolina, USA, and will travel to the place of business of Embrex or its
customers on a scheduled basis on request. Embrex will be charged usual and
customary travel, lodging, and meals expenses in regard to such travel.

 

4.   COMPENSATION AND FEES FOR SERVICES. Embrex shall make monthly payment of
sums necessary to compensate AA for services provided and/or expenses incurred
in carrying out its obligations under this Agreement in accordance with AA’s
standard fee schedules and policies, which may be adjusted from time to time
during the term of this Agreement, or in accordance with other compensation
arrangements made between the parties. Monthly invoices and payment of said
invoiced sums shall be issued  

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and made for the month of May, 2003 and all months thereafter, until such time
as this Agreement is terminated as hereinafter provided. The parties acknowledge
that the above described monthly sums to be invoiced by AA and paid by Embrex
shall not be less than the minimum amount of $36,800 per month, and shall
continue until such time as this Agreement is terminated as hereinafter
provided.

 

 

5.   TERMINATION. This Agreement shall terminate as follows:

 

(a)   Unless previously terminated pursuant to (b) below, this Agreement shall
terminate on July 1, 2010; and

 

(b)   Embrex may terminate this Agreement for any reason at its election by
delivering written notice of its intent to terminate not less than thirty (30)
calendar days prior to the intended termination date.

 

Subject to the terms and conditions set forth in paragraph 6 below, the
occurrence of an event set forth in clauses (a) or (b) above shall cause this
Agreement to cease and terminate the obligations of Embrex under this Agreement
(except paragraph 6) shall cease and terminate, and the obligations of AA under
this Agreement shall cease and terminate.

 

6.   PURCHASE OF MACHINERY. Upon termination of this Agreement pursuant to
paragraph 5 above, Embrex shall be required to purchase from AA the Machinery
(as defined below) for a total purchase price equal to (a) $2,515,343 minus (b)
all amounts paid by Embrex to AA under paragraph 4 of this Agreement (the
“Purchase Price”). The Purchase Price shall be payable by Embrex to AA in
immediately available funds within ten (10) calendar days following termination
of this Agreement; provided, however, (i) in the event the Purchase Price is a
negative number, AA shall pay to Embrex the amount by which the Purchase Price
is less than zero (0) within ten (10) calendar days following termination of
this Agreement and (ii) Embrex shall be entitled to set off, in whole or in
part, against amounts due to AA under this paragraph 6, all amounts owed or due
Embrex under any other agreement by and between Embrex and AA. “Machinery” shall
mean: The pre-production models of the device for discarding non-viable avian
eggs and sampling and sorting eggs according to gender pursuant to the
Development and Supply Agreement dated September 30, 2001 by and between Embrex
and AA.

 

7.   COMPLETE CONTRACT / AMENDMENT. This Agreement represents the complete and
full agreement between the parties regarding the matters described herein, and
no amendment or variation of the terms of this Agreement shall be valid unless
made in writing and signed by a duly authorized representative of AA and Embrex.

 

8.   SUCCESSORS & ASSIGNS. This Agreement inures to the benefit of and is
enforceable by the respective parties’ legal representatives and assigns,
including any successor to, or purchaser or acquirer of (in each case, whether
direct or indirect, by

 

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purchase, merger, consolidation, reorganization, or otherwise), all or
substantially all of the business or assets of either party.

 

9.   NOTICES. Notices to AA or Embrex hereunder shall be sent via courier or by
standard parcel post to the following addresses:

 

If to AA:

 

Advanced Automation, Inc.

201 Washington Street

Cedar Falls, IA 50613

Attn: Mr. David Takes, President

 

If to Embrex:

 

Embrex, Inc.

1040 Swabia Court

Durham, North Carolina 27703

Attn: Don T. Seaquist, Vice President, Finance & Administration

 

10.   LAW APPLICABLE. This Agreement is drawn to be effective in and shall be
construed in accordance with the laws of the State of North Carolina, USA,
without regard to principles of conflicts of laws.

 

[Signature Page Follows]

 

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[Signature Page to Services Agreement]

 

Agreed and executed as of this 30th day of April, 2003.

 

ADVANCED AUTOMATION, INC.

 

By:

 

/s/    DAVID L. TAKES        

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    David L. Takes President

 

Agreed and executed as of this 30th day of April, 2003.

 

EMBREX, INC.

 

By:

 

/s/    RANDALL L. MARCUSON        

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    Randall L. Marcuson President & CEO

 

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