Exhibit 10.3

 

Form: 07L
Release: 2.3
www.lands.nsw.gov.au

 

LEASE

 

New South Wales
Real Property Act 1900

 

Leave this space clear. Affix additional
pages to the top left-hand corner.

 

PRIVACY NOTE: Section 31B of the Real Property Act 1900 (RP Act) authorises the
Registrar General to collect the information required by this form for the
establishment and maintenance of the Real Property Act Register. Section 96B RP
Act requires that the Register is made available to any person for search upon
payment of a fee, if any.

 

 

 

STAMP DUTY

 

Office of State Revenue use only

 

 

 

 

 

(A)

 

FOLIO OF THE REGISTER

 

Property leased

FOLIO IDENTIFIER A/161650 and B/161650 including factory known as 244 Young
Street, Waterloo, NSW 2017 together with 38 on-site parking spaces

 

 

 

 

 

(B)

 

LODGED BY

 

Document
Collection
Box

Name, Address or DX, Telephone, and LLPN if any

Reference:

CODE

  L

 

 

 

 

 

(C)

 

LESSOR

 

CHARVIC PTY LTD (ACN 003 181 093)

 

 

 

 

The lessor leases to the lessee the property referred to above.

 

 

 

 

 

(D)

 

 

 

Encumbrances (if applicable):

 

 

 

 

 

(E)

 

LESSEE

 

OPTIUM AUSTRALIA PTY LIMITED (ACN 098 184 582)

(F)

 

 

 

TENANCY:

 

(G)   1.     TERM       Three (3) years

 

        2.     COMMENCING DATE       7 December 2007

 

        3.     TERMINATING DATE       6 December 2010

 

        4.     With an OPTION TO RENEW for a period of three (3) years set out
in clause 17 of Annexure “A”

 

        5.     With an OPTION TO PURCHASE set out in clause N. A. of N. A.

 

        6.     Together with and reserving the RIGHTS set out in clause N. A. of

 

        7.     Incorporates the provisions or additional material set out in
ANNEXURE(S) “A” hereto.

 

        8.     Incorporates the provisions set out in N.A. in the Department of
Lands, Land and Property Information Division as No. N.A.

 

        9.     The RENT is set out in item No. 1 of the Reference Schedule

 

ALL HANDWRITING MUST BE IN BLOCK CAPITALS.

DEPARTMENT OF LANDS

0709

LAND AND PROPERTY INFORMATION DIVISION

 

1

--------------------------------------------------------------------------------

 

 

 

DATE

 

 

 

 

 

 

 

(H)

 

Certified correct for the purposes of the Real Property Act 1900
and executed on behalf of the corporation named below by the
authorised person(s) whose signature(s) appear(s) below
pursuant to the authority specified.

 

 

Corporation:

 

 

 

 

Authority:

 

 

 

 

 

 

SEE ANNEX “A”

 

 

Signature of authorised person:

 

Signature of authorised person:

 

 

 

 

 

 

 

Name of authorised person:

 

Name of authorised person:

 

 

Office held:

 

Office held:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Certified correct for the purposes of the Real Property Act 1900
and executed on behalf of the corporation named below by the
authorised person(s) whose signature(s) appear(s) below
pursuant to the authority specified.

 

 

Corporation:

 

 

 

 

Authority:

 

 

 

 

 

 

SEE ANNEX “A”

 

 

Signature of authorised person:

 

Signature of authorised person:

 

 

 

 

 

 

 

Name of authorised person:

 

Name of authorised person:

 

 

Office held:

 

Office held:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(I)

 

STATUTORY DECLARATION *

 

 

 

 

 

 

 

 

 

I       

 

 

 

 

 

 

 

 

 

solemnly and sincerely declare that—

 

 

 

 

 

 

 

 

 

1.  The time for the exercise of option to       in expired lease No.       has
ended; and

 

 

 

 

 

2.  The lessee under that lease has not exercised the option.

 

 

 

 

 

 

 

 

 

 

 

 

I make this solemn declaration conscientiously believing the same to be true and
by virtue of the provisions of the Oaths Act 1900 and I certify this application
correct for the purposes of the Real Property Act 1900.

 

 

 

 

 

Made and subscribed at

 

in the State of New South Wales

 

 

 

 

 

 

 

on

 

in the presence of—

 

 

 

 

 

 

 

 

 

 

 

 

Signature of witness:

 

Signature of lessor:

 

 

 

 

 

 

 

 

 

 

 

 

Full name of witness:

 

 

 

 

 

 

 

 

 

Address of witness:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualification of witness:

 

[tick one]

 

 

 

 

o   Justice of the Peace

 

 

 

 

o   Practising Solicitor

 

 

 

 

o   Other qualified witness [specify]

--------------------------------------------------------------------------------

*  As the Department of Lands may not be able to provide the services of a
justice of the peace or other qualified witness, the statutory declaration
should be signed and witnessed prior to lodgment of the form at Land and
Property Information Division.

 

2

--------------------------------------------------------------------------------

 

 

THIS IS ANNEXURE “A” TO THE LEASE BETWEEN
CHARVIC PTY LTD AS LESSOR AND
OPTIUM AUSTRALIA PTY LIMITED AS LESSEE
OF PROPERTY KNOWN AS 244 YOUNG STREET,  WATERLOO NSW 2017

 

INDEX

 

REFERENCE SCHEDULE 

7

 

1.

DEFINITIONS & INTERPRETATION 

8

 

 

 

1.1.

Definition 

8

 

 

 

1.2

Interpretation 

10

 

 

 

1.3

Exclusion of Implied Covenants and Powers 

11

 

 

 

2.

RENT AND OUTGOINGS 

11

 

 

 

2.1

Rent Payment

11

 

 

 

2.2.

Rent Review

11

 

 

 

2.3

Lessor’s Estimate of Outgoings

13

 

 

 

2.4

Outgoings Payment and Adjustments

13

 

 

 

2.5.

GST 

14

 

 

 

3.

TERMINATION OR ABATEMENT ON DAMAGE 

15

 

 

 

3.1 

Lessor’s Notice to Rebuild or Terminate

15

 

 

 

3.2

Lessee’s Notice to Terminate

16

 

 

 

3.3

Termination following Failure to Rebuild 

16

 

 

 

3.4  

Continued Operation during Rebuilding

16

 

 

 

3.5

Abatement of Rent 

16

 

 

 

3.6

No Requirement to Rebuild 

16

 

 

 

3.7

Disputes 

16

 

 

 

4.

RESUMPTION

17

 

 

 

4.1

Resumption 

17

 

 

 

5.

USE OF PREMISES 

17

 

 

 

5.1

Permitted Use 

17

 

 

 

5.2

No Noxious Use 

17

 

 

 

5.3

Use of Appurtenances 

17

 

 

 

5.4

Drains and Wastes 

17

 

 

 

5.5

Holing of Walls 

18

 

 

 

5.6

Cleaning 

18

 

3

--------------------------------------------------------------------------------

 

5.7

Overloading of Floors 

18

 

 

 

5.8

Installation of Machinery 

18

 

 

 

5.9

Overloading of Electrical Equipment 

18

 

 

 

5.10

Inflammable Substances 

18

 

 

 

5.11

Animals 

18

 

 

 

5.12

Special Services 

18

 

 

 

5.13

Fittings and Fixtures 

19

 

 

 

5.14

Glass and Signs 

19

 

 

 

5.15

Doors, Locks and Windows 

19

 

 

 

5.16

Bulbs, Tubes and Illuminated Signs 

19

 

 

 

5.17

Painting of the Building 

19

 

 

 

5.18

Requirements of Public Authorities 

19

 

 

 

5.19

Pest Control 

19

 

 

 

5.20

Infectious Illness 

20

 

 

 

5.21

Notice of Defects 

20

 

 

 

5.22

Exterior Signs 

20

 

 

 

5.23

Auctions 

20

 

 

 

5.24 

Lessee Not to Cause Rent Reductions

20

 

 

 

5.25

Car Parking Areas and Gardens 

20

 

 

 

6.

LESSEE’S WORKS 

21

 

 

 

6.1

Lessee’s Works 

21

 

 

 

6.2

Lessor’s Approval 

21

 

 

 

6.3

Conditions 

21

 

 

 

6.4

Permits 

21

 

 

 

6.5

Lessor’s Property on Termination 

21

 

 

 

7.

ASSIGNMENT 

21

 

 

 

7.1

Restrictions on Assignments

 21

 

 

 

8.

MAINTENANCE, REPAIR, ALTERATIONS, ETC

22

 

 

 

8.1

Repair of Building 

22

 

 

 

8.2

Specific Repairs 

23

 

 

 

8.3

Alterations 

23

 

 

 

8.4

Partitioning

 23

 

 

 

8.5

Lessor May Enter the Premises 

24

 

 

 

8.6

Lessor May Carry out Repairs 

25

 

 

 

8.7

Lessor’s Reservations 

25

 

 

 

8.8

Notice to Lessee 

25

 

4

--------------------------------------------------------------------------------

 

8.9

Liens on Premises 

25

 

 

 

8.10

Environmental Law 

25

 

 

 

9.

AIR CONDITIONING AND FIRE EQUIPMENT 

26

 

 

 

9.1

Repair and Use 

26

 

 

 

9.2

No Interference with Equipment 

27

 

 

 

9.3

Access to Contractors 

27

 

 

 

10.

ELECTRICITY AND OTHER SERVICES 

27

 

 

 

10.1

Lessee to Arrange 

27

 

 

 

10.2

Lessee to Pay Charges 

27

 

 

 

10.3

Supply Failure 

27

 

 

 

11.

INSURANCE 

27

 

 

 

11.1

Lessee to Effect Insurance 

27

 

 

 

11.2

General Insurance Provisions 

27

 

 

 

11.3

Heating and Energy 

28

 

 

 

11.4

Insurance not to be Avoided 

28

 

 

 

11.5

Fire Regulations 

28

 

 

 

11.6

Payment of Additional Premiums 

28

 

 

 

11.7

Lessor as Attorney 

28

 

 

 

12.

INDEMNITIES 

28

 

 

 

13.

COVENANTS BY THE LESSOR (QUIET ENJOYMENT, REMOVAL OF LESSEE’S FIXTURES) 

29

 

 

 

13.1

Quiet Enjoyment 

29

 

 

 

13.2

Removal of Lessee’s Fixtures 

30

 

 

 

13.3

Maintenance of Building and Services 

30

 

 

 

14.

DEFAULT AND TERMINATION 

30

 

 

 

14.1

Events of Default 

30

 

 

 

14.2

Lessor may pay in Default 

31

 

 

 

14.3

Interest on overdue Moneys 

31

 

 

 

14.4

Yielding up 

31

 

 

 

14.5

Removal of Lessee’s Fixtures 

32

 

 

 

14.6 

Lessee’s Fixtures Not Removed

32

 

 

 

15.

BREACH OF ESSENTIAL TERM

32

 

 

 

15.1

Essential Terms 

32

 

 

 

15.2

Compensation for Breach 

33

 

 

 

15.3

Acknowledgement by Lessee 

33

 

5

--------------------------------------------------------------------------------

 

15.4

Lessee’s Right to Damages 

33

 

 

 

15.5

Lessor to Mitigate Loss 

33

 

 

 

15.6

Calculation of Damages 

34

 

 

 

16.

APPOINTMENT OF ATTORNEY 

34

 

 

 

16.1

Attorney 

34

 

 

 

17.

OPTION FOR RENEWAL 

34

 

 

 

17.1

Grant of Option 

34

 

 

 

17.2 

Total Lease Term

35

 

 

 

17.3

Rent Payable during Renewed Lease Term 

35

 

 

 

18.

HOLDING OVER

35

 

 

 

18.1

Lessee remaining in possession 

35

 

 

 

18.2

Rent Payable during Renewed Lease Term 

35

 

 

 

18.3

Increase in Rent 

35

 

 

 

19.

GENERAL 

35

 

 

 

19.1

Waiver of Breach 

35

 

 

 

19.2

Notices 

36

 

 

 

19.3

Stamp Duty and Costs 

36

 

 

 

19.4

For Sale/Lease Signs 

36

 

 

 

19.5

No Partnership 

36

 

 

 

19.6

Lessor’s Covenant 

37

 

 

 

19.7

Whole Agreement 

37

 

 

 

19.8

No Liability for Provision of Services 

37

 

 

 

19.9

Lessee occupies at Sole Risk 

37

 

 

 

19.10

No Moratorium 

37

 

 

 

19.11

Additional Liability of Lessee 

37

 

 

 

20.

BANK GUARANTEE

38

 

 

 

20.1

Provision of Guarantee

38

 

 

 

20.2

Increase in Deposit

38

 

 

 

20.3

Appropriation of Deposit

38

 

 

 

20.4

Assignment of Deposit

39

 

 

 

21.

MAKE GOOD ON TERMINATION

39

 

 

 

22.

LEASE SUBJECT TO DEVELOPMENT CONSENT

40

 

 

 

23.

REMOVAL OF RACKING

40

 

6

--------------------------------------------------------------------------------

 

 

REFERENCE SCHEDULE

 

ITEM 1.

 

BASE RENT:

 

 

 

 

 

$426,580 per annum plus GST payable in advance by instalments of $35,548.34 plus
GST on the first day of each calendar month commencing on 1 April 2008.

 

 

 

 

 

 

ITEM 2.

 

PERCENTAGE OF ANNUAL OUTGOINGS:

 

 

 

 

 

100% of Outgoings.

 

 

 

 

 

 

ITEM 3(a)

 

MARKET REVIEW DATES:

 

 

 

 

 

Upon exercise of the Option.

 

 

 

 

 

 

ITEM 3(b)

 

PERCENTAGE INCREASE REVIEW DATES:

 

 

 

 

 

Annually on the anniversary of the Commencement Date

 

 

 

 

 

 

ITEM 4.

 

PERMITTED USE:

 

 

 

 

 

Commercial Offices, research rooms, warehouse, clean room and manufacturing of
optical components.

 

 

 

 

 

 

ITEM 5.

 

OPTION FOR RENEWAL:

 

 

 

 

 

Three (3) years commencing 1 December 2010.

 

 

 

 

 

 

ITEM 6.

 

BANK GUARANTEE:

 

 

 

 

 

Six (6) months’ gross rent plus GST, initially being $293,173,20.

 

 

7

--------------------------------------------------------------------------------

 

1.             DEFINITIONS & INTERPRETATION

 

1.1.         Definition

 

(a)                                  “Air Conditioning Equipment” includes all
compressors, condensers, chiller sets, pumps, pipework, switchboards, wiring,
thermostats, controls, cooling towers, air production and reticulation of
chilled water and conditioned air in the Building.

 

(b)                                 “Appurtenances” includes all water closets,
lavatories, grease traps, water apparatus, wash basins, bathrooms, gas fittings,
electrical fittings and apparatus, and other services contained in or about the
Building as the context requires.

 

(c)           “Authorisation” means:

 

(i)                                     any consent, authorisation,
registration, agreement, relevant certificate, permission, licence, approval,
authority or exemption from, by or with an Authority; or

 

(ii)                                  any entitlement arising from the
incapacity of a relevant Authority to prohibit or restrict anything in whole or
in part because of the expiry of time within which it could legally intervene to
do so.

 

(d)                                 “Authority” includes any public,
governmental, semi-governmental, city, municipal, health, licensing or any other
authority having jurisdiction or authority in respect of the Premises or the use
of the Premises or the Permitted Use.

 

(e)                                  “Building” means the building erected upon
the Land and all substitutions, alterations or modifications to the building and
includes the Land upon which such Building is erected.

 

(f)            “Claim” includes all actions, claims, demands, notices, losses,
damages, compensation, costs and expenses.

 

(g)           “Commencing Date” means the date described on the front page of
this Lease for the commencement of the Term.

 

(h)                                 “Environmental Law” means a law, ordinance,
regulation or the like which relates to an aspect of the environment or health.

 

(i)                                     “Fire Equipment” includes all
stop-cocks, hydrants, alarms, fire sprinkler systems or other fire detection and
prevention equipment in the Building.

 

(j)            “Land” means the land described in the Certificate of Title
referred to on the front page of this Lease.

 

(k)                                  “Lessee” means and includes the Lessee, its
successors and permitted assigns and where not repugnant to the context the
invitees, contractors, servants, employees and agents of the Lessee.

 

(l)            “Market Review Date” means the dates nominated in Item 3(a) of
the Reference Schedule.

 

 

8

--------------------------------------------------------------------------------

 

(m)          “Outgoings” means the following in respect of the Premises:

 

(i)                                     all rates (including council and water
rates), and taxes (including land tax) on a single holding basis, and
impositions payable to any Authority in relation to the Land, the Building and
the Premises;

 

(ii)                                  all rates and charges payable to any
Authority in relation to any of the supply of water, sewerage and the removal of
waste and other garbage from the Premises;

 

(iii)          all charges for gas, electricity, telephone and public utilities
servicing the Premises;

 

PROVIDED THAT payments to be made under this clause shall be adjusted for any
assessment year or period which is broken by the Commencing Date or Terminating
Date of this Lease or as held over but otherwise shall be payable for the whole
period of the assessment and the Lessor shall refund to the Lessee the proper
proportion of the said payments should this Lease during the period of the
assessment expire or be determined not through the default or breach of the
Lessee.

 

(n)           “Percentage Increase Review Date” means the dates nominated in
Item 3(b) of the Reference Schedule.

 

(o)           “Permitted Use” means the use outlined in Item 4 of the Reference
Schedule.

 

(p)                                 “Premises” means the premises described on
the front page of this Lease together with any modifications, extensions and
alterations thereto from time to time and including the Lessor’s fixtures and
fittings in the Building and includes all leasehold improvements made by the
Lessee, including the Airconditioning Equipment replaced by the Lessee, the
kitchen and bathrooms constructed by the Lessee with the Lessor’s consent.

 

(q)           “Reference Schedule” means the reference schedule at the front of
this Lease.

 

(r)                                    “Rent” means the rent specified in Item 1
of the Reference Schedule as reviewed on the Review Dates in accordance with
Clause 2.2.

 

(s)           “Review Dates” means the dates (if any) specified in Item 3 of the
Reference Schedule.

 

(t)                                    “Services” means all services or systems
of any nature from time to time provided to the Building and/or to the Land or
available for use and includes the provision of any lighting, gas, fuel, power,
water, sewerage, drainage, loading docks, plant rooms, storage areas, the Fire
Equipment, the Air Conditioning Equipment and the fittings, fixtures,
appliances, plant and equipment utilised for any of these Services and any
services or systems from time to time utilised for access to the Building.

 

(u)                                 “Term” means the term demised to the Lessee
by this Lease and includes any holding over period with the consent of the
Lessor.

 

(v)           “Terminating Date” means the date specified on the front page of
this Lease

 

 

9

--------------------------------------------------------------------------------

 

 

as the date upon which the Term of the Lease terminates.

 

1.2          Interpretation

 

(a)           Severability

 

If any term, covenant or condition of the Lease or the application thereof to
any person or circumstance shall be or become invalid or unenforceable, the
remaining terms, covenants and conditions shall not be affected thereby and each
term, covenant and condition of the Lease shall be valid and enforceable to the
fullest extent permitted by law.

 

(b)           Bodies and Associations

 

References to any Authority, association, society, club or body shall in the
event of any such entities ceasing to exist or being reconstituted, renamed or
replaced or the powers or functions of any of them being transferred to any
other entity refer respectively to the entity established or constituted in lieu
thereof or succeeding to the similar powers or functions.

 

(c)           Implied Covenants

 

The covenants implied by law (statutory or otherwise) are not negatived but
shall be deemed to have been modified (where so permitted) to the extent of any
inconsistency with the provisions of the Lease.

 

(d)           Plurals and Genders

 

The singular shall include the plural and vice versa and words importing one
gender shall include every gender.

 

(e)           Contra Proferentum

 

In the interpretation of this Lease, no rules of construction shall apply to the
disadvantage of one party on the basis that that party put forward the Lease or
any part thereof.

 

(f)            Headings

 

Headings have been inserted for guidance only and do not form any part of the
context of this Lease.

 

 

(g)           Statutes

 

Reference to a statute or ordinance includes all regulations under and
amendments to that statute or ordinance whether by subsequent statute or
otherwise and a statute or ordinance passed in substitution for the statute or
ordinance referred to or incorporating any of its provisions.

 

(h)           Persons

 

A reference to person includes references to firms, a body corporate, an
association or an Authority and includes a reference to the person’s executors,
administrators, successors and permitted assigns.

 

 

10

--------------------------------------------------------------------------------

 

(i)            Lessee’s Agents

 

If this Lease prohibits the Lessee from doing a thing then the Lessee must do
everything necessary to ensure that the Lessee’s sub-lessees, invitees,
contractors, servants, employees and agents do not do that thing and the Lessee
may not allow or cause any person to do that thing. If this Lease requires the
Lessee to do a thing then the Lessee must do everything necessary to ensure that
the Lessee’s sub-lessees, invitees, contractors, servants, employees and agents
also do that thing.

 

1.3          Exclusion of Implied Covenants and Powers

 

The covenants and powers implied in every lease by virtue of Sections 84 and 85
of the Conveyancing Act 1919 (as amended) shall not apply to or be implied in
this Lease except insofar as the same or part or parts thereof are included in
the covenants hereinafter contained.

 

2.             RENT AND OUTGOINGS

 

2.1          Rent Payment

 

(a)                                  The Lessee shall during the Term pay to the
Lessor without demand from the Lessor and without any deduction or set off the
Rent in advance by regular and consecutive monthly payments each equal to
one-twelfth (1/12) of the Rent on the first day of each month during the Term
(except the first and last payments which if necessary will be proportionate)
with the first payment being payable on the date specified in Item 1 of the
Reference Schedule.

 

(b)                                 The Rent will be reviewed at each Review
Date to an amount calculated in accordance with Clause 2.2.

 

(c)                                  The acceptance from time to time and at any
time by the Lessor of the Rent at a figure applicable to any period prior to the
relevant Review Date will not relieve the Lessee from the liability to pay on
demand the balance due in terms of Clause 2.2.

 

(d)                                 If a rent free period or rental incentive or
payment of fitout expenses (“Incentive”) has been provided by the Lessor to the
Lessee during this lease, and if this lease is terminated as a consequence of
the Lessee’s default then the Incentive will no longer apply and Rent will
become due and payable for that proportion of the Incentive period at the Rent
rate set out in Item 1 of the Reference Schedule as relates to the period from
the date of termination due to the Lessee’s default to the Terminating Date of
the Lease.

 

2.2.         Rent Review

 

(a)                                  Market Rental Review

 

(i)                                     Ascertaining the Market Rent

 

The Lessor at any time within a period commencing sixty (60) days prior to a
Market Review Date and expiring not later than the Market Review Date
immediately following the relevant Market Review Date will review the Rent to an
amount which the Lessor considers would at the

 

 

11

--------------------------------------------------------------------------------

 

time of such review be the current market rent of the Premises as between a
willing lessor and a willing lessee having regard to the Premises offered, the
provision of parking facilities (if any), the terms other than rental and all
matters then relevant to the determination of such rental but without in any way
limiting the generality of the foregoing the Lessee’s obligations (if any) to
contribute to the Outgoings and subject to the following provisions of this
clause the amount so determined shall be the Rent payable by the Lessee from the
relevant Market Review Date PROVIDED THAT nothing in this clause shall operate
to reduce the Rent payable below the previous years’ annual Rent.

 

(ii)                                  Dispute of Proposed Market Rent

 

The Lessor shall notify the Lessee in writing of the Rent which the Lessor
considers is the current market rent of the Premises and the Lessee shall have
thirty (30) days from the date of receipt of such notice from the Lessor within
which the Lessee may notify the Lessor in writing as to whether it disputes the
current market rent determined by the Lessor. Should the Lessee not so notify
the Lessor that it disputes the Lessor’s assessment of the current market rent
then the Lessee will be deemed to have accepted the Lessor’s assessment of the
current market rent and the Lessor’s assessment of the current market rent shall
be the Rent payable from the relevant Market Review Date.

 

(iii)                               Determination by Valuer

 

In the event that the Lessee disputes the Lessor’s assessment of the current
market rent, such current market rent shall be determined by a valuer of the
Australian Property Institute Inc -New South Wales Division registered so to act
with more than 10 years valuing experience and at least 5 years valuing
experience of property in a similar location and of a similar nature as that of
the Premises, agreed upon by the Lessor and by the Lessee and such appointment
shall be made within twenty one (21) days of receipt of the notice by the Lessor
from the Lessee that the Lessee disputes the Lessor’s assessment of the current
market rent. The valuer’s determination must be made within one month of his or
her appointment.

 

(iv)                              Valuer if no Agreement

 

If the Lessor and the Lessee cannot agree on the appointment of a valuer in
accordance with sub-clause 2.2(a)(iii) then a valuer appointed by the President
of the Australian Property Institute Inc, New South Wales Division registered so
to act with more than ten (10) years valuing experience and at least five
(5) yearsvaluing experience of property in a similar location and of a similar
nature as that of the Premises, shall be appointed and shall be instructed to
make a determination as to Rent (including a statement as to how the
determination was reached) within on month of his appointment and his decision
shall be final and binding on the Lessor and Lessee.

 

 

12

--------------------------------------------------------------------------------

 

(v)                                 Submissions to the Valuer

 

The Lessor and the Lessee may make submissions to the valuer appointed under
this clause which the valuer may or may not take into consideration in making
the determination, in the valuer’s absolute discretion.

 

(vi)                              Valuer as an expert

 

Any valuer appointed in accordance with Clause 2.2(a) shall be deemed to be
acting as an expert and not as an arbitrator and accordingly the provisions of
the Commercial Arbitration Act, 1984 shall not apply.

 

(vii)                           Costs

 

All costs incurred in the determination of the Rent pursuant to this clause
shall be borne in equal shares by the Lessor and the Lessee.

 

(viii)                        Amount of Rent Payable Until Determination

 

Until the current market rent is determined, the Lessee must pay to the Lessor
the previous year’s annual Rent increased by four percent (4%).

 

(b)                                 Percentage Increase Rental Review

 

On each Percentage Increase Review Date the Rent shall be increased to an amount
per annum equal to the amount represented by R in the formula:

 

R = A x 104
100

where:

 

R             means the Rent payable for the period following the Percentage
Increase Review Date.

 

A             means the Rent payable for the period just ended at the relevant
Percentage Increase Review Date.

 

2.3          Lessor’s Estimate of Outgoings

 

The Lessor will on and from the commencement date of the Term, furnish to the
Lessee an estimate (the “Estimate”) giving reasonable details of the Outgoings
which will payable by the Lessor for the following twelve (12) month period of
the Lease and the Lessee will pay, within thirty (30) days of the receipt of
such Estimate from the Lessor, the amount due on a monthly basis, payable in
advance as to one-twelfth (1/12) of the Estimate.

 

2.4          Outgoings Payment and Adjustments

 

(a)                                  The Lessee shall pay during the Term the
percentage specified in Item 2 of

 

 

13

--------------------------------------------------------------------------------

 

the Reference Schedule of annual Outgoings.

 

(b)                                 As soon as practicable after 30th day of
June in each year, the Lessor will furnish to the Lessee a statement (the
“Statement”) giving reasonable details of the Outgoings paid by the Lessor for
the preceding twelve (12) month’s period. Except in the case of manifest error
notified by either party to the other within fourteen (14) days of the service
of the Statement on the Lessee, the Statement shall be conclusive evidence of
the matters stated therein.

 

(c)                                  Within one month after the Lessor gives the
Lessee the Statement there is to be an adjustment between the amount of
Outgoings actually paid by the Lessee and the amount actually reasonably and
properly expended by the Lessor during the previous year.

 

(d)                                 The Lessor covenants with the Lessee that
the Lessor will pay all such Outgoings to the appropriate authorities.

 

(e)                                  Notwithstanding the foregoing the following
provisions shall apply to any broken period being a period of less than one
(1) complete year from the date of commencement of the Lease to the end of the
current rating year or a period from the commencement of a rating year to the
date of termination of the Lease, namely:

 

(i)                                     in respect of any broken period
occurring at the commencement of the Lease the Lessee shall pay to the Lessor a
proportionate part only of the amount of Outgoings to be reimbursed as aforesaid
such proportion being the same proportion as the number of days from the date of
commencement of the Lease to the end of the rating year bears to three hundred
and sixty five (365) days;

 

(ii)                                  in respect of any broken period occurring
in the last year of the Term or of any extension thereof, the Lessee shall pay
to the Lessor a proportionate part only of the amount of the Outgoings to be
reimbursed as aforesaid, such proportion being the same proportion as the number
of days from the date of commencement of the rating year to the date of
termination of the Lease bears to three hundred and sixty five (365) days.

 

2.5.      GST         

 

(a)                                  GST Definitions

 

For the purpose of this lease:

 

(i)                                     “GST” means GST within the meaning of
the GST Act;

 

(ii)                                  “GST Act” means the A New Tax System
(Goods and Services Tax) Act 1999 (as amended);

 

(iii)                               Expressions set out in italics in this
clause bear the same meaning as those expressions in the GST Act.

 

 

14

--------------------------------------------------------------------------------

 

(b)                                 Amounts otherwise payable do not include GST

 

Except where express provision is made to the contrary, and subject to this
clause, the consideration payable by any party under this Lease represents the
value of any taxable supply for which payment is to be made.

 

(c)                                  Liability to pay any GST

 

If a party makes a taxable supply in connection with this Lease for a
consideration, which, under Clause 2.5(b), represents its value, then the party
liable to pay for the taxable supply must also pay, at the same time and in the
same manner as the value is otherwise payable, the amount of any GST payable in
respect of the taxable supply.

 

(d)                                 Penalties

 

Where a party has paid, is liable to pay or shall become liable to pay any
penalties or interest as a result of late payment of GST where late payment is
as a result of the failure of the other party to comply with the terms of this
clause, then the other party shall pay to the party an additional amount on
demand equal to the amount of those penalties and interest for GST.

 

2.6.         Method of Payment

 

All payments made under this Lease must be made by a direct debit from the
Lessee’s bank to the Lessor’s bank account unless otherwise notified in writing
by the Lessor to the Lessee from time to time.

 

3.             TERMINATION OR ABATEMENT ON DAMAGE

 

3.1          Lessor’s Notice to Rebuild or Terminate

 

If the whole or any part of the Building shall be destroyed or damaged by fire,
flood, lightning, storm, tempest or other disabling cause without any neglect or
default on the part of the Lessee so as to render the Building during the Term
substantially unfit for the use and occupation of the Lessee or so as to deprive
the Lessee of substantial use of the same, then:

 

(a)                                  The Lessor shall have the option within
thirty (30) days after such destruction or damage by notice in writing to the
Lessee either to terminate the Lease if it is impracticable or undesirable to
restore or rebuild the Building, or to restore or rebuild the Building for a
similar use and purpose whether or not the Building is affected or not by such
disabling cause, and shall within such period give written notice of its
intention to the Lessee.

 

(b)                                 If the Lessor elects not to restore or
rebuild the Premises and the Lessor notifies the Lessee of this, then either
party may by notice in writing to the other terminate this Lease by giving not
less than seven (7) days notice in writing to the other, in which case no
compensation is payable by either party in respect of that termination but such
termination shall be without prejudice to the rights of either party in respect
of any antecedent breach or nonobservance of any covenant, condition or
provision of this Lease.

 

 

15

--------------------------------------------------------------------------------

 

3.2                               Lessee’s Notice to Terminate

 

In the event that the Lessor does not exercise its option within the thirty (30)
day period, then the Lessee may by notice in writing to the Lessor terminate the
Lease. No liability shall attach to the Lessor or to the Lessee by reason of a
termination pursuant to this clause but such termination shall be without
prejudice to the rights of either party in respect of any antecedent breach or
non-observance of any covenant, condition or provision of this Lease.

 

3.3                               Termination following Failure to Rebuild

 

In the event that the Lessor elects to restore and rebuild the Building and has
not commenced and continued the rebuilding or restoration within a reasonable
time after the event of damage or destruction, and if the Lessee has given
notice requesting such repair, then either party may by notice in writing to the
other terminate this Lease on giving not less than seven (7) days notice in
writing to the other, in which case no compensation is payable by either party
in respect of that termination but such termination shall be without prejudice
to the rights of either party in respect of any antecedent breach or
non-observance of any covenant, condition or provision of this Lease.

 

3.4                               Continued Operation during Rebuilding

 

The Lessee shall during any period of restoration or rebuilding of the Building
or of any part of the Building continue the operation of its business in the
Premises so far as it may be reasonably practicable for the Lessee to do so
having regard to the nature and extent of the Lessee’s business and the nature
and extent of the damage sustained.

 

3.5                               Abatement of Rent

 

Upon the happening of any such damage or destruction, the Rent and Outgoings (or
a proportionate part according to the extent of damage sustained) for the period
from the date of damage or destruction and continuing for the period of
reconstruction shall abate until the Premises shall have been reinstated or made
fit for use and occupation provided that Rent and Outgoings shall not abate if
the destruction or damage was caused or contributed to by the Lessee or any
person claiming through or under the Lessee and the damage is not covered by
insurance of the Building; and if the damage is covered by the insurance of the
Building, the Lessee shall be liable for the amount, if any, by which the Rent
and Outgoings are greater than the compensation provided under the policies of
insurance;

 

3.6                               No Requirement to Rebuild

 

Nothing in this part imposes any liability upon the Lessor to rebuild all or
part of the Premises or the Building.

 

3.7                               Disputes

 

In the event of any dispute arising out of this Clause, the same shall be
referred to a valuer of the Australian Property Institute Inc - New South Wales
Division registered so to act with more than 10 years valuing experience and at
least 5 years valuing experience of property in a similar location and of a
similar nature as that of the Premises, agreed upon by the Lessor and by the
Lessee (but in the absence of any agreement by the President of that
organisation, who must make a determination of the amount by which the Rent is
to abate and the duration of the abatement. In

 

 

16

--------------------------------------------------------------------------------

 

making a determination, the valuer is deemed to be acting as an expert and not
an arbitrator and the costs will be borne equally by the parties and paid
promptly.

 

4.                                      RESUMPTION

 

4.1                               Resumption

 

In the event of the whole or any part of the Premises being resumed or otherwise
being permanently taken for public purposes by a competent Authority with the
effect that the Lessee’s use of the Premises is adversely affected in a material
manner, then the Lessee may by notice in writing to the Lessor terminate this
Lease and on the giving of such a notice this Lease shall be at an end. No
liability shall attach to the Lessor or to the Lessee by reason of a termination
pursuant to this sub-clause but such termination shall be without prejudice to
the rights of either party in respect of any antecedent breaching or
non-observance of any covenants, conditions or provision of this Lease and
without prejudice to the right of the Lessee to claim compensation from the
resuming Authority arising from the resumption.

 

5.                                      USE OF PREMISES

 

5.1                               Permitted Use

 

The Lessee shall not without the prior written consent of the Lessor, use the
Premises for any purpose other than for the Permitted Use and will not use the
Premises for any purpose or purposes which are prohibited by the zoning of the
Land or which are not approved by the relevant local government Authority or is
prohibited by any statute, ordinance, proclamation, order or regulation, present
or future.

 

5.2                               No Noxious Use

 

The Lessee will not permit any noxious, immoral, noisome, offensive or illegal
act, trade, business, occupation or calling at any time during the Term to be
exercised, carried on, permitted or suffered in the Premises and the Lessee will
not permit any act, matter or thing whatsoever at any time during the Term to be
done in the Premises which shall or may cause annoyance, nuisance, grievance,
damage or disturbance to other persons and without limiting the generality of
the foregoing, will not permit or suffer the escape of excessive pollution
emissions of whatsoever nature in or from the Premises and will in this respect
comply with all directions and requirements of the Lessor, and any responsible
Authority.

 

5.3                               Use of Appurtenances

 

The Lessee shall not use the Appurtenances for any purpose other than those for
which they were constructed and shall not place therein any sweepings, rubbish,
rags or other deleterious substances.

 

5.4                               Drains and Wastes

 

The Lessee shall keep and maintain the waste pipes, drains and conduits
originating in the Building and the Premises in a clean, clear and free flowing
condition.

 

 

17

--------------------------------------------------------------------------------

 

5.5                               Holing of Walls

 

The Lessee shall not cut, make holes in, mark, deface, drill or damage the
Appurtenances, walls, ceilings or floors of the Building without the prior
written consent of the Lessor, which consent shall not be unreasonably withheld
provided that the Lessee will reinstate any such Appurtenances, walls ceilings
or floors at the end of the Term to their condition at the earlier of the
Commencing Date or the date of first occupation of the Premises by the Lessee.

 

5.6                               Cleaning

 

The Lessee will during the Term at its own cost cause the Premises to be cleaned
by a contractor nominated by the Lessee in a proper and workmanlike manner to
the reasonable satisfaction of the Lessor and from time to time will remove and
take away from the Premises all refuse in accordance with the requirements of
the local council or other responsible Authority and of the Lessor.

 

5.7                               Overloading of Floors

 

The Lessee shall observe the maximum floor loading weights as determined by an
engineer engaged by the Lessor and shall not permit the floors of the Building
to be broken, strained or damaged by overloading.

 

5.8                               Installation of Machinery

 

The Lessee will not bring into the Building any heavy, noisy or vibrating
machinery or other plant, fittings or equipment (including safes) without the
prior written consent of the Lessor and in no event shall the Lessee cause any
structural or other damage to the floors or walls or any other parts of the
Building and the Lessor may direct the routing, installation and location of all
such machinery, plant, fittings and equipment and the Lessee shall observe and
comply with all such directions.

 

5.9                               Overloading of Electrical Equipment

 

The Lessee shall not install any electrical equipment in or about the Building
that overloads the cables or boards or sub-boards through which electricity is
conveyed to the Building.

 

5.10                        Inflammable Substances

 

The Lessee shall not bring upon or store in the Building any explosive or any
inflammable or corrosive fluids or chemicals in contravention of the statutory
provisions or of any Authority or of any policy of insurance relating to the
Building.

 

5.11                        Animals

 

The Lessee shall not  keep any animals or birds in the Premises or the Building.

 

5.12                        Special Services

 

The Lessee shall pay to the Lessor upon demand any unusual costs charges and
expenses incurred by the Lessor at the request of the Lessee including those
connected with any alterations, repairs or maintenance to the Building or
providing

 

 

18

--------------------------------------------------------------------------------

 

such additional or unusual services for the Lessee.

 

5.13                        Fittings and Fixtures

 

The Lessee shall at its own expense fit out the Building with the machinery,
fittings and fixtures necessary for the business of the Lessee in a safe manner
and will keep them in good repair and efficient working order and condition and
on the termination of the Lease, such fixtures not removed by the Lessee under
Clause 13.2 shall at the option of the Lessor, become the property of the
Lessor.

 

5.14                        Glass and Signs

 

The Lessee shall promptly and at its own cost repair or replace all broken,
cracked or damaged glass and signs in or about the Building.

 

5.15                        Doors, Locks and Windows

 

The Lessee shall at its own cost keep and maintain the gates, shutters, doors,
locks, windows and window fittings of the Building in good and efficient working
order and condition and at the termination of the Lease shall deliver to the
Lessor all keys to the Premises.

 

5.16                        Bulbs, Tubes and Illuminated Signs

 

The Lessee shall at its own cost promptly replace all broken or faulty light
bulbs, tubes and all associated fittings in or about the Building.

 

5.17                        Painting of the Building

 

The Lessee shall at its own cost before vacating the Premises paint in a proper
and workmanlike manner those internal parts of the Building and outside doors
and signage at the main entrance of the Building which have at any time
previously been painted at least once in every period of three (3) years and in
any event during the last year of the Term of the Lease with not less than two
(2) coats of first quality paint in the original colours thereof or in such
other colours as may be nominated in writing by the Lessor and the Lessee shall
produce receipts or such other evidence of painting in accordance with this
covenant as the Lessor may reasonably require upon demand.

 

5.18                        Requirements of Public Authorities

 

The Lessee will insofar as it is possible for the Lessee, promptly comply with
all statutes, ordinances, proclamations, orders and regulations present or
future affecting or relating to the Premises or its use, and with all
requirements notices or orders which may be given by any Authority, PROVIDED
THAT this covenant shall not impose on the Lessee any obligation in respect of
any structural maintenance replacement or repair except where rendered necessary
by any act, neglect, default or omission on the part of the Lessee or by the
Lessee’s particular use or occupancy of the Premises.

 

5.19                        Pest Control

 

The Lessee will take all reasonable precautions to keep the Premises free of
rodents, vermin, insects, pests, termites, birds and animals and in the event of
failing so to do will if so required by the Lessor but at the cost of the Lessee
employ

 

 

19

--------------------------------------------------------------------------------

 

from time to time or periodically pest exterminators approved of by the Lessor
(such approval not to be unreasonably withheld).

 

5.20                        Infectious Illness

 

The Lessee will in the event of it becoming aware of any infectious illness
occurring in the Premises promptly notify the Lessor and the proper Authorities
and at the expense of the Lessee will thoroughly fumigate and disinfect the
Premises to the satisfaction of the Lessor and relevant Authorities and
otherwise comply with their lawful requirements in regard to the same.

 

5.21                        Notice of Defects

 

Upon it becoming aware of the same, the Lessee will give to the Lessor prompt
notice in writing of any accident to or defect or want of repair in any services
to the Premises or to the Air Conditioning Equipment, the Fire Equipment, the
Appurtenances or the lifts and escalators and of any circumstances relative to
the Building likely to be or to cause any danger, risk or hazard to the same or
to any person.

 

5.22                        Exterior Signs

 

The Lessee will not without the prior approval in writing of the Lessor (such
approval not to be unreasonably withheld) erect, display, affix or exhibit on or
to the exterior or interior of the Building or any part of the Premises any
signs, lights, embellishments, advertisements, television or wireless antenna or
mast, awning or canopy, names or notices visible from outside the Premises and
shall make good all damage so caused and upon the termination of the Lease shall
remove all such signs, advertisements and embellishments and make good any
damage caused to the Premises and the Building.

 

5.23                        Auctions

 

The Lessee shall not without the prior written consent of the Lessor which
consent may be withheld at the absolute discretion of the Lessor use the
Premises for any auction bankrupt or fire sale.

 

5.24                        Lessee Not to Cause Rent Reductions

 

The Lessee will not without the written consent of the Lessor by any act, matter
or deed or by any failure or omission impair, reduce or diminish directly or
indirectly the Rent or impose or cause on the Lessor any liability of the Lessee
under or by virtue of this Lease even though entitled so to do whether by
statute, ordinance, proclamation, order, regulation or moratorium (present or
future) or otherwise.

 

5.25                        Car Parking Areas and Gardens

 

The Lessee will keep and maintain in a clean and tidy condition the car parking
areas and grounds and will keep mown all lawns and keep all gardens weeded to
ensure compliance with this clause.

 

 

20

--------------------------------------------------------------------------------

 

6.                                      LESSEE’S WORKS

 

6.1                               Lessee’s Works

 

The Lessor acknowledges that the Lessee intends to install new airconditioning
to both the ground floor and the first floor, and to modernise the kitchen and
bathroom in the Building (the “Lessee’s Works”).

 

6.2                               Lessor’s Approval

 

The Lessee may not carry out the Lessee’s Works to the Building without the
Lessor’s prior written approval.  If the Lessor gives approval, it may impose
reasonable conditions.  The Lessee must comply with these conditions.

 

6.3                               Conditions

 

In addition to any conditions that may be imposed by the Lessor, the Lessee must
ensure that the Lessee’s Works are done:-

 

(a)                                  by Contractors approved by the Lessor
(which may not unreasonably withhold its approval);  and

 

(b)                                 in a proper and workmanlike manner;  and

 

(c)                                  in accordance with plans, specifications
and schedules of finishes required and approved by the Lessor (which may not
unreasonably withhold its approval); and      

 

(d)                                 in accordance with all requirements of any
Authority and in accordance with the Environmental Law; and

 

(e)                                  in accordance with the Lessor’s reasonable
requirements and directions.

 

6.4                               Permits

 

The Lessee will provide the Lessor with a copy of all building permits or other
consents issued by any Authority pursuant to Clause 6.3(c).

 

6.5                               Lessor’s Property on Termination

 

The Lessee acknowledges that the Lessee’s Works become the property of the
Lessor upon termination of this Lease.

 

7.                                      ASSIGNMENT

 

7.1                               Restrictions on Assignments

 

The Lessee will not during the continuance of this Lease assign, transfer,
demise, sublet, part with or share the possession of, or grant any licence
affecting or mortgage, charge or otherwise encumber or deal with the Lessee’s
interest in the Premises or by any act or deed procure any of the foregoing
other than as set out below:

 

(a)                                  any assignment, transfer or subletting
shall be deemed not to be a breach of this clause if prior thereto:

 

 

21

--------------------------------------------------------------------------------

 

(i)                                     the Lessee either has not committed any
default under this Lease or has committed a default under this Lease which has
been waived or excused in writing or remedied;

 

(ii)                                  the Lessee has proved to the reasonable
satisfaction of the Lessor that the proposed assignee, transferee or sub-lessee
(the “Ingoing Lessee”) is a respectable responsible and solvent person of sound
financial standing, and is capable of carrying on the Permitted Use on the
Premises and, if required by law, has obtained the prior written approval of the
relevant Authorities to its proposed use of the Premises;

 

(iii)                               the Ingoing Lessee has entered into a
covenant with the Lessor in the form required by the Lessor that he will duly
perform and observe the covenants and agreements on the Lessee’s part contained
in this Lease;

 

(iv)                              the Ingoing Lessee has furnished the Lessor
with such guarantee or guarantees of the performance of his obligations under
this Lease as the Lessor reasonably requires;

 

(v)                                 in the case of an assignment the Lessee has
entered into a deed in the form required by the Lessor under which the Lessee
releases the Lessor from all Claims against the Lessor in respect of, or in any
way arising from, this Lease;

 

(vi)                              the Lessee has paid all fees and expenses
incurred by the Lessor in connection with the investigation of the proposed
Ingoing Lessee and all other expenses including legal fees relating to the
proposed assignment, transfer or subletting; and

 

(vii)                           there will be no change of use of the Premises
as a result of the assignment, transfer or subletting without the prior consent
of the Lessor, which consent shall not be unreasonably withheld and subject also
to the prior approval of any relevant authority.

 

(b)                                 For the purpose of this clause any change in
the shareholding of the Lessee (if a company) altering the effective control of
the Lessee from that existing at the Commencing Date or (in the case of an
assignee) from that existing at the date of the assignment of this Lease to that
Lessee shall be deemed an assignment of this Lease.

 

8.                                      MAINTENANCE, REPAIR, ALTERATIONS, ETC.

 

8.1                               Repair of Building

 

The Lessee shall at its own cost during the whole of the Term and for so long as
the Lessee may remain in possession or occupation of the Premises when, where
and so often as need be maintain, replace, repair and keep the whole of the
Building and the Premises and Appurtenances and Fire Equipment in good and
substantial repair, working order and condition (having regard to their
condition at the Commencing Date), damage by fair wear and tear, explosion,
earthquake, aircraft, riot, civil commotion, fire, flood, lightning, storm,
tempest and fair wear and tear, Act of God and war damage and structural repairs
where not rendered necessary by the negligence acts or omissions of the Lessee
or the particular use of the Premises

 

 

22

--------------------------------------------------------------------------------

 

only excepted provided that these exceptions shall not apply if any insurance
moneys are irrecoverable by the Lessor through the neglect, default or
misconduct of the Lessee and persons claiming through the Lessee. The Lessee
acknowledges that the Building was in good repair and condition at the
Commencing Date.

 

8.2                               Specific Repairs

 

The Lessee shall, without affecting the generality of Clause 8.1, at the
Lessee’s expense:

 

(a)                                  paint the Building as required by Clause
5.17 and in addition, at the expiration of the Term, paper or otherwise
appropriately treat with materials and to standards reasonably determined by the
Lessor such parts of the Building which have or ought to have been so papered or
treated;

 

(b)                                 keep the equipment of the Lessee maintained,
clean and in good order and repair and keep in good condition all fittings,
plant, furnishings and equipment of the Lessee;

 

(c)                                  make good any breakage, defect or damage to
the Building or the Premises, the Appurtenances, the Fire Equipment, the
Services occasioned by want of care, misuse or abuse on the part of the Lessee
and persons claiming through the Lessee or otherwise occasioned by any breach or
default by the Lessee of this Lease;

 

(d)                                 keep  the standard carpets and floor
coverings and blinds and curtains (if any) in the Building as are supplied by
the Lessor in good and tenantable repair and condition, fair wear and tear
excepted.

 

8.3                               Alterations

 

The Lessee shall not without the previous consent in writing of the Lessor make
any alterations additions or other improvements to the Building or its
Appurtenances (including the holing of walls and redecoration or painting)
unless it has obtained the necessary permissions or consents of the relevant
Authorities and delivered copies of these and copies of all the relevant plans
and specifications to the Lessor and the Lessor has notified the Lessee in
writing that it has no objection to such alterations additions or improvements
being carried out provided that:

 

(a)                                  all alterations, additions or other
improvements carried out under this clause will be at the cost and expense of
the Lessee and in a proper and workmanlike manner; and

 

(b)                                 at the request of the Lessor the Lessee
shall immediately prior to or upon the expiry or other termination of the Term
at the Lessee’s own cost and expense restore the Premises to their condition
existing prior to the carrying out of the said alterations, additions or other
improvements.

 

8.4                               Partitioning

 

(a)                                  The Lessee shall use internal partitions
within the Building only of such standard as to type, quality, colour and size
as the Lessor shall decide and which shall be installed in the Building by a
builder approved of by the Lessor under the supervision of an architect approved
by the Lessor and

 

 

23

--------------------------------------------------------------------------------

 

 

the Lessee covenants not to make any additions or alterations to the partitions
except according to the said standards and supervision and with the prior
approval in writing of the Lessor all such approvals not to be unreasonably
withheld.

 

(b)                                 The cost of internal partitions and their
installation within the Building including all doors, vents, glass and other
items included in or incidental to the same and the cost of all additional
lights and power outlets and switches and telephone outlets and alterations
and/or additions to the Air Conditioning Equipment and/or Fire Equipment which
may be required by law and/or by reason of the position of any such partitions
or the particular requirements of the Lessee together with all architect’s and
other consultant’s fees incurred in connection with the same shall be borne by
the Lessee.

 

(c)                                  Such partitions shall be and remain the
property of the Lessee who shall be responsible for all maintenance and
insurance thereof and if so required by the Lessor such partitions shall be
removed by the Lessee from all parts of the Building vacated by the Lessee at or
prior to the expiration of the Lease and in default thereof the Lessor may at
the expense of the Lessee remove and dispose of the same provided that any such
partitions not so removed by the Lessee by that date shall become the property
of the Lessor and all damage done to the Building by reason of such removal
shall be made good by the Lessee and if the Lessee fails so to do the Lessor may
make good all such damage at the expense of the Lessee.

 

8.5                               Lessor May Enter the Premises

 

(a)                                  The Lessor shall have the right for itself
and all those authorised by it upon reasonable notice (except in case of
emergency when no notice shall be required) and at all reasonable times to:

 

(i)                                     enter upon and view the state of repair
of the Premises and leave in the Building a notice in writing requiring the
Lessee to carry out any repairs or maintenance which are the responsibility of
the Lessee under the Lease and the Lessee shall forthwith repair any defects in
accordance with the terms of the Lease;

 

(ii)                                  carry out any works or make any repairs,
alterations or additions to, and to enter upon all or any part of the Premises,
and to use the same for the purpose of effecting or carrying out any repairs,
alterations or additions or other work which the Lessor may consider necessary
or desirable to any part of the Building from time to time; and

 

(iii)                               enter the Premises with workmen and others
and all necessary materials and appliances for the purpose of complying with the
terms of any present or future legislation affecting the Premises or the
Building or of any notice by any Authority having jurisdiction or authority over
or in respect of the Premises or the Building in respect of the destruction of
insects, rodents or other pests or for the carrying out of any repairs,
alterations or works (including the provision of air conditioning, sprinklers,
lighting, power, telephone and other services to the Lessee and other lessees of
the Building for which purpose the Lessor may from time to time require access
to the

 

 

24

--------------------------------------------------------------------------------

 

service ducts, walls, floors and ceilings and the Premises) and also for the
purpose of exercising the rights and powers of the Lessor in this Lease.

 

(b)                                 In exercising its rights under this clause,
the Lessor shall ensure that as little disturbance as is reasonably practicable
is caused to the Lessee in its use of the Premises.

 

8.6                               Lessor May Carry out Repairs

 

In default of the Lessee repairing any defect according to reasonable notice
including such notice under Clause 5.21 and Sub-clause 8.5(a) the Lessor may
enter the Premises and execute at all reasonable times all or any of the
required repairs as the Lessor may think fit, and in addition to the Lessor’s
other remedies, recover from the Lessee the cost of such repairs as the Lessee
ought to have effected, including all sums paid on account of any insurance,
indemnities or compensation under the Worker’s Compensation Act.

 

8.7                               Lessor’s Reservations

 

The Lessor reserves the right upon giving reasonable notice to the Lessee, to
effect alterations, additions, renovations and refurbishment works to the
Building both externally and internally and to any and all services in the
Premises and in doing so (but without in any way limiting the generality of the
foregoing) may encroach upon parking areas, employ or use the airspace above any
part of the Building, interrupt the Services to the Premises and alter the
vehicular or pedestrian access or ways to or within the Building and the Lessee
will provide access to the Premises for this purpose and not make any objection
or Claim in respect of any such works PROVIDED ALWAYS that the Lessor shall
carry out such works in such a manner as will minimise so far as it may be
practicable any inconvenience or interruption to the business of the Lessee.

 

8.8                               Notice to Lessee

 

The Lessor must give at least two (2) months prior written notice to the Lessee
of any alterations or refurbishment of the Building or the Premises which is
likely to adversely affect the business of the Lessee unless the alteration or
refurbishment is necessitated by an emergency.

 

8.9                               Liens on Premises

 

The Lessee shall pay or cause to be paid all costs of any work done by the
Lessee or caused to be done by the Lessee on the Premises, and the Lessee will
keep the Premises clear of all liens on account of work done for the Lessee or
persons claiming under the Lessee. The Lessee agrees to and shall indemnify,
defend and keep the Lessor free and harmless against any Claim, costs (including
solicitor’s costs) and all other expenses in the absence of any negligence on
the part of the Lessor, on account of Claims of lien of labourers or material
for any work performed or materials or supplies furnished for the Lessee or
persons claiming under the Lessee.

 

8.10                        Environmental Law

 

The Lessee shall:

 

 

 

25

--------------------------------------------------------------------------------

 

(a)                                  subject to any pollution and any
environmental hazard or contamination existing prior to the earlier of the date
of first occupation by the Lessee and the Commencing Date, maintain the Premises
free from pollution and any environmental hazard or contamination;

 

(b)                                 maintain procedures which, in the opinion of
the Lessor are adequate to monitor its compliance with Environmental Law and
Authorisations;

 

(c)                                  where the Lessor reasonably suspects that
the Lessee is not complying with Sub-clause 8.10(b) above or with any
Environmental Law or Authorisation:

 

(i)                                     provide or do everything necessary to
facilitate a site assessment of the procedures under Sub-clause 8.10(b) above,
and compliance with any Environmental Law or Authorisation by a consultant
approved by the Lessor; and

 

                (ii)                                  maintain the
confidentiality of those assessments;

 

(d)                                 permit the Lessor or any person authorised
by the Lessor, to enter on the Premises at all reasonable times, on not less
than one day’s notice (except in the case of emergency), to carry out
environmental assessments; and

 

(e)                                  remedy any non-compliance with an
Environmental Law or Authorisation revealed by any site assessment,
environmental assessment or procedure carried out or required under this clause.

 

The Lessor must remedy at its cost any pollution or environmental hazard or
contamination existing prior to the earlier of the date of first occupation by
the Lessee and the Commencing Date.

 

9.                                      AIR CONDITIONING AND FIRE EQUIPMENT

 

9.1                               Repair and Use

 

Where any Air Conditioning Equipment or Fire Equipment are provided or installed
in the Building by the Lessor:

 

(a)                                  the Lessee shall use reasonable endeavours
to keep and maintain the Air Conditioning Equipment and fire hydrants in good
working order and reasonably available for its use whilst the Lessor will
maintain the sprinkler system in the Building provided that if the Lessee shall
install partitions or make other amendments to the layout of the floors in the
Building, the Lessee is responsible for any costs of relocating sprinklers to
ensure compliance with the requirements of any Authority;

 

(b)                                 the Lessee will at all times comply with and
observe the reasonable requirements of the Lessor in relation to the Air
Conditioning Equipment and Fire Equipment and will not do anything in relation
to the same or otherwise in relation to the use or ventilation of the Building
which might interfere with or impair the efficient operation of the Air
Conditioning Equipment and Fire Equipment;

 

(c)                                  The Lessee must arrange for the servicing
of the Air Conditioning Equipment at its own expense commencing on the
Commencement Date.

 

26

--------------------------------------------------------------------------------

 

9.2          No Interference with Equipment

 

The Lessee shall not interfere with the Air Conditioning Equipment or the Fire
Equipment.

 

9.3          Access to Contractors

 

                                                The Lessee shall at all times
permit any authorised persons access to the Premises to inspect, service,
maintain and repair the Air Conditioning Equipment, Fire Equipment, lifts.

 

10.          ELECTRICITY AND OTHER SERVICES

 

10.1        Lessee to Arrange

 

                                                The Lessee will make its own
arrangements for the supply of electricity to and the installation of telephone,
computer, telecommunications and like services in the Building.

 

10.2        Lessee to Pay Charges

 

                                                The Lessee will duly and
punctually pay all charges for electricity, telephone, gas, excess water or
water separately metered and supplied to the Premises provided that if the
Lessee makes default in the payment of any such charges or accounts, then the
Lessor may at its option pay the same and recover any amounts so paid as if the
same were overdue Rent.

 

10.3        Supply Failure

 

                                                Subject to the Lessor using
reasonable endeavours to keep such services operating and available to the
Premises, the Lessor will not be under any liability for any Claim sustained by
the Lessee or any other person at any time as a result of or arising in any way
out of the failure of the electricity, telecommunications or water supply or any
other services or facilities including the Appurtenances, enjoyed by the Lessee
in conjunction with the Premises.

 

11.          INSURANCE

 

11.1        Lessee to Effect Insurance

 

The Lessee will:-

 

(a)                                  at its own expense, effect and keep current
at all times during the Term public risk insurance relating to the Premises in
the amount of twenty million dollars ($20,000,000) or for such greater amount
from time to time as the Lessor may reasonably require;

 

(b)                                 at its own expense, insure and keep insured
for its full insurable value all glass in or about the Building against
breakage.

 

11.2                        General Insurance Provisions

 

All insurances referred to in Clause 11.1 above are to be effected with the
Lessor’s interest noted on the policy with an insurer reasonably approved by the
Lessor in writing and the Lessee shall punctually pay all premiums and duty
necessary and

 

 

27

--------------------------------------------------------------------------------

 

whenever required will produce to the Lessor the policies of insurance and the
receipt for the last premium.

 

11.3        Heating and Energy

 

The Lessee will not use any method of heating or lighting or supply of any other
form of energy in or about the Building in contravention of any policy of
insurance in respect of the Premises.

 

11.4        Insurance not to be Avoided

 

The Lessee will not at any time during the Term do, permit or omit to do any
act, matter or thing upon the Premises or the bringing or keeping of anything in
the Building which may render any insurance policy relating to the Premises
against damage by fire and other risks void or voidable or cause the rate of
premium on any such insurance premiums to be liable to be increased.

 

11.5        Fire Regulations

 

The Lessee will at all times and at its own cost comply with all regulations or
requirements of any Authority and the proper requirements of any interested
insurer in respect of sprinklers and other fire prevention equipment and
installations (including alarms) in the Building. The Lessee shall not be
required to install a new sprinkler system in the Building or upgrade the
existing sprinkler system, subject to the Lessee’s compliance with Clause
9.1(a).

 

11.6        Payment of Additional Premiums

 

The Lessee will from time to time as and when required by notice in writing from
the Lessor promptly pay all extra excess premiums of insurance on the
improvements erected in the Premises and/or the contents of such improvements if
any such extra excess premiums be required on account of extra risk caused by
the Lessee’s use of the Premises.

 

11.7        Lessor as Attorney

 

The Lessor in its own name and as the Attorney for the Lessee in the name of the
Lessee or otherwise shall be entitled to institute all or any proceedings
against any insurer insuring the risks referred to in this Lease to recover from
such insurer any amount for loss, damage or injury or other money payable under
any indemnity in favour of the Lessor.

 

12.          INDEMNITIES

 

12.1        The Lessee FURTHER COVENANTS with the Lessor that:

 

(a)                                  The Lessee agrees to occupy use and keep
the Premises at the risk of the Lessee and hereby releases to the full extent
permitted by law the Lessor and its contractors and employees from all claims
and demands of every kind and from all liability which may arise in respect of
any accident or damage to property or death of or injury to any person of
whatsoever nature or kind in the Premises or the Building other than as may be
caused or contributed to  by the negligence of the Lessor its contractors or
employees and the Lessee agrees that the Lessor shall have no responsibility or
liability for any loss of or damage to fixtures or personal property of the
Lessee

 

28

--------------------------------------------------------------------------------

 

other than as may be caused by the negligence of the Lessor its contractors or
employees.

 

(b)                                 Without prejudice to the generality of
Sub-Clause (a) hereof, to the extent that moneys paid to the Lessor out of
insurances effected by the Lessee do not fully indemnify the Lessor against the
same and except where the same is caused or contributed to by the negligence of
the Lessor or its contractors or employees, the Lessee will and does hereby
indemnify the Lessor its contractors and employees from and against all actions,
claims, demands, losses, damages, costs and expenses incurred by the Lessor or
for which the Lessor or its contractors or employees may become liable in
respect of any damage to property or death of or injury to any person which may
be suffered or sustained in or upon the Premises whether in the occupation of
the Lessor or of the Lessee or of any other person.

 

(c)                                  Without limiting the generality of
Sub-Clauses (a) and (b) of this Clause the Lessee will and does hereby indemnify
the Lessor from and against all actions, claim, demands, losses, damages, costs
and expenses for which the Lessor may become liable in respect of or arising
from:

 

(i)                                     The negligent or careless use, misuse,
waste or abuse by the Lessee or any contractor, subcontractor, licensee,
invitee, client, customer or visitor of the Lessee or any other person claiming
through or under the Lessee of the water, gas, electricity, lighting or other
service and facilities of the Premises or arising from any faulty fitting or
fixture of the Lessee.

 

(ii)                                  Overflow or leakage of water (including
rain water) in or from the Premises but having origin within the Premises caused
by an act or omission on the part of the Lessee or other persons as aforesaid.

 

(iii)                               Loss damage or injury from any cause
whatsoever to property or person caused by the use of the Premises by the Lessee
or other persons as aforesaid; and

 

(iv)                              Loss, damage or injury from any cause
whatsoever to the Premises or to any property or person within or without the
Premises occasioned by any act, omission, neglect, breach or default of the
Lessee or other persons as aforesaid.

 

13.          COVENANTS BY THE LESSOR (QUIET ENJOYMENT, REMOVAL OF LESSEE’S
FIXTURES)

 

13.1        Quiet Enjoyment

 

The Lessor FURTHER COVENANTS with the Lessee that the Lessee paying the rent
hereby reserved and duly and punctually observing and performing the covenants
obligations and provisions of this Lease on the part of the Lessee to be
observed and performed shall and may peaceably possess and enjoy the Premises
for the term hereby granted without interruption or disturbance from the Lessor
or any other person or persons lawfully claiming by from or under the Lessor.

 

 

29

--------------------------------------------------------------------------------

 

13.2        Removal of Lessee’s Fixtures

 

(a)                                  The Lessee may at or prior to the
expiration of the Lease (and will, if so required by the Lessor, at or
immediately following the expiration or sooner termination of the term) take
remove and carry away from the Premises all fixtures fittings plant equipment or
other articles upon the Premises in the nature of trade or tenants’ fixtures
brought upon the Premises by the Lessee with the consent of the Lessor but the
Lessee shall in such removal do no damage to the Premises and shall reinstate
the Premises to the same condition as prior to the installation of any such
items.

 

(b)                                 If the Lessee does not remove and carry away
any of such fixtures, fittings, plant, equipment and other articles or items at
or immediately following the determination of this Lease, the Lessor may at the
expense of the Lessee remove and dispose of the same and any of such fixtures,
fittings, plant, equipment and other articles or items not removed by the Lessee
as aforesaid shall become the property of the Lessor.

 

13.3        Maintenance of Building and Services

 

The Lessor will use its best endeavours to keep the Building structurally sound
and watertight and the Services in working order, except where the Lessee has
such responsibility specifically under this Lease.

 

14.          DEFAULT AND TERMINATION

 

14.1        Events of Default

 

The Lessor and the Lessee COVENANT AND AGREE  that if:

 

(a)                                  The rent hereby reserved or any part
thereof or any other moneys payable by the Lessee to the Lessor hereunder shall
be unpaid for the space of fourteen (14) days after any of the days on which the
same ought to have been paid and in accordance with the covenants for payment
herein contained (although no formal or legal demand shall have been made
therefore); or

 

(b)                                 The Lessee commits permits or suffers to
occur any breach or default in the due and punctual observance and performance
of any of the covenants obligations and provisions of this Lease or the
Rules and Regulations of the Building and the Lessee fails to remedy same at the
expiration of fourteen (14) days’ notice in writing by the Lessor requiring same
to be remedied; or

 

(c)                                  The Lessee being a company an order is made
or a resolution is effectively passed for the winding up of the Lessee (except
for the purpose of reconstruction or amalgamation with the written consent of
the Lessor which consent shall not be unreasonably withheld); or

 

(d)                                 A creditor’s petition in bankruptcy is
presented against the Lessee; or

 

(e)                                  The Lessee presents a petition in
bankruptcy against himself, or if there happens any event referred to in
Section 40 of the Bankruptcy Act, 1966 which with the happening or failure to
happen of any subsequent event

 

30

--------------------------------------------------------------------------------

 

therein referred to would result in the commission by the Lessee of any act of
bankruptcy, or if any document the execution of which by the Lessee would result
in the commission by him of an act of bankruptcy, or if any deed of assignment
or deed of arrangement is prepared by or for, or is presented to the Lessee for
execution by him or except for the purposes of amalgamation or reconstruction,
or if the Lessee being a company ceases or threatens to cease to carry on
business or goes into liquidation whether voluntary or otherwise or is wound up;
or

 

(f)                                    Any event occurs entitling the holder or
proprietor of any charge over the whole or any part of the assets and
undertaking of the Lessee to require immediate repayment of the moneys thereby
secured;

 

THEN ipso facto the Lessor at any time or times thereafter shall have the right
to reenter into and upon the Premises or any part thereof in the name of the
whole and to have again repossess and enjoy the same as of its former estate
anything herein contained to the contrary notwithstanding but without prejudice
to any action or other remedy which the Lessor has or might or otherwise could
have for arrears of rent or breach of covenant or for damages as a result of any
such event and thereupon the Lessor shall be freed and discharged from any
action suit claim or demand by or obligation to the Lessee under or by virtue of
this Lease.

 

14.2        Lessor may pay in Default

 

On each and every occasion on which the Lessee omits or neglects to pay any
money or to do or effect anything which the Lessee has herein covenanted to pay
do or effect (and without limiting the generality of the foregoing if the Lessee
shall fail to effect any insurance or to pay any insurance premium required to
be effected or paid by the Lessee hereunder) then it shall be lawful for but not
obligatory upon the Lessor (and without prejudice to any rights and powers
arising from such default) to pay such money or to do or effect such thing by
itself its architects agents contractors and workmen as if it were the Lessee
and for that purpose the Lessor its architects agents contractors workmen and
agents may enter upon the whole or any part of the Premises and there remain for
the purpose of doing or effecting any such thing and any expenses and costs of
carrying out such work shall forthwith be payable by the Lessee to the Lessor.

 

14.3        Interest on overdue Moneys

 

Without prejudice to the rights, powers and remedies of the Lessor otherwise
under this Lease the Lessee will pay to the Lessor interest on any moneys due by
the Lessee to the Lessor on any account whatsoever pursuant to this Lease but
unpaid for fourteen (14) days such interest to be computed from the due date for
the payment of the moneys in respect of which the interest is chargeable until
payment of such moneys in full and be recoverable in like manner as Rent in
arrears. The rate of interest applicable shall be two (2) percent above the rate
as recorded from time to time by the Westpac Banking Corporation Limited for
overdrafts of $100,000.00 or if there be no such rate then the rate of ten
percentum (10%) per annum and such interest shall accrue and be calculated on a
daily basis.

 

14.4        Yielding up

 

The Lessee will forthwith upon the expiration of the Term or sooner
determination of this Lease (unless otherwise directed by the Lessor in writing)
peaceably surrender and yield up to the Lessor the Premises in such repair,
order and condition as

 

31

--------------------------------------------------------------------------------

 

required by Clause 21 and clean and free from rubbish and in good and
substantial repair and condition (having regard to the age of what is being
surrendered or yielded up and its condition at the Commencing Date) and the
Premises made good to return them to the condition as at the date of first
occupation by the Lessee, subject to fair wear and tear and positions within the
Premises as at the date of first occupation by the Lessee. The Lessee must
remove any additional partitions installed within the Building from the Lease
Commencement Date if required by the Lessor upon expiration of the Lease or
sooner determination of this Lease.

 

14.5        Removal of Lessee’s Fixtures

 

The Lessee may at or prior to the determination of this Lease (and will if so
required by the Lessor at or following the expiration or sooner determination of
the Term) take, remove and carry away from the Premises all fixtures, fittings,
plant, equipment or other articles upon the Premises in the nature of trade or
Lessee’s fixtures brought upon the Premises by the Lessee but the Lessee shall
in such removal do no damage to the Premises and the Building or shall promptly
make good any such damage.

 

14.6        Lessee’s Fixtures Not Removed

 

If the Lessee does not remove and carry away any of its fixtures, fittings,
plant, equipment and other articles or items at or immediately prior to the
determination of this Lease (or within such further reasonable time as the
Lessor may allow), the Lessor may at the expense of the Lessee remove and
dispose of the same and any of such fixtures, fittings, plant, equipment and
other articles or items not removed by the Lessee or the Lessor as aforesaid
shall become the property of the Lessor. The Lessor may at the expense of the
Lessee make good any damage to the Premises caused as a result of such removal
and disposal.

 

15.          BREACH OF ESSENTIAL TERM

 

15.1        Essential Terms

 

Notwithstanding anything to the contrary herein (whether express or implied), it
is hereby expressly agreed and declared that the covenants terms and conditions
by the Lessee contained or implied in:

 

(a)                                  Clauses 2 and 18 to pay the Rent throughout
the term and any period of holding over at a date not later than fourteen (14)
days after the due day for the payment of each monthly instalment;

 

(b)                                 Clause 5 hereof inter alia relating to the
use of the Premises;

 

(c)                                  Clause 8 hereof inter alia relating to
repair and maintenance;

 

(d)                                 Clause 11 hereof inter alia relating to
insurances;

 

(e)                                  Clause 7 inter alia relating to assignment,
sub-letting or otherwise of the Premises;

 

are subject to the proviso hereinafter contained) essential and/or fundamental
terms of this Lease. The breach, non-observance or non-performance of any one or
more of such covenants terms and conditions shall be deemed to be a fundamental
breach

 

32

--------------------------------------------------------------------------------

 

of the provision of this Lease on the part of the Lessee to be observed and
performed PROVIDED THAT the presence of this Clause in this Lease shall not mean
or be construed as meaning that there are no other fundamental and/or essential
terms in this Lease.

 

15.2        Compensation for Breach

 

The Lessee covenants with the Lessor to compensate the Lessor in respect of any
breach of an essential and/or fundamental term of this Lease and the Lessor
shall be entitled to recover damages from the Lessee in respect of such
breaches.  The Lessor’s entitlement under this Clause is in addition to any
other remedy or entitlement to which the Lessor may have including without
limiting the generality of the foregoing termination of this Lease.

 

15.3        Acknowledgement by Lessee

 

The Lessee expressly acknowledges and agrees that:

 

(a)                                  should the Lessee’s conduct (whether by
acts or omissions) constitute a repudiation of this Lease (or of the Lessee’s
obligations under the Lease) or constitute a breach of any of the Lessee’s
covenants, the Lessee covenants to compensate the Lessor for any loss or damage
suffered by reason of or arising from any such repudiation or breach;

 

(b)                                 the Lessor shall be entitled to recover
damages against the Lessee for repudiation or breach of covenant for the damage
suffered by the Lessor for and/or during the entire term of this Lease;

 

(c)                                  the Lessor’s entitlement to recover damages
from the Lessee and/or the Covenantor and/or any other person shall not be
affected or limited by inter alia any of the following:

 

(i)            the Lessee abandoning or vacating the Premises; and/or

 

(ii)           the Lessor electing to re-enter or terminate the Lease; and/or

 

(iii)          the Lessor accepting the Lessee’s repudiation; and/or

(iv)          the Parties’ conduct (or that of any servant or agent thereof)
constituting a surrender by operation of law.

 

15.4        Lessee’s Right to Damages

 

The Lessor shall be entitled at any time in the Lessor’s absolute discretion to
institute legal proceedings claiming damages against the Lessee in respect of
the entire lease term including the period before and after the Lessee has
vacated the Premises and before and after the abandonment termination
repudiation acceptance of repudiation or surrender by operation of law referred
to in the immediately preceding Sub-Clause(s) whether the proceedings are
instituted either before or after such conduct.

 

15.5                        Lessor to Mitigate Loss

 

In the event of the Lessee vacating the Premises whether with or without the
Lessor’s consent, the Lessor shall take reasonable steps to mitigate its loss
and to attempt to re-lease the Premises at a reasonable rent and on reasonable
terms.  The Lessor’s

 

33

--------------------------------------------------------------------------------

 

entitlement to damages shall be assessed on the basis that the Lessor has
observed the obligation to mitigate damages.  The Lessor’s conduct in pursuant
of this duty to mitigate damages shall not of itself constitute acceptance of
the Lessee’s breach or repudiation or a surrender by operation of law.

 

15.6        Calculation of Damages

 

Should the Lessor terminate this Lease following any breach of a
fundamental/essential provision or otherwise, then without prejudice to any
other right or remedy of the Lessor herein contained or implied, the Lessor
shall be entitled to recover from the Lessee (and/or any Guarantor as the case
may be) the difference between the aggregate of the Rent and other moneys
payable by the Lessee hereunder for the unexpired residue of the term less any
amount the Lessor is able to obtain or could in the Lessor’s opinion reasonably
be expected to obtain by observing the provisions of Clause 15(e) hereof.

 

16.          APPOINTMENT OF ATTORNEY

 

16.1        Attorney

 

The Lessee irrevocably nominates, constitutes and appoints the Lessor and, if a
company, each of the directors of the Lessor from time to time, jointly and each
of them severally, to be the true and lawful attorneys and attorney of the
Lessee on its behalf, and in its name as its act and deed from time to time if
and when the Lessor shall think fit, for the purpose of giving full effect to
any power of re-entry, to execute as the act and deed of the Lessee a surrender
of the Lease in favour of the Lessor and to procure the registration of such
surrender under the provisions of the Real Property Act provided always that the
provisions of this clause shall be deemed to come into force and the powers
shall be exercisable only if and when the power of re-entry or of determination
of the Lease by the Lessor shall have become exercisable by reason of default on
the part of the Lessee in the observance or performance of any of the covenants
and conditions on its part contained or implied in this Lease, conclusive
evidence of which for the purpose of this clause shall be a statutory
declaration signed by the Lessor or, if a company, then by a secretary or
manager or director of the company. The Lessee covenants with the Lessor that on
every transfer or sub-letting under or by virtue of the Lease the Lessee will at
the expense of the Lessee obtain from the transferee or sub-lessee a Power of
Attorney in favour of the Lessor in terms similar to this present clause.

 

17.          OPTION FOR RENEWAL

 

17.1        Grant of Option

 

If the Lessee not being in default of its obligations under this Lease shall
require a renewed lease of the Premises for the further period referred to in
Item 5 of the Reference Schedule from the expiration of the term of this Lease
and of such requirement prior to the expiration of the said Term gives to the
Lessor not less than six (6) months’ and not more than nine (9) months’ previous
notice in writing, then the Lessor will at the cost of the Lessee demise to the
Lessee the Premises for such further period from the expiration of the term of
this Lease (hereinafter referred to as the “Renewed Lease Term”) at an Initial
Rental as shall be calculated in accordance with Clause 17.3 herein and
otherwise subject to the covenants and conditions herein contained but with the
exception of this Clause.

 

34

--------------------------------------------------------------------------------

 

17.2        Total Lease Term

 

It is the intention of the parties that should the Lessee exercise its option
for the further term available to it hereunder the total of the term of this
Lease and of such option shall not exceed six (6) years.

 

17.3        Rent Payable during Renewed Lease Term

 

The Rent payable during the first year of the Renewed Lease Term (without
limiting, varying or excluding the obligation of the Lessee for the payment of
the Lessee’s proportion of Outgoings in respect of the Premises pursuant to
Clauses 2.3 hereof which shall remain in full force and effect) shall be the
Current Market Rent determined in accordance with the provisions of Clause
2.2(a) for the first year of the Renewed Lease Term and thereafter increased by
four per centum (4%) per annum in accordance with the provisions of Clause
2.2(b).

 

18.          HOLDING OVER

 

18.1        Lessee remaining in possession

 

In the event of the Lessee holding over in possession of the Premises with the
consent of the Lessor after the expiration or sooner determination of the Term
then the Lessee shall become a calendar monthly tenant of the demised Premises
upon the same terms covenants and conditions as are herein contained so far as
they are applicable to a calendar monthly tenancy and such tenancy shall be
determinable by one calendar month’s notice which may be given by either party
to the other expiring at any time.

 

18.2        Rent Payable during Renewed Lease Term

 

The Rent payable each calendar month by the Lessee to the Lessor under a
calendar monthly tenancy constituted by virtue of Clause 18.1 shall be whichever
is the greater of a sum equivalent to one twelfth (1/12) of the annual rental
payable by the Lessee to the Lessor at the date of expiration of this Lease or
the sum fixed from time to time by any notice given by the Lessor to the Lessee
pursuant to Clause 18.3.

 

18.3        Increase in Rent

 

At any time and from time to time whether before or after the expiration of this
Lease the Lessor may by notice in writing to the Lessee fix the calendar monthly
rent payable by the Lessee to the Lessor under a calendar monthly tenancy
created by virtue of Clause 18.1 which shall be the Current Market Rent
determined in accordance with Clause 2.2(a) herein. The Rent so fixed shall be
and from the date specified in the notice which shall not be earlier than thirty
(30) days after the date upon which the notice is given to the Lessee be deemed
to be the Rent payable by the Lessee to the Lessor under the calendar monthly
tenancy and the Lessee covenants to pay the same to the Lessor.

 

19.          GENERAL

 

19.1        Waiver of Breach

 

The Lessor and the Lessee FURTHER COVENANT AND AGREE that no waiver by

 

35

--------------------------------------------------------------------------------

 

the Lessor of any one breach of any covenant obligation or provision in this
Lease contained or implied shall operate as a waiver of another breach of the
same or of any other covenant obligation or provision in this Lease contained or
implied.

 

19.2        Notices

 

(a)                                  All demands requisitions consents elections
or notices shall be in writing and if served or given by the Lessor hereunder
shall be valid and effectual if served and given under the common seal of the
Lessor or under the hand of any Director or Attorney or Manager or Secretary for
the time being of the Lessor or of the Managing Agent for the time being
employed by the Lessor for the Building.

 

(b)                                 Without prejudice to any other means of
giving notice any such demand requisition consent election or notice requiring
to be served hereunder shall be sufficiently served on the Lessee if served
personally or if left addressed to the Lessee on the Premises or forwarded to
the Lessee by prepaid post to the last known place of business or abode of the
Lessee and shall be sufficiently served on the Lessor if served personally or if
addressed to the Lessor and left at or sent by prepaid post to the Lessor’s
registered office for the time being or last known place of business or abode
and a demand requisition consent election or notice sent by post shall be deemed
to be given at the time when it ought to be delivered in due course of post.

 

19.3        Stamp Duty and Costs

 

The Lessee shall pay all stamp duty and all the Lessor’s reasonable legal and
other costs, charges and expenses of and incidental to the preparation,
completion, stamping and registration of this Lease and any assignment,
subletting, surrender or termination (otherwise than by effluxion of time)
thereof and the consent of any person whose consent may be required and in the
case of default by the Lessee in observing or performing any of its covenants in
this Lease contained or implied, the Lessee shall pay to the Lessor all legal
and other costs, charges and expenses for which the Lessor shall become liable
in consequence of or in connection with such default.

 

19.4        For Sale/Lease Signs

 

The Lessee will at all reasonable times permit the Lessor to exhibit to
prospective tenants or purchasers the Premises and will at all times within six
(6) months immediately preceding the termination of this Lease allow the Lessor
to affix and exhibit where the Lessor shall think fit at any time the usual  “To
be Let” notice and in each case with the name and address of the Lessor and/or
its agent thereon and the Lessee will not remove any such notice without the
written consent of the Lessor. The Lessor may at any time affix and exhibit a
“For Sale” sign to the outside of the Premises. The Lessee will co-operate with
the Lessor in a reasonable manner to allow prospective tenants or purchasers to
inspect the Premises subject to prior reasonable notice from the Lessor.

 

19.5        No Partnership

 

Nothing contained herein shall be deemed or construed by the parties hereto nor
by any third party as creating the relationship of partnership or of principal
and agent or of joint venture between the parties hereto it being understood and
agreed that neither the method of computation of rent nor any other provision
contained herein

 

36

--------------------------------------------------------------------------------

 

nor any acts of the parties hereto shall be deemed to create any relationship
between the parties hereto other than the relationship of the Lessor and the
Lessee upon the terms and conditions only as provided in this Lease.

 

19.6        Lessor’s Covenant

 

In any case where pursuant to these presents the doing or executing of any act
matter or thing by the Lessee is dependent upon the consent or approval of the
Lessor such consent or approval may be given conditionally or unconditionally or
withheld by the Lessor in its absolute uncontrolled discretion unless otherwise
herein provided.

 

19.7        Whole Agreement

 

The covenants provisions terms and agreements contained herein expressly or by
statutory implication cover and comprise the whole of the agreement between the
parties hereto and the parties expressly agree and declare that no further or
other covenants agreements provisions or terms whether in respect of the
Premises or otherwise shall be deemed to be implied herein or to arise between
the parties by way of collateral or other agreement or by reason of promise
representation warranty or undertaking given or made by any party hereto to
another on or prior to the execution hereof and the existence of any such
implication or collateral or other agreement is hereby negatived.

 

19.8        No Liability for Provision of Services

 

Subject to the Lessor’s compliance with Clause 13.3, the Lessor will not be
under any liability for any loss injury or damage sustained by the Lessee or any
other person at any time as a result of or arising in any way out of the failure
of the electricity or water supply or any other services or facilities provided
by the Lessor or enjoyed by the Lessee in conjunction with the Premises.

 

19.9        Lessee occupies at Sole Risk

 

Whenever the Lessee is obliged or required hereunder to do or effect any act
matter or thing then the doing of such act matter or thing shall, unless this
Lease otherwise provides, be at the sole risk and expense of the Lessee.

 

19.10      No Moratorium

 

Unless application is mandatory by law any statute ordinance proclamation order
regulation or moratorium present or future shall not apply to this Lease so as
to abrogate extinguish impair diminish fetter delay or otherwise prejudicially
affect any rights powers remedies or discretions given or accruing to the Lessee
or the Lessor.

 

19.11      Additional Liability of Lessee

 

To the extent permissible at law the Lessee will forthwith upon demand pay to
the Lessor by way of additional rent an amount equivalent to any moneys paid by
the Lessor in respect of any liability imposed on the Lessee under or by virtue
of this Lease notwithstanding that any statute ordinance proclamation order
regulation or moratorium present or future directly or indirectly imposes such
liability upon the Lessor. This clause only obliges the Lessee to reimburse the
Lessor where the Lessor actually incurs costs in taking steps that would have
otherwise been the responsibility of the Lessee under this Lease.

 

37

--------------------------------------------------------------------------------

 

20.          BANK GUARANTEE

 

20.1        Provision of Guarantee

 

On the execution of this Lease the Lessee will:

 

(a)                                  provide to the Lessor an unconditional
guarantee from a bank licensed to carry on business in Australia and having an
office in Sydney and approved by the Lessor which entitles the Lessor to make a
claim on the guarantee without recourse to the Lessee which entitles the Lessor
to apply any amount under the guarantee to any amount payable by the Lessee to
the Lessor under this Lease as the Lessor determines; or

 

(b)                                 deposit with the Lessor, to be held by the
Lessor on the Lessee’s account in an interest bearing account in the Lessor’s
name with the interest remaining in the account, but being accounted for to the
Lessee, an amount being the sum as specified in Item 7 of the Reference Schedule
(“the Deposit”) as security for the due and punctual observance and performance
of all the terms on the Lessee’s part contained in this Lease.

 

20.2        Increase in Deposit

 

Upon each Review Date, the Lessee will provide to the Lessor either an increased
Deposit, or a replacement Deposit which represents the increased sum arising
from the review of the Rent.

 

20.3        Appropriation of Deposit

 

(a)                                  If at any time the Lessee fails to duly and
punctually observe and perform the terms of this Lease, then the Lessor may in
its discretion at any time appropriate and apply so much of or the whole of the
Deposit as may be necessary in the opinion of the Lessor to compensate the
Lessor for loss or damage sustained or suffered by the Lessor by reason of such
breach by the Lessee.

 

(b)                                 Any such appropriation by the Lessor shall
not be deemed to and shall not operate to waive the Lessee’s breach and shall
not prejudice any other right of the Lessor arising from such breach.

 

(c)                                  If the Lessor appropriates all or part of
the Deposit, then the Lessee will within five (5) days of demand by the Lessor
provide to the Lessor in the form of the original Deposit the amount of the sum
so appropriated in order to reinstate the Deposit.

 

(d)                                 If the Lessee complies with all the terms of
the Lease, the Deposit less any sums appropriated by the Lessor in accordance
with this clause and not reinstated shall be refunded to the Lessee as soon as
reasonably practicable after the expiration of the Term or of any holding over
period or upon the sooner termination of this Lease.

 

(e)                                  If an Incentive has been provided by the
Lessor to the Lessee and as a consequence of Sub-clause 20.3 (d) later becomes
payable by the Lessee to the Lessor the Deposit may be applied against all or
part of the Incentive then due and payable by the Lessee to the Lessor.

 

38

--------------------------------------------------------------------------------

 

20.4        Assignment of Deposit

 

If the Lessor assigns or transfers its interest in the Premises it may either:

 

(a)                                  assign the Deposit less any sums properly
appropriated by the Lessor and not reinstated to any assignee or transferee; or

 

(b)                                 request and the Lessee must promptly
provide, a replacement Deposit in favour of the new lessor in exchange for the
original Deposit,

 

and thereupon the Lessor is discharged from all liability to the Lessee or any
other person with respect to the Deposit.

 

21.          MAKE GOOD ON TERMINATION

 

The Lessee will on termination of this Lease or upon the Lessee vacating the
Premises at the request of the Lessor-

 

(a)           Remove the Lessee’s signs.

 

(b)                                 Remove the Lessee’s electrical installations
including all exposed and concealed wiring, conduits extending from the Lessee’s
electrical switchboard, wall and floor mounted general purpose outlets, light
fittings and light switches.

 

(c)           Dismantle and make good all parts of the Building set up for PABX
use by the Lessee.

 

(d)                                 Remove all data wiring installed by the
Lessee back to the point of entry and return all communications cupboards to
their original condition.

 

(e)                                  Remove the Lessee’s telephone installations
including exposed and concealed wiring, conduits, junction boxes, switchboards
and handsets.

 

(f)                                    Make good all damage caused to the
Building or the Premises by the Lessee in complying with Clause 21 as
appropriate and in particular, the carpets excluding any repairs or replacement
of carpet where partitions existed at the date of the Lease, skirtings, panels
to air conditioning, acoustic ceilings tiles and ceiling grid and remove all
screws and nails driven into wall surfaces and make good any damage caused to
walls.

 

(g)                                 Subject to Clause 5.17, prepare and apply
two (2) coats of paint or any other specialist finishes of a type, brand, colour
and finish approved by the Lessor to all previously painted or finished internal
surfaces, including skirtings, plaster wall and column surfaces.

 

(h)                                 Remove all rubbish and surface materials
after completion of the works and ensure that the internal face of all window
glazing is thoroughly cleaned, the carpet steam cleaned and the carpet pile
lifted.

 

(i)                                     Re-instate the Building and the Premises
to the condition they were at the Commencing Date (fair wear and tear excepted)
and in the case of the carpets in the Building, replace all carpets which are
cut, damaged (beyond fair wear and tear) or mutilated.

 

39

--------------------------------------------------------------------------------

 

22.          LEASE SUBJECT TO DEVELOPMENT CONSENT

 

(a)                                  It is acknowledged by the Lessor and the
Lessee that this Lease is subject to the Council of the City of Sydney giving
consent to the Lessee changing the use of the premises to the use set out in an
Application for Development completed by the Lessee and consented to by the
Lessor to be lodged with the said Council. If the Lessee does not obtain the
Development approval on terms acceptable to the Lessee acting reasonably, in a
period of two (2) months from the commencement date of the Lease, then the
Lessee may surrender the Lease and the deposit paid by the Lessee to the
Lessor’s agent will be forfeited to the Lessor.

 

(b)                                 The Lessor has consented to the Lessee’s
Application for Development on the basis that it is not responsible for the
contents of same and accepts no liability to the Lessee should the Application
for Development not be granted or granted on terms not acceptable to the Lessee.

 

23.          REMOVAL OF RACKING

 

The Lessor will at its own cost as soon as practicable after the Commencing Date
of this Lease, remove all racking from the warehouse in the Building in a proper
and workmanlike manner and will cause all bolts and screws to be cut off to
floor level.

 

We certify this Lease to be correct for the purposes of the Real Property Act
1900.

 

 

 

)

 

EXECUTED by CHARVIC PTY LTD in

)

 

accordance with its Constitution in the

)

 

presence of:

)

 

 

)

 

 

)

 

/s/ Christine Tritton

 

)

/s/ Vicki M. Parsons

 

Signature of Secretary

)

Signature of Director

 

)

 

 

)

 

 

)

 

Christine Tritton

 

)

Vicki M. Parsons

 

Print Name of Secretary

)

Print Name of Director

 

40

--------------------------------------------------------------------------------

 

 

)

 

EXECUTED by OPTIUM AUSTRALIA

)

 

PTY LIMITED in accordance with its

)

 

Constitution in the presence of:

)

 

 

)

 

 

)

 

/s/ Simon Poole

 

)

/s/ David Renner

 

Signature of Director/Secretary

)

Signature of Director

 

)

 

 

)

 

 

)

 

Simon Poole

 

)

David Renner

 

Print Name of Director/Secretary

)

Print Name of Director

 

41

--------------------------------------------------------------------------------