Document:

exv10w4

 

Exhibit 10.4

Dated 10 March 2006

	 	 	 	 	 	 	 
	 

	 	 	(1	)	 	COLERIDGE (NO. 45) LIMITED
	 
	 	 	 	 	 	 
	 

	 	 	(2	)	 	BOOKHAM TECHNOLOGY PLC
	 
	 	 	 	 	 	 
	 

	 	 	(3	)	 	BOOKHAM, INC.

 

PRE-EMPTION AGREEMENT

relating to the freehold property known as

Caswell, Towcester, Northamptonshire NN12 8EQ

 

LONDON

 

 

CONTENTS

	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	1.

	 	Definitions and interpretation
	 	 	1	 
	 

	 	1.1 Defined terms
	 	 	1	 
	 

	 	1.2 Interpretation
	 	 	2	 
	2.

	 	pre-emption right
	 	 	3	 
	 

	 	2.1 Grant of pre-emption right
	 	 	3	 
	 

	 	2.2 Qualifying Event
	 	 	3	 
	 

	 	2.3 Disposal
	 	 	3	 
	 

	 	2.4 Pre-emption procedure
	 	 	3	 
	 

	 	2.5 Exercise of the Pre-emption Right
	 	 	4	 
	 

	 	2.6 Effect of the rejection of the Offer
	 	 	4	 
	 

	 	2.7 Disputes over Disposals on Requisite Terms
	 	 	5	 
	 

	 	2.8 Expiry of Pre-emption Right
	 	 	5	 
	3.

	 	Completion
	 	 	5	 
	 

	 	3.1 Date of completion
	 	 	5	 
	 

	 	3.2 Payment of completion monies
	 	 	5	 
	4.

	 	Capacity and covenants for title
	 	 	6	 
	 

	 	4.1 Covenants for title
	 	 	6	 
	5.

	 	Title
	 	 	6	 
	 

	 	5.1 Deduction of title
	 	 	6	 
	 

	 	5.2 Incumbrances
	 	 	6	 
	 

	 	5.3 Matters affecting the Property
	 	 	6	 
	 

	 	5.4 Creation of Incumbrances
	 	 	7	 
	6.

	 	Transfer
	 	 	7	 
	 

	 	6.1 Transfer
	 	 	7	 
	 

	 	6.2 Engrossments
	 	 	7	 
	 

	 	6.3 Registration
	 	 	7	 
	7.

	 	Standard Commercial Property Conditions
	 	 	7	 
	8.

	 	Effect of this Agreement
	 	 	8	 
	 

	 	8.1 Representations
	 	 	8	 
	 

	 	8.2 Entire Agreement
	 	 	8	 
	 

	 	8.3 No merger
	 	 	8	 
	9.

	 	Notices
	 	 	8	 
	10.

	 	Law and jurisdiction
	 	 	8	 
	11.

	 	Contracts (Rights of Third Parties) Act 1999
	 	 	8	 
	12.

	 	Personal
	 	 	9	 
	13.

	 	Guarantee
	 	 	9	 
	 
	Schedules	 	 	 	 
	 
	 	 	 	 	 	 
	1.

	 	Prescribed Form of Notice	 	 	 	 
	2.

	 	The Documents affecting the Property
	 	 	 	 

 i

 

 

THIS PRE-EMPTION AGREEMENT is dated 10 March 2006 and made between:

	(1)	 	COLERIDGE (NO. 45) LIMITED (registered number 5732931) whose registered office is at Europa
House, 20 Esplanade, Scarborough, North Yorkshire YO11 2AA;

	(2)	 	BOOKHAM TECHNOLOGY PLC (registered number 2298887) whose registered office is at Caswell,
Towcester, Northamptonshire NN12 8EQ; and

	(3)	 	BOOKHAM, INC. (a company incorporated in the State of Delaware with organisational
identification number 3822373) whose registered office is at Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware, USA.

IT IS AGREED that:

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Defined terms
	 
	 	 	In this Agreement, the following words and expressions mean:
	 
	 	 	“1994 Act” means the Law of Property (Miscellaneous Provisions) Act 1994;
	 
	 	 	“2002 Act” means the Land Registration Act 2002;
	 
	 	 	“Buyer” means the second party to this Agreement and shall not include successors in title
or those deriving title from that party;
	 
	 	 	“Buyer’s Solicitors” means Mayer, Brown, Rowe & Maw LLP of 11 Pilgrim Street, London EC4V
6RW (Ref: 20947/05095306);
	 
	 	 	“Contractual Completion Date” means 21 days after the date on which the Buyer accepts the
offer in accordance with Clause 2.5;
	 
	 	 	“Date of Actual Completion” means the date on which completion of the Transfer takes place;
	 
	 	 	“Disposal” means a transfer (but not charge or mortgage) or any other kind of disposition of
the whole or any part of the Property and “Dispose” has a corresponding meaning;
	 
	 	 	“Documents” means the deeds and documents details of which are set out in Schedule 2
(Documents affecting the Property);
	 
	 	 	“Guarantor” means the third party to this Agreement;
	 
	 	 	“Incumbrances” means the covenants, restrictions, stipulations and other matters contained
or referred to in the Title or the Documents, other than any mortgage or legal charge;
	 
	 	 	“Lease” means the lease of the Property made between the Seller (1) the Buyer (2) and the
Guarantor (3) and dated                                                               2006;

1

 

	 	 	“Offer” means an offer to purchase the Property made by the Seller to the Buyer under Clause
2.4;
	 
	 	 	“Offer Terms” means the terms for the purchase of the Property contained in the Offer being
(inter alia) the price being paid by the proposed purchaser for the Property or any part of
the Property;
	 
	 	 	“Pre-emption Right” means the right granted by the Seller to the Buyer in Clause 2.1;
	 
	 	 	“Prescribed Time Limit” means the time for acceptance of an Offer being 21 days from the
date of receipt;
	 
	 	 	“Property” means the freehold property registered with title absolute at Land Registry under
title number NN184271 and known as Caswell, Towcester, Northamptonshire NN12 8EQ;
	 
	 	 	“Qualifying Event” has the meaning given to it by Clause 2.2;
	 
	 	 	“Requisite Terms” has the meaning, in relation to a Disposal, given to it by Clause 2.6(c).
	 
	 	 	“Seller” means the first party to this Agreement and shall include successors in title or
those deriving title from that party;
	 
	 	 	“Seller’s Solicitors” means Shepherd & Wedderburn, 12 Arthur Street, London EC4R 9AB (Ref:
[Ÿ]) or such other solicitors as the Seller may notify to the Buyer’s Solicitors;
	 
	 	 	“Title” means an official copy of the register and title plan to the Property and full
copies of any documents noted on the register, other than any mortgage or legal charge;
	 
	 	 	“Transfer” means the transfer of the Property to be made by the Seller to the Buyer pursuant
to this Agreement;
	 
	 	 	“VAT” means value added tax as referred to in the Value Added Tax Act 1994.

	1.2	 	Interpretation
	 
	 	In this Agreement, unless the context requires otherwise, any reference to:

	 	(a)	 	a Clause or Schedule is to a clause or a schedule to this Agreement and
headings to the clauses and schedules of this Agreement do not affect its
interpretation and are for guidance only;
	 
	 	(b)	 	an enactment includes any consolidation, re-enactment or modification of the
same and any subordinate legislation in force under the same.

2

 

	2.	 	PRE-EMPTION RIGHT
	 
	2.1	 	Grant of pre-emption right

	 	(a)	 	The Seller grants to the Buyer the Pre-emption Right;

	 	(b)	 	The Pre-emption Right confers on the Buyer the right to purchase the Property
and is exercisable by the Buyer following the occurrence of a Qualifying Event provided
such Qualifying Event occurs within the period of 20 years from the date of this
Agreement; and
	 
	 	(c)	 	Notwithstanding the provisions of Clause 2.1(b) the Pre-emption Right shall
expire automatically without notice to or from either party to this Agreement
immediately upon the expiry or sooner determination of the Lease (howsoever
determined).

	2.2	 	Qualifying Event
	 
	 	 	A Qualifying Event occurs at the time that the Seller agrees terms with or receives an offer
from a third party relating to the whole or part of the Property on terms which are
acceptable to the Seller.

	2.3	 	Disposal
	 
	 	 	A Disposal is to be treated as taking place when a binding contract for the Disposal is
entered into unless the contract is never completed and for the avoidance of doubt a binding
contract shall not include a contract which is conditional upon compliance with the terms of
this Agreement and/or the Buyer’s rejection of or failure to accept the Offer.

	2.4	 	Pre-emption procedure

	 	(a)	 	On the occurrence of a Qualifying Event, the procedure set out in this Clause
must be carried out.
	 
	 	(b)	 	The Seller must give notice to the Buyer of the occurrence of the Qualifying
Event within 5 working days and the notice is to contain:

	 	(i)	 	the Offer Terms;
	 
	 	(ii)	 	the Offer to the Buyer at the Offer Terms, capable of
acceptance by the Buyer within the Prescribed Time Limit after the giving of
the notice, and for completion 21 days after acceptance; and
	 
	 	(iii)	 	a copy of the conditional contract entered into to effect the
Disposal or where no such contract has yet been entered into a copy of the
agreed terms or a copy of the offer referred to in Clause 2.2 above and (if
any) heads of terms and the latest draft of any relevant documentation
pertaining to the Disposal,

and is to be in substantially the form annexed to this Agreement and duly signed by,
or by the duly authorised agent of, the Seller.

3

 

	 	(c)	 	The Seller is not entitled to vary or add to the terms of the Offer, and the
Offer is to be irrevocable during the Prescribed Time Limit.
	 
	 	(d)	 	The Seller will use reasonable endeavours to reply to the usual conveyancing
preliminary enquiries raised by the Buyer.

	2.5	 	Exercise of the Pre-emption Right

	 	(a)	 	The Buyer may, in exercise of the Pre-emption Right, accept the Offer by
signing and returning the duplicate or another copy of the Offer to the Seller within
the Prescribed Time Limit (time being of the essence).
	 
	 	(b)	 	Following the exercise of the Pre-emption Right, the Seller will sell and the
Buyer will buy the Property on the Offer Terms on the terms of the Transfer and subject
to the Standard Commercial Property Conditions current at the date of the Buyer’s
acceptance of the Offer (or if there is no such edition then the latest edition) so far
as they are applicable to and not inconsistent with or varied (expressly or impliedly)
by the conditions of sale in this Agreement.

	2.6	 	Effect of the rejection of the Offer

	 	(a)	 	If the Buyer rejects the Offer, or fails to accept the Offer within the
Prescribed Time Limit, the following provisions of this Clause are to operate.
	 
	 	(b)	 	The Seller may make a Disposal on Requisite Terms at any time within 9 months
after the rejection or lapse of the Offer, and, on the making of such a Disposal, the
Pre-emption Right will automatically be extinguished (in respect of that part of the
Property subject to the Disposal only) without notice to or from either party to this
Agreement, but:

	 	(i)	 	until such a Disposal is made, the Pre-emption Right is to
remain in operation against a Disposal which would not be on Requisite Terms;
and
	 
	 	(ii)	 	if the Seller does not make a Disposal on Requisite Terms
within the 9 month Disposal period referred to at Clause 2.6(b) above, the
Pre-emption Right will resume full operation from the expiry of that 9 month
period.

	 	(c)	 	A Disposal will be on Requisite Terms only if:

	 	(i)	 	the price or value of the consideration for the Disposal is no
less than the Offer Terms;
	 
	 	(ii)	 	the Disposal is made subject to but with the benefit of the
Documents;
	 
	 	(iii)	 	the other terms of the Disposal are not such as to reduce the
value of the price or consideration in a manner which could be regarded as an
exercise principally to defeat the operation of the Pre-emption Right;

4

 

	 	(iv)	 	and a Disposal is to be treated as incorporating the terms of
any collateral document or transaction on which the Disposal depends or which
otherwise materially affects it.

	2.7	 	Disputes over Disposals on Requisite Terms

	 	(a)	 	In case of dispute as to whether a Disposal would be on Requisite Terms, the
issue in dispute is to be dealt with by submission to an independent expert.
	 
	 	(b)	 	The expert is to be appointed by the parties jointly, or, if they do not agree
on an appointment, appointed by the President (or other acting senior officer) for the
time being of the Royal Institution of Chartered Surveyors on the request of either
party.
	 
	 	(c)	 	The person so appointed is to act as an expert and not as an arbitrator.
	 
	 	(d)	 	The expert must be a person who has at least 10 years’ of experience of valuing
property of the same type and in the same location as the Premises.
	 
	 	(e)	 	The expert must afford each party the opportunity within reasonable time limits
to make representations to him.
	 
	 	(f)	 	The fees and expenses of the expert, including the cost of his nomination are
to be borne equally by the parties, who, unless they otherwise agree, are to bear their
own costs relating to the determination of the issue by the expert.
	 
	 	(g)	 	The determination of the issue in dispute by the expert is to be conclusive and
to bind the parties.

	2.8	 	Expiry of Pre-emption Right
	 
	 	 	At the expiry or extinguishment of the Pre-emption Right (whether by effluxion of time or
extinguishment or otherwise) the Seller shall (at the Seller’s expense) apply for the
cancellation of any notice registered at the Land Registry in respect of the Pre-emption
Right.

	3.	 	COMPLETION
	 
	3.1	 	Date of completion
	 
	 	 	Where the Buyer exercises the Pre-emption Right completion of the Transfer shall take place
on the Contractual Completion Date at the offices of the Seller’s Solicitors or as they may
reasonably direct.

	3.2	 	Payment of completion monies

	 	(a)	 	The correct completion monies, including any arrears outstanding under the
Lease at the Contractual Completion Date and any interest and other sums payable under
this Agreement shall be paid by direct credit to such account at such bank within the
United Kingdom as the Seller’s Solicitors may direct.

5

 

	 	(b)	 	The Seller shall not be bound to complete until it has received payment of all
amounts due by the Buyer to the Seller pursuant to this Agreement.

	4.	 	CAPACITY AND COVENANTS FOR TITLE
	 
	4.1	 	Covenants for title
	 
	 	 	The Seller sells the Property with full title guarantee.

	5.	 	TITLE
	 
	5.1	 	Deduction of title
	 
	 	 	Title having been deduced and copies of the Documents having been supplied to the Buyer’s
Solicitors, the Buyer is deemed to purchase the Property with full knowledge of the Title
and the Documents and with notice of any matter contained or referred to therein. The Buyer
shall not raise any requisitions or enquiries in respect of the Title or the Documents save
in respect of matters revealed by pre-completion searches and requisitions.

	5.2	 	Incumbrances
	 
	 	 	The Property is sold subject to and, if applicable, with the benefit of the Incumbrances.

	5.3	 	Matters affecting the Property
	 
	 	 	The Property is sold subject to such of the following matters as relate to the Property:

	 	(a)	 	all local land charges, whether registered or not before the date of this
Agreement, and all matters capable of registration as local land charges;
	 
	 	(b)	 	all notices served and orders, demands, proposals or requirements made by any
local, public or other competent authority, whether before or after the date of this
Agreement;
	 
	 	(c)	 	all unregistered interests which override registered dispositions as defined by
Schedule 3, 2002 Act and any interest preserved by the transitional provisions of
Schedule 12, 2002 Act to the extent and for so long as any interest is so preserved;
and
	 
	 	(d)	 	all actual or proposed orders, directions, notices, charges, restrictions,
conditions, agreements or other matters arising under any town and country planning or
highways legislation

and the Buyer having or being deemed to have notice of all such matters shall not be
entitled to raise any requisition or objection to them save in respect of pre-completion
searches and requisitions and matters arising from them.

6

 

	5.4	 	Creation of Incumbrances

	 	(a)	 	The Seller may not create any easement, restrictive covenant, lease or other
right of occupation, use or enjoyment of the whole or part of the Property at any time
during the subsistence of this Agreement without the Buyer’s consent (not to be
unreasonably withheld or delayed).
	 
	 	(b)	 	The Seller shall not execute or otherwise create a charge or mortgage of the
Property unless the person in whose favour such charge is to be created first executes
a deed agreeing and covenanting with the Buyer that it will for so long as the charge
subsists and remains and the mortgagee/chargee is entitled to the benefit thereof and
the right of pre-emption granted by this Agreement subsists:

	 	(i)	 	not exercise any power of sale under the charge save in
accordance with the terms of this Agreement in the same manner and to the same
extent the Seller is required so to do as if the mortgagee/chargee were the
Seller selling its interest in the Property;
	 
	 	(ii)	 	not to transfer or otherwise dispose of the benefit of the
mortgage or charge save to a person who shall execute a deed in similar form
and effect as that executed by the mortgagee/chargee upon the execution of the
mortgage/charge.

	6.	 	TRANSFER
	 
	6.1	 	Transfer
	 
	 	 	The Transfer of the Property shall contain a covenant by the Buyer to indemnify the Seller
against any breach of the terms of any of the Incumbrances by the Buyer or the Buyer’s
successors in title so far as they are subsisting and affect the Property.

	6.2	 	Engrossments
	 
	 	 	Engrossments of the Transfer shall be prepared by the Buyer’s Solicitors in duplicate and
shall be executed and delivered by the Buyer to the Seller’s Solicitors at least two working
days before the Contractual Completion Date.

	6.3	 	Registration
	 
	 	 	Within 30 days after the Date of Actual Completion the Buyer shall make an application to
Land Registry for registration of the Transfer and on completion of such registration shall
provide the Seller with a copy of the title information document for the Property.

	7.	 	STANDARD COMMERCIAL PROPERTY CONDITIONS
	 
	 	 	The Standard Commercial Property Conditions current at the date of the Buyer’s Option Notice
(or if there is no such edition then the latest edition) form part of this Agreement so far
as they are applicable and not inconsistent with or varied (expressly or impliedly) by this
Agreement.

7

 

	8.	 	EFFECT OF THIS AGREEMENT
	 
	8.1	 	Representations
	 
	 	 	The Buyer acknowledges that it has inspected the Property and purchases it with full
knowledge of its actual state and condition and shall take the Property as it stands and
that in entering into this Agreement it places no reliance on any representation or warranty
relating to the Property other than those, if any, which may have been given by the Seller’s
Solicitors in written reply to any written enquiry made by the Buyer’s Solicitors prior to
the date of this Agreement.

	8.2	 	Entire Agreement
	 
	 	 	This Agreement represents the entire agreement between the parties relating to the Property.
It is not capable of being amended except in writing by or with the specific consent of the
parties to this Agreement.

	8.3	 	No merger
	 
	 	 	Those terms of this Agreement that remain to be performed after the Date of Actual
Completion will remain in full force and effect and shall not merge with the Transfer.

	9.	 	NOTICES
	 
	 	 	Notices shall be served at the address of the relevant party or their solicitors shown at
the start of this Agreement or at such other address in the United Kingdom as either party
may notify in writing to the other from time to time. In the case of the Seller, all
notices served on it must also be served at:
	 
	 	 	[Ÿ]
	 
	 	 	In the case of the Guarantor, all notices served on it must also be served at the registered
office of the Buyer.

	10.	 	LAW AND JURISDICTION
	 
	 	 	This Agreement shall be construed in accordance with English law and the parties irrevocably
submit to the non-exclusive jurisdiction of the English courts to settle any dispute which
may arise in connection with this Agreement.

	11.	 	CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
	 
	 	 	Each party confirms that no term of this Agreement is enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party to this Agreement.

	12.	 	PERSONAL
	 
	 	 	For the avoidance of doubt the Pre-emption Right may only be exercised by Bookham Technology
Plc (registered number 2298887) in accordance with the provisions of this Agreement.

8

 

	13.	 	GUARANTEE
	 
	 	 	In consideration of the Seller entering into this Agreement with the Buyer the Guarantor as
a primary obligation:

	 	(a)	 	guarantees to the Seller that the Buyer will comply promptly with the terms and
conditions contained in this Agreement;
	 
	 	(b)	 	will indemnify and keep the Seller indemnified (by way of indemnity only)
against all loses, damages, costs and expenses arising as a result of any default by
the Buyer in complying with the terms and conditions contained in this Agreement; and
	 
	 	(c)	 	agrees that no time or indulgence granted to the Buyer by the Seller nor any
variation of the terms of this Agreement nor any other thing by virtue of which but for
this provision the Guarantor would have been released will in any way release the
obligations of the Guarantor to the Seller under this Clause.

EXECUTION:

The parties have shown their acceptance of the terms of this Agreement by executing it after the
Schedules.

9

 

SCHEDULE 1

PRESCRIBED FORM OF NOTICE

To: Bookham Technology plc

In the
matter of a Pre-emption Agreement (the “Pre-emption
Agreement”) dated 
                                2006
made between Coleridge (No. 45) Limited (1) Bookham Technology plc (2) and Bookham Inc. (3)
relating to freehold property known as Caswell, Towcester, Northamptonshire NN12 8EQ (the
“Premises”).

TAKE NOTICE that a Qualifying Event has occurred entitling you to exercise the Pre-emption Right
under the Pre-emption Agreement.

An Offer is now made to you under Clause 2.4 (Pre-emption procedure) of the Pre-emption Agreement
on the following terms:

The Offer Terms comprise a purchase price of [Ÿ] pounds (£[Ÿ]). [Other relevant
provisions are:]

	1.	 	[If the Offer is not accepted by you within the Prescribed Time Limit, it is intended to
Dispose of the Premises in accordance with [negotiations which have] [a contract of sale
conditional on your not exercising the Pre-emption Right which has] been ongoing with a third
party. A copy of the terms of the proposed disposal is attached.]

	2.	 	This notice constitutes an Offer to you to sell the Premises to you on the Offer Terms,
capable of acceptance by you within 21 days after the giving of this notice.

	3.	 	The sale conditions and terms of the Pre-emption Agreement are incorporated by reference in
this Offer.

	4.	 	The words and expressions designated by initial capital letters which are not defined in this
notice are defined in the Pre-emption Agreement and have the same meanings in this Offer.

[You may accept this Offer by signing the duplicate of this letter, or another copy of it, in a
manner indicating acceptance and giving or sending it to us.

[You are referred to the Pre-emption Agreement as to your rights, and the consequences of failure
to accept the Offer in time or at all.]

Dated
                            

                                        

(the Seller)

10

 

SCHEDULE 2

THE DOCUMENTS AFFECTING THE PROPERTY

	 	 	 	 	 	 	 
	Date	 	 	 	Document	 	Parties
	24 February	1969	 	 	Deed of easement	 	 (1) The Plessey Group Limited
	 

	 	 	 	 	 	(2) Frederick Bernard Bolton
	 
	 	 	 	 	 	 
	 

	2006	 	 	Lease
	 	(1) Coleridge (No. 45) Limited
	 

	 	 	 	 	 	(2) Bookham Technology plc
	 

	 	 	 	 	 	(3) Bookham, Inc.

11

 

EXECUTION:

	 	 	 	 	 	 	 
	SIGNED as a Deed by COLERIDGE

	 	 	)	 	 	 
	(NO. 45) LIMITED acting by a director/a

	 	 	)	 	 	 
	director and its secretary:

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	Director /s/ illegible
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Director/Secretary /s/ illegible 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	SIGNED as a Deed by  BOOKHAM 

	 	 	)	 	 	 
	 TECHNOLOGY PLC acting by a

	 	 	)	 	 	 
	 director/a director and its secretary:

	 	 	)	 	 	 
	 
	 	 	 	 	 	 
	Director /s/ Stephen Abely
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Director /s/ Thomas Kelley
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Executed as a Deed by BOOKHAM, INC

	 	 	)	 	 	 
	a company formed under the laws of the

	 	 	)	 	 	 
	State of Delaware, United States of

	 	 	)	 	 	 
	America,
by   S. Abely
	 	 	)	 	 	/s/ Stephen Abely
	being a person who, in accordance with the

	 	 	)	 	 	 
	laws of that territory, is acting under the

	 	 	)	 	 	 
	authority of the company

	 	 	)	 	 	 

12exv10w5

 

Exhibit 10.5

Dated 10 March 2006

	 	 	 	 	 	 	 
	 

	 	 	(1	)	 	COLERIDGE (NO. 45) LIMITED
	 
	 	 	 	 	 	 
	 

	 	 	(2	)	 	BOOKHAM TECHNOLOGY PLC
	 
	 	 	 	 	 	 
	 

	 	 	(3	)	 	BOOKHAM, INC.

 

LEASE

relating to Caswell,

Towcester, Northamptonshire, NN12 8EQ

 

LONDON

 

 

CONTENTS

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

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

Schedules

	 	 	 
	1.

	 	Exceptions and reservations to the Landlord
	2.

	 	Incumbrances
	3.

	 	Renewal rent determination
	4.

	 	Guarantor’s covenants
	5.

	 	List of Landlord’s Fixtures

ii

 

THIS LEASE is dated 10 March 2006 and made between:

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

THIS DEED WITNESSES that:

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

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

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

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

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

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

2

 

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

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

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

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

3

 

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

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

4

 

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

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

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

5

 

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

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

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

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

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

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

6

 

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

	3.2	 	Outgoings

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

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

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

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

	3.3	 	Repair

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

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

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

7

 

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

	3.4	 	Alterations and additions

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

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

	3.5	 	Authorised and prohibited uses

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

8

 

	3.6	 	Compliance with statutory requirements

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

	3.7	 	Notices
	 
	 	The Tenant shall:

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

	3.8	 	Dealings with this Lease

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

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

9

 

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

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

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

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

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

10

 

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

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

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

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

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

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

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

	 	(f)	 	The Tenant shall:

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

11

 

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

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

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

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

	3.10	 	Registration and notification of dispositions

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

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

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

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

	3.11	 	Fishing rights

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

	3.12	 	Costs and fees

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

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

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

	3.13	 	Yielding up

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

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

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

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

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

	3.14	 	Fire precautions
	 
	 	 	The Tenant shall:

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

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

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

	 	(i)	 	the Surety being an individual:

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

	 	(ii)	 	the Surety being a body corporate:

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

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

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

	3.17	 	Tenant to insure

	 	(a)	 	The Tenant shall insure:

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

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

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

	3.18	 	Rebuilding and reinstatement

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

	3.19	 	Impossibility of reinstatement

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

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

	3.20	 	Landlord’s obligation

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

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

	3.21	 	Tenant’s obligations

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

	3.22	 	Insurer’s requirements
	 
	 	 	The Tenant shall:

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

	3.23	 	Uninsured Damage

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

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

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

18

 

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

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

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

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

19

 

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

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

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

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

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

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

20

 

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

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

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

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

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

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

	6.2	 	Notices

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

10 Carlos Place, London W1K 3AT marked F.A.O. Dider Tandy or as the Landlord shall
from time to time notify the Tenant.

In the case of the Guarantor, all notices served on it must also be served at the
registered office of the Tenant.

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

EXECUTION:

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

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SCHEDULE 1

EXCEPTIONS AND RESERVATIONS TO THE LANDLORD

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

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

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

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SCHEDULE 2

INCUMBRANCES

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

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SCHEDULE 3

RENEWAL RENT DETERMINATION

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

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

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

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

“Hypothetical Lease” means a lease:

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

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

25

 

“Overpayment” means the amount, if any, by which the Market Rental Value as determined in
accordance with paragraph 2 is less than the Principal Rent payable immediately prior to the
expiry of the Contractual Term;

“President” means the President for the time being of the Royal Institution of Chartered
Surveyors or, in default of the President, the Vice-President or next senior officer of the
said Institution able to appoint a Surveyor;

“Renewal Lease” means the lease(s) to be granted pursuant to Clause 5 ;

“Renewal Principal Rent” means the rent to be first reserved under the relevant Renewal
Lease;

“Surveyor” means an independent surveyor or valuer to be appointed in accordance with this
Schedule 3; and

“Uplift” means the amount, if any, by which the Market Rental Value as determined in
accordance with paragraph 2 exceeds the Principal Rent payable immediately prior to the
expiry of the Contractual Term.

	2.	 	DETERMINATION OF REVIEWED RENT

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

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

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

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

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

This procedure may be repeated as often as necessary.

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

	3.	 	MEMORANDUM OF RENEWAL PRINCIPAL RENT

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

	4.	 	PAYMENT OF RENEWAL PRINCIPAL RENT

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

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

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

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

27

 

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

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

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

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SCHEDULE 4

GUARANTOR’S COVENANTS

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

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

29

 

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

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

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

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

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

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

30

 

SCHEDULE 5

LIST OF LANDLORD’S FIXTURES

31

 

	 	 	 
	EXECUTION:
	 	 
	 
	 	 
	SIGNED as a Deed by COLERIDGE

	 	)
	(NO. 45) LIMITED acting by a director/a

	 	)
	director and its secretary:
	 	 
	 
	 	 
	Director
   /s/ illegible
	 	 
	 
	 	 
	Director/Secretary    /s/ illegible
	 	 
	 
	 	 
	SIGNED as a Deed by BOOKHAM

	 	)
	TECHNOLOGY PLC acting by a director/a

	 	)
	director and its secretary:

	 	)
	 
	 	 
	Director /s/ Stephen Abely
	 	 
	 
	 	 
	Director /s/ Thomas Kelley
	 	 
	 
	 	 
	Executed as a Deed by BOOKHAM, INC

	 	)
	a company formed under the laws of the

	 	)
	State of Delaware, United States of

	 	)    /s/ Stephen Abely
	America, by S. Abely
	 	 
	being a person who, in accordance with the
	 	 
	laws of that territory, is acting under the
	 	 
	authority of the company
	 	 

32

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