Document:

Subtenant Non-Disturbance and Substitute Lease Agreement

 EXHIBIT 10.8 
  
 NORTH CAROLINA 
 DURHAM COUNTY 
  
 SUBTENANT NON-DISTURBANCE AND
SUBSTITUTE LEASE AGREEMENT 
  
 THIS SUBTENANT NON-DISTURBANCE
AND SUBSTITUTE LEASE AGREEMENT (the “Agreement”) is dated for reference purposes as of January 16, 2004 among W & G ASSOCIATES, A NORTH CAROLINA LIMITED PARTNERSHIP (“W&G”) and EMBREX, INC., a North Carolina corporation
(“Embrex”). 
  
 RECITALS: 
  
 A. W & G Associates, a North Carolina general partnership (predecessor in interest to
W&G), as landlord, and W & G Instruments, Incorporated, a New Jersey corporation (predecessor in interest to Acterna, LLC, a Delaware limited liability company referred to herein as “Acterna”), as tenant, entered into a Lease
Agreement dated October 1, 1984 and amended January 1, 1986, October 1, 1989, January 24, 1994 as ratified July 5, 1994, February 23, 1999, and October 1, 1999 (as amended, the “Lease”) pursuant to which Acterna, the successor in interest
to Wandel & Goltermann Technologies, Inc., a North Carolina corporation, which was successor in interest to Wandel & Goltermann, Inc., a New Jersey corporation which was the successor in interest to W & G, Instruments, Inc. leased Lot
S-5B, containing 10.00 acres, more or less as shown on Plat Book 131, Page 87, Durham County Registry (the “Land”), together with certain easement rights as set forth in that certain Declaration of Covenants Containing Easements recorded
in Book 1963, Page 190, Durham County Registry (the “Premises”); and 
  
 B. In addition to the Premises, W&G is also the owner of that certain lot and parcel of land designated as Lot S-5A, containing 5.00 acres, more or less, as shown on Plat Book 131, Page 87, Durham County Registry, together with certain
easement rights as set forth in that certain Declaration of Covenants Containing Easements recorded in Book 1963, Page 190, Durham County Registry (the “5 Acre Parcel”); and 
  
 C. Acterna Corporation (“Acterna”), as successor in interest to Wandel & Goltermann Technologies, Inc., a North Carolina
corporation (“WGTI”), subleased approximately 49,600 rentable square feet of the Premises (the “Subleased Premises”) to Embrex pursuant to that certain Sublease Agreement dated as of October 1, 1999, and amended by First
Amendment to Sublease dated February 29, 2000 (the “First Amendment”), by letter dated January 8, 2001 constituting the Second Amendment to Sublease Agreement, by letter dated August 28, 2001, by letter dated December 17, 2001 captioned
Fourth Amendment to Sublease Agreement, and by letter dated January 31, 2003 captioned Fifth Amendment to Sublease Agreement (as amended, the “Sublease”) including the Right of First Refusal as set out in the Sublease; and 
  
 D. In accordance with the terms of the Lease, W&G granted its consent to the Sublease
subject to the terms and conditions of that certain Consent of Landlord to Sublease and Acknowledgment by Sublandlord and Subtenant, executed by W&G, WGTI and Embrex, dated 

  

 
as of October 1, 1999 and by joinder in the First Amendment to Sublease dated February 29, 2000 (the “Consent”); and 
  
 E. Acterna succeeded to the interest of WGTI in the Lease and the Sublease; and 

 
 F. Acterna has defaulted under the terms of the Lease; a copy of W&G’s notice of
default has been received by Embrex as required by the Consent; and 
  
 G. Acterna
filed a petition under Chapter 11 of the United States Bankruptcy Code on or about May 6, 2003 and the Lease and Sublease were subsequently rejected in such action. 
  
 H. Embrex has requested of W&G that so long as Embrex is not in default under the terms of the Sublease, for W&G continue to
recognize Embrex’s occupancy under the terms of the Sublease notwithstanding the default of Acterna under the Lease, and W&G has agreed subject to the terms and conditions set forth herein. 
  
 AGREEMENT: 
  
 NOW, THEREFORE, in consideration of the covenants and conditions set forth
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, W&G and Embrex, intending to be legally bound, agree as follows: 
  
 1. From the date of the rejection of the Lease (the “Effective Date”) W&G agrees that so long as Embrex is not in default
under the terms of the Sublease beyond any applicable grace or cure period, W&G shall not disturb Embrex’s occupancy of the Subleased Premises and, subject to the terms hereof, W&G hereby recognizes such occupancy under the terms of the
Sublease as if it were a direct lease between W&G and Embrex (the Sublease as so recognized is sometimes referred to herein as the “Substitute Lease”). Embrex hereby recognizes and attorns to W&G as its landlord, under the terms of
the Substitute Lease from the Effective Date subject to the terms and conditions set forth in this Agreement. It is understood and agreed that such non-disturbance and attornment shall be deemed to have occured automatically as of the Effective
Date. 
  
 2. Embrex hereby represents and warrants: 
  

	 	a.	Embrex has accepted occupancy of the Subleased Premises; Embrex has validly exercised its Right of First Refusal contained in the Sublease; no future Request of First Refusal
exists; and immediately prior to the Effective Date Embrex subleased the entire building on the Land, containing the Subleased Premises, being 49,600 rentable square feet, more or less (the “Building”); 

  

	 	b.	Prior to the Effective Date, the “Rent Structure” under the Sublease had converted from “Full-Service” to “Triple Net”. Accordingly, Embrex has assumed
the obligations for expenses and services set out under the heading “Full Service” in the Sublease and the Rent Schedule under the Substitute Lease as of the Effective Date is as follows: 

  

										
	 Period

	  	$/rf/yr.

	  	Monthly Rent

	 	 	Rent Structure

	 Effective Date
	  	$	9.70	  	$	40,093.33	*	 	Triple-Net
	 10/01/03 – 09/30/04
	  	$	9.99	  	$	41,292.00	 	 	Triple-Net
	 10/01/04 – 09/30/05
	  	$	10.29	  	$	42,532.00	 	 	Triple-Net

  

	*	Does not include monthly charge for landscaping previously paid to Acterna because Acterna is no longer doing the landscaping. 

  

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 In addition to the Rent set forth in the Rent Schedule above, Embrex is responsible under the Substitute
Lease for (i) the maintenance of the exterior of the Building, (ii) payment of Embrex’s Proportionate Share of taxes, insurance and maintenance and repair of the sidewalks, parking lots, landscaping, exterior lighting and other items applicable
to the Land, and Embrex’s Proportionate Share of all HVAC, mechanical, roof and structural maintenance and repair with respect to the Building and (iii) contracting directly for services to the Subleased Premises, including, but not limited to,
HVAC, electricity, water, janitorial services and trash removal. Embrex acknowledges that its Proportionate Share applicable to the Land and the Building is 100% 
  
 As of June 1, 2003 Embrex has assumed direct responsibility for the following additional items regarding the Land:

  
 Landscaping services and snow removal to be performed by
Budd Landscaping Services effective June 1, 2003. 
  
 Acterna did
not provide Embrex with a schedule of exterior maintenance with respect to the Building as contemplated by Section 6 of the Sublease. 
  
 As of the Effective Date, Embrex had paid to Acterna $0.00 for 2002 ad valorem real property taxes; $104.97 per month for Acterna’s liability
insurance premiums for the period April 1, 2001 to and including April 30, 2003 (this monthly payment for insurance was also included in the payment made to W&G for May 2003 but was not included in subsequent rent payments to W&G); and $0.00
for 2003 ad valorem real property taxes. Embrex shall, upon W&G’s request, provide evidence of such payments. Embrex acknowledges its obligations to obtain and maintain casualty and public liability insurance under Section 15 of the
Sublease. 
  

	 	c.	Embrex’s “Proportionate Share” means 100% (49,600 RSF/49,600 RSF) as of the Effective Date; 

  

	 	d.	As of the Effective Date, any and all repairs, replacements, alterations, additions or improvements required pursuant to the terms of the Sublease had been completed and accepted by
Embrex. All obligations of Acterna to provide or remove signage under the Sublease were satisfied prior to the Effective Date. 

  

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	 	e.	As of the date hereof, Embrex is not in default, nor does any condition exist which, with the passage of time, would constitute a default under the Substitute Lease.

  

	 	f.	To the best of Embrex’s knowledge, Acterna, immediately before rejection of the Lease and Sublease, was not in default under the terms of the Sublease other than its failure to
pay to Embrex $16,885.58, being Acterna’s one-third (1/3) share of certain costs of HVAC repairs to the Subleased Premises pursuant to Section 3(a)(i) of the First Amendment. Embrex acknowledges and agrees that W&G has no obligation to
Embrex with respect to Acterna’s share of the cost of these HVAC repairs and that Acterna’s default shall not allow Embrex any remedy under the Substitute Lease between Embrex and W&G under this Agreement. 

  

	 	g.	Embrex did not encourage or advise Acterna to terminate the Lease or otherwise default under the terms of the Lease, it being understood that the parties desire to protect
Embrex’s tenancy under the Sublease. 

  
 3. Notwithstanding the
terms of the Sublease, Embrex and W&G agree that as of the Effective Date: 
  
 (i) W&G shall make 186 parking spaces on the Land available for Tenant’s use in reasonable proximity to the Building; it being understood and agreed that no specific parking spaces are reserved for
Embrex’s use in the parking areas located on the Land and the 5 Acre Parcel, but W&G shall not reserve the use of any specific spaces on the Land for the use of tenants or other users of the 5 Acre Parcel. It is acknowledged that W&G
may construct additional parking spaces on the Land (which construction shall not materially interfere with Tenant’s use of the Land) and such additional parking spaces shall not be reserved for any particular tenant’s use, but will be
used generally by tenants of buildings located on the Land and the 5 Acre Parcel, unless otherwise specifically agreed in writing by the parties hereto. 
  
 (ii) W&G shall maintain the parking lots and drives located on the Land and Embrex shall pay the cost of such maintenance as Additional Rent. To the
extent that the maintenance of the parking lots and drives located on the Land is performed and billed with the maintenance of the parking lots and drives on the 5 Acre Parcel, Embrex shall only pay its proportionate share of such costs based on the
proportion that the square footage of the Building bears in relation to the total square footage of the two buildings located on the Land and the 5 Acre Parcel. Removal of snow and ice from the parking lots and drives on the Land shall continue to
be the obligation of Embrex (which snow and ice removal is currently performed by Budd Landscaping Services pursuant to the contract between Embrex and Budd Landscaping Services effective June 1, 2003). 
  
 (iii) Tenant shall monthly, as Additional Rent, pay Tenant’s
proportionate share of the cost of liability insurance W&G carries with respect to the Land and the 5 Acre Parcel; provided Tenant’s proportionate share shall be based on the same proportion that the 

  

 4 

 
square footage of the Building bears in relation to the total square footage of the two buildings located on the Land and the 5 Acre Parcel. 
  
 4. Notwithstanding anything to the contrary in the Sublease or the Consent, W&G’s
obligations to not disturb Embrex’s occupancy and to recognize the same is subject to the following terms and conditions: 
  
 a. Embrex accepts the Subleased Premises “as is” as of the date hereof; 
  
 b. Upon termination or expiration of the Substitute Lease, Embrex will, upon the request of W&G, remove any or all of
the venting and/or additional HVAC units which were or are added to the Premises as improvements by or for Embrex (unless and only to the extent the new tenant for the Premises specifically asks for such items to remain) and shall repair any damage
to the roof caused by such removal, ordinary wear and tear excepted; 
  
 c. W&G shall not be subject to any credits, offsets, defenses or claims that Embrex might have against Acterna. W&G shall not be liable for and shall not be required to recognize and shall have no responsibility for: 
  

	 	(i)	rent or other sums paid to Acterna more than one (1) month in advance; 

  

	 	(ii)	any amendments to the Sublease made without W&G’s prior written consent; 

  

	 	(iii)	any defaults under the Sublease by Acterna or any acts or omissions of Acterna; 

  

	 	(iv)	any obligations of Acterna under the Sublease arising prior to the Effective Date; or 

  

	 	(v)	any security deposit Acterna may hold from Embrex in connection with the Sublease, except to the extent W&G actually receives such deposit. 

  
 f. W&G shall have no liability for any cash payments or reimbursements
due from Acterna under the Sublease, including but not limited to (i) for any brokerage commission or other charge or expense in connection with expansion of the Subleased Premises or extension of Embrex’s term, (ii) the Cash Inducement (as
defined in the Sublease) and (iii) repayment for Acterna’s share of property insurance covering the Premises or other obligations regarding the Land (such as ad valorem taxes). 
  
 g. W&G has not received any of the security deposit which Acterna held under the Sublease. Embrex shall deposit with
W&G a security deposit of $41,292.00 which security deposit need not be held in an interest bearing account. Any interest on such account shall belong to W&G. 
  

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 5. Embrex received written notice from W&G to make its monthly payments of rent under the Sublease directly to
W&G pursuant to the terms of the Consent. Commencing with the May 2003 rent payment Embrex has paid and is continuing to pay such rent directly to W&G and the same shall constitute rent payments under the Substitute Lease as of the Effective
Date. 
  
 6. The parties acknowledge that notwithstanding the fact that the filing
by or on behalf of Acterna of any pleading or petition to declare Acterna bankrupt under any bankruptcy law or act may be a default under the Lease, the filing of such bankruptcy may stay or otherwise affect W&G’s rights under the Lease or
give Acterna certain rights with regard to the Lease. Nothing contained herein shall require W&G to act in any manner contrary to or in violation of applicable law, including the United States Bankruptcy Code. 
  
 7. Either W&G or Embrex shall have the right, at its option, to require that the other
enter into a new lease directly for the Subleased Premises for the remaining term of the Sublease and otherwise on the terms provided in the Sublease, including the remaining extension options and except as modified by this Agreement. 
  
 8. Notwithstanding that this Agreement is in fact executed by the parties hereto after the
Effective Date, it is understood and agreed that the intent of the parties is to acknowledge that as of the Effective Date a Substitute Lease has been in effect between the parties upon the same terms as the Sublease as amended by and subject to the
terms of this Agreement. 
  
 9. The Recitals set forth above are incorporated
herein. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Sublease. 
  
 10. This Agreement is subject to the prior written consent of Wachovia Bank, N.A. (formerly First Union National Bank), as the owner and holder of certain deeds of trust encumbering the Premises. 
  
 11. W&G acknowledges that Acterna has vacated the building located on the 5 Acre Parcel
(the “W&G Building”). W&G agrees that before leasing the W&G Building to another tenant (other than consenting to a direct lease with Mindready Solutions (USA), Inc., a subtenant of Acterna that is currently in possession of a
portion of the W&G Building for the portion subleased by Mindready Solutions (USA), Inc. from Acterna) W&G will cause the necessary telephone and telecommunications closet to be installed in the W&G Building as set forth on a proposal
from East Coast Telecom, Inc., to W&G (mistakenly referred to as “Wandell and Goltermann”) dated 10/13/03 (the “Proposal”) to perform the work described in the Proposal in order that Embrex will have the sole use of the
telephone and telecommunications closet in the Building. W&G and Embrex have agreed to split (50%-50%) the cost of such removal and relocation as set forth on the Proposal. Embrex shall pay to W&G its share of such cost upon completion of
the work. 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written.

  

			
	EMBREX, INC., a North Carolina corporation
		
	By:	 	/s/ Don T. Seaquist
	Name:	 	Don T. Seaquist
	Title:	 	Vice President, Finance and Administration
	Date:	 	1/16/2004

  

			
	W & G ASSOCIATES, A NORTH CAROLINA LIMITED PARTNERSHIP.
		
	By:	 	/s/ Bert Kuthe
	Name:	 	Bert Kuthe
	Title:	 	General Representation
	Date:	 	1/23/2004

  

 7First Amendment to Substitute Lease Agreement

 EXHIBIT 10.9 
  
 FIRST AMENDMENT TO SUBSTITUTE LEASE AGREEMENT 
  
 THIS FIRST AMENDMENT TO SUBSTITUTE LEASE AGREEMENT (the “Agreement”) is dated for reference purposes as of October 1, 2004 (the “Effective
Date”) among W&G ASSOCIATES, a North Carolina Limited Partnership (“W&G”), and EMBREX, INC., a North Carolina corporation (“Embrex”). W&G and Embrex are sometimes referred to herein as the “Parties.”

  
 RECITALS: 
  
 A. W&G and Embrex are parties to that certain Subtenant Non-Disturbance and Substitute
Lease Agreement (the “Substitute Lease”), dated for reference purposes as of January 16, 2004, regarding the lease by Embrex of approximately 49,600 square feet of office space at 1040 Swabia Court, Durham, North Carolina, 27703 (defined
in the Substitute Lease as the “Premises”). 
  
 B. In addition to the
Premises, W&G is also the owner of that certain lot and parcel of land designated as Lot S-5A, containing 5.00 acres, more or less, as shown on Plat Book 131, Page 87, Durham County Registry, together with certain easement rights as set forth in
that certain Declaration of Covenants Containing Easements recorded in Book 1963, Page 190, Durham County Registry (the “5 Acre Parcel”). The 5 Acre Parcel is adjacent to the Premises. 
  
 C. W&G owns a two-story office building on the 5 Acre Parcel . Such building contains
approximately 92,430 rentable square feet and is defined in the Substitute Lease and herein as the “W&G Building.” 
  
 D. W&G has agreed to lease to Embrex and Embrex has agreed to lease from W&G approximately 10,185 rentable square feet of office space located on the first floor
of the W&G Building (such 10,185 rentable square feet shall hereinafter be defined as the “2004 Additional Premises”). The 2004 Additional Premises is identified more specifically on the floor plan attached hereto as Exhibit A.

  
 E. W&G and Embrex desire to amend the Substitute Lease to memorialize the
lease of the 2004 Additional Premises to Embrex. 
  
 F. All capitalized terms not
defined herein shall have the meaning attributed to such terms in the Substitute Lease or the Sublease Agreement dated for reference purposes October 1, 1999 and entered into by and between Wandel & Golterman Technologies, Inc. and Embrex (the
“Sublease Agreement”). 
  

 AGREEMENT: 
  

NOW, THEREFORE, in consideration of the covenants and conditions set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, W&G and Embrex, intending to be legally bound, agree as follows: 
  
 1. As of the Effective Date, W&G demises and leases to Embrex and Embrex hereby lets and leases from W&G the 2004 Additional Premises on the terms and conditions
set forth in the Substitute Lease as modified by this Agreement. The parties hereby acknowledge that, under this Agreement, Embrex’s right to access the 2004 Additional Premises and to commence repairs, replacements, alterations, additions,
improvements or upfitting to the 2004 Additional Premises shall begin as of the Effective Date. 
  
 2. Embrex hereby notifies W&G that Embrex, pursuant to Section 8 of the Sublease Agreement, is exercising its option to extend the Intial Sublease Term for the first Extended Sublease Term with respect to the
Premises and the 2004 Additional Premises. As so extended, the first Extended Sublease Term shall expire on September 30, 2007. W&G hereby acknowledges the receipt of and the sufficiency of such notice. 
  
 3. 
  

a. Embrex shall pay W&G a monthly rental payment with respect to the 2004 Additional Premises beginning January 1, 2005 (the “2004 Additional Premises Rent
Commencement Date”). Embrex shall not owe any rental payments for the period from the Effective Date through December 31, 2004. On and after the 2004 Additional Premises Rent Commencement Date, the rent payable with respect to the 2004
Additional Premises shall be: 
  

									
	 Period

	  	$/rf/yr.

	  	Monthly Rent

	  	 Rent Structure

	 1/1/05 – 09/30/05
	  	$	10.29	  	$	8,733.64	  	Triple-Net (as modified by this Agreement)
	 10/01/05 – 09/30/06
	  	$	10.70	  	$	9,081.63	  	Triple-Net (as modified by this Agreement)
	 10/01/06 – 09/30/07
	  	$	11.13	  	$	9,446.59	  	Triple-Net (as modified by this Agreement)

  
 b. The Parties hereby
agree that the Triple-Net rent structure shall only apply to the 2004 Additional Premises. Embrex shall not be responsible for the replacement, repair or maintenance of the exterior of the W&G Building, the interior of the W&G Building
outside the 2004 Additional Premises, sidewalks, parking lots, landscaping, exterior lighting, snow removal, roof and structural components, HVAC and mechanical systems, and other items applicable to the W&G Building or the 5 Acre Parcel. In the
event that Embrex undertakes to lease space in the W&G Building outside the 2004 Additional Premises, the Parties hereby agree to renegotiate the issue of responsibility for the costs of maintaining the common areas of the W&G Building
outside the 2004 Additional Premises. 
  
 c. The parties agree
that W&G shall be responsible for contracting for HVAC, electricity, and water services for the 2004 Additional Premises. W&G shall ensure that, during the period from 7 A.M. to 7 P.M. Monday through Friday, excepting Thanksgiving Day,
Christmas Day, and New Year’s Day, the 2004 Additional Premises shall be heated or cooled to a temperature between 70 and 74 degrees Fahrenheit. Embrex shall pay to W&G Embrex’s 

  

 
Proportionate Share of the cost of providing HVAC, electricity, and water services to the 2004 Additional Premises within ten (10) days of Embrex’s
receipt from W&G of a reasonably itemized statement of such costs. Embrex’s “Proportionate Share” with respect to the 2004 Additional Premises means 11.02% (10,185 RSF/92,430 RSF). 
  
 d. Embrex shall be responsible for contracting directly for janitorial and
trash removal services for the 2004 Additional Premises, and Embrex hereby agrees to maintain the 2004 Additional Premises in a reasonably clean condition. 
  
 e. Embrex shall pay its Proportionate Share of all real property taxes owed with respect to the W&G Building during the term of the Substitute Lease.
Embrex shall pay such Proportionate Share within ten (10) days of its receipt from W&G of a statement reasonably itemizing Embrex’s Proportionate Share of such real property taxes. W&G shall not send Embrex such a statement until
W&G has received the current real property tax bill for the W&G Building. 
  
 f. Embrex shall pay its Proportionate Share of all building and fire hazard insurance premiums owed with respect to the W&G Building; however, Embrex shall not be responsible for any other insurance costs relating
to the W&G Building or the 5 Acre Parcel. 
  
 4. W&G hereby grants to
Embrex the right to use the loading dock and adjacent “staging area” on the first floor of the W&G Building for the purpose of receiving shipments and storing such shipments temporarily. Furthermore, W&G grants to Embrex the right
to erect a sign containing the word “Embrex” in the parking area adjacent to the loading dock. If Embrex undertakes to erect such a sign, such sign shall be reasonably similar in size and appearance to the “MindReady” sign
currently in the exterior area of the loading dock and shall be for the purpose of directing delivery drivers to the loading dock. The Parties agree that W&G, only for the purpose of adding additional tenants to any such sign, may make
reasonable alterations to such sign upon the consent of Embrex, such consent not to be unreasonably withheld. 
  
 5. W&G hereby agrees to provide Embrex with keys to the exterior door of the W&G Building that provides access to the mechanical/electrical room located adjacent to the 2004 Additional Premises. W&G shall
provide such keys to Embrex no later than November 15, 2004. 
  
 6. W&G hereby
agrees to construct, at the sole cost and expense of W&G, such tenant separation devices as are reasonably needed to ensure that the 2004 Additional Premises is secured from the remainder of the W&G Building. W&G hereby covenants to
ensure that all tenants in the W&G Building are separated and secured from all other tenants in the W&G Building. Any such construction necessary under this Section 6 shall be completed by W&G no later than November 15, 2004. 

 
 7. W&G hereby agrees to relocate, at the expense of Embrex, the office door of its
Facilities Manager’s office so that such door will not open into the 2004 Additional Premises. W&G shall complete such relocation no later than November 15, 2004. 
  

 3 

 8. Except as provided in this Agreement, W&G and Embrex hereby agree that all repairs, replacements, alterations,
additions, improvements or upfitting to the 2004 Additional Premises shall be made by Embrex at its sole cost and expense. Prior to beginning work upon such upfitting or improvement, Embrex shall obtain the consent of W&G, such consent not to be
unreasonably withheld, conditioned or delayed and which shall be deemed to have been given if W&G shall not have responded within ten (10) calendar days of its receipt of Embrex’s request for consent. 
  
 9. W&G hereby agrees that it shall make available to Embrex, in a parking lot located on
the 5 Acre Parcel, 4.5 parking spaces for every 1000 square feet leased by Embrex in the W&G Building. These parking spaces shall be in addition to, and not in replacement of, the parking spaces currently provided to Embrex in connection with
Embrex’s lease of the Premises. 
  
 10. W&G hereby grants to Embrex a
right of first refusal with respect to any and all offers to lease office space located in the W&G Building, including the space currently leased by MindReady. If W&G receives an offer to lease space in the W&G Building from a party
other than Embrex, W&G must first offer Embrex the opportunity to enter into a lease for such space on the same terms and conditions as the offer made to W&G by the potential third party lessee. Embrex shall have five business days from its
receipt of notice from W&G that an offer has been made to lease space in the W&G Building in which to exercise its right of first refusal with respect to such space. Such notice shall specify all the material terms of the offer to which the
notice relates. 
  
 11. W&G hereby grants Embrex the right to erect a sign at
the front of the W&G Building noting that Embrex is a tenant in the W&G Building and directing Embrex’s visitors to the proper visitor entrance. If Embrex desires to erect such sign, Embrex shall obtain W&G’s consent, not to be
unreasonably withheld, with respect to the size and design of such sign. Any such sign shall comply with all applicable laws, ordinances, rules and regulations. The Parties agree that W&G, only for the purpose of adding additional tenants to any
such sign, may make reasonable alterations to such sign upon the consent of Embrex, such consent not to be unreasonably withheld. 
  
 12. W&G hereby agrees that it will include Embrex’s name and office location in any building directory displayed in or around the W&G Building. 

 
 13. Except as modified by this Agreement, all other provisions of the Sublease Agreement
and the Substitute Lease shall remain in full force and effect. If there is a conflict between this Agreement and either the Sublease Agreement or the Substitute Lease with respect to the 2004 Additional Premises, this Agreement shall control. If
there is a conflict between this Agreement and either the Sublease Agreement or Substitute Lease with respect to the Premises, the Sublease or Substitute Lease, as applicable, shall control. 
  
 [signature page to follow] 
  

 4 

 [signature page to First Amendment to Substitute Lease Agreement] 
  
 IN WITNESS WHEREOF, the Parties, each by authority duly given, have executed
this Agreement as of the day and year first above written. 
  

			
	 EMBREX, INC., a North Carolina corporation

		
	By:	 	 /s/ Don T. Seaquist

	 Name:
	 	 Don T. Seaquist

	 Title:
	 	 Vice President, Finance and Administration

	 Date:
	 	 10/14/2004

  

			
	W & G ASSOCIATES, a North Carolina Limited Partnership
		
	By:	 	 /s/ Bert Kuthe

	 Name:
	 	 Bert Kuthe

	 Title:
	 	 Attorney-in-Fact

	 Date:
	 	 10/26/2004

  

 5 

 CONSENT OF LENDER 
  

Wachovia Bank, National Association executes this Consent of Lender for the sole purpose of evidencing its consent to the terms of this First Amendment to Substitute
Lease Agreement dated for reference as of October 1, 2004 between W&G Associates, a North Carolina Limited Partnership, and Embrex, Inc., a North Carolina corporation, to which this is attached. 
  

			
	 WACHOVIA BANK, NATIONAL ASSOCIATION:

		
	 By:
	 	 /s/ Rhonda Y. Hinnant

	 Name:
	 	 Rhonda Y. Hinnant

	 Title:
	 	 Vice President

	 Date:
	 	 12/1/2004

  

 6 

 Exhibit A 
 Floor Plan 
  

 7

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