Exhibit 10.5
Dated 10 March 2006

             
 
    (1 )   COLERIDGE (NO. 45) LIMITED
 
           
 
    (2 )   BOOKHAM TECHNOLOGY PLC
 
           
 
    (3 )   BOOKHAM, INC.

 
LEASE
relating to Caswell,
Towcester, Northamptonshire, NN12 8EQ
 
(OF MAYER BROWN ROWE & MAN LOGO) [f19895f1989500.gif]
LONDON

 

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CONTENTS

        Clause   Page 1.
Definitions and interpretation
  1  
1.1 Definitions
  1  
1.2 Contents and headings
  5  
1.3 Interpretation
  5  
1.4 Joint and several liability
  5 2.
Demise and rents
  5  
2.1 Demise
  5  
2.2 Rents payable
  5  
2.3 Rights reserved
  6  
2.4 Matters to which the Premises are subject
  6 3.
Tenant’s covenants
  6  
3.1 Payment of Rents
  6  
3.2 Outgoings
  6  
3.3 Repair
  7  
3.4 Alterations and additions
  7  
3.5 Authorised and prohibited uses
  8  
3.6 Compliance with statutory requirements
  8  
3.7 Notices
  9  
3.8 Dealings with this Lease
  9  
3.9 Short term lettings
  11  
3.10 Registration and notification of dispositions
  12  
3.11 Fishing rights
  12  
3.12 Costs and fees
  13  
3.13 Yielding up
  13  
3.14 Fire precautions
  14  
3.15 Value Added Tax
  14  
3.16 Replacement of Surety
  14  
3.17 Tenant to insure
  14  
3.18 Rebuilding and reinstatement
  15  
3.19 Impossibility of reinstatement
  16  
3.20 Landlord’s obligation
  17  
3.21 Tenant’s obligations
  17  
3.22 Insurer’s requirements
  17  
3.23 Uninsured Damage
  17 4.
Landlord’s covenant
  19  
4.1 Quiet Enjoyment
  19  
4.2 Planning Permission
  19 5.
Tenant’s option to renew
  19  
5.1 Renewal Lease
  19

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        Clause   Page  
5.2 Renewal Commencing Rental
  20 6.
Agreements and declarations
  20  
6.1 Forfeiture and re-entry
  20  
6.2 Notices
  21  
6.3 Exclusion of certain rights
  21  
6.4 Value Added Tax
  21 7.
Contracts (Rights of Third Parties) Act 1999
  21 8.
Guarantor’s covenants
  21

Schedules

     
1.
  Exceptions and reservations to the Landlord
2.
  Incumbrances
3.
  Renewal rent determination
4.
  Guarantor’s covenants
5.
  List of Landlord’s Fixtures

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THIS LEASE is dated 10 March 2006 and made between:

(1)   COLERIDGE (NO. 45) LIMITED (registered number 5732931) whose registered
office is at Europa House, 20 Esplanade, Scarborough, North Yorkshire YO11 2AA
(the “Landlord”);   (2)   BOOKHAM TECHNOLOGY PLC (registered number 2298887)
whose registered office is at Caswell, Towcester, Northamptonshire, NN12 8EQ
(the “Tenant”); and   (3)   BOOKHAM, INC. (a company incorporated in the State
of Delaware with organisational identification number 3822373) whose registered
office is at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware,
USA (the “Guarantor”).

THIS DEED WITNESSES that:

1.   DEFINITIONS AND INTERPRETATION   1.1   Definitions       The following
words and expressions mean:       “Act” means any Act of Parliament or statute
for the time being in force and any regulations, laws and directives made or
issued by or with the authority of The European Commission or the Council of
Ministers and having effect in England and Wales;       “Ancillary Documents”
means any documents supplemental to this Lease or entered into pursuant to its
terms;       “Authorised Use” means any use in connection with the business of
the Tenant from time to time carried on at the Premises together with car
parking and ancillary uses or such other use as the Landlord may approve (such
approval not to be unreasonably withheld or delayed);       “Conduits” means all
conduits or media used for the passage or transmission of the Utilities or any
other service benefiting the Premises whether installed by the Landlord, the
Tenant or by any other person;       “Contractual Term” means twenty (20) years
from and including the ___                    2006;       “Deed of Easement”
means the deed of easement dated 24 February 1969 and made between (1) Plessey
Company Limited and (2) Frederic Bernard Bolton;       “Environment” means any
and all organisms (including without limitation man), ecosystems, property and
the following media:

  (a)   air (including without limitation the air within buildings and the air
within other natural or man-made structures whether above or below ground);

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  (b)   water (including without limitation water under or within land and
coastal and inland waters); and     (c)   land (including without limitation
land under water);

    “Environmental Laws” means all law (including without limitation statutory
law, subordinate legislation, common law, judicial decisions and the law of the
European Union and notices issued by any competent authority), treaties, codes
of practice and guidance notes in each case having legally binding effect from
time to time which have as a purpose or effect the protection of the Environment
and/or the prevention of Harm and/or the provision of remedies in respect of
Harm;       “Environmental Permits” means any and all consents, permits or
authorisations required under Environmental Law;       “Environmental
Contamination” means the presence of any Hazardous Matter in, on or under the
Premises or any structure thereon (or emanating from in, on or under the
Premises or any structure thereon) causes or arising at any time;      
“Excluded Buildings” means those buildings hatched red on Plan 2 and known as
building numbers B24 and B31 in respect of which the Tenant shall have no
repairing obligations;       “Group Company” means a company which is either:

  (a)   the holding company of the Tenant; or     (b)   a wholly-owned
subsidiary of either the Tenant or the Tenant’s holding company as both
expressions are defined in s736 Companies Act 1985;

    “Harm” means material harm to the Environment and for the avoidance of doubt
(but without limitation) harm to the health of living organisms or other
interference with the ecological systems of which they form part and in the case
of man includes offence caused to any of his senses or harm to his property;    
  “Hazardous Matter” means any and all substances (whether alone or in
combination with other substance or matter) which may cause Harm (including
without limitation, vibration, noise, electricity, heat or other radiation) and
any other polluting or waste matter;       “Insured Risks” means loss or damage
by terrorism, fire, storm, lightning, flood, earthquake, and terrorist
explosion, non-hostile aircraft and parts of aircraft and articles dropped from
such aircraft, riot and civil commotion, malicious damage and such other risks
as the Landlord or the Tenant may request (each acting reasonably);      
“Landlord’s Fixtures” means those items specified in Schedule 5 (List of
Landlord’s Fixtures) insofar as they exist at the date hereof together with any
replacements for or additions to such items and equipment made throughout the
Term;       “Lease” means this lease and any Ancillary Documents;

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    “Lease Provisions” means the covenants on the part of the Tenant and the
conditions, provisions agreements and declarations contained in this Lease and
any Ancillary Documents;       “Notice” means any formal notice, direction,
complaint, enquiry, request for information or communication served by any
competent authority upon the Premises or the Tenant;       “Plans” means the
plans annexed to this Lease and numbered Plan 1 and Plan 2 respectively;      
“Planning Acts” means the Town and Country Planning Act 1990, the Planning and
Compensation Act 1991, the Planning and Compulsory Purchase Act 2004 and, where
applicable, the Planning (Listed Buildings and Conservation Areas) Act 1990 and
the Planning (Hazardous Substances) Act 1990 and any associated or similar
legislation regulating the development or use of land;       “Planning
Permission” means any consent given or deemed to be given pursuant to the
Planning Acts;       “Premises” means the land and buildings known as Caswell,
Towcester, Northamptonshire, NN12 8EQ (as registered at the Land Registry with
title number NN184271) which are shown edged red on Plan 1 together with:

  (a)   all Conduits exclusively serving the Premises;     (b)   all glass
within or enclosing the Premises;     (c)   all Landlord’s Fixtures, but
excluding Tenant’s Trade Fixtures; and     (d)   all additions, alterations and
improvements made to the Premises from time to time during the Term;

    “Prescribed Rate” means 3% per annum above the base rate from time to time
of The Royal Bank of Scotland plc, or such other bank as the Landlord may from
time to time nominate by notice to the Tenant, or any alternative rate which may
replace such base lending rate. If such base lending rate is abolished without
an alternative rate being prescribed by law, the “Prescribed Rate” shall mean
such comparable rate of interest as the Landlord reasonably determines;      
“Principal Rent” means:

  (a)   one million one hundred thousand pounds (£1,100,000) per annum from and
including the Rent Commencement Date to                     
                                         2011;     (b)   one million two hundred
and forty-four thousand five hundred and forty-nine pounds (£1,244,549) per
annum from and including                     
                                         2011 to                     
                                         2016; and

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  (c)   one million four hundred and eight thousand and ninety three pounds
(£1,408,093) per annum from and including                     
                                         2016 to                     
                                         2021;     (d)   one million five
hundred and eighty three thousand one hundred and twenty eight pounds
(£1,593,128) per annum from and including                     
                                         2021 to the expiry of the Contractual
Term;

    “Reform Order” means the Regulatory Reform (Business Tenancies) (England and
Wales) Order 2003;       “Renewal Rent Determination Date” means the date being
one year prior to the date of expiry of the Contractual Term in respect of the
first lease renewal and thereafter the date of the commencement of the term of
the relevant renewed lease granted pursuant to clause 5;       “Rent
Commencement Date” means the date hereof;       “Rents” means the rents reserved
by Clause 2.2 (Rents payable) together with any value added tax payable on such
rents;       “Requisite Notice” means written notice given at least 48 hours
before entry is required;       “Schedule of Condition” means the photographic
schedule of condition dated 4 November 2005 relating to the Premises agreed
between the parties and prepared by Workman Property & Building Consultants;    
  “Structure” means any building whether permanent or temporary including
without limitation storage tanks or facilities or pipes or other natural or
man-made structure above or below ground;       “Surety” means any person who at
any time has guaranteed to the Landlord payment of the Rents and performance of
the Lease Provisions;       “Tenant’s Personnel” means servants, agents,
employees, licensees and invitees of the Tenant and under the Tenant’s control;
      “Tenant’s Trade Fixtures” means all fixtures and fittings plant and
machinery and all other items at in or on the Property which are not Landlord’s
Fixtures;       “Term” means the Contractual Term together with any period of
holding over, continuation or extension of the Contractual Term whether by
statute or otherwise;       “Underlet Premises” means the premises let by any
underlease;       “Usual Quarter Days” means 25 March, 24 June, 29 September and
25 December in each year of the Term;       “Uninsured Damage” means damage by
an Uninsured Risk;

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    “Uninsured Risk” means any risk to the extent and for the period that the
insurance cover for damage by that risk is not capable of being insured on the
London insurance market or otherwise is at a premium or subject to such
conditions which in the opinion of the Landlord and the Tenant (both acting
reasonably) is/are unreasonable, or such other events which are not from time to
time insured;       “Utilities” means water, gas, electricity
telecommunications, drainage, electrical impulses and other services benefiting
the Premises whether provided by the Landlord, the Tenant or any other person,
including statutory suppliers; and       “Value Added Tax” means value added tax
as referred to in the Value Added Tax Act 1994 (or any tax of a similar nature
substituted or levied in addition to it).

1.2   Contents and headings       The contents page and headings are included
for ease of reference only and do not affect the interpretation or construction
of this Lease.   1.3   Interpretation       In this Lease, unless the context
requires otherwise, any reference to:

  (a)   a Clause or the Schedule is to a clause of or a schedule to this Lease;
    (b)   this Lease includes the Schedules, which form part of this Lease for
all purposes;     (c)   an enactment includes any consolidation, re-enactment or
modification of the same and any subordinate legislation in force under the
same;     (d)   the masculine, feminine or neuter gender respectively includes
the other genders, references to the singular include the plural, and vice
versa, and references to persons include firms, corporations and unincorporated
associations and bodies;     (e)   consent includes any other form of licence,
permission, approval or authorisation;     (f)   any consent of the Landlord
required under this Lease shall be in writing;     (g)   the Premises includes
any part of the Premises;     (h)   neighbouring premises includes any premises
adjoining, adjacent to or in the vicinity of the Premises; and     (i)   the
Landlord, the Tenant and the Guarantor includes their respective successors in
title and, if individuals, their respective estates and personal
representatives.

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1.4   Joint and several liability       Any agreement, covenant, representation,
warranty, acknowledgement or undertaking in this Lease on the part of two or
more persons is made or given by such persons jointly and severally.

2.   DEMISE AND RENTS   2.1   Demise       The Landlord lets the Premises to the
Tenant for the Contractual Term.   2.2   Rents payable       The rents payable
by the Tenant for the letting are:

  (a)   the Principal Rent, which shall be paid by equal quarterly payments in
advance on the Usual Quarter Days. The first payment of the Principal Rent,
apportioned on an annual basis for the period from and including the Rent
Commencement Date up to the first day of the Usual Quarter Days following the
Rent Commencement Date, shall be paid on the date of this Lease; and     (b)  
interest on the following amounts:

  (i)   any Principal Rent which is not paid on the due date for payment; and  
  (ii)   any other sums due to the Landlord under this Lease which are not paid
within 14 days of a demand for payment.

  Interest on these amounts shall be calculated on a daily basis at the
Prescribed Rate, both before and after any judgment, for the period from the due
date for payment to the date on which they are actually paid. It shall be
compounded quarterly and shall be payable on demand.

2.3   Rights reserved       The rights set out in Schedule 1 (Exceptions and
reservations to the Landlord and others) are excepted and reserved out of the
letting for the benefit of the Landlord and those authorised by the Landlord.  
2.4   Matters to which the Premises are subject       The letting is made
subject to the matters set out in Schedule 2 (Incumbrances) and the Deed of
Easement.   3.   TENANT’S COVENANTS       The Tenant covenants with the Landlord
as follows:   3.1   Payment of Rents       The Tenant shall pay the Rents in
accordance with Clause 2 (Demise and Rents) without any deduction or set off
whatsoever (whether legal or equitable). If the

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    Landlord so requires the Principal Rent shall be paid directly to the
Landlord’s bankers by bankers standing order.

3.2   Outgoings

  (a)   Subject to Clause 3.2(b) the Tenant shall pay all existing and future
rates, taxes, charges, assessments, duties, impositions and outgoings assessed
or imposed at any time during the Term on or in respect of:

  (i)   the Premises, whether assessed or imposed on the owner or occupier; and
    (ii)   any payment payable by the Tenant under this Lease,     whether
parliamentary, parochial, local or of any other description and whether or not
of a capital or non-recurring nature.

  (b)   The obligations in Clause 3.2(a) shall exclude any tax other than Value
Added Tax (which the Tenant expressly covenants to pay under this Clause 3)
assessed or imposed in respect of:

  (i)   the Rents;     (ii)   the grant of this Lease; or     (iii)   any
dealing or deemed dealing by the Landlord with its interest in the Premises.

3.3   Repair

  (a)   Whilst this Lease is vested in Bookham Technology Plc (registered number
2298887) then the Tenant shall keep the Premises and all buildings on the
Premises (save for the Excluded Buildings) in a wind and watertight condition.  
  (b)   As soon as this Lease has been assigned or transferred by Bookham
Technology Plc (registered number 2298887) then the Tenant shall keep the
Premises and the buildings on it (save for the Excluded Buildings) in no worse
state of repair and condition as is evidenced by the Schedule of Condition (fair
wear and tear excepted).     (c)   Without prejudice to the provisions of Clause
3.3(a) of this Lease the Tenant shall keep:

  (i)   such part of the Premises that are from time to time undeveloped and the
grass, gardens, trees and shrubs in proper and neat order and condition; and    
(ii)   any roads, pavements, courtyards and service areas in working repair and
condition.

  (d)   Whenever during the Term any Landlord’s Fixtures which continue to be
required for use by the Tenant have become unusable and incapable of

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      economic repair the Tenant shall replace them with articles which are
suitable and efficient for the Tenant’s requirements.     (e)   Damage to the
Premises and any of the buildings on the Premises by any of the Insured Risks is
excepted from the Tenant’s liability under Clauses 3.3(a), 3.3(b), 3.3(c) and
3.3(d), unless the insurance monies for such buildings are rendered
irrecoverable in whole or in part by any act or default of the Tenant or the
Tenant’s Personnel.

3.4   Alterations and additions

  (a)   The Tenant may carry out alterations improvements or additions to the
Premises (whether of a structural or a non-structural nature) either internally
or externally provided that if the gross internal floor area of all the
buildings on the Premises will or is reasonably likely to fall below 169,281
square feet as a result of any such alterations, improvements or additions then
the Landlord’s prior written consent will be required for such alterations
improvements or additions (such consent not to be unreasonably withheld or
delayed) and during such period as the gross internal floor area of all the
buildings on the Premises remains below this figure.     (b)   The Tenant may
demolish the Excluded Buildings either in whole or in part at any time during
the Term.     (c)   For the avoidance of doubt at the expiration or sooner
determination of the Term the Tenant shall not be required to remove any
alterations, improvements or additions made to the Premises.     (d)   The
Tenant covenants with the Landlord that where it does carry out and complete any
alterations improvements or additions then it shall do so:

  (i)   expeditiously;     (ii)   in a good and workmanlike manner, with good
quality materials fit for the purpose for which they are required;     (iii)  
in accordance in all respects with all legal requirements and the terms of all
relevant consents; and     (iv)   at its sole risk.

3.5   Authorised and prohibited uses

  (a)   The Tenant shall not use the Premises for any purpose other than the
Authorised Use.     (b)   Nothing contained in this Lease implies or warrants
that the use of the Premises for the Authorised Use or any other use from time
to time authorised by the Landlord will be in accordance with the Planning Acts.

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3.6   Compliance with statutory requirements

  (a)   The Tenant shall at its expense obtain from the appropriate authorities
all licences consents and permissions as may be required for the carrying out by
the Tenant of any operations on or use of any part of the Premises.     (b)  
The Tenant shall in relation to any obligations placed on it under any Acts
and/or Planning Acts comply with all such Acts and/or Planning Acts and shall
not at any time during the Term do or permit or suffer anything which shall be a
contravention by it of any of the Acts and/or the Planning Acts or of any
licences consents authorisations permissions and conditions (if any) from time
to time granted or imposed under such Acts nor permit anything which would be a
contravention by it thereof and shall comply with the same.     (c)   Unless the
Landlord directs otherwise in writing the Tenant shall carry out before the
expiry or sooner determination of this Lease (howsoever determined) any works
stipulated to be carried out to the Premises as a condition of any planning
permission which may have been granted during the Term and implemented by the
Tenant whether or not the date by which the planning permission requires such
works to be carried out falls within the Term.     (d)   The Tenant shall in
relation to any obligations placed on it under any Environmental Laws comply
with such obligations and in particular (but without limitation) obtain and
comply with Environmental Permits required for the operation of its business at
the Premises and/or to storage use or disposal of any Hazardous Matter on or
from the Premises.

3.7   Notices     The Tenant shall:

  (a)   promptly give the Landlord a copy of any Notice;     (b)   at the
reasonable request of the Landlord and at the Landlord’s expense to make or join
in making such objections or representations in respect of any Notice as the
Landlord may reasonably require.

3.8   Dealings with this Lease

  (a)   The Tenant shall not assign, underlet, part with the possession of or
share the occupation of the whole or any part of the Premises save as permitted
by this Clause.     (b)   The Tenant may:

  (i)   having first complied with the pre-conditions in Clause 3.8(c) (and
subject always to clause 3.8(d)) assign the whole of the Premises with the
previous consent of the Landlord not to be unreasonably withheld or delayed; or

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  (ii)   having first complied with the pre-conditions in Clause 3.8(e) underlet
the whole or part of the Premises with the previous consent of the Landlord not
to be unreasonably withheld or delayed; or

  (c)   If the Tenant wishes to assign the whole of the Premises, as a
pre-condition of giving consent to the same the Landlord shall be entitled to
require that:

  (i)   the proposed assignee enters into a covenant with the Landlord prior to
the assignment to pay the Rents and to observe and perform the Lease Provisions
from the date of the assignment until the proposed assignee is released from its
obligations to pay the Rents and observe and perform the Lease Provisions under
s5(2) Landlord and Tenant (Covenants) Act 1995 or, if later, under s11(2) of
that Act;     (ii)   the Tenant provides full details of the proposed assignment
to the Landlord including the amount of any fines, premiums, reverse premiums or
other financial payments or incentives and any non-monetary incentives to be
made, given, received or which are payable in order to secure the proposed
assignment;     (iii)   the proposed assignee provides such evidence of its
financial status and the financial status of any guarantor of the proposed
assignee as the Landlord may reasonably require to satisfy itself that the
proposed assignee is of sufficient financial standing to enable it to comply
with the Lease Provisions;     (iv)   if the Landlord reasonably so requires the
proposed assignee shall provide one or more acceptable guarantors for the
proposed assignee who will covenant with the landlord in the terms (mutatis
mutandis) set out in Schedule 4;     (v)   if the Landlord reasonably so
requires the proposed assignee will prior to the assignment provide such
additional security for performance by the proposed assignee of its obligations
under this Lease as the Landlord may reasonably require; and     (vi)   the
Tenant enters into an authorised guarantee agreement in such reasonable form as
is required by the Landlord (acting reasonably) no later than the date of the
assignment, which agreement is to be by deed.

  (d)   For the purpose of s19(1A) of the Landlord and Tenant Act 1927 it is
agreed that the Landlord shall not be regarded as unreasonably withholding
consent to any proposed assignment of the whole of the Premises if it is
withheld on the ground (and it is the case) that any one or more of the
circumstances mentioned below exist (whether or not such withholding is solely
on such ground or on that ground together with other grounds):

  (i)   in the Landlord’s reasonable opinion the proposed assignee (taking into
account any guarantees and other security for the performance by the assignee of
the tenant’s covenants under this Lease) is not able to pay

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      the Rents reserved by this Lease as and when they fall due and/or to
observe and perform the obligations of the Tenant under this Lease;     (ii)  
there are arrears of the Rents reserved hereunder at the date of the application
for the assignment to the proposed assignee and/or the proposed date for
completion of the licence giving the Landlord’s consent.

  (e)   If the Tenant wishes to underlet the Premises either in whole or part as
a pre-condition of giving consent to the same the Landlord shall be entitled to
require that:

  (i)   any undertenant or assignee of any devolutionary interest enters into a
covenant with the Landlord:

  (A)   to observe and perform the Lease Provisions, other than the covenant to
pay the Rents and to comply with the obligations on the undertenant in the
underlease throughout the term of the underlease or until the undertenant is
released by virtue of the Landlord and Tenant (Covenants) Act 1995, if sooner;
and     (B)   to procure that any subsequent assignee of any devolutionary
interest enters into a covenant with the Landlord in the form of this Clause
3.8(e)(i);

  (ii)   any covenant given to the Landlord by an undertenant or assignee of any
devolutionary interest shall subsist during the period from the date of the
underletting or assignment, as the case may be, until the earlier of:

  (A)   the determination of the term of the underlease;     (B)   the next
assignment of the underlease with all consents required by this Lease and the
underlease; and     (C)   the date upon which the undertenant or assignee, as
the case may be, is released from liability by virtue of s11(2) Landlord and
Tenant (Covenants) Act 1995; and

  (iii)   any underlease (however remote) contains a lawful and valid agreement
to exclude ss24-28 Landlord and Tenant Act 1954 as amended by the Reform Order.

  (f)   The Tenant shall:

  (i)   not at any time either expressly or by implication waive any breach of
the covenants or conditions on the part of any undertenant or assignee of any
devolutionary interest comprised in any underlease or devolutionary interest;
and     (ii)   enforce any breach of the same at its own cost and expense.

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  (g)   Notwithstanding anything in this Clause 3.8, the Tenant shall be
entitled to share occupation of the whole or any part of the Premises with any
other Group Company on terms which do not create any relationship of landlord
and tenant provided that:

  (i)   the Tenant shall give notice to the Landlord within 28 days of the
commencement or termination of any such arrangement; and     (ii)   any such
arrangement shall terminate automatically on the Tenant and any such member of
the group ceasing to be Group Companies and the former member of the group
occupying the Premises shall vacate them as soon as reasonably practicable but
in any event within one month thereafter.

3.9   Short term lettings       The Tenant may, without the consent of the
Landlord and without complying with the provisions of Clause 3.8 (save in
respect of underleases to third parties other than Group Companies where Clause
3.8(e)(i) shall apply), grant underleases of any part or parts of the Premises
on the following terms and conditions:

  (a)   for a term which shall not exceed ten years’ in length (or such shorter
period to expire no less than two weeks prior to the end of the Term) and which
shall in any event expire no less than two weeks before the end of the Term;    
(b)   with a condition for re-entry on breach of covenant by the undertenant;  
  (c)   with an absolute covenant on the part of the undertenant not to assign,
charge, underlet, share or part with possession or occupation of or permit any
person to occupy the whole or any part of the Premises to be comprised in such
underlease other than by way of an assignment of whole with the prior consent of
the lessor (which shall not be unreasonably withheld), a right to underlet part
of the Underlet Premises on substantially the same terms as this Clause 3.9 but
with the lessor’s prior consent (which shall not be unreasonably withheld) and a
right to share possession with group companies of the undertenant on
substantially the same terms as Clause 3.8(g); and     (d)   with the lawful
exclusion of the provisions of ss24-28 inclusive of the Landlord and Tenant Act
1954 in relation to such underlease.

3.10   Registration and notification of dispositions

  (a)   Within one month of every assignment, transfer, underlease or other
disposition of or relating to the Premises or any devolution by will, intestacy
or operation of law the Tenant shall:

  (i)   give notice of the same with full particulars to the Landlord’s
Solicitors;     (ii)   produce to the Landlord for registration and retention a
copy of such instrument duly certified by a Solicitor to be a true copy; and

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  (iii)   produce to the Landlord a true copy of any deed of covenant referred
to at Clause 3.8(e) and/or 3.9.

  (b)   To furnish to the Landlord within ten working days of demand full
particulars of all derivative interests of or in the Premises however remote or
inferior PROVIDED THAT the Landlord may only make such request once in any
12 month period.

3.11   Fishing rights

Notwithstanding Clause 3.8 the Tenant may grant licences to any third parties
granting fishing rights on the lake situated on the Premises on such terms and
conditions as the Tenant may determine and for the avoidance of doubt the Tenant
shall have the sole right to manage (at its own cost) fishing on the lake and
collect (at its own cost) all revenues from such activities for its sole
benefit.

3.12   Costs and fees

  (a)   The Tenant shall pay on demand all reasonable and proper fees, charges,
costs, disbursements, and expenses, including but without prejudice to the
generality of the foregoing legal charges, bailiff’s charges and surveyors’ fees
incurred or expended by the Landlord of and incidental to and/or in
contemplation of:

  (i)   the preparation and service of a notice under ss146 and 147 Law of
Property Act 1925, whether or not forfeiture for such breach is avoided
otherwise than by relief granted by the Court;     (ii)   any application or
request for any approval or consent required by this Lease whether or not any
such approval or consent is granted by the Landlord (provided approval or
consent is not unreasonably withheld) or the application or request is proceeded
with by the Tenant; and     (iii)   the enforcement of any covenant on the part
of the Tenant.

  (b)   The sums payable under this Clause 3.12 shall be payable whether they
have been incurred or expended before or after the expiration or determination
of the Term whether by effluxion of time or otherwise.

3.13   Yielding up

  (a)   The Tenant shall yield up the Premises at the expiration or sooner
determination of the Term:

  (i)   with vacant possession; and     (ii)   in such state of repair and
condition as accords with the Lease Provisions.

  (b)   For the avoidance of doubt the parties hereby acknowledge and agree that
the Tenant’s Trade Fixtures belong to the Tenant absolutely and that the Tenant
may remove the Tenant’s Trade Fixtures from the Premises at any time during the
Term or at the end of the Term if it so desires but at no time shall it be

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    obliged to do so PROVIDED THAT if the Tenant does remove any of the Tenant’s
Trade Fixtures, it must do so in a good and workmanlike manner and make good any
damage caused by such removal to the reasonable satisfaction of the Landlord.  
  (c)   The Tenant further covenants with the Landlord in the last three months
of the Term (however determined) to procure that:

  (i)   all Tenant’s Trade Fixtures which contain Hazardous Matter or which
might in any event lead to Environmental Contamination at any time in the future
are removed from the Premises and any works of making good or reinstatement are
carried out and completed to the reasonable satisfaction of the Landlord; and  
  (ii)   the works required to be carried out pursuant to this sub-clause shall
be carried out by properly qualified and experienced contractors.

3.14   Fire precautions       The Tenant shall:

  (a)   at all times during the Term adequately equip the Premises with fire
fighting and extinguishing equipment, apparatus and appliances; and     (b)  
comply with all lawful requirements which may from time to time be made by any
competent authority in relation to means of escape from the Premises in case of
fire or in relation to fire precautions generally.

3.15   Value Added Tax       If Value Added Tax shall be chargeable in respect
of any supplies made by the Landlord to the Tenant then the Tenant shall also
pay to the Landlord the amount of the Value Added Tax so chargeable within
14 days of receipt of a valid Value Added Tax invoice.   3.16   Replacement of
Surety

  (a)   The Tenant shall give notice to the Landlord within 28 days of:

  (i)   the Surety being an individual:

  (A)   dying;     (B)   having a bankruptcy order made against him; or     (C)
  having an administration order made against him;

  (ii)   the Surety being a body corporate:

  (A)   having a provisional liquidator, receiver, administrator or
administrative receiver appointed over all or any part of its assets; or

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  (B)   having a winding-up order made against it.

  (b)   If any of the events referred to in Clause 3.16(a) occur and if so
required by the Landlord, the Tenant shall, at its own expense, procure that
some other person acceptable to the Landlord execute a guarantee in the form set
out in Schedule 4 (Guarantor’s covenants) within 28 days of the Landlord
requesting the same.

3.17   Tenant to insure

  (a)   The Tenant shall insure:

  (i)   the Premises against the Insured Risks with an insurer of repute in
their full reinstatement cost, including the costs of demolition and site
clearance, Value Added Tax and architects’, surveyors’ and other professional
fees; and     (ii)   against public liability of the Landlord in connection with
any matter relating to the Premises or the occupation or use of the Premises by
the Tenant or anyone at the Premises with the express or implied authority of
the Tenant.

  (b)   The Tenant shall not be in breach of its obligations under Clause
3.17(a) where any Insured Risk cannot be insured on the London insurance market
or is otherwise only available at a premium or subject to onerous conditions
which in the Tenant’s opinion (acting reasonably) are unreasonable but the
Tenant shall advise the Landlord if at any time such non insurance shall arise.
    (c)   In each case such insurance shall be subject to such exceptions,
excesses and conditions as may be usual from time to time in the London
insurance market.     (d)   Insurance under both 3.17(a)(i) and (ii) and 3.17(f)
will be effected in the name of the Tenant with the Landlord named as an
additional insured together with such further interests noted thereon as the
Tenant may require and the Landlord (acting reasonably) may request.     (e)  
The Tenant will supply the Landlord (but not more than twice in any 12 month
period) with a copy of the insurance policy for the Premises and evidence of
payment of the relevant premium and will notify the Landlord as soon as
reasonably practicable thereafter of any material change in the terms of the
policy.     (f)   If (in the Landlord’s reasonable opinion) the insurance taken
out by the Tenant is not in accordance with Clause 3.17(a)(i) then the Tenant
must as soon as reasonably practicable (after receiving written notice from the
Landlord specifying the amount of cover it deems to be in accordance with Clause
3.17(a)(i) together with relevant supporting documentation) increase or alter
(as appropriate) the cover in accordance with such notice at its own cost and
provide the Landlord with evidence of such increase within 10 working days of
the date of the notice provided that such cover is reasonably available in the
London insurance market on reasonable terms.

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  (g)   If the Tenant fails to comply with Clause 3.17(f) having first been
provided with notice by the Landlord and all relevant supporting documentation
then the Landlord may increase or alter (as appropriate) the insurance cover on
behalf of and in the name of the Tenant to the level set out in its notice
served on the Tenant pursuant to Clause 3.17(f) and the Tenant shall pay to the
Landlord on demand the proper cost of such increase in the cover.     (h)   The
Tenant hereby acknowledges that for the purpose of clauses 3.17(f) and 3.17(g) a
fire insurance valuation carried out by or on behalf of the Landlord shall be
adequate to comprise what is required for relevant supporting documentation.

3.18   Rebuilding and reinstatement

  (a)   If the Premises or any part of them or the access to or egress from them
are damaged or destroyed by an Insured Risk, the Tenant shall (unless payment of
any insurance monies is refused because of any act of the Landlord and the
Landlord has failed to comply with Clause 3.20) rebuild and reinstate the
Premises as soon as reasonably practicable. This obligation shall be subject to
the Tenant first obtaining all necessary Planning Permissions and other consents
which it shall use all reasonable endeavours to obtain as soon as reasonably
possible thereafter provided that, the Tenant shall not be required to rebuild
and reinstate the Premises so as to be in all respects identical to the Premises
prior to such damage or destruction provided that the Premises as so rebuilt and
reinstated shall be of no less size and/or quality and shall otherwise be no
less capable of meeting the Tenant’s operational requirements than the Premises
as constructed prior to such occurrence. Such reinstatement and rebuilding shall
be carried out and completed in accordance with the provisions of Clause 3.4(d)
as if they were set out here mutatis mutandis.     (b)   The Landlord shall
provide (at the Tenant’s reasonable cost) all such assistance as the Tenant may
reasonably require in connection with making any claim in respect of the
occurrence of an Insured Risk and recovering any insurance monies due pursuant
thereto. The Landlord confirms (and will provide any such confirmation as the
insurers may request) that the insurance monies received may be paid and
expended by the Tenant in complying with its obligations in this Clause 3.18
(other than insurance monies received in respect of loss of rent and business
interruption which shall belong to the Tenant absolutely).     (c)   If the
insurance monies received by the Tenant pursuant to the insurance effected by it
pursuant to Clause 3.17 shall be insufficient to meet the cost of such
rebuilding, repair and reinstatement pursuant to this Clause 3.18 then (subject
to Clause 3.20) the Tenant shall make good such shortfall out of its own monies.

3.19   Impossibility of reinstatement

  (a)   The Tenant shall be under no obligation to rebuild or reinstate the
Premises if, having used all reasonable endeavours to do so, it is unable to
procure all Planning Permissions and other consents necessary for such
rebuilding or

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      reinstatement and all insurance monies received or receivable in respect
of the insurance effected pursuant to Clause 3.17 shall belong to the Landlord
and the Tenant in shares which reflect their respective interests in the
Premises.     (b)   If following damage or destruction of the Premises by an
Insured Risk reinstatement of the Premises has not occurred within the period of
three years (commencing on the date of such damage or destruction) then on or
following the expiry of such period (but not following completion of such
reinstatement) the Landlord or the Tenant shall be entitled to serve notice on
the other at any time terminating this Lease forthwith but without prejudice to
the rights of each party against the other in respect of any antecedent breach
of any obligation under this Lease and upon the service of such notice this
Lease shall determine, and all insurance monies received or receivable in
respect of the insurance effected pursuant to Clause 3.17 shall belong to the
Landlord and the Tenant in shares which reflect their respective interests in
the Premises.

3.20   Landlord’s obligation

  (a)   The Landlord shall not do anything in or upon the Premises which would
cause the insurance effected on the Premises pursuant to Clause 3.17(a) to be
rendered void or voidable or otherwise adversely affected.     (b)   If
insurance monies in respect of the Premises or any part of them are rendered
wholly or partially irrecoverable in whole or in part as a result of any act or
default of the Landlord (or any charge of the Landlord or any servant, agent,
employee, or licensee or invitee of the Landlord or any chargee of the
Landlord):

  (i)   the Landlord shall pay to the Tenant on demand a sum equivalent to the
amount of insurance monies so rendered irrecoverable; and     (ii)   the Tenant
shall not be obliged to comply with its obligations under Clause 3.18 unless and
until the Landlord complies with Clause 3.20(a).

3.21   Tenant’s obligations

  (a)   The Tenant shall not do anything in or upon the Premises which would
cause the insurance for the time being effected on the Premises pursuant to
Clause 3.17(a) to be rendered void or voidable or otherwise adversely affected.
    (b)   If the Premises are damaged or destroyed by any of the Insured Risks
the Tenant shall give notice as soon as reasonably practicable of such events to
the Landlord.

3.22   Insurer’s requirements       The Tenant shall:

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  (a)   (and so far as applicable the Landlord shall) comply with all
regulations and lawful requirements of the insurers with whom insurance cover is
effected pursuant to Clause 3.17;     (b)   notify the Landlord as soon as
reasonably practicable upon the happening of any event or circumstance which
might materially affect or lead to any claim on any insurance policy effected
pursuant to Clause 3.17, or which should be disclosed to the insurance company;
and     (c)   be responsible for and shall pay any excess(es) due under the
insurance policy taken out under any part of clause 3.17.

3.23   Uninsured Damage

  (a)   If Uninsured Damage occurs then the provisions of this Clause 3.23 shall
apply.     (b)   Following the occurrence of Uninsured Damage:

  (i)   the Tenant shall, within six months of the occurrence of the Uninsured
Damage (time being of the essence) give written notice to the Landlord
(“Election Notice”) stating whether or not it proposes to rebuild or reinstate
the Premises in accordance with Clause 3.23(c);     (ii)   the Tenant may but
shall not be obliged to repair such Uninsured Damage to the Premises in
accordance with its covenants under this Lease.

  (c)   If the Tenant serves an Election Notice stating that it proposes to
rebuild or reinstate the Premises then the Tenant shall rebuild and reinstate
the Premises in accordance with the obligations set out in Clause 3.18 as if the
same were set out here in full (mutatis mutandis).     (d)   If the Tenant
serves an Election Notice stating that it does not propose to rebuild or
reinstate the Premises or if no Election Notice is served in accordance with
Clause 3.23(b)(i) then (where no Election Notice is served) at any time after
the expiry of the period of six months from the occurrence of the Uninsured
Damage or (where an Election Notice is served stating that the Tenant does not
propose to rebuild or reinstate) at any time after the service of such Election
Notice (but not following commencement of and expeditious carrying out of the
rebuilding or reinstatement of the Premises or service of written notice by the
Tenant on the Landlord of the Tenant’s intention to carry out such rebuilding or
reinstatement) either party shall be entitled to determine this Lease by serving
on the other not less than one month’s notice (“Determination Notice”). On the
expiration of the Determination Notice (but not if commencement of and
expeditious carrying out of the rebuilding or reinstatement of the Premises or
service of written notice by the Tenant on the Landlord of the Tenant’s
intention to carry out such rebuilding or reinstatement has occurred prior to
expiry of such Notice) this Lease shall determine and there shall be no claim
against the Landlord or the Tenant respectively in respect of the disrepair
caused by such Uninsured Damage but

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    otherwise such determination shall be without prejudice to the rights of
each against the other in respect of any antecedent breach of any obligation
within this Lease.     (e)   If reinstatement of the Premises has not occurred
in accordance with Clause 3.23(c) or Clause 3.23(d) (as the case may be) by the
expiry of three years after the occurrence of the Uninsured Damage then on or
following the expiry of such period (but not following completion of such
reinstatement) either party shall be entitled to serve notice on the other at
any time after the expiry of that three year period terminating this Lease
forthwith but without prejudice to the rights of each party against the other in
respect of any antecedent breach of any obligations within this Lease and upon
expiry of such notice this Lease shall determine.     (f)   If Uninsured Damage
occurs then notwithstanding the provisions of this Clause 3.23 the parties shall
consult with each other as to the practicability of rebuilding and reinstating
the Premises and shall make available to each other all reports which either of
them may have commissioned in relation to the Premises following the occurrence
of Uninsured Damage and all appraisals and estimates as to the feasibility and
cost of rebuilding and reinstating the same.

4.   LANDLORD’S COVENANT       The Landlord covenants with the Tenant and the
Guarantor as follows:   4.1   Quiet Enjoyment       The Tenant shall and may
peaceably and quietly hold and enjoy the Premises during the Term without any
lawful interruption or disturbance by the Landlord or any person rightfully
claiming under or in trust for the Landlord or by title paramount.   4.2  
Planning Permission       The Landlord shall not make any application for a
Planning Permission during the Contractual Term in relation to the Premises or
any adjoining property (which would (if granted) have or be likely to have an
adverse impact on the Tenant’s permitted use and operation at the Premises (or
any part of them)).   5.   TENANT’S OPTION TO RENEW   5.1   Renewal Lease

  (a)   If the Tenant wishes to take a further lease of the Premises from the
expiry of the Contractual Term of this Lease then provided that:

  (i)   the Tenant shall at any time give to the Landlord not less than six
months’ notice in writing of such wish to expire on the date of expiry of the
Contractual Term of this Lease;     (ii)   the Tenant pays the Principal Rent up
to and including the date of expiry of the Contractual Term; and

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  (iii)   if the Tenant’s obligations under this Lease are guaranteed by any
Surety at the date of expiry of the Contractual Term, the Tenant shall procure
that any such Surety shall enter into such further lease to guarantee the
obligations of the lessee thereunder     the Landlord shall grant to the Tenant
and the Tenant shall accept a further lease of the Premises for a term of five
years commencing on the date of the expiry of the Contractual Term of this
Lease.

  (b)   The further lease referred to at Clause 5.1(a) shall be on the same
terms and conditions as this Lease save that:

  (i)   this Clause 5 shall be included but the term of the further lease to be
granted shall be two years commencing on the date of the expiry of the
Contractual Term of the preceding lease (and the definition of the “Contractual
Term” shall be amended accordingly) ; and     (ii)   the Principal Rent which
shall be payable from the commencement of the five or two year term (as
appropriate) shall be the sum determined in accordance with Clause 5.2     and
shall be completed no later than the date of expiry of the relevant Contractual
Term.     For the avoidance of doubt the further two year lease(s) may be
renewed as often as the Tenant may require pursuant to and in accordance with
the terms of this Clause 5.

5.2   Renewal Commencing Rental     The commencing rental reserved by such
further lease(s) shall be the annual amount determined on the Renewal Rent
Determination Date in accordance with the provisions of Schedule 3 (Renewal rent
determination).   6.   AGREEMENTS AND DECLARATIONS   6.1   Forfeiture and
re-entry

  (a)   In any of the events set out in Clause 6.1(b) the Landlord, or any
person or persons duly authorised by the Landlord, may at any time re-enter the
Premises or any part of them in the name of the whole and repossess and enjoy
the same as if this Lease had not been made. Upon such re-entry, this Lease
shall absolutely cease and determine, but without prejudice to any right of
action or remedy of the Landlord in respect of any antecedent breach of any of
the Lease Provisions by the Tenant.     (b)   The Landlord may exercise its
rights under Clause 6.1(a) if:

  (i)   the Rents or any part of them remain unpaid for 21 days after formal
written demand;

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  (ii)   there is a material breach of the Lease (taking into account all of the
Lease Provisions) by the Tenant and the Tenant has failed to commence remedial
action within 30 days of receipt of written notification by the Landlord of such
material breach (such notice to specify the nature of the material breach and
the remedial action required);     (iii)   the Tenant being a body corporate:

  (A)   a winding-up order is made; or     (B)   has a provisional liquidator
appointed;

  (iv)   the Tenant being an individual, or if individuals any one of them:

  (A)   is made bankrupt; or     (B)   has an administration order made against
him;

  (v)   the Tenant, being two or more individuals trading together or practising
in partnership and holding the Premises on trust for themselves and others as an
asset of the partnership, or being an individual, holding the Premises on trust
for himself and others as an asset of the partnership:

  (A)   a winding-up order is made; or     (B)   has an administration order
made against it.

6.2   Notices

  (a)   Any notice or consent required by this Lease shall be valid only if
given in writing and signed by or on behalf of the party issuing the same.    
(b)   s196 Law of Property Act 1925, as amended by the Recorded Delivery Service
Act 1962, shall apply to any notices required to be given or served under this
Lease.     (c)   Notices shall be served at the address of the relevant party or
their solicitors shown at the start of this Lease or at such other address in
the United Kingdom as either party may notify in writing to the other from time
to time. In the case of the Landlord , all notices served on it must also be
served at:

10 Carlos Place, London W1K 3AT marked F.A.O. Dider Tandy or as the Landlord
shall from time to time notify the Tenant.
In the case of the Guarantor, all notices served on it must also be served at
the registered office of the Tenant.

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6.3   Law and jurisdiction       This Lease shall be construed in accordance
with English law and the parties irrevocably submit to the non-exclusive
jurisdiction of the English courts to settle any dispute which may arise in
connection with this Lease.   6.4   Exclusion of certain rights       Any of
those matters referred to in s62 Law of Property Act 1925 shall be excluded from
this Lease.   6.5   Value Added Tax       In this Lease the expressions “Rents”,
“Principal Rent”, “further rent”, “additional rent” and any other sums payable
by the Tenant shall be construed as being subject to any Value Added Tax that is
payable from time to time on such amounts. No such items shall be deemed to be
inclusive of any Value Added Tax unless expressly stated to be.   7.   CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999       Each party confirms that no term of
this Lease is enforceable under the Contracts (Rights of Third Parties) Act 1999
by a person who is not a party to this Lease.   8.   GUARANTOR’S COVENANTS      
The Guarantor, in consideration of this Lease being granted by the Landlord at
the instance and request of the Guarantor, covenants with and guarantees to the
Landlord as set out in Schedule 4 (Guarantors covenants).

EXECUTION:
The parties have shown their acceptance of the terms of this Lease by executing
it as a deed after the Schedules.

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SCHEDULE 1
EXCEPTIONS AND RESERVATIONS TO THE LANDLORD

1.   RIGHTS OF ENTRY       The right at reasonable times and on Requisite Notice
to enter the Premises in the company of a representative of the Tenant and
strictly in accordance with such regulations that the Tenant shall impose from
time to time (which without prejudice to the generality of the foregoing, shall
include company rules for contractors CT-HAS-40201 (as amended from time to
time)) to:

  (a)   view and examine the state of repair and condition of the Premises;    
(b)   confirm that the Tenant has complied with the provisions of this Lease; or
    (c)   exercise any of the Landlord’s rights under this Lease.

The person entering causing as little damage and inconvenience as reasonably
possible and making good at its expense any damage caused to the reasonable
satisfaction of the Tenant and the Landlord shall indemnify and keep indemnified
the Tenant from and against all costs, liabilities, losses, actions and demands
of whatever nature arising in any way directly or indirectly out of a breach of
any of the Tenant’s regulations (provided the Tenant has provided the Landlord
with a written copy of such regulations prior to its entry on to the Premises)
or any damage caused as a result of such entry.

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SCHEDULE 2
INCUMBRANCES
All matters referred to in the property and charges register of title number
NN184271 as at 2 September 2005 at 17:46:18 (save for any financial charges).

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SCHEDULE 3
RENEWAL RENT DETERMINATION

1.   DEFINITIONS       In this Schedule 3 the following words and expressions
mean:       “Assumptions” means the following assumptions which shall apply on
the rent determination pursuant to this Schedule 3:

  (a)   that the covenants on the part of the Landlord and the Tenant have been
duly observed and performed, but without prejudice to either party’s rights in
respect of any breach of them;     (b)   that if on the Renewal Rent
Determination Date the Premises have been damaged or destroyed that they have
been fully reinstated; and     (c)   that the Premises are being lawfully used
for the actual use as at the Renewal Rent Determination Date.

“Disregards” means the following matters which shall be disregarded on the rent
determination pursuant to this Schedule 3:

  (a)   works and improvements carried out during the Term to the Premises by
the Tenant or any lawful sub-tenant or occupier;     (b)   any goodwill
attaching to the Premises by reason of the business conducted from them by the
Tenant, any undertenant or other lawful occupier or any predecessor in title;  
  (c)   the fact that the Tenant or any lawful sub-tenant or occupier occupies
the Premises or any adjoining or neighbouring property; and     (d)   any effect
on rent of temporary works being carried out on any adjoining or nearby
property.

“Hypothetical Lease” means a lease:

  (a)   granted with vacant possession in the open market without a premium
between a willing landlord and a willing tenant;     (b)   for a term of five
years (in the case of the five year term lease renewal) or two years (in the
case of the two year term lease renewal) commencing on the Renewal Rent
Determination Date; and     (c)   containing similar covenants, conditions,
provisions, agreements and declarations to those contained in this Lease.

“Market Rental Value” means the rent at which the Premises might reasonably be
expected to be let as a whole on the Renewal Rent Determination Date on the
terms of a Hypothetical Lease assuming the Assumptions and the Disregards apply;

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“Overpayment” means the amount, if any, by which the Market Rental Value as
determined in accordance with paragraph 2 is less than the Principal Rent
payable immediately prior to the expiry of the Contractual Term;
“President” means the President for the time being of the Royal Institution of
Chartered Surveyors or, in default of the President, the Vice-President or next
senior officer of the said Institution able to appoint a Surveyor;
“Renewal Lease” means the lease(s) to be granted pursuant to Clause 5 ;
“Renewal Principal Rent” means the rent to be first reserved under the relevant
Renewal Lease;
“Surveyor” means an independent surveyor or valuer to be appointed in accordance
with this Schedule 3; and
“Uplift” means the amount, if any, by which the Market Rental Value as
determined in accordance with paragraph 2 exceeds the Principal Rent payable
immediately prior to the expiry of the Contractual Term.

2.   DETERMINATION OF REVIEWED RENT

  (a)   The Renewal Principal Rent shall be the Market Rental Value agreed or
determined in accordance with this Schedule 3 whether or not in fact determined
by the Renewal Rent Determination Date.     (b)   The Landlord and the Tenant
will use all reasonable endeavours to agree the Market Rental Value which shall
be payable with effect from the date of commencement of the term of the Renewal
Lease by the date no later than three (3) months prior to the Renewal Rent
Determination Date and in the absence of agreement between the Landlord and the
Tenant, the Market Rental Value shall be determined by the Surveyor acting as an
arbitrator under the Arbitration Act 1996.     (c)   The Surveyor may be
appointed not more than three (3) months before or at any time after the Renewal
Rent Determination Date:

  (i)   by agreement between the Landlord and the Tenant; or     (ii)   in the
absence of such agreement, by the President upon the application of the Landlord
or the Tenant.

  (d)   The Landlord or the Tenant may apply for a substitute Surveyor to be
appointed in accordance with paragraph 2(3) if:

  (i)   the Surveyor fails to determine the Market Rental Value within three
months after the date of his appointment or such longer period as may in all the
circumstances be reasonable;     (ii)   the Surveyor relinquishes his
appointment or dies; or

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  (iii)   for any reason it becomes apparent that the Surveyor will be unable to
complete his duties under paragraph 2.

This procedure may be repeated as often as necessary.

  (e)   The fees payable to the President and to the Surveyor shall be borne as
determined by the Surveyor. If either the Landlord or the Tenant shall fail to
pay their share of the fees payable under this paragraph 2(5) within 21 days of
the same being demanded by the President or the Surveyor the other shall be
entitled to pay the same and recover the sum as a debt from the party which
failed to make payment.     (f)   Immediately upon the Landlord and the Tenant
reaching agreement as to the Market Rental Value or upon the Surveyor’s
determination of this, the Renewal Principal Rent will be deemed to have been
determined in accordance with this Schedule 3.

3.   MEMORANDUM OF RENEWAL PRINCIPAL RENT

Upon the Market Rental Value being agreed or determined in accordance with
paragraph 2, a memorandum recording the Renewal Principal Rent determined in
accordance with this Schedule 3 shall be signed by the Landlord and the Tenant
or by a duly authorised officer on behalf of either party.

4.   PAYMENT OF RENEWAL PRINCIPAL RENT

If the Tenant has served a notice pursuant to Clause 5 (Tenant’s option to
renew) and the Market Rental Value has not been agreed or determined by the date
of the commencement of the term of the relevant Renewal Lease:

  (a)   the Tenant shall pay to the Landlord by way of Principal Rent under the
Renewal Lease a sum equal to the Principal Rent payable immediately prior to the
date of expiry of the Contractual Term until the date of such agreement or
determination (Date of Determination); and     (b)   within fourteen (14) days
of the Date of Determination:

  (i)   where there is an Uplift, the Tenant shall pay to the Landlord:

  (A)   the Uplift for the period from and including the term commencement date
of the relevant Renewal Lease until the Usual Quarter Day following the Date of
Determination; and     (B)   interest on the Uplift calculated on a daily basis
at 3% below the Prescribed Rate from the date upon which each part of the Uplift
would have been payable if the Market Rental Value had been agreed prior to the
date of completion of the Renewal Lease until the date of payment; or

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  (ii)   where there is an Overpayment, the Landlord shall pay to the Tenant:

  (A)   the Overpayment for the period on and from the term commencement date of
the Renewal Lease until the Usual Quarter Day following the Date of
Determination; and     (B)   interest on the Overpayment calculated on a daily
basis at 3% below the Prescribed Rate from the dates upon which each part of the
Overpayment comprised in the Principal Rent has been paid by the Tenant on and
from the date of completion of the Renewal Lease until the date of payment.

5.   GENERAL       The Landlord and Tenant acknowledge that notwithstanding the
expiry of this Lease and/or the grant of a Renewal Lease the provisions of this
Schedule 3 shall still be enforceable in order to calculate the Principal Rent
under the relevant Renewal Lease.

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SCHEDULE 4
GUARANTOR’S COVENANTS

1.   GUARANTEE       If the Tenant fails to comply with any of the Lease
Provisions, the Guarantor guarantees that it shall, on demand by the Landlord,
immediately perform and discharge the obligations of the Tenant under them.   2.
  CONTINUING GUARANTEE       The guarantee set out in Paragraph 1 (Guarantee) is
a continuing guarantee and is additional to, and not in substitution for, any
other security or guarantee which is or may be held by the Landlord from time to
time in respect of the obligations of the Tenant under the Lease.   3.   PRIMARY
OBLIGATION       The Guarantor shall perform and discharge all of the Tenant’s
obligations under this Lease as if they were the primary obligations of the
Guarantor.   4.   INDEMNITY       The Guarantor shall indemnify and keep
indemnified the Landlord against any losses, liabilities, costs and expenses
resulting from the failure of the Tenant to observe any of the Lease Provisions.
  5.   TO ACCEPT A NEW LEASE

  (a)   In this Paragraph 5, the following expressions mean:         “Event of
Default” means the disclaimer or surrender of the Lease by either a trustee in
bankruptcy of the Tenant, if the Tenant is an individual, a liquidator of the
Tenant, if the Tenant is a company; the disclaimer of the Lease by the Crown, if
the Lease becomes bona vacantia, or the striking off of the Tenant from the
register of companies pursuant to the provisions of the Companies Act 1985 or
the forfeiture of this Lease.         “Landlord’s Notice” means a notice in
writing requiring the Guarantor to take a New Lease or indemnify the Landlord as
provided in Paragraph 5(d) of this Schedule served by the Landlord on the
Guarantor within three months of an Event of Default coming to the Landlord’s
knowledge.         “New Lease” means a lease of the Property for a term
commencing on the date of the Event of Default, expiring on the date the Term
would have expired had there been no Event of Default, reserving rents
equivalent to the Rents and containing terms identical to the Lease Provisions.
    (b)   If, following an Event of Default, the Landlord serves a Landlord’s
Notice requiring the Guarantor to take a New Lease, the Guarantor shall accept a
New Lease, execute a counterpart of the New Lease and pay the Landlord’s

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      solicitors’ costs and disbursements of and incidental to the grant of the
New Lease.

  (c)   If at the date of the Event of Default any review of the rent under the
Lease has fallen due but the rent review shall not have been agreed or
determined prior to the grant of the New Lease then the New Lease shall provide
for a review of the rent upon the first day of the term of that New Lease.    
(d)   If, following an Event of Default, the Landlord serves a Landlord’s Notice
requiring the Guarantor to indemnify the Landlord, the Guarantor shall pay to
the Landlord on demand the Rents for the period commencing on the date of the
Event of Default and ending on the earlier of:

  (i)   the date three months after the date of the Event of Default; and    
(ii)   the date, if any, upon which rent becomes payable after the Premises are
re-let.

6.   UNCONDITIONAL GUARANTEE       The Guarantor’s obligations under this
Schedule, including its guarantee under Paragraph 1 (Guarantee), are
unconditional and irrevocable.   7.   NO ASSIGNMENT OF BENEFIT NECESSARY      
The benefit of the Guarantor’s obligations under this Schedule, including its
guarantee under Paragraph 1 (Guarantee), shall pass to the Landlord’s successors
in title to this Lease without the need for any assignment of the same.   8.  
DURATION OF GUARANTEE       The guarantee in this Schedule shall remain in full
force and effect until the earlier of:

  (a)   the determination of the Term;     (b)   the assignment of this Lease by
the Tenant in accordance with the provisions of Clause 3.8 (Dealings with this
Lease); or     (c)   the date upon which the Tenant is released from liability
under this Lease by virtue of s11(2) Landlord and Tenant (Covenants) Act 1995

    but without prejudice to any accrued right of action or remedy of the
Landlord.   9.   GENERAL       In this Schedule, any reference to the “Tenant”
shall be deemed to refer to the tenant for the time being of this Lease at the
date the Guarantor enters into this guarantee and shall expressly exclude any
assignee of the Tenant.

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SCHEDULE 5
LIST OF LANDLORD’S FIXTURES

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EXECUTION:
   
 
   
SIGNED as a Deed by COLERIDGE
  )
(NO. 45) LIMITED acting by a director/a
  )
director and its secretary:
   
 
   
Director    /s/ illegible
   
 
   
Director/Secretary    /s/ illegible
   
 
   
SIGNED as a Deed by BOOKHAM
  )
TECHNOLOGY PLC acting by a director/a
  )
director and its secretary:
  )
 
   
Director /s/ Stephen Abely
   
 
   
Director /s/ Thomas Kelley
   
 
   
Executed as a Deed by BOOKHAM, INC
  )
a company formed under the laws of the
  )
State of Delaware, United States of
  )    /s/ Stephen Abely
America, by S. Abely
   
being a person who, in accordance with the
   
laws of that territory, is acting under the
   
authority of the company
   

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