Document:

EX-10.27

Exhibit 10.27

ADDENDUM TO THE AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND CONSTRUCTION OF A WAVE ENERGY POWER PLANT SIGNED ON JULY 27, 2006
BETWEEN IBERDROLA ENERGIAS MARINAS DE CANTABRIA, S.A. AND OCEAN POWER TECHNOLOGIES LIMITED.

Made and entered into in Madrid on February 18, 2008.

B E T W E E N

Of the one part,

IBERDROLA
ENERGIAS MARINAS DE CANTABRIA, S.A., with registered offices in
Santander, Cantabria, Calle Amos de Escalante,
number 6, 2B, represented by Mr. Javier Garcia Perez, with
Spanish Identification Document number 30.604.192-R and
Mr. Rafael de Icaza de La
Sota, with Spanish Identification Document number 16.035.858-M, in his capacity as attorneys, as accredited by means of the deed of incorporation
of the company signed on  September 25, 2006 before the Notary of Madrid Mr. Miguel Raiz-Gallardon Garcia de la Rasilla under number 7.567 of his protocol (the “CLIENT”).

And, of the other part,

OCEAN POWER TECHOLOGIES LIMITED, a company incorporated in England and Wales Company No.   5225532) with its registered office at Warwick Innovation Centre,
Gallows Hill, Warwick CV334 6UW, United Kingdom, represented by
Mr. Mark Draper, with UK Passaport number 80061626, in his capacity as Director of Company (the “CONTRACTOR”).

The CLIENT
and the CONTRACTOR shall hereinafter be referred to collectively as the “Parties”, and individually as “Party”.

W H E R E A S

	I.	 	Whereas, in July 27, 2006, the Parties have signed an Agreement for the Engineering,
Procurement and Construction of a Wave Energy Power Plant (hereinafter, the “EPC Agreement”).
	 
	II.	 	Whereas, the Parties have agreed to modify the milestones and
the regulation of the PAC and the DAC and other terms of the EPC
Agreement, so it suits better with the development of the Works,
namely to accommodate a separate completion of the
installation, commissioning, PAC and DAC for the PowerBuoy PB40ES and
associated  mooring system, on the one hand, and the Subsca cable
and Underwater Substation
‘Pod’ on the other.

 

 

	III.	 	In virtue of the aforesaid, the Parties, hereby execute this Addendum to the EPC
Agreement (the “Addendum”), which will be governed by the following clauses:

CLAUSE 1

CHANGES TO CLAUSE 1 OF THE EPC AGREEMENT; REFERENCES TO DEFINED 

TERMS AND CLAUSES.

	1.	 	The Parties agree to change Clause 1 of the EPC Agreement that will read as follows:

“1. DEFINITIONS

1.1 For
the purposes of this Agreement, the following
terms shall have the meaning set forth beside each of them (such meanings to
be equally applicable to both the singular and plural forms of the terms defined).

	 	 	 
	Agreement

	 	Means this agreement together
with all of its Annexes.
	 
	 	 
	Agreed Price

	 	Means the compensation due by the CLIENT to the CONTRACTOR
for the entire and satisfactory execution of
the Works determined pursuant to Clause is of this Agreement that shall be paid to the CONTRACTOR according to the Schedule of Milestones.
	 
	 	 
	Business Day

	 	Means any day that is not a Saturday, Sunday or
holiday (whether a national, regional or local holiday) in Madrid
and Cantabria.
	 
	 	 
	Calendar

	 	Means the timeline for execution
of the Works contained in Annex II.
	 
	 	 
	Certificate
of Completion of Commissioning
of the PB40ES PowerBuoy and mooring system
	 	Means the certificate issued by the Contractor’s
Representative which accredits that the Commissioning
Period of the PB40ES PowerBuoy and mooring system is finalized and
the PB40ES PowerBuoy and mooring system is ready for
Provisional Acceptance pursuant to Clause 9 of this Agreement.
	 
	 	 
	Certificate of Completion of Commissioning of the Subsea cable and
Underwater Substation ‘pod’
	 	Means the certificate issued by
the Contractor’s Representative which accredits
that the Commissioning Period of the Subsea cable and Underwater
Substation ‘pod’ is finalized and the Subsea cable and Underwater
Substation ‘Pod’ is ready for Provisional Acceptance pursuant ot Clause 9 of this Agreement.
	 
	 	 
	Certificate of Completion of Installation of the PB40ES
	 	Means the certificate issued by the Contractor’s
Representative which accredits that the PB40ES PowerBuoy

 

 

	 	 	 
	PowerBuoy and mooring system
	 	and mooring system is ready for commissioning.
	 
	 	 
	Certificate
of Completion of Installation of Subsea
cable and Underwater

	 	Means the certificate issued by the Contractor’s Representative
which accredits that the Subsea
cable and Underwater Substation ‘Pod’ is ready for commissioning. 
	 
	 	 
	Substation ‘Pod’
Client’s Representative

	 	Means the representative of the Client as designated in Clause 26 of this Agreement.
	 
	 	 
	Commissioning Period of the PB40ES PowerBuoy
and mooring system

	 	Period commencing upon issue of
the Certificate of Completion of
Installation of the PB40ES
PowerBuoy and mooring system and
finishes
at the signature of the
Provisional Acceptance Certificate of the PB40ES PowerBuoy and mooring system.
	 
	 	 
	Commissioning Period of the
Subsea cable and Underwater Substation ‘Pod’
	 	Period commencing upon issue of
the Certificate of Completion of
Installation of the Subsea cable
and Underwater Substation ‘Pod’
and finishes at the signature of
the Provisional Acceptance
Certificate of the Subsea cable
and Underwater Substation ‘Pod’.
	 
	 	 
	Commissioning Protocol of the PB40ES
PowerBuoy and mooring system
	 	The preliminary Commissioning
Protocol for the PB40ES PowerBuoy and mooring system is attached to the Agreement as
Annex X. The final Commissioning Protocol for the PB40ES PowerBuoy and mooring system
shall be delivered by the
CONTRACTOR to the CLIENT at
least one month prior to the
Scheduled date for commencement
of the commissioning of the
PB40ES PowerBuoy and mooring system.
	 
	 	 
	Commissioning Protocol of the Subsea
cable and Underwater Substation ‘Pod’
	 	The Preliminary Commissioning Protocol for the Subsea cable
and Underwater Substation ‘Pod’
connected to the PB40ES
PowerBuoy is attached to the
Agreement as Annex X. The final commissioning Protocol for the Subsea cable and Underwater Substation ‘Pod’ shall be
delivered by the CONTRACTOR to the CLIENT at least one month prior to the scheduled date for commencement of the commissioning of the Subsea
cable and Underwater Substation ‘Pod’.
	 
	 	 
	Contractor’s Representative

	 	Means the person appointed by the CONTRACTOR in this Agreement under Clause 27.1, who acts on behalf of the CONTRACTOR.
	 
	 	 
	Day

	 	Means a calendar day.
	 
	 	 
	Definitive Acceptance Certificate of
the PB40ES PowerBuoy and mooring
system

	 	Document to the signed by the Client and the Contractor after conclusion of Testing Period of the PB40ES
PowerBuoy and mooring system in accordance with Clause 10. A draft of this document is included in Annex VII.

 

 

	 	 	 
	Definitive Acceptance Certificate of the Subsea cable and
Underwater Substation ‘Pod’
	 	Document to be signed by the Client and the contractor
after conclusion of Testing Period of the Subsea cable and
Underwater Substation ‘Pod’ in accordance with Clause 10. A
draft of this document is included in Annex VII.
	 
	 	 
	Equipment

	 	Means the equipment and/or materials supplied by the
CONTRACTOR and falling within the scope of this Agreement,
as defined in Clause 3 and the related Annexes.
	 
	 	 
	EURIBOR

	 	Means the interest rate applicable among the banks published
in Brussels for the three months deposits in Euros as it is defined daily in the Telerate screen, page
248, 11:00 morning time (central Europe time), the second banking day previous to the beginning of every period in
which the Automatic Paying System is operative in Trans European Real Time TARGET. This
rate shall be increased, as the case may be, with any cost, surcharges, taxes, etc, as
duly supported by documents, which are referred to in the EURIBOR definition.
	 
	 	 
	Final Commissioning Protocol of the PB40ES PowerBuoy and mooring system
	 	Means the Commissioning Protocol delivered by the
CONTRACTOR to the CLIENT at least one month prior to the scheduled date
for commencement of the commissioning of the PB40ES PowerBuoy
and Mooring system.
	 
	 	 
	Final Commissioning
Protocol of the
Subsea cable and
Underwater
Substation ‘Pod’

	 	Means the Commissioning Protocol delivered by the
CONTRACTOR to the CLIENT at least one month prior to the
scheduled date for commencement of the commissioning of the
Subsea cable and Underwater Substation ‘Pod’.
	 
	 	 
	Force Majenre

	 	Means any event or fact as described in Clause 24 of this Agreement.
	 
	 	 
	IBERENOVA

	 	Means Iberdrola Energias Renovables II S.A., Sociedad
Unipersonal, a company incorporated and validly existent
under the laws of Spain: registered with the Madrid Commercial Registry, of Section 8, page 285710, Tax
Identification Number (C.I.F.) A-83028035, with registered office at Madrid, Calle Tomas Redando, number 1.
	 
	 	 
	IDAE
	 	Means Instituto para la Diversificacion Y Ahorro de la Energia, S.A., public entity ascribed to the Ministry of
Industry, Tourism and Commerce through the General
Secretary of Energy, with domicile in Madrid, at Calle
Madera number 8 and CIF number Q 2820009 E.
	 
	 	 
	Independent Expert

	 	Means the qualified specialist appointed by the School of
Industrial Engineers of Madrid or the Institute of
Mechanical Engineers or Electrical Engineers in London,

 

 

	 	 	 
	 	 	U.K. upon request by either Party.
	 	 	 
	Insurance Schedule	 	Means the required policies that the CONTRACTOR must
take out and maintain under this Agreement.
	 	 	 
	Intellectual and Industrial Property	 	Means all (i) trademarks, trade names, Internet domain
names, logos, symbols, all applications and
registrations for the foregoing and all goodwill
associated therewith and symbolized thereby; (ii)
patents, utility models, registrations, invention
disclosures and applications therefore, including
divisions, continuations, continuations-in-part and
including renewals, extensions and reissues and all
inventions and discoveries whether patentable or
not; (iii) published and unpublished works of
authorship, whether copyrightable or not (including
databases and other compilations of information),
Copyrights therein and thereto, and registrations and
applications therefore, and all renewals, extensions,
restorations and reversion thereof; and (iv) other
industrial and intellectual property or proprietary
rights; concerning the Plant and the PowerBuoyTM system.
	 	 	 
	Know How	 	Means all the information, trade secrets, documents,
technical data, technical knowledge, including
processes, schematics, business methods, formulae,
drawings, prototypes, models, designs, quality control
systems, quality standards and specifications
developed or acquired by the CONTRACTOR, presently or
in the future, concerning the Plant and the
PowerBuoyTM system, or its design,
constructions, commissioning, use, exploitation and
assembling.
	 	 	 
	Major Defects	 	Means such defects that could affect the production
and/or transmission of energy by the PB40ES PowerBuoy
and mooring system or Subsea cable and Underwater
Substation ‘Pod’ and/or the safety of the PB40ES PowerBuoy
and mooring system and/or the Subsea cable and Underwater Substation
‘Pod’ and/or of the people working therein.
	 	 	 
	Milestone	 	Means the relevant stages of progress of the Works as
described under the Schedule of Milestones and
Calendar.
	 	 	 
	Minor Defects	 	Means such material defects that are not Major Defects.
	 	 	 
	Notice of Approval	 	Means the document issued by the Client under Clause
19.2 (i) of this Agreement.
	 	 	 
	Notice of Completion	 	Means the communication sent by the Contractor to the

 

 

	 	 	 
	 	 	Client under clause 19.2 (i) which accredits the
completion of a Milestone.
	 	 	 
	Notice of Pending Works	 	Means the document issued by the Client under Clause
19.2 (ii) of this Agreement.
	 	 	 
	OPT	 	Means Ocean Power Technologies,
Inc., a company
incorporated and validly existent under the laws of
New Jersey, USA; with registered office at 1590 Reed
Road, Pennington, NJ, USA.
	 	 	 
	Order for Change	 	Means the document signed by both the Client and the
Contractor for a given modification of the Works under
clauses 11.1 or 11.2 of this Agreement.
	 	 	 
	Parties	 	Means the Client and the Contractor jointly.
	 	 	 
	Party	 	Means the Client or the
Contractor, as the context may require.
	 	 	 
	PB40ES PowerBuoy and mooring system	 	Means the
PowerBuoy®1 x
40kW PB40ES, its
mooring system, and all other ancillary equipment and
services required to provide a complete installation
of the PowerBuoy 1 x 40kW PB40ES. As described in Annex
1.
	 	 	 
	Phase 1	 	Means Phase 1 of the Santona Wave Energy Project as
defined in Recital 1 of this Agreement in which the
parties to the Project have studied and decided about
the viability of the Project at the Site.
	 	 	 
	Phase 2A	 	Means Phase 2A of the Santona Wave Energy Project as
defined in Recital IV of this Agreement, consisting of
the design, manufacture, factory tests, dispatch and
unloading, ex works delivery, assembly and
commissioning of the PowerBuoyTM 1 x 40kW
PB40ES, its mooring system, the underwater substation
and submarine cable both with capacity for energy
evacuation of this PowerBuoyTM and
other nine (9) 150kW PB150 PowerBuoysTM and
all other ancillary equipment and services required to
provide a complete installation of the
PowerBuoyTM  1 x 40kW PB40ES. All as
described in Annex 1.
	 	 	 
	Phase 2B	 	Means Phase 2B of the Santona Wave Energy Project
consisting of the design, manufacture, factory tests,
dispatch and unloading, ex-works delivery, assembly and
commissioning of the nine PoweBuoysTM 9 x
150kW PB150, their mooring systems, submarine cables and all
other ancillary equipment and services required to
provide a complete installation of the
PowerBuoysTM.

 

 

	 	 	 
	
PowerBuoyTM
	 	Means the Technology owned by the Contractor.
	 
	 	 
	Preliminary Commissioning Protocol
	 	Means the Commission Protocol attached to the Agreement as Annex X.
	 
	 	 
	Provisional Acceptance
Certificate or PAC of the PB40ES PowerBuoy and mooring system
	 	Document to be signed
by the Client and the Contractor to put on record the satisfactory completion of the Commissioning Protocol of the PB40ES
PowerBuoy and mooring system, including all Minor Defects that the Contractor must remedy prior to the signature of DAC of the PB40ES
PowerBuoy and mooring system. A draft of this Document is included in Annex VI.
	 
	 	 
	Provisional Acceptance
Certificate or PAC of the Subsea cable and Underwater Substation ‘Pod’
	 	Document to be signed by the Client and the
Contractor to put on record the satisfactory completion of the Commissioning Protocol of the Subsea
cable and Underwater Substation ‘Pod’, including all Minor Defects that the Contractor must remedy prior to
signature of DAC of the Subsea cable and Underwater Substation ‘Pod’. A draft of this Document is included in Annex VI.
	 
	 	 
	Santoňa Wave Energy Agreement
	 	Means the agreement signed on July 2, 2004 by OPT, IBERENOVA, SODERCAN,
and IDAE, and modified on June 17, 2005 to included TOTAL as a party.
	 
	 	 
	Santoňa Wave Energy Project or SWEP
	 	Means the pilot project consisting of a power plant harnessing wave energy with an initial installed capacity of 1.39 MW
on the north coast of Spain based on the Technology.
	 
	 	 
	Schedule of Milestones
	 	Means the schedule describing the progress
of the Works and the timeline for payment of the Agreed Price contained in Annex V.
	 
	 	 
	Site
	 	Means the place where the PB40ES PowerBuoy and
mooring system and the Subsea cable and Underwater Substation ‘Pod’ will be installed located at the coast opposite the
“Punta del Pescador” Lighthouse
in Santoňa; in the Cantabrian region in Spain as specified in Annex XIII.
	 
	 	 
	SODERCAN
	 	Means Sociedad para el Desarrallo Regional de Cantabria, S.A., a company incorporated
and validly existent under the laws of Spain by virtue of its incorporation deed granted on December 15,
1984 before the Notary of Santander, Mr. Jose Antonia Olascoega, with number 1271 of his public protocol;
registered with the Cantabria Commercial Registry, at Volume 296,
Book 101, Sheet 60 and Page S-1751; Tax Identification Number (C.I.F.) A-3904457, with

 

 

	 	 	 
	 
	 	registered office at Santander,
Avenida de Los Infantes 32, “Quinta Labal”.
	 
	 	 
	SPV
	 	Means the public limited company created by IBERENOVA, IDAE, OPT, SODERCAN
and TOTAL for the construction and operation of the Santona Wave Project as agreed under the Santona Wave Energy Agreement.
	 
	 	 
	Subcontractors
	 	All firms or individuals contracted by the
CONTRACTOR to do part of the Works contemplated in this Agreement.
	 
	 	 
	Subsea cable and Underwater Substation ‘Pod’
	 	Means the underwater substation
and submarine cable, as described in Annex I,
with capacity for energy evacuation of the PB40ES PowerBuoy and other nine (9) 150kW PB150 PowerBuoys.
	 
	 	 
	Taxes
	 	Means any taxes, rates, special
levies (“contribuciones especiales”),
charges (“exacciones parafiscales”) or any other encumbrance of tax nature, required by any
administrative authority, including surcharges, interests and penalties.
	 
	 	 
	Technical Documentation
	 	Means the documents, workshop plans, calculations and
sketches listed in Annex IX of this Agreement.
	 
	 	 
	Technology
	 	Means the technology for electricity generation
harnessing the energy produced by the waves called
PowerBuoyTM system owned by the CONTRACTOR. In particular,
it means all the Know How and Intellectual and Industrial Property related to the PowerBuoyTM system, including the
moorings and the
underwater substation.
	 
	 	 
	Testing Period of the PB40ES PowerBuoy and
mooring system
	 	Means six months including three months between October and March (inclusive);
plus any extensions made hereunder. Period commencing upon signature of the Provisional Acceptance of the PB40ES PowerBuoy and mooring system and
finishing at the signature of the Definitive Acceptance Certificate of the PB40ES PowerBuoy and mooring system.
	 
	 	 
	Testing Period of the Subsea cable and Underwater Substation ‘Pod’
	 	Means six months commencing upon
signature of the Provisional Acceptance Certificate of the Subsea cable and Underwater Substation ‘Pod’ and finishing at the signature of the Definitive Acceptance Certificate of the Subsea cable and Underwater Substation ‘Pod’.

 

 

	 	 	 
	Time for Completion

	 	Means the period of time for the Contractors
completing the assembly, installation and
commissioning of the PB40ES PowerBuoy and mooring
system and Subsea cable and Underwater Substation
‘Pod’ according to this Agreement.
	 
	TOTAL

	 	Means Total Eolica S.A., a company incorporated and
validly existent under the laws of Spain registered with
the La Coruna Commercial Registry, at Section S,
Page 25547; Tax Identification Number (C.I.F)
A-15745706, with registered office at Avenida Fernando
de Casas Novoa, number 37, planta  B,3°A,.
	 
	Works

	 	Means all actions work and services for the supply,
construction and commissioning of the PB40ES PowerBuoy
and mooring system and the Subsea cable and Underwater
Substation ‘Pod’ described in Clause 3 of this
Agreement.

	1.2	 	Other terms may be defined in other clauses of this Agreement.”

CLAUSE 2

CHANGES TO DEFINITION OF PLANT.

The Parties agree that, unless otherwise agreed under this Addendum, each and every reference to
“Plant” throughout the EPC Agreement is replaced by  — “PB40ES PowerBuoy and mooring system and/or
the Subsea cable and Underwater Substation ‘Pod’” – both as defined in Clause 1 of the EPC
Agreement as amended by this Addendum.

CLAUSE 3

CHANGES TO CLAUSE 3.1 OF THE EPC AGREEMENT.

The Parties agree to change Clause 3.1 of the EPC Agreement that will read as follows:

	“3.7	 	 The CONTRACTOR shall perform the Works and shall deliver the Equipment according to the
Technical Documentation according to Annex IX.”

CLAUSE 4

CHANGES TO CLAUSE 4 OF THE EPC AGREEMENT

The Parties agree that Clause 4.2 of the EPC Agreement shall be amended as follows:

	“4.2	 	 Upon signing the Provisional Acceptance Certificate of the PB40ES PowerBuoy and mooring

 

 

	 	 	system, the CONTRACTOR shall hand over the “as built” documents of the Equipment included in the
PB40ES PowerBuoy and mooring system in accordance with Annex IX, and any other documentation as may
be agreed between the Parties, all the documents generated during commissioning of the PB40ES
PowerBuoy and mooring system, including any modifications based on reasonable written comments made
by the CLIENT and agreed by the CONTRACTOR on the Provisional Acceptance of the PB40ES
PowerBuoy and mooring system.
	 
	 	 	Upon signing the Provisional Acceptance Certificate of the Subsea cable and Underwater
Substation ‘Pod’, the CONTRACTOR shall hand over the “as built” documents of the Subsea
cable and Underwater Substation ‘Pod’ in accordance with Annex IX, and any other
documentation as may be agreed between the Parties, all the documents generated during
commissioning of the Subsea cable and Underwater Substation ‘Pod’, including any
modifications based on reasonable written comments made by the CLIENT and agreed by the
CONTRACTOR on the Provisional of the Subsea cable and Underwater Substation ‘Pod’.”

CLAUSE 5

CHANGES TO CLAUSE 6.6 OF THE EPC AGREEMENT

The Parties agree to change Clause 6.6 of the EPC Agreement that will read as follows:

	“6.6 	 	If any fault or defect is discovered during testing and/or inspection as contemplated in
Clause 6.4, the CONTRACTOR shall be responsible for correcting the fault or defect prior to
the relevant PAC.”

CLAUSE 6

CHANGES TO CLAUSE 7 OF THE EPC AGREEMENT

The Parties agree to change Clauses 7.2, 7.4 and 7.5 of the EPC Agreement that will read as
follows:

	“(...)	 	 

	7.2	 	The PB40ES PowerBuoy and mooring system and the Subsea cable and Underwater Substation
‘Pod’ shall be installed at the Site once the CLIENT has given its written confirmation that
the required permits and consents for installation have been obtained.

	(...)	 	 
	 
	7.4	 	Inspections by the CLIENT shall not release the CONTRACTOR from any of its obligations and
liabilities hereunder nor shall they imply acceptance of the PB40ES PowerBuoy and mooring system,
or the Subsea cable and Underwater Substation ‘Pod’.

 

 

(...)

	7.5	 	As soon as the CONTRACTOR considers the assembly and installation of the PB40ES PowerBuoy and
mooring system is complete, according to the terms of this Agreement, it shall issue a Certificate
of Completion of Installation of the PB40ES PowerBuoy and mooring system indicating that the PB40ES
PowerBuoy and mooring system is ready for Commissioning.
	 
	 	 	As soon as the CONTRACTOR considers the assembly and installation of the Subsea cable and
Underwater Substation ‘Pod’ connected to the PB40ES PowerBuoy is complete, according to
the terms of
this Agreement, it shall issue a Certificate of Completion of Installation of the Subsea cable and
Underwater Substation ‘Pod’ indicating that the Subsea cable and Underwater Substation ‘Pod’ is ready for
Commissioning.”

CLAUSE 7

CHANGES TO CLAUSE 8 OF THE EPC AGREEMENT

The Parties agree to change Clause 8 of the EPC Agreement that will read as follows:

“8. COMMISSIONING

8.1 Protocol

During the commissioning of each of the PB40ES PowerBuoy and mooring system and the Subsea cable
and Underwater Substation ‘Pod’ connected to the PB40ES PowerBuoy, the CLIENT shall appoint an
overseer, who shall check the correct application of the corresponding Commissioning Protocols. The
CONTRACTOR shall deliver the Final Commissioning Protocol of the PB40ES PowerBuoy and mooring
system and the Final Commissioning Protocol of the Subsea cable and Underwater Substation ‘Pod’, to
the CLIENT, which must contain at least the issues contained in the Annex X as applicable to each of
the relevant Final Commissioning Protocols, at least one (1) month prior to the Scheduled date of
commencement of commissioning of the PB40ES PowerBuoy and mooring system or

commencement of commissioning of Subsea cable and Underwater
Substation ‘Pod’, as applicable.

The CLIENT may request the
CONTRACTOR to make such further tests during this period, as may be
required by the competent authorities for the grid connections and the initial operation of the
PB40ES PowerBuoy and mooring system or the Subsea cable and Underwater Substation ‘Pod’ connected to the
PB40ES PowerBuoy. Any additional tests that the CLIENT asks the CONTRACTOR to make shall be at the
CLIENT’s cost.

In Annex X is included a Preliminary Commissioning Protocol.

Each of the actions included in the Commissioning
Protocols carried out  during commissioning shall be
recorded in the protocol or corresponding procedure, dated and signed by the person effecting the action
and the person responsible for commissioning.

 

 

If any
fault, failure or Major Defects, as defined in this Agreement are
detected in any of the
Equipment, the CONTRACTOR shall be obliged to remedy the problem during the
corresponding Commissioning Period.

8.2 Commissioning Period

The proper functioning of the PB40ES PowerBuoy and
mooring system on one hand, and the Subsea
cable and Underwater Substation ‘Pod’ connected to the
PB40ES PowerBuoy on the other, shall be
checked during the applicable Commissioning Period according to the corresponding Final
Commissioning Protocol.

For
finalizing the Commissioning Period of the PB40ES PowerBuoy and
mooring system it is required
that the PB40ES PowerBuoy and mooring system will be in operation for
one (1) month producing
energy measured at the electrical output from the PowerBuoy.

Once the Commissioning Period of the PB40ES PowerBuoy
and mooring system is finalized the
CONTRACTOR shall issue a Certificate of Completion of Commissioning of the PB40ES PowerBuoy
and mooring system and shall notify the CLIENT indicating that the PB40ES PowerBuoy and mooring system
is ready for Provisional Acceptance.

For finalizing the Commissioning Period of the Subsea cable and
Underwater Substation ‘Pod’ it is
required that the Subsea cable and Underwater Substation
‘Pod’ connected to the PB40ES PowerBuoy is in
operation for one (1) month transmitting energy to shore measured at
the onshore grid connection
point supplied by the CLIENT.

Once the Commissioning Period of the Subsea cable and
Underwater Substation ‘Pod’ is finalized the
CONTRACTOR shall issue a Certificate of Completion of Commissioning of the Subsea cable and
Underwater Substation ‘Pod’ and shall notify the CLIENT indicating that the Subsea cable and
Underwater Substation ‘Pod’ is ready for Provisional Acceptance.”

CLAUSE 8

CHANGES TO CLAUSE 9 OF THE EPC AGREEMENT

The Parties agree to change Clause 9 that will read as follows:

	“9.	 	PROVISIONAL ACCEPTANCE
	 
	9.1	 	Provisional Acceptance of the PB40ES PowerBuoy and mooring system
	 
	9.1.1	 	Upon termination of the Commissioning Period of the PB40ES PowerBuoy and mooring system,
the CONTRACTOR shall notify the CLIENT in writing indicating:

	 	a)	 	A date proposed by the CONTRACTOR for a joint visit with the CLIENT. The proposed
date shall be at least seven (7) Business Days after the date of notification. If the
proposed date is not convenient for the CLIENT, it may be postponed to a later

 

 

	 	 	 	date no more than seven (7) Business Days after the latest date indicated in the initial proposal.
	 
	 	b)	 	The confirmation that the corresponding Commissioning Period has finalized
satisfactorily.
	 
	 	c)	 	The confirmation of delivery of the required Technical Documentation under Clause 4.

	9.1.2	 	The Equipment, temporary installations and materials left over from the Works shall be
removed by the CONTRACTOR after completing assembly of the PB40ES PowerBuoy and mooring system
leaving the Site totally free and clear , as a prerequisite for signing of the corresponding
PAC.
	 
	9.1.3	 	During the joint visit, the parties shall inspect the state of the Equipment and complete a
check list, indicating any defects and/or irregularities detected and any pending Works. The
CONTRACTOR shall remedy within the following two (2) weeks at least those Major Defects that
preclude acceptance, after which the CLIENT and the CONTRACTOR shall
proceed to do a new
visit and complete a new check list with the Minor Defects so the
CLIENT could sign the
corresponding PAC and attach to in the list of pending matters.
	 
	9.1.4	 	If the Parties do not reach an agreement as to the existence and/or remedy of Major Defects
and consequent obligation of issue of the PAC, any of them may entrust their divergence to an
Independent Expert, who will decide and thirty (30) days from its engagement and whose
decision shall be final and binding for both Parties.
	 
	9.1.5	 	The Minor Defects of the Equipment shall be listed as
pending and remedied within the
times agreed upon signing the corresponding PAC. If the pending
defects are not remedied within the agreed times the CLIENT may remedy the deficiency itself or commission a third party to do so , for
the expense of the CONTRACTOR and without releasing the latter from its responsibilities.
	 
	9.2	 	Provisional Acceptance of the Subsea cable and Underwater Substation ‘Pod’
	 
	9.2.1	 	Upon termination of the Commissioning Period of the Subsea cable and Underwater
Substation ‘Pod’, the CONTRACTOR shall notify the CLIENT in writing, indicating:

	 	a)	 	A date proposed by the CONTRACTOR for a joint visit with the CLIENT. The
proposed date shall be at least seven (7) Business Days after
the date of notification. If the proposed date is not convenient for the CLIENT, it may be postponed to a later
date no more than seven (7) Business Days after the latest date indicated in the
initial proposal.
	 
	 	b)	 	The confirmation that the corresponding Commissioning
Period has finalized
satisfactorily.
	 
	 	c)	 	The confirmation of delivery of the required Technical Documentation under
Clause 4.

 

 

	9.2.2	 	The Equipment, temporary installations and materials left over from the Works shall be
removed by the CONTRACTOR after completing assembly of the Subsea cable and Underwater
Substation ‘Pod’, leaving the Site totally free and clear, as a prerequisite for signing of
the corresponding PAC.
	 
	9.2.3	 	During the joint visit, the Parties shall inspect the state of the Equipment and complete a
check list, indicating any defects and/or irregularities detected and any pending Works. The
CONTRACTOR shall remedy within the following two (2) weeks at least those Major Defects that
preclude acceptance, after which the CLIENT and the CONTRACTOR shall proceed to do it new visit
and complete a new check list with the Minor Defects so the CLIENT could sign the
corresponding PAC and attach to it the list of pending matters.
	 
	9.2.4	 	If the Parties do not reach an agreement as to the
existence and/or remedy of Major Defects
and consequent obligation of issue of the PAC, any of them may entrust their divergence to an
Independent Expert, who will decide on thirty (30) days from its engagement and whose decision
shall be final and binding for both Parties.
	 
	9.2.5	 	The Independent Expert will not be required and the corresponding PAC should be issued, if
the competent authority from the industry regional department of Cantabria issues the
definite start-up certificate to operate the PB40ES PowerBuoy and mooring system and the
Subsea cable and Underwater Substation ‘Pod’ (Acta de
Puesta en Marcha Definition).
	 
	9.2.6	 	The Minor Defects of the Equipment shall be listed as pending and remedied within the times
agreed upon signing the corresponding PAC, If the pending defects are not remedied within the
agreed times, the CLIENT may remedy the deficiency itself or commission a third party to do
so, for the expense of the CONTRACTOR and without releasing the latter from its
responsibilities.
	 
	9.3	 	If, for reason beyond the control of the CONTRACTOR, it is not possible to effect the
commissioning of the PB40ES PowerBuoy and mooring system and/or that
of the Subsea cable
and Underwater Substation ‘Pod,’ the Parties shall agree on how to proceed to obtain the
corresponding PAC without jeopardizing the interest of the CLIENT. In any case, provided it is
signed, the relevant PAC would contain the corresponding reservations and the CONTRACTOR would
undertake to do whatever has been established for that Commissioning Period as soon as the
impeding obstacles have disappeared. This document shall indicate the effective date of
beginning of the relevant Testing Period for the purpose of the Definitive Acceptance of the
PB40ES PowerBuoy and mooring system.
	 
	9.4	 	Upon signing the Provisional Acceptance Certificate of each of the PB40ES PowerBuoy and
mooring system and that of the Subsea cable and
Underwater Substation ‘Pod’ ownership of the
PB40ES PowerBuoy and mooring system and that of the Subsea cable and Underwater Substation
‘Pod’ as well as the relevant Equipment shall be transferred to the CLIENT. The CONTRACTOR
shall bear the risks of loss of or damage to the PB40ES PowerBuoy and mooring system and that
of the Subsea cable and Underwater Substation ‘Pod’ and the relevant Equipment up to its
effective transfer of ownership, without prejudice to the other

 

 

	 	 	guarantees and liabilities of the CONTRACTOR hereunder. The CONTRACTOR will be responsible for the care and
preservation of the PB40ES PowerBuoy and mooring system and that  of
the Subsea cable and
Underwater Substation ‘Pad’ until their Provisional Acceptance.”

CLAUSE 9

CHANGES TO CLAUSE 10 OF THE EPC AGREEMENT

The Parties agree to change Clause 10 that will read as follows:

	“10.	 	DEFINITIVE ACCEPTANCE
	 
	10.1.	 	Definitive Acceptance of the PB40ES PowerBuoy and mooring system shall be issued after the
end of the corresponding Testing Period, provided that the pending Minor Defects indicated in
the PAC of the PB40ES PowerBuoy and mooring system and any others detected during the relevant
Testing Period have been remedied and provided that the CONTRACTOR delivers the information
required under Clause 21.4 and 21.5 to confirm fulfilment of the
guaranteed values included therein.
	 
	10.2.	 	Definitive Acceptance of the’ Subsea cable and
Underwater Substation ‘Pod’ shall be issued
after the end of the corresponding Testing Period, provided that the pending Minor Defects
indicated in the PAC of the Subsea cable and Underwater Substation ‘Pad’ and any others detected
during the relevant Testing Period have been remedied.
	 
	10.3.	 	If the Parties do not reach an agreement as to the
fulfilment of the above criteria and consequent
obligation of issue of the corresponding DAC, any of them may entrust
their divergence  to an Independent
Expert, who will decide on thirty (30) days from its engagement and whose decision shall be
final and binding for both Parties.
	 
	10.4.	 	The CONTRACTOR shall deliver to the CLIENT an updated version of Annex XIV based on real data
collected during the Testing Period of the PB40ES PowerBuoy and mooring system. The CONTRACTOR
shall deliver such information within the ninety (90) days following the Definitive Acceptance
of the PB40ES PowerBuoy and mooring system

CLAUSE 10

CHANGES TO CLAUSE 14 OF THE EPC AGREEMENT

The Parties agree to change Clauses 14.5 and 14.7 of the EPC Agreement that will read as follows:

“14.(...)

	14.5	 	Environmental Protection

 

 

The
CONTRACTOR shall be responsible for continuous cleaning of the Site
and the surrounding area of the
Site, the [**] or the “path” to reach the Site during the Works and the periodical removal of any
debris left over from installation of the Equipment.

The
CONTRACTOR shall comply with the Environmental Impact Declaration or
equivalent assessment
issued by Spanish authorities, if applicable, as well as with the
Environmental Supervision  plan (“Plan de
Vigilancia Ambiental”) throughout the duration of the
Works. The CONTRACTOR shall be responsible for paying
any fines that may be levied by the competent  authorities when
breaching obligations in this regard. The
CONTRACTOR shall be liable towards the CLIENT for all damages caused to the environment by the
CONTRACTOR and/or its Subcontractors during the performance of the Works. It shall also be liable
for removing from the Site all toxic and hazard substances and  waste generated by the CONTRACTOR and
its Subcontractors during the Works.

(...)

	14.7	 	Replacement parts and consumables

The
Contractor shall provide all parts, consumables equipment and tools
which are necessary for the commissioning of the
PB40ES PowerBuoy and mooring system during the Commissioning Period of the PB40ES PowerBuoy and mooring system.

The
Contractor shall provide all parts, consumables, equipment and tools which are necessary for the commissioning of the
Subsea cable and Underwater Substation ‘Pod’ during the
Commissioning Period of the Subsea cable and Underwater Substation
‘Pod’.

CLAUSE 11

CHANGES TO CLAUSE 18 OF THE EPC AGREEMENT

The
Parties agree to change Clause 18.7 of the EPC Agreement that will
read as follows:

“18,
(...)

	18.7	 	In order to enable the CLIENT to control the cost and expenses incurred by the CONTRACTOR
regarding the different concepts of the table above the CONTRACTOR
shall report the actual cost
incurred in the Works, to the CLIENT, on a monthly basis by delivery
of the relevant documents
supporting those costs as well as equipment and services invoices. This monthly report will
include also the accumulated costs from the beginning of the Agreement and the costs forecast for
finalising the PB40ES PowerBuoy and mooring system and/or Subsea cable and Underwater Substation
‘Pod’ up to the relevant PAC”

CLAUSE 12

CHANGES TO CLAUSE 20 OF THE EPC AGREEMENT

The Parties agree to change Clause 20.1 of the EPC Agreement that will read as follows:

 

 

“20. PERFORMANCE BOND/LETTER OF CREDIT

	 	20.1	 	The CONTRACTOR shall deliver to the CLIENT a letter of credit of first requirement issued by
a top ranking bank in Spain for 10% of the Agreed Price against the payment of that same amount by the
CLIENT to secure the performance of the Works (the “Performance Bond”), as attached in Annex VIII.
	 
	 	 	 	This Performance Bond shall be valid and effective without any obligation by the CLIENT to return it until
the earlier of (i) the termination of this Agreement under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2,
or (ii) the date when the Parties agree in writing to proceed with Milestones 12 and 15.
Then the CLIENT will return the Performance Bond to the CONTRACTOR against delivery of a new letter
of credit of first requirement issued by a top ranking bank in Spain for 3% of the Agreed Price to secure
the performance of the outstanding Milestones. This new letter of credit will be valid and effective
until the earlier of (i) the date of signature of the PAC of the Subsea cable and Underwater Substation
‘Pod’ or (ii) the termination of this Agreement under Clauses 31.1 (ii) or 31.2.
	 
	 	20.2	 	The CONTRACTOR shall grant a letter of credit of first requirement issued by a top ranking bank in Spain
for 5% of the Agreed Price against payment of the same amount upon performance of Milestone number 3.
This letter of credit shall secure the supply of the equipment covered by that Milestone and shall be valid
and effective until the earlier of (i) delivery of the respective equipment or (ii) termination of the Agreement
under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2.
	 
	 	20.3	 	The CONTRACTOR shall grant a letter of credit of first requirement issued by a top ranking bank in Spain
for 5% of the Agreed Price against payment of the same amount upon performance of Milestone number 4. This
letter of credit shall secure the supply of the equipment covered by that Milestone and shall be valid
and effective until the earlier of (i) delivery of the respective equipment or (ii) termination of the
Agreement under Clauses 18.5.(ii)(c), 31.1 (ii) or 31.2.”

CLAUSE 13

CHANGES TO CLAUSE 21 OF THE EPC AGREEMENT

The Parties agree to change Clause 21 of the EPC Agreement that will read as follows:

“21. WARRANTIES

21.1 PB40ES PowerBuoy and mooring system

The CONTRACTOR offers the following guarantees effective as from the PAC of the PB40ES
PowerBuoy and mooring system:

 

 

The remedies set forth in this Clause 21.1 and 21.3 are the sole and exclusive remedy of the
CLIENT with respect to the breach of the stipulated guarantees.

21.1.1 Ownership Guarantee

The CONTRACTOR represents and warrants that at the date of signature of the PAC of the PB40ES
PowerBuoy and mooring system:

(i) the Equipment comprising the PB40ES PowerBuoy and mooring system is fully and exclusively
owned by the CONTRACTOR:

(ii) the
Equipment comprising the PB40ES PowerBuoy and mooring system is transferred to the
CLIENT according to this Agreement free from charges, encumbrances, constraints on transfer or
third-party rights; and

(iii) the CONTRACTOR is authorised to transfer their full and exclusive ownership to the CLIENT.

This ownership guarantees shall be valid and enforceable against third party claims throughout the
limitation period established in the applicable law.

In the event of default, invalidity or uncertainty of these guarantees, the CONTRACTOR shall
defend the validity of the sale of the Equipment and hold the CLIENT harmless from damages of
whatsoever nature including costs and expenses.

If there is any lien or encumbrance on any of the Equipment and it is not imputable in the CLIENT,
the CONTRACTOR must, as soon as possible, replace or cancel that attachment, lien or encumbrance at its cost.

The CONTRACTOR represents and warrants to the CLIENT that all creations, plans, drawings,
specifications, documents, procedures, methods, products or inventions supplied, prepared or made by
the CONTRACTOR hereunder and the use of any of them does not infringe any third-party rights.
In the event of any claim or action by a third party alleging infringement of any intellectual or
industrial property right, the CLIENT must notify the CONTRACTOR promptly and the CONTRACTOR will
carry out all the negotiations to settle the claim. At the request of the CONTRACTOR, the CLIENT will provide
all reasonable assistance to the CONTRACTOR against the claim of the third party. In such case, the
CONTRACTOR shall hold the CLIENT harmless from all damages (including costs and expenses) that may be
produced and shall obtain for the CLIENT the right to use, or continue using, the Equipment. Delayed performance
of the Works due to this cause shall not release the CONTRACTOR from any liabilities for delays or entitle
it to raise the Agreed Price.

21.1.2 Quality Guarantee

The CONTRACTOR guarantees that the components of the Equipment comprising the PB40ES
PowerBuoy and mooring system shall comply with the standards required for normal operation of the
PB40ES PowerBuoy and mooring system during the term of the O&M Agreement.

 

 

If during the O&M Agreement any of the components of the Equipment fail to comply with the
referred standards the CONTRACTOR shall have to repair or replace, at its option, any such component on its
account, included the cost of retrieval from the Site and redeployment of the defective items, if
required.

21.1.3 Repair and Replacement Guarantee

The CONTRACTOR shall, during a period of one year beginning with the signature of the PAC of the
PB40ES PowerBuoy and mooring system repair or replace, at its option, all failures or defects in the
Equipment comprising the PB40ES PowerBuoy and mooring system elements found to have a faulty design,
quality or operations as soon as possible without any cost to the CLIENT. The cost of materials,
labour and, in general, all expenses incurred in total repair shall be for the account of the
CONTRACTOR, included the cost of retrieval from the Site and redeployment of the defective items if
required.

If the CONTRACTOR does not repair or replace in a reasonable period of time, the CLIENT shall
notify the CONTRACTOR, indicating a reasonable deadline for making the repair or replacement. If
the CONTRACTOR continues not fulfilling its obligation after that time, the CLIENT shall be entitled to
carry out the repair for the account of the CONTRACTOR, which will be responsible for the direct
damages caused by this delay.

Correct and adequate repair by the CLIENT in the above circumstances shall not release the
CONTRACTOR from all its liabilities.

21.1.4 Power Output Guarantee

In respect of the PB40ES PowerBuoy and mooring system, the  CONTRACTOR guarantees fulfilment of a Power
Output of at least 50% of that predicted (according to the Theoretical Power Table contained in
table 1 of Annex XIV) during the Testing Period of the PB40ES PowerBuoy and mooring system given
the measured energy levels. Wave energy levels will be collected and recorded for at least 50% of
the Testing Period of the PB40ES PowerBuoy and mooring system by the dedicated Acoustic Doppler
Current Profiling (ADCP) unit at or near the Site or, if the ADCP fails to collect the required data
for the project, by extrapolating data from publicly available
sources (e.g. RPE 2914, 2915 or Bilbao
Buoy), the latter being subject to approval by the CLIENT. PowerBuoy output levels will be recorded
for at
least 50% of the Testing Period of the PB40ES PowerBuoy and mooring
system by the SCADA system,
PowerBuoy output power, as measured with the meter equipment. The proposed meter equipment with its
auxiliary transformers would have an accuracy compliant with the IEC 687 Class 0.5 specification
and have bi-directional measurement capability with Ethernet communications. A Siemens 9300 series
device or equivalent meter shall be installed at the low tension wire at the output from the
PowerBuoy, will be compared against the predicted level which is calculated using the collected wave
energy levels and the theoretical power table in Annex XIV.

In the event of breach of this guarantee that results in the delay of the DAC of the PB40ES
PowerBuoy and mooring system beyond the date included in Clause 31, the remedies set forth in
Clause 31 shall apply.

 

 

21.1.5 Energy Production Guarantee

In repect of the PB40ES PowerBuoy and mooring system, the CONTRACTOR guarantees fulfilment of an
Energy Production of at least 50% of that predicted according to the Theoretical Power Table
contained in table 1 of Annex XIV using the real  wave data captured during the Testing Period of the
PB40ES PowerBuoy and mooring system in the method described in Clause 21.4.

In the event of breach of this guarantee that results in the delay of the DAC of the PB40ES
PowerBuoy and mooring system beyond the date included in Clause 31, the remedies set forth in Clause
31 shall apply.

21.1.6 Spare Parts Guarantee

The CONTRACTOR guarantees the existence of spare parts or equivalent replacements (which may
require redesign) for any component of the Equipment and undertakes to offer the CLIENT their
availability for supply during the term of the Testing Period of the PB40ES PowerBuoy and mooring system, until
DAC of the PB40ES PowerBuoy and mooring system is achieved of this Agreement terminated.

21.2 Subsea cable and Underwater Substation ‘Pod’

The CONTRACTOR offers the following guarantees effective as from the PAC of the Subsea cable and
Underwater Substation ‘Pod’:

The remedies set forth in the Clause 21.2 and 21.3 are the sole and exclusive remedy of the CLIENT
with respect to the breach of the stipulated gurantees;

21.2.1 Ownership Guarntee

The CONTRACTOR represents and warrants that at the date of signature of the PAC of the Subsea cable
and Underwater Substation ‘Pod’:

(i) the Equipment comprising the Subsea cable and Underwater Substation ‘Pod’ is fully and
exclusively owned by the CONTRACTOR;

(ii) the Equipment comprising the Subsea cable and Underwater Substation ‘Pod’ is transferred to
the CLIENT according to this Agreement free from charges, encumbrances, constraints on transfer or
third-party rights; and

(iii) the CONTRACTOR is authorised to transfer their full and exclusive ownership to the CLIENT.

This ownership guarantees shall be valid and enforceable against third party claims throughout the
limitation  period established in the applicable law.

In the event of default, invalidity or uncertainty of these guarantees, the CONTRACTOR shall defend
the validity of the sale of the Equipment and hold the CLIENT harmless from the damages of

 

 

If there is any lien or encumbrance on any of the Equipment and it is not imputable to the CLIENT,
the CONTRACTOR must, as soon as possible, replace or cancel that attachment, lien or encumbrance at
its cost.

The CONTRACTOR represents and warrants to the CLIENT that all creations, plans, drawings,
specifications, documents, procedures, methods, products or inventions supplied, prepared or made by
the CONTRACTOR hereunder and the use of any of them does not infringe any third-party rights.
In the event of any claim or action by a third party alleging infringement of any intellectual or
industrial property right, the CLIENT must notify the CONTRACTOR promptly and the CONTRACTOR will
carry out all the negotiations to settle the claim. At the request of the CONTRACTOR, the CLIENT
will provide all reasonable assistance to the CONTRACTOR against the claim of the third party. In
such case, the CONTRACTOR shall hold the CLIENT harmless from all damages (including costs and
expenses) that may be produced and shall obtain for the CLIENT the right to use, or continue
using, the Equipment. Delayed performance of the Works due to this cause shall not release the
CONTRACTOR from any liabilities for delays or entitle it to raise the Agreed Price.

21.2.2 Quality Guarantee

The CONTRACTOR guaranties that the components of the Equipment comprising the Subsea cable and
Underwater Substation ‘Pod’ shall comply with the standards required for normal operation of the
Subsea cable and Underwater Substation ‘Pod’, during the term of the O&M Agreement.

If during the O&M Agreement any of the components of the Equipment fail to  comply with the
referred standards the CONTRACTOR shall have to repair or replace, at its option, any such component
on its account, included the cost of retrieval from the Site and redeployment of the defective items,
if required.

21.2.3 Repair and Replacement Guarantee

The CONTRACTOR shall, during  a period of one year beginning with the signature of the PAC of the
Subsea cable and Underwater Substation ‘Pod’, except for the cable for which the Parties will
endeavors to obtain a two-year guarantee in which case the CONTRACTOR shall grant an equivalent
guarantee to the CLIENT, repair or replace, at its option, all failures or defects in the Equipment
comprising the Subsea cable and Underwater Substation ‘Pod’ elements found to have a faulty
design, quality or operation as soon as possible without any cost to the CLIENT. The cost of
materials, labour and, in general, all expenses incurred in total repair shall be for the account of
the CONTRACTOR included the cost of retrieval from the Site and redeployment of the defective items,
if required.

If the
CONTRACTOR does not repair or replace in a reasonable period of time, the CLIENT
shall notify the CONTRACTOR, indicating a reasonable deadline for making
the repair or replacement. If the CONTRACTOR continues not fulfilling its obligation after that
time, the CLIENT shall be entitled to carry out the repair for the account of the CONTRACTOR, which
will be responsible for the direct damages caused by this delay.

 

 

Correct and adequate repair by the CLIENT in the above circumstances shall not release the
CONTRACTOR from all its liabilities.

21.2.4
Spare Parts Guarantee

The
CONTRACTOR guarantees the existence of spare parts or equivalent replacements (which may require
redesign) for any component of the Equipment and undertakes to offer the CLIENT their availability for supply
during the term of the Testing Period of the Subsea cable and Underwater Substation ‘Pod’, until
DAC of the Subsea cable and Underwater Substation ‘Pod’ is achieved or this Agreement is
terminated.

21.3 Limitations on Guarantees

The
CONTRACTOR does not guarantee the consequences arising from the CLIENT’S failure to observe the
instructions contained in the operating and maintenance manuals,
unless it is the CONTRACTOR that is responsible for the operation and
maintenance of the PB40ES PowerBuoy and mooring system
and of the Subsea cable and Underwater Substation ‘Pod’,
nor does it guarantee the consequences of
normal wear and tear or corrosion, from external phenomena, form abnormal or negligent use, nor
those arising, from any repairs or modifications made without prior
approval of the CONTRACTOR, except
when they have been made by virtue or default by the CONTRACTOR or its obligation to repair within
the times established in Clause 21.1.3 or 21.2.3.”

CLAUSE 14 

CHANGES TO ANNEX V OF THE EPC AGREEMENT

The Parties agree that the Schedule of Milestones contained in the Annex V is replaced by this one:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	OPT Allo-	 	 
	 	 	 	 	Forecast	 	% of con-	 	Amount	 	cation	 	 
	No.	 	Milestone	 	Date	 	tract price	 	(kC)	 	(kC)	 	Evidence of Completion
	1

	 	EPC Contract Signature
	 	Paid
	 	 	10	%	 	 	266	 	 	 	 	Signing of the EPC contract.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	2

	 	Placement of
PowerBuoy component
orders
	 	Paid
	 	 	4	%	 	 	107	 	 	 	 	OPT to provide
copies of contracts/Purchase orders
placed with
subcontractors
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	Delivery of
Bathymetry study
	 	Paid
	 	 	4	%	 	 	107	 	 	 	 	Bathymetry report
supplied

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Forecast	 	% of contract	 	Amount	 	OPT Allocation	 	Evidence of
	No.	 	Milestone	 	Date	 	price	 	(KC)	 	(KC)	 	Completion
	6

	 	Order of Subsea
Cable
	 	Paid
	 	 	5	%	 	 	133	 	 	 	 	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal
	 	 	23	%	 	 	613	.00	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	Purchase order of
Substation POD
equipment
	 	Jan. ’08	 	 	5	%	 	 	134	 	 	 	 	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	Purchase order of
Mooring System
	 	Nov. ’07	 	 	5	%	 	 	134	 	 	 	300	 	 	OPT to provide
copies of
contracts/Purchase
orders placed with
subcontractors.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	PB40ES steel

fabrication complete	 	Oct. ’07	 	 	7	%	 	 	186	 	 	 	 	 	 	Certificate of
completion from
steel subcontractor
approved by OPT.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Visual evidence
(e.g. digital
photograph of steel
parts).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8

	 	Delivery of POD
main components
(Transformer,
switchgear) at
Santander
	 	Mar. ’08	 	 	7	%	 	 	186	 	 	 	 	 	 	Copy of goods
received
certificated from
delivery agent.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	9

	 	Assembly of
Underwater
Substation ‘Pod’ on
land complete
(Santander)
	 	May. ’08	 	 	7	%	 	 	186	 	 	 	 	 	 	Final ‘POD Functional Test’ certificate from OPT.

Visual evidence of
final testing (e.g.
digital photo of
assembled USP).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10

	 	Assembly of PB40ES
PowerBuoy on land
complete
(Santander)
	 	Mar. ’08	 	 	7	%	 	 	186	 	 	 	143	 	 	Final ‘Buoy Functional Test’ certificate from OPT. 

Visual evidence of
final testing (e.g.
digital photo of
assembled buoy).
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11

	 	Delivery of subsea
cable ‘ex-works’ at
Santander
	 	Feb. ’08	 	 	13	%	 	 	346	 	 	 	 	 	 	Certificate of
completion from
Cable manufacturer
and Visual
evidence.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	13

	 	Installation of
PB40ES mooring
system at site and
test complete
	 	Mar. ’08	 	 	4	%	 	 	106	 	 	 	57	 	 	Certificate of completion of mooring from OPT.

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Forecast	 	% of contract	 	Amount	 	OPT Allocation	 	Evidence of
	No.	 	Milestone	 	Date	 	price	 	(KC)	 	(KC)	 	Completion
	14

	 	Deployment of
PB40ES PowerBuoy at
site complete
	 	April. ’08	 	 	8	%	 	 	213	 	 	 	 	 	 	Certificate of
Completion of
PowerBuoy
installation from
OPT
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16

	 	PAC of all PB40ES PowerBuoy and mooring system	 	April. ’08
	 	 	4	%	 	 	106	 	 	 	 	 	 	Provisional
Acceptance
Certificate for the
PB40ES PowerBouy
and mooring system
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17

	 	DAC of the PB40ES PowerBuoy and mooring system	 	Dec. ’08
	 	 	2	%	 	 	54	 	 	 	 	 	 	Definitive
Acceptance
Certificate for the
PB40ES PowerBouy
and mooring system
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal	 	 	69	%	 	 	1837	 	 	 	500	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12

	 	Subsea cable installation and
test complete
	 	 	 	To Be Determined	 	 	 	 	 	 	 	 	 	Copy of
subcontractor
installation
certificate for the
cable.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15

	 	Installation of
Underwater
Substation ‘Pod’
complete
	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Certificate of
completion of POD installation from OPT
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18

	 	PAC of the Subsea
cable and
Underwater
Substation ‘Pod’
	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Provisional
Acceptance
Certificate for the
Subsea cable and
Underwater
Substation ‘Pod’
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19

	 	DAC of the Subsea cable and Underwater Substation ‘Pod’	 	 	 	To Be Determined
	 	 	 	 	 	 	 	 	 	Definitive Acceptance Certificate for the Subsea cable and Underwater Substation ‘Pod’
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Subtotal
	 	 	8	%	 	 	213	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Total
	 	 	100	%	 	 	2663	 	 	 	500	 	 	 

CLAUSE 15

COSTS

The Parties acknowledge and agree that:

(i) The revised Schedule of Milestones in Clause 14 confirms that the maximum cost overrun
allocated by the CONTRACTOR of €500,000 under clause 18.5 (i) of the EPC contract will
have been fully utilized.

(ii) Actual costs of Milestones 12,15,18 and 19 are to be determined.

 

 

CLAUSE 16

Models of PAC and DAC

The Parties agree that the Model of Provisional Acceptance in Annex VI and the Model of Definitive
Acceptance in Annex VII will be adjusted to reflect the principle of having both a PAC of the
PB40ES PowerBuoy and mooring system on the one hand a PAC of the Subsea Cable and Underwater
substation ‘POD’ on the other under Annex VI and a DAC of the PB40ES PowerBuoy and mooring system
on the one hand and a DAC of the Subsea Cable and Underwater substation ‘POD’ on the other under
Annex VII with the word Plant in the Annexes referring to PB40ES PowerBuoy and mooring system or
the Subsea Cable and Underwater substation, ‘POD’ as applicable.

CLAUSE 17

REMAINING AGREEMENT

The Parties agree that except as amended in accordance with this
Addendum the EPC Agreement
remains in full force and effect according to its terms.

IN WITNESS WHEREOF, this Agreement is signed in two originals, both to the same effect, at the
place and date first above mentioned.

	 	 	 	 	 
	

	 		 	
	THE CLIENT
	 	THE CONTRACTOREX-10.28

Exhibit 10.28

Dated 1 February 2008

	(1)	 	KUC PROPERTIES LIMITED
	 
	(2)	 	OCEAN POWER TECHNOLOGIES LIMITED

LEASE

relating to premises known as Unit 54(15) Hurlbutt Road Heathcote Industrial Estate Warwick
CV34 6TD

	 	 	 
	Eversheds LLP

	 	T +44 (0) 845 497 1000
	115 Colmore Row

	 	F +44 (0) 845 497 1900
	Birmingham

	 	DX 13004 Birmingham
	B3 3AL

	 	www. eversheds .com

 

 

PARTICULARS

PART 1: LAND REGISTRY PARTICULARS

	 	 	 	 	 
	LR1.

	 	Date of lease
	 	1 February 2008
	 
	 	 	 	 
	LR2.

	 	Title number(s)	 	 
	 
	 	 	 	 
	LR2.1

	 	Landlord’s title number(s)
	 	WK268918.
	 
	 	 	 	 
	LR2.2

	 	Other title numbers
	 	None.
	 
	 	 	 	 
	LR3.

	 	Parties to this lease	 	 
	 
	 	 	 	 
	 

	 	Landlord
	 	KUC PROPERTIES LIMITED (registered number SC044073)
whose registered office is at 24/25 St Andrew
Square Edinburgh EH2 1AF.
	 
	 	 	 	 
	 

	 	Tenant
	 	OCEAN POWER TECHNOLOGIES LIMITED
(registered number 05225532) whose registered office
is at Warwick Innovation Centre Warwick Technology
Park Gallows Hill Warwick CV34 6UW.
	 
	 	 	 	 
	LR4.

	 	Property
	 	In the case of a conflict between this clause and
the remainder of this lease then, for the purposes
of registration, this clause shall
prevail.
	 
	 	 	 	 
	 

	 	 	 	The premises (referred to in this Lease as “the
Premises”) known as Unit 54 No. 15 Hurlbutt
Road Heathcote Industrial Estate Leamington Spa
shown edged red on the attached plan
including all alterations, improvements and
additions made to those premises during the Term,
landlord’s fixtures and conduits exclusively
serving those premises at any time during the
Term and one half severed vertically of all party
walls dividing those premises from any
adjoining premises but

 

 

	 	 	 	 	 
	 

	 	 	 	excluding the airspace above the
upper level of the buildings on
those premises at any time during
the Term.
	 
	 	 	 	 
	LR5.

	 	Prescribed statements etc	 	 
	 
	 	 	 	 
	LR5.1

	 	Statements prescribed under rules 179
(dispositions in favour of a charity), 180
(dispositions by a charity) or 196 (leases under
the Leasehold Reform, Housing and Urban Development
Act 1993) of the Land Registration Rules 2003
	 	None.
	 
	 	 	 	 
	LR5.2

	 	This lease is made under, or by
reference to, provisions of:
	 	None.
	 
	 	 	 	 
	LR6.

	 	Term for which the Property is leased
	 	From and including December 2007. 

To and including 18 December 2011.

(This term is referred to in this
Lease as “the Contractual Term”).
	 
	 	 	 	 
	LR7.

	 	Premium
	 	None.
	 
	 	 	 	 
	LR8.

	 	Prohibitions or restrictions on
disposing of this lease
	 	This Lease contains a provision that prohibits or restricts dispositions.
	 
	 	 	 	 
	LR9.

	 	Rights of acquisition etc	 	 
	 
	 	 	 	 
	LR9.1

	 	Tenant’s contractual rights to renew
this lease, to acquire the reversion or another
lease of the Property, or to acquire an interest in
other land
	 	None.
	 
	 	 	 	 
	LR9.2

	 	Tenant’s covenant to (or offer to)
surrender this lease
	 	None.
	 
	 	 	 	 
	LR9.3

	 	Landlord’s contractual rights to
acquire this lease
	 	None.
	 
	 	 	 	 
	LR10.

	 	Restrictive covenants given in this lease by the
Landlord in
	 	None.

 

 

	 	 	 	 	 
	 

	 	respect of land other than
the Property	 	 
	 
	 	 	 	 
	LR11.

	 	Easements	 	 
	 
	 	 	 	 
	LR11.1

	 	Easements granted by this
lease for the benefit of the
Property
	 	The rights specified in Schedule 1.
	 
	 	 	 	 
	LR11.2

	 	Easements granted or
reserved by this lease over
the Property for the benefit
of other property
	 	The rights specified in Schedule 2.
	 
	 	 	 	 
	LRI2.

	 	Estate rentcharge burdening
the Property
	 	None.
	 
	 	 	 	 
	LR13.

	 	Application for standard
form of restriction
	 	None.
	 
	 	 	 	 
	LR14.

	 	Declaration of trust where
there is more than one
person comprising the Tenant
	 	Not applicable.

 

 

PART 2: OTHER PARTICULARS

	 	 	 
	Initial Rent

	 	Sixteen thousand pounds (£16,000) per annum exclusive of
value added tax
	 
	 	 
	Rent Start Date

	 	1 February 2008
	 
	 	 
	Permitted Use

	 	Use of the Premises for storage,
administration and manufacture within Class B1 (c) or
B8 of the Schedule to the Town & Country Planning (Use
Classes) Order 1987

 

 

CONTENTS

	 	 	 	 	 
	Clause	 	Page
	 
	 	 	 	 
	1   DEFINITIONS AND INTERPRETATION 
	 	 	1	 
	1.1 ‘Additional Rents’ 
	 	 	1	 
	1.2 ‘Building’ 
	 	 	1	 
	1.3 ‘Conduits’ 
	 	 	1	 
	1.4 ‘Insurance Rent’ 
	 	 	1	 
	1.5 ‘Insured Risks’ 
	 	 	2	 
	1.6 ‘Interest Rate’ 
	 	 	2	 
	1.7 ‘Internal Painting Year’ 
	 	 	2	 
	1.8 ‘Landlord’ 
	 	 	2	 
	1.9 ‘Main Structure’ 
	 	 	2	 
	1.10 ‘Plan’ 
	 	 	2	 
	1.11 ‘Planning Acts’ 
	 	 	2	 
	1.12 ‘Premises’ 
	 	 	3	 
	1.13 ‘the Regulation’ 
	 	 	3	 
	1.14 ‘Rent’ 
	 	 	3	 
	1.15 ‘Service Costs’ 
	 	 	3	 
	1.16 ‘Service Charge’ 
	 	 	3	 
	1.17 ‘Service Charge Year’ 
	 	 	3	 
	1.18 ‘Superior Lease’ 
	 	 	4	 
	1.19 ‘Superior Landlord’ 
	 	 	4	 
	1.20 ‘Tenant’ 
	 	 	4	 
	1.21 ‘Term’ 
	 	 	4	 
	2   DEMISE AND RENT RESERVATION
	 	 	4	 
	3   TENANT’S COVENANTS 
	 	 	5	 
	3.1 To pay rent
	 	 	5	 
	3.2 Interest 
	 	 	5	 
	3.3 Rates and taxes 
	 	 	5	 
	3.4 To repair 
	 	 	6	 
	3.5 To paint and redecorate 
	 	 	6	 
	3.6 To yield up 
	 	 	6	 
	3.7 To comply with statutory requirements 
	 	 	7	 
	3.8 Planning 
	 	 	7	 
	3.9 Notices received 
	 	 	8	 
	3.10 Notice as to defects 
	 	 	8	 
	3.11 To permit entry to examine and do repairs 
	 	 	8	 
	3.12 To repair on notice 
	 	 	9	 
	3.13 Landlord may repair on Tenant’s default 
	 	 	9	 
	3.14 Re-letting 
	 	 	9	 
	3.15 Landlord’s costs 
	 	 	10	 
	3.16 Insurance 
	 	 	10	 
	3.17 Electrical alterations 
	 	 	11	 
	3.18 Alterations 
	 	 	11	 

 

 

	 	 	 	 	 
	Clause	 	Page
	 
	 	 	 	 
	3.19 Permitted Use 
	 	 	13	 
	3.20 Prohibited uses 
	 	 	13	 
	3.21 Advertising signs and posters 
	 	 	13	 
	3.22 Nuisance 
	 	 	13	 
	3.23 To clean windows and clear refuse 
	 	 	14	 
	3.24 Easements 
	 	 	14	 
	3.25 Alienation etc 
	 	 	14	 
	3.26 To register any disposition 
	 	 	17	 
	3.27 Not to overload premises nor obstruct Conduits 
	 	 	17	 
	3.28 To comply with regulations 
	 	 	18	 
	3.29 Restrictive covenants and Superior Lease 
	 	 	18	 
	3.30 Indemnity
	 	 	18	 
	3.31 Value added tax 
	 	 	18	 
	3.32 Information as to subtenants 
	 	 	19	 
	4   LANDLORD’S COVENANTS 
	 	 	19	 
	4.1 Quiet enjoyment 
	 	 	19	 
	4.2 To insure 
	 	 	19	 
	4.3 To repair and to maintain services 
	 	 	20	 
	4.4 Superior Lease 
	 	 	20	 
	5   FURTHER PROVISIONS 
	 	 	20	 
	5.1 Forfeiture and re-entry 
	 	 	20	 
	5.2 Rent cesser 
	 	 	21	 
	5.3 Determination 
	 	 	22	 
	5.4 Insurance proceeds 
	 	 	22	 
	5.5 Disputes 
	 	 	22	 
	5.6 Service of notices 
	 	 	22	 
	5.7 Compensation for disturbance 
	 	 	23	 
	5.8 Rights and easements 
	 	 	23	 
	5.9 Jurisdiction 
	 	 	23	 
	5.10 Landlord’s liability 
	 	 	23	 
	5.11 The Superior Landlord and mortgagee 
	 	 	23	 
	6   EXCLUSION OF THE 1954 ACT 
	 	 	24	 
	7   NEW TENANCY 
	 	 	24	 
	8   RIGHTS OF THIRD PARTIES 
	 	 	24	 
	9   NO AGREEMENT FOR LEASE 
	 	 	24	 
	Schedules
	 	 	 	 
	1   Rights Granted 
	 	 	25	 
	1 Support 
	 	 	25	 
	2 Passage of utilities 
	 	 	25	 
	3 Use of common parts 
	 	 	25	 
	4 Right to enter adjacent premises 
	 	 	25	 
	2   Rights Reserved by the Landlord 
	 	 	27	 
	1 Support 
	 	 	27	 
	2 Passage of utilities 
	 	 	27	 
	3 Easements 
	 	 	27	 
	4 Right of entry 
	 	 	27	 

 

 

	 	 	 	 	 
	Clause	 	Page
	 
	 	 	 	 
	5 Right to alter
	 	 	27	 
	3   SERVICES
	 	 	29	 
	Part 1(A)
	 	 	29	 
	Part 1(B)
	 	 	30	 
	Part 2
	 	 	31	 
	4   Guarantee Covenants
	 	 	32	 
	5   Deeds
	 	 	33	 

 

 

 

 

THIS LEASE made on the date set out in clause LR1 of the Land Registry Particulars between (1) the
Landlord and (2) the Tenant WITNESSES as follows:

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	 	 	In this lease where the context so admits the words and expressions set out in the Lease
Particulars shall have the meanings there set out and the following words and expressions
shall mean:
	 
	1.1	 	“Additional Rents”

	 	1.1.1	 	the Insurance Rent (as hereinafter defined)
	 
	 	1.1.2	 	the Service Charge (as hereinafter defined)
	 
	 	1.1.3	 	any interest chargeable under this lease
	 
	 	1.1.4	 	all expenses costs fees and other sums incurred under the provisions of
the sub-clauses of this lease headed Landlord’s costs Landlord may repair on
Tenant’s default To pay costs and Value added tax
	 
	 	1.1.5	 	any additional insurance premiums payable by the Tenant under the
sub-clause headed Insurance.

	1.2	 	“Building”
	 
	 	 	the land and building known as Heathcote Industrial Estate Leamington Spa and the
curtilage thereof and any boundary walls and fences and all additions and alterations
thereto,
	 
	1.3	 	“Conduits”
	 
	 	 	pipes drains gutters flues channels wires and other conducting media and ancillary
apparatus in or serving the Building.
	 
	1.4	 	“Insurance Rent”
	 
	 	 	a sum representing a fair proportion of the cost to the Landlord of:

	 	1.4.1	 	complying with the Landlord’s insuring covenant hereinafter contained
	 
	 	1.4.2	 	public liability insurance of the Landlord in connection with the Building
	 
	 	1.4.3	 	obtaining at periodic intervals independent valuations of the Building for
insurance purposes

1

 

	 	 	together with an amount equivalent to the excess sums (if any) which the insurers are not
liable to pay out on any insurance claim in respect of the Premises.
	 
	1.5	 	“Insured Risks”
	 
	 	 	fire lightning explosion aircraft (not being hostile aircraft) and articles dropped
therefrom riot civil commotion earthquake storm tempest flood burst water pipes and
impact by road vehicles and any other insurable risks against which the Landlord shall
from time to time deem it desirable to insure subject in each case to:

	 	1.5.1	 	insurance for any risk being reasonably obtainable on
normal commercial terms
	 
	 	1.5.2	 	such exclusions and limitations as may be imposed by the insurers.

	1.6	 	“Interest Rate”
	 
	 	 	the base rate of Barclays Bank plc or such other bank as the Landlord may nominate from
time to time acting reasonably or if the base rate shall cease to exist such other rate
of Interest as is most closely comparable with it as may be specified by the Landlord.
	 
	1.7	 	“Internal Painting Year”
	 
	 	 	2010.
	 
	1.8	 	“Landlord”
	 
	 	 	the Landlord named in the Lease Particulars and where the context so admits the
reversioner for the time being expectant upon the termination of the tenancy hereby
created.
	 
	1.9	 	“Main Structure”
	 
	 	 	the roof foundations floor structures load-bearing walls or frame stanchions beams
columns and all external walls window frames and all common Conduits of the Building.
	 
	1.10	 	“Plan”
	 
	 	 	the plan annexed hereto.
	 
	1.11	 	“Planning Acts”
	 
	 	 	the Town and Country Planning Act 1990 and all other legislation relating to planning.

2

 

	1.12	 	“Premises”
	 
	 	 	the premises known as Unit No. 54(15) Heathcote Industrial Estate which are shown for
Identification only edged red on the Plan and which shall for the purpose of clarification
extend to and include:

	 	1.12.1	 	the interior finishes of external walls and of internal load bearing walls frames
stanchions beams and columns and the floor boards and floor and ceiling finishes
	 
	 	1.12.2	 	all internal non load bearing walls or partitions wholly within the Premises
	 
	 	1.12.3	 	one half in thickness of all internal non load bearing walls or partitions
separating the Premises from any other part of the Building
	 
	 	1.12.4	 	all doors door frames and glass in windows and doors
	 
	 	1.12.5	 	all Conduits which serve exclusively the Premises and
	 
	 	1.12.6	 	all Landlord’s fixtures and fittings 
	 
	 	but shall exclude the Main Structure.

	1.13	 	“the Regulation”
	 
	 	 	the Tenant must not store or leave refuse on the Premises other than in lidded containers
with a volume of not more than 1,100 litres.
	 
	1.14	 	“Rent”
	 
	 	 	the Initial Rent but such term does not include the Additional Rents although the word
“rents” includes both the Rent and the Additional Rents.
	 
	1.15	 	“Service Costs”
	 
	 	 	the costs incurred by the Landlord in carrying out the works and providing the services
set out in Part 1(A) of Schedule 3 and the service
expenses incurred under Part 1(B) of that Schedule.
	 
	1.16	 	“Service Charge”
	 
	 	 	the sum payable by the Tenant in accordance with Part 2 of Schedule 3.
	 
	1.17	 	“Service Charge Year”
	 
	 	 	the period of twelve months up to the 31st of December in each year or such other period
as the Landlord shall from time to time choose.

3

 

	1.18	 	“Superior Lease”
	 
	 	 	any lease of the whole or any part of the Building superior to this lease.
	 
	1.19	 	“Superior Landlord”
	 
	 	 	the person entitled to the benefit of the reversion expectant upon the
determination of any Superior Lease.
	 
	1.20	 	“Tenant”
	 
	 	 	the Tenant named in the Lease Particulars and where the context so admits its successors
in title to the tenancy hereby created.
	 
	1.21	 	“Term”
	 
	 	 	the Contractual Term and any period of holding over or extension of the Contractual Term
whether by statute or common law.

and in this lease where the context so admits:

	1.22	 	the singular includes the plural and vice-versa and the masculine the feminine and the neuter
shall each include the others;
	 
	1.23	 	reference to any statute (but not any Use Class Order) shall Include any legislation
amending or replacing the same and any statutory instruments orders rules or regulations
having effect thereunder;
	 
	1.24	 	every covenant by the Tenant not to do any act shall include an obligation not to allow that
act to be done;
	 
	1.25	 	where the Tenant or the Guarantor is more than one person their covenants and references to
them shall be joint and several;
	 
	1.26	 	references to ‘this lease’ are to this lease as varied or supplemented; and
	 
	1.27	 	the clause headings shall not affect the construction.
	 
	2.	 	DEMISE AND RENT RESERVATION
	 
	 	 	The Landlord HEREBY DEMISES unto the Tenant the Premises TOGETHER WITH the easements and
rights specified in Schedule 1 EXCEPT AND RESERVED unto the Landlord and others the
easements and rights specified in Schedule 2 TO HOLD the Premises unto the Tenant for the
Contractual Term SUBJECT TO the provisions of the deeds and documents referred to in
Schedule 5 YIELDING AND PAYING therefor to the Landlord during the Term yearly and
proportionately for any fraction of a year the rents set out hereunder:

4

 

	2.1	 	The Initial Rent to be paid by equal quarterly payments in advance on the usual
quarter days in every year the first payment (apportioned in respect of the period from
the Rent Start Date up to and including the day immediately preceding the next following
quarter day) to be paid on the date hereof
	 
	2.2	 	the Additional Rents — to be payable from the date hereof or the date of occupation if
earlier (as determined by the Landlord or its surveyor acting reasonably) and to be paid to
the Landlord within seven days of demand (except as otherwise provided).
	 
	3.	 	TENANT’S COVENANTS
	 
	 	 	THE Tenant HEREBY COVENANTS with the Landlord throughout the Term or until released
pursuant to the Landlord and Tenant (Covenants) Act 1995 as follows:
	 
	3.1	 	To pay rent

	 	3.1.1	 	To pay the reserved rents at the times and in manner aforesaid without
any deduction or set off
	 
	 	3.1.2	 	If the Landlord reasonably requires to pay by Banker’s Standing Order

	3.2	 	Interest
	 
	 	 	If any rents or other sums payable hereunder shall be due but unpaid to pay interest
thereon (if demanded by the Landlord) calculated on a daily basis from the due date until
receipt by the Landlord at the rate of 3% over the interest rate per annum (except as
otherwise provided herein) over the Interest Rate compounded on the usual quarter days
(which rate shall apply before as well as after any judgment of the Court) Provided that
this sub-clause shall not prejudice any other right or remedy in respect of such rents.
	 
	3.3	 	Rates and taxes

	 	3.3.1	 	To pay and discharge all existing and future rates taxes (save any taxes
payable by the Landlord solely due to Its ownership of the Building or Premises)
assessments outgoings duties and impositions whatsoever payable by law in respect of
the Premises or any part thereof by the owner or occupier thereof including all
charges in respect of water gas electricity and telecommunications used or
consumed at the Premises
	 
	 	3.3.2	 	If the Tenant claims rate relief for empty premises and the Landlord
accordingly is unable at the end of the Term to claim any such relief to indemnify
the Landlord in respect of any such relief lost.

5

 

	 	3.3.3	 	Not to agree or by default allow to be fixed the rateable value of the
Premises or any part thereof without the prior written consent (not to be
unreasonably withheld or delayed) of the Landlord and to cooperate with the
Landlord in any negotiations with the District Valuer at the sole cost of the
Landlord and if so requested by the Landlord to take all necessary steps to
appeal against any such rateable value fixed.

	3.4	 	To repair

	 	3.4.1	 	In a proper and workmanlike manner to repair maintain and cleanse and keep
in good and substantial repair and condition the Premises and all additions and
improvements thereto including (but without prejudice to the generality of the
foregoing) all sanitary central heating and water apparatus therein serving the
Premises (damage caused by any of the Insured Risks excepted save to the extent that
payment of any policy moneys is withheld in whole or in part by reason of any act
neglect or default of the Tenant or anyone at the Premises expressly or impliedly
with the authority of the Tenant or any undertenant)
	 
	 	3.4.2	 	To renew and replace from time to time all Landlord’s fixtures and
fittings which may be or become beyond repair
	 
	 	3.4.3	 	To pay a sum equivalent to the loss of Rent during such period as is
reasonably required for the carrying out of works after the end of the tenancy by
reason of any breach of this sub-clause without prejudice to any other right of the
Landlord.

	3.5	 	To paint and redecorate
	 
	 	 	In the Internal Painting Year in a proper and workmanlike manner and to the reasonable
satisfaction of the Landlord to paint all the inside parts of the Premises previously
painted with two coats of good quality paint (the last painting to be in colours and
materials to be approved by the Landlord Provided That such approval shall not be
unreasonably withheld or delayed) and at the same time to oil varnish polish paper or
treat all internal parts thereof previously or requiring to be so treated and to wash
down all washable surfaces.
	 
	3.6	 	To yield up
	 
	 	 	At the expiration or sooner determination of the Term:

	 	3.6.1	 	peaceably to yield up to the Landlord the Premises with vacant possession
in repair and decorated in accordance with the several covenants herein contained

6

 

	 	3.6.2	 	to give up all keys of the Premises to the Landlord
	 
	 	3.6.3	 	to remove all Tenant’s chattels and all rubbish from the Premises and (if
requested by the Landlord) all Tenant’s fixtures and fittings and to make good
immediately any damage caused by the removal.

	3.7	 	To comply with statutory requirements

	 	3.7.1	 	At all times to observe and comply with the provisions of or imposed under
any statute licence consent authorisation or regulation regulating or
permitting the use of the Premises and the requirements of any competent authority in
that connection and at the expense of the Tenant to do all that is necessary to
obtain maintain and renew all licences and registrations required by law for the use
of the Premises
	 
	 	3.7.2	 	At the sole cost of the Tenant to comply with the requirements of every
Act of Parliament and all directly applicable European Community law for the time
being in force and of all byelaws orders and regulations licences consents
permissions and conditions made thereunder affecting the Premises or any use
thereof.

	3.8	 	Planning
	 
	 	 	In relation to the Planning Acts:

	 	3.8.1	 	not to carry out any development (as therein defined) without having first
obtained all necessary consents thereunder
	 
	 	3.8.2	 	not without the prior written consent of the Landlord to apply for
permission for any such development
	 
	 	3.8.3	 	not without the prior written consent of the Landlord to implement any
planning permission relating to the Premises
	 
	 	3.8.4	 	to pay any charge which may be imposed under the Planning Acts in respect
of the carrying out of any operations or the institution or continuance of the use of
the Premises
	 
	 	3.8.5	 	unless the Landlord shall otherwise direct in writing to carry out and
complete before the expiration or sooner determination of the Term any works
stipulated to be carried out to the Premises notwithstanding that such works are to
be carried out by a later date as a condition of planning permission for any
development begun before such expiration or sooner determination
	 
	 	3.8.6	 	if the Tenant shall receive any compensation relating to the Tenant’s
interest hereunder due to any restriction placed upon the user of the

7

 

Premises as a result of the Planning Acts then if and when the Tenant’s
interest hereunder shall determine the Tenant shall forthwith make such
provision as is just and equitable for the Landlord to receive its due benefit
from such compensation

	 	3.8.7	 	to produce to the Landlord all such plans documents and other evidence as
the Landlord shall reasonably require in order to satisfy itself that the provisions
of this covenant have been complied with.

	3.9	 	Notices received
	 
	 	 	Within seven days of receipt to give full particulars to the Landlord of any notice
direction order or proposal for a notice direction or order made given or Issued to the
Tenant by any government department or local or public authority and to supply two copies
of the same to the Landlord and without delay to take all necessary steps to comply with
the same and also at the request of the Landlord and at the joint cost of the Landlord
and the Tenant to make or join with the Landlord in making such objections or
representations relating to the same as the Landlord shall deem expedient.
	 
	3.10	 	Notice as to defects
	 
	 	 	Forthwith upon becoming aware of the same to give notice in writing to the Landlord of
any defect or any wants of repair of the Premises or the remainder of the Building which
would or might give rise to an obligation on the Landlord to do or refrain from doing any
act or thing in order to comply with any statutory duty of care imposed on the Landlord
and at all times to display and maintain all notices which the Landlord (acting
reasonably) may from time to time display or require to be displayed at the Premises.
	 
	3.11	 	To permit entry to examine and do repairs
	 
	 	 	To permit entry to the Premises or any part thereof at all reasonable hours in the
daytime on reasonable prior notice being given (or without prior notice and at any time
in emergency):

	 	3.11.1	 	by the Landlord to view the same to examine the state and condition
thereof to take inventories of the fixtures and fittings therein and to
make any inspection which may be required for the purposes of the
Landlord and Tenant Acts 1927 and 1954 or any other enactments for
the time being affecting the Premises the Building or the owner or
occupier thereof and for any other purpose connected with the interest
of the Landlord in the Building or its disposal charge or demise
	 
	 	3.11.2	 	by the Landlord and (with the previous authority of the Landlord) the tenants and occupiers of any adjoining premises so as to execute

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	 	 	 	repairs decorations or alterations to the Premises the adjoining premises or
the Building and which cannot otherwise reasonably be executed without such
entry and to empty cleanse renew or repair any of the Conduits belonging to the
Premises and such adjoining premises or the Building

	 	3.11.3	 	by the surveyors agents contractors and workmen of the respective parties hereby
permitted or so authorised to enter together with appliances

subject in all such cases to the persons so entering making good in a reasonable manner
any damage thereby occasioned to the Premises at their sole cost.

	3.12	 	To repair on notice
	 
	 	 	To repair and make good to the reasonable satisfaction of the Landlord all breaches of
covenant defects and wants of repair for which the Tenant may be liable within two
calendar months after the giving of notice to the Tenant or sooner if requisite.

	3.13	 	Landlord may repair on Tenant’s default
	 
	 	 	That if the Tenant shall at any time default in the performance of any of the covenants
herein contained relating to the repair decoration cleansing or condition of the Premises
or any part thereof of which notice has been given as aforesaid it shall be lawful for
workmen or others employed by the Landlord (but without prejudice to the right of
re-entry hereinafter contained) to enter upon the Premises and repair and restore the
same and all expenses incurred thereby (which expression shall include but not be limited
to the proper fees of professional advisers) shall be a debt immediately payable by the
Tenant to the Landlord on demand.

	3.14	 	Re-letting
	 
	 	 	To permit the Landlord or its agents during the six months immediately preceding the
expiration or sooner determination of the Contractual Term or at any time thereafter to
affix and retain without interference upon any suitable part of the Premises a notice for
reletting (or at any time for selling) the same but not so as materially to conceal the
Tenant’s own business signs and name and to permit all persons with written authority
from the Landlord or its agents to enter upon and view the Premises at all reasonable
times of the day without interruption.

9

 

	3.15	 	Landlord’s costs
	 
	 	 	To pay to the Landlord on an indemnity basis all solicitors’ counsels’ surveyors’ and
other costs expenses and fees incurred by the Landlord:

	 	3.15.1	 	in or in contemplation of lawful and proper proceedings relating to the
Premises whether or not under Sections 146 or 147 of the Law of
Property Act 1925 or the preparation and service of a notice
thereunder (whether or not any right of re-entry or forfeiture has been
waived by the Landlord or a notice served on the Tenant has been
complied with or the Tenant has enjoyed relief under the provisions of
the Act or forfeiture is avoided otherwise than by relief granted by the
Court)
	 
	 	3.15.2	 	incidental to the enforcement of any of the Tenant’s covenants in this
lease and in particular in the preparation and service of a schedule of
dilapidations at any time during or within 6 months of the end of the
Term and in the inspection of the works which are the subject of such
schedule whether during or after the carrying out thereof
	 
	 	3.15.3	 	in connection with the recovery of any arrears
	 
	 	3.15.4	 	in respect of any application for consent required by this lease whether
or not such consent is granted.

	3.16	 	Insurance

	 	3.16.1	 	Not to do or omit any act whatsoever whereby any insurance effected
on the Premises or anything therein or on the Building or on any
adjoining or neighbouring premises of the Landlord or of any
associated company of the Landlord may become void or voidable or
the premiums payable far such insurance increased
	 
	 	3.16.2	 	To the extent that any insurance premium payable in respect of any
such adjoining or neighbouring premises or the Building is increased by
any use act or omission of the Tenant (or anyone at the Premises
expressly or impliedly with the authority of the Tenant or any
undertenant) to pay to the Landlord on demand the full amount of
such increase (and not only the proportion which the Premises bears to
any such adjoining or neighbouring premises or the Building)
	 
	 	3.16.3	 	In the event of the Premises or any part thereof being destroyed or
damaged by any of the Insured Risks to give immediate notice thereof
to the Landlord

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	 	3.16.4	 	In the event of such adjoining or neighbouring premises or the Building
or any part thereof being destroyed or damaged by any of the Insured
Risks and the insurance money being wholly or partly irrecoverable by
reason of any act neglect omission or default of the Tenant (or anyone
at the Premises expressly or impliedly with the authority of the Tenant
or any undertenant) then and in every such case the Tenant will pay to
the Landlord forthwith on demand the whole or (as the case may
require) a fair proportion of the cost of completely rebuilding and
reinstating the same
	 
	 	3.16.5	 	To comply with the requirements and recommendations of the
Landlord’s insurers and not to store on the Premises any specially
inflammable explosive combustible or deleterious or otherwise
hazardous substance and not to release any such substance on to the
Premises or on to or into any other land air or water
	 
	 	3.16.6	 	Not to effect any insurance in respect of a risk against which the
Landlord shall insure under Clause 4.2 hereof and not to request the
insurers to make a note of the interest of the Tenant or the Tenant’s
mortgagee or any undertenant on any policy effected by the Landlord
	 
	 	3.16.7	 	To insure and keep insured in the joint names of the Landlord and the
Tenant and such other names as the Landlord may reasonably require
all the plate glass or any substitute or alternative material used in
windows (if any) and doors in the Premises against breakage with an
insurance company of repute to the full reinstatement cost thereof and
public liability relevant to such breakage and pay all premiums
necessary for that purpose and whenever required produce to the
Landlord the policy of insurance and the receipt for the current year’s
premium and whenever a claim arises to use the insurance money
forthwith in reinstating the same with a like or improved material to
the reasonable satisfaction of the Landlord making up any deficiency
out of the Tenant’s own moneys.

	3.17	 	Electrical alterations
	 
	 	 	Not without the prior written consent (not to be unreasonably withheld or delayed) of the
Landlord to alter or add to the electrical installation of the Premises (and ensure that
any permitted alterations or additions are carried out in accordance with the terms and
conditions laid down by the Institution of Electrical Engineers and the Regulations of
the Electricity Supply Authority).
	 
	3.18	 	Alterations

	 	3.18.1	 	Not to cut injure or alter any part of the Main Structure

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	 	3.18.2	 	Not to make any other erection addition or alteration whatsoever to
the Premises without the previous consent in writing of the Landlord
not to be unreasonably withheld or delayed (such consent to be
without prejudice nevertheless to the provisions of the sub-clauses
hereof headed Planning Electrical alterations and To comply with
statutory requirements) nor except:

	 	3.18.2.1	 	in accordance with plans and specifications (with such
additional copies thereof as the Landlord may reasonably
require) previously submitted to and approved in writing
by the Landlord
	 
	 	3.18.2.2	 	to the satisfaction of the Landlord

PROVIDED always that any alterations or additions shall at the end or sooner determination of the
Term be reinstated by the Tenant if so required in writing by the Landlord

	 	3.18.3	 	Notwithstanding any other provision contained in this lease the
Landlord may prohibit the Tenant from making any erection addition
alteration improvement or planning application in relation to the
Premises or the Building which could (if followed at any time by a
disposal or deemed disposal of any part thereof) give rise to a charge
for tax upon the Landlord whether immediate deferred or contingent
upon the happening of any future event
	 
	 	3.18.4	 	Where any erection addition or alteration falls within the scope of the
Construction (Design and Management) Regulations 1994 the Tenant shall:

	 	3.18.4.1	 	be the only client for the purposes of the Regulations
	 
	 	3.18.4.2	 	send a declaration to that effect to the Health and Safety
Executive in accordance with Regulation 4(4) before the
relevant work is commenced and provide the Landlord
with a copy of the acknowledgement from the Health and
Safety Executive as soon as it is received by the Tenant
	 
	 	3.18.4.3	 	comply with its obligations as client in respect of all work
	 
	 	3.18.4.4	 	at any time upon request provide the Landlord with copies
of all health and safety files relating to the Premises in
accordance with the Regulations and at the end or sooner
determination of the Term deliver such files to the
Landlord.

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	3.19	 	Permitted Use
	 
	 	 	Not to use and occupy the Premises other than for the Permitted Use.
	 
	3.20	 	Prohibited uses
	 
	 	 	Not to use any part of the Premises for any public meeting exhibition or entertainment or
for any illegal immorai or noxious purpose or for the purposes of a club or for any sale
by auction or for the playing of any sound-producing instrument or apparatus audible
outside the Premises or as a sleeping place for any person or for betting or gaming.
	 
	3.21	 	Advertising signs and posters
	 
	 	 	Not without the previous written consent of the Landlord to place display in or upon the
Premises any aerial sign advertisement notice poster display of lights or other object or
notification whatsoever other than sign boards displaying the name and business of the
Tenant of a reasonable size and appropriate to such business and on the expiration or
sooner determination of the Term to remove or efface the same and to make good any damage
caused.
	 
	3.22	 	Nuisance

	 	3.22.1	 	Not to do any act matter or thing of a dangerous noxious noisome or
offensive nature or which may be or grow to be a danger nuisance
annoyance or disturbance to the Landlord or to other occupiers or
residents for the time being of the Building or the Landlord’s adjoining
or neighbouring premises or to the public nor to allow any
manufacturing operations or other processes to be carried on
otherwise than within the Premises
	 
	 	3.22.2	 	Not to keep any goods parcels refuse or rubbish in or about the
staircases lifts corridors landings entrances forecourts passages or
other common parts of the Building (except in receptacles provided for
that purpose) or otherwise obstruct the same
	 
	 	3.22.3	 	Not to behave in any manner which shall be unreasonable
unneighbourly objectionable loud noisy unruly or unsightly and in all
matters to act in regard to the Premises and the Building in a
responsible manner so as to cause the least possible interference with
the use and enjoyment of other occupiers of the Building or the
Landlord’s adjoining premises and so as to cause no additional expense
for the upkeep thereof and (without prejudice to the Tenant’s
obligation not to do anything which will be a breach of this clause)
upon receiving notice from the Landlord of anything done on or
brought onto the Premises or the Building which in the opinion of the

13

 

	 	 	 	Landlord reasonably held shall be inconsistent with this covenant forthwith to
discontinue or remove the same and to take to the satisfaction of the Landlord
acting reasonably all steps necessary to prevent any recurrence of the matter
or matters mentioned in any such notice

	 	3.22.4	 	To take all necessary and reasonable precautions (whether by the installation and
maintenance of devices for consuming or absorbing fumes noise or vibrations or for
catching intercepting or precipitating noise or dust or other particles or by some
other means) to reduce to a minimum the amount of noise vibrations fumes dust and
other matter emanating from the Premises PROVIDED always that nothing in this
sub-clause contained shall be deemed to be an authorisation by the Landlord of the
commission of a nuisance.

	3.23	 	To clean windows and clear refuse
	 
	 	 	To clean the windows of the Premises as often as occasion shall require and at least once
in every calendar month and at least once a week to remove all refuse rubbish and scrap
which may have accumulated on the Premises.
	 
	3.24	 	Easements
	 
	 	 	To preserve unobstructed and undefeated all rights of light and other easements
appertaining to the Premises and not to permit (but give notice to the Landlord of) any
act whereby a new easement or encroachment might come to be made into against over or
upon the Premises and to do all such things as the Landlord may reasonably require to
prevent the same.
	 
	3.25	 	Alienation etc

	 	3.25.1	 	Not to:

	 	3.25.1.1	 	assign charge underlet or part with possession of part only
of the Premises
	 
	 	3.25.1.2	 	share the possession or occupation of the whole or any
part of the Premises
	 
	 	3.25.1.3	 	part with possession of the whole of the Premises save by
way of an assignment of the whole on the terms
hereinafter permitted

	 	3.25.2	 	Not to assign the Premises without the Landlord’s prior written consent
such consent not to be unreasonably withheld or delayed and subject
to compliance with Clause 3.25.3

14

 

	3.25.3	 	Not to assign the Premises unless the following conditions (which are specified for the
purposes of section 19(1A) of the Landlord and Tenant Act 1927) are complied with prior to
such assignment namely that:

	 	3.25.3.1	 	the tenant for the time being shall have entered into an authorised guarantee
agreement with the Landlord pursuant to section 16 of the Landlord and Tenant
(Covenants) Act 1995 guaranteeing the performance by the assignee of the covenants
on the part of the Tenant contained in this lease in the terms (mutatis mutandis)
set out in Schedule 4 or in such other form consistent with section 16 as the
Landlord shall reasonably require
	 
	 	3.25.3.2	 	any guarantor of the Tenant’s obligations under this lease shall have joined
in any such authorised guarantee agreement in order to covenant (as principal
debtor) with the Landlord that the Tenant shall comply with the authorised
guarantee agreement mentioned in the preceding sub-clause
	 
	 	3.25.3.3	 	(if reasonably required by the Landlord) the proposed assignee shall have
procured a covenant with the Landlord by an acceptable guarantor or guarantors in
the terms (mutatis mutandis) set out in Schedule 4 or in such other form as the
Landlord shall reasonably require
	 
	 	3.25.3.4	 	all rents and other sums due under this lease have been paid.

	3.25.4	 	Not to underlet the Premises without the Landlord’s prior written consent such consent not
to be unreasonably withheld and not to underlet:

	 	3.25.4.1	 	except to an undertenant who shall first have:
	 
	 	(a)	 	entered into a covenant with the Landlord to observe and perform the
covenants and conditions on the part of the Tenant contained in this lease (other
than the covenant to pay rent) and
	 
	 	(b)	 	if reasonably so required by the Landlord procured a covenant with the
Landlord by an acceptable guarantor or guarantors in the terms (mutatis mutandis)
set out in Schedule 4 or in such other form as the Landlord may reasonably require

15

 

	 	3.25.4.2	 	in consideration of any premium
	 
	 	3.25.4.3	 	without reserving a yearly rent payable in advance on the usual quarter days
equal to the greater of:
	 
	 	(a)	 	the then full current open market rack rental value of the Premises
and
	 
	 	(b)	 	the Rent then payable under this lease
	 
	 	 	 	such yearly rent to be reviewable on the same dates and on the same
terms as the Rent payable under this lease
	 
	 	3.25.4.4	 	except on similar covenants and conditions (which the Tenant shall enforce) to
those in this lease and in particular:
	 
	 	(a)	 	a proviso for re-entry on breach of any covenant in the underlease
and
	 
	 	(b)	 	similar terms as to carrying out or paying for repairs paying
insurance premiums and paying the service charges under this lease
	 
	 	3.25.4.5	 	without taking from the undertenant unqualified covenants (which the Tenant
shall enforce):
	 
	 	(a)	 	not to assign the whole of the Premises without the prior written
consent of the Landlord (under this lease)
	 
	 	(b)	 	not (save by way of a charge of the whole) to deal In any other way
whatsoever with the Premises or any part thereof and
	 
	 	(c)	 	to obtain from any assignee of the Premises a covenant with the
Landlord (under this lease) to observe and perform the covenants and conditions on
the part of the Tenant contained in this lease (other than the covenant to pay
rent)

	3.25.5	 	Not without the Landlord’s prior written consent such consent not to be unreasonably
withheld:

	 	3.25.5.1	 	to vary the terms of any underlease or
	 
	 	3.25.5.2	 	to agree any rent on review under any underlease and if the rent thereunder is
to be determined by a third party in

16

 

	 	 	 	accordance with the conditions therein contained to procure
that the Landlord’s representations as to the rent
payable thereunder are made to that person to the
reasonable satisfaction of the Landlord and to
provide the Landlord with details of all rent
reviews within one month of agreement or
determination

	3.26	 	To register any disposition

	 	3.26.1	 	To give notice in writing of every assignment assent transfer underlease change of name charge or devolution of or other instrument relating to or affecting the Premises and to
produce a certified copy of the same within twenty one days after the execution
or grant thereof to the solicitors of the Landlord and to pay their
reasonable registration fee (and that of any superior landlord) in
respect of each such instrument PROVIDED THAT registration of any such document shall not
require the Landlord to consider the terms thereof and shall not be evidence that it has
done so.
	 
	 	3.26.2	 	As soon as reasonably practicable after the date of this Lease,
the Tenant named in the Particulars is to apply to the Land
Registry to note the burden of the rights granted by clause 2 and
to note the benefit of the rights reserved by clause 2 on the title number set out
in clauses LR2.1 of the Land Registry Particulars.

	3.27	 	Not to overload premises nor obstruct Conduits

	 	3.27.1	 	Not to overload any part of the Premises or to impose a weight or
strain in excess of that which the Premises are constructed to bear with due margin for safety
	 
	 	3.27.2	 	Not to stop up or obstruct in any way whatsoever or permit oil grease or other harmful or excessive matter or substance to enter the washbasins or lavatory basins or the
drains and sewers of the Building and to employ maintain and renew such plant for treating any deleterious effluent
before permitting the same to enter such drains and sewers as may be required by
the Landlord from time to time in accordance with best modern practice and to
make good at the sole cost of the Tenant all damage caused or cost incurred by
reason of any such stopping up or obstruction.

17

 

	3.28	 	To comply with regulations

	 	 	 	To conform to the Regulation and all other regulations reasonably made by the
Landlord for the proper management of the Building and notified to the Tenant in
writing from time to time and to conform to all such reasonable regulations and
instructions as the Landlord may from time to time make or give for the
regulation of vehicular traffic within the curtilage of the Building and not to park
any vehicle therein or on any adjoining or neighbouring property of the Landlord
without the express written authority of the Landlord to do so.

	3.29	 	Restrictive covenants and Superior Lease

	 	 	 	To observe and perform the obligations contained in:

	 	3.29.1	 	the deeds and documents referred to in Schedule 5 so far as the same are
for the time being enforceable and capable of taking effect and
	 
	 	3.29.2	 	the Superior Lease (except the obligation to pay rent) insofar as the same
relate to or affect the Premises and are not in this lease specifically the
responsibility of the Landlord.

	3.30	 	Indemnity

	 	 	 	To indemnify the Landlord against all damages losses proper costs expenses
actions demands proceedings and liabilities arising directly or indirectly out
of:

	 	3.30.1	 	any act omission or negligence of the Tenant or anyone at the Premises
expressly or impliedly with the Tenant’s authority or
	 
	 	3.30.2	 	any breach by the Tenant of the provisions of this lease.

	3.31	 	Value added tax

	 	3.31.1	 	To pay the Landlord value added tax chargeable in respect of any taxable
supplies made by the Landlord to the Tenant in connection with this lease
(whether or not at the election of the Landlord)
	 
	 	3.31.2	 	Where the Tenant has agreed in this lease to reimburse the Landlord for
the costs or expenses of any supplies provided to the Landlord by a third
party (but in respect of which the Landlord makes no taxable supply to the
Tenant) the Tenant shall also at the same time reimburse the Landlord with
an amount equivalent to the value added input tax incurred by the Landlord
save to the extent that the Landlord is entitled to a credit for such input
tax and the Landlord shall use reasonable endeavours to recover the input
tax before requesting the Tenant to account for the same.

18

 

	3.32	 	Information as to subtenants

	 	 	 	To give to the Landlord in writing the information set out in section 40(1)
Landlord and Tenant Act 1954 and all such other information as the Landlord
may reasonably request in relation to any procedure under the said Act
(including copies of all notices served by or on the Tenant pursuant to
section 25 or 26) or in relation to the implementation of any rent review
within twenty one days after service at any time during the Term of a notice
requesting such information.

	4.	 	LANDLORD’S COVENANTS

	 	 	 	THE Landlord HEREBY COVENANTS with the Tenant as follows:

	4.1	 	Quiet enjoyment

	 	 	 	That the Tenant paying the rents hereby reserved and observing and performing
the covenants conditions and agreement on the part of the Tenant herein
contained shall and may quietly hold and enjoy the Premises during the Term
without any interruption by the Landlord or persons lawfully claiming under
the Landlord.

	4.2	 	To insure

	 	4.2.1	 	To insure in some insurance office of repute (unless such insurance
is vitiated by any act neglect or default of the Tenant or anyone at the
Premises expressly or impliedly with the authority of the Tenant or any
undertenant):

	 	4.2.1.1	 	the Building and all Landlord’s fixtures and fittings and plant
therein of an insurable nature against destruction or damage by the
Insured Risks in such sum as shall be determined from time to time
by the Landlord to represent the reinstatement cost thereof
together with all professional and other fees and expenses and the
cost of site clearance and other incidental expenses
	 
	 	4.2.1.2	 	for the loss of two years Rent caused by any of the Insured Risks

	 	4.2.2	 	To supply a summary of such insurance and evidence of the current
premium on request once yearly
	 
	 	4.2.3	 	In the case of destruction or damage to the Premises by any of the
Insured Risks to ensure that all insurance moneys (other than for loss of
Rent and public liability) received by the Landlord are with all convenient
speed (subject to the necessary labour and materials being

19

 

	 	 	 	procurable and to all necessary statutory consents being obtained)
laid out in reinstating the Premises provided that the Landlord’s
liability hereunder shall be deemed to be satisfied if the
Landlord provides premises as convenient and commodious as but not
necessarily identical with that previously existing.

	4.3	 	To repair and to maintain services
	 
	 	 	Subject to the Tenant paying the Service Charge when due and unless prevented
or restricted by any circumstances beyond its control the Landlord will so
far as the same is not the responsibility of any other tenant of the
Building:

	 	4.3.1	 	from time to time repair maintain and renew the Main Structure of
the Building and any other part of the Building used in common and
all common fixtures fittings plant equipment and Conduits therein
subject to the proviso that no liability hereunder shall be deemed
to arise unless due notice in writing of a need for repair has
been given to the Landlord by the Tenant or by another tenant in
the Building
	 
	 	4.3.2	 	so far as practicable provide the services set out in Part 1(A) of
Schedule 3 Provided always that the Landlord may from time to time
withhold discontinue increase or vary the services or any of them
or the times at which they are supplied if the Landlord
deems it reasonably necessary for the more efficient
management of the Building as a whole.

	4.4	 	Superior Lease
	 
	 	 	To pay the rent reserved by any Superior Lease and to observe and
perform the covenants agreements and provisions thereof but only
so far as the Superior Landlord shall require the same to be
observed and performed and except so far as they are by this lease
expressly assumed by the Tenant.
	 
	4.5	 	To keep the Building in good repair and condition but no better
repair and condition than at the date of this Lease.
	 
	5.	 	FURTHER PROVISIONS
	 
	 	 	PROVIDED ALWAYS THAT and it is hereby agreed as follows:
	 
	5.1	 	Forfeiture and re-entry
	 
	 	 	That this lease is made upon the express condition that if:

	 	5.1.1	 	any reserved rents shall be unpaid for fourteen days
after the due dates whether the same shall have been lawfully demanded
or not or

20

 

	 	5.1.2	 	any Tenant’s covenant shall not have been observed or performed or
	 
	 	5.1.3	 	in respect of a Tenant or a guarantor (not being a company):

	 	5.1.3.1	 	an application is made for an interim order under Part VIII of the
Insolvency Act 1986 or
	 
	 	5.1.3.2	 	a bankruptcy petition is presented or there is made
against him a bankruptcy order or
	 
	 	5.1.3.3	 	there is summoned any meeting of creditors or the Tenant makes any
proposal to his creditors for a composition in satisfaction of
debts or proposes or enters into any arrangement of
whatever nature with his creditors or

	 	5.1.4	 	in respect of a Tenant or a guarantor (being a company):

	 	5.1.4.1	 	it enters into liquidation whether compulsory or voluntary
(other than for the purposes of an amalgamation or
reconstruction resulting in a solvent company) or
	 
	 	5.1.4.2	 	a petition is presented for a winding up order or an
administration order (or the company or its directors
resolve to present either) or it is wound up or
	 
	 	5.1.4.3	 	there is summoned any meeting of creditors or the Tenant (or
its directors) makes any proposal to the creditors for a
composition in satisfaction of its debts or proposes or
enters into any arrangement of whatever nature for the
benefit of the creditors or its members or
	 
	 	5.1.4.4	 	there is appointed a receiver or a receiver and manager or
an administrator or an administrative receiver (or a person
becomes entitled to exercise any such powers) or

	 	5.1.5	 	the Tenant has any distress or execution levied on any goods
at the Premises

	 	 	then it shall be lawful for the Landlord or its authorised agent to re-enter
upon the Premises and to re-possess and enjoy the same as if this lease had not
been made but without prejudice to any right of action or remedy of any party in
respect of any antecedent breach of any of the covenants herein contained.
	 
	5.2	 	Rent cesser
	 
	 	 	If the Premises or any part thereof or all access thereto shall be destroyed or
damaged by any of the Insured Risks so as to make the Premises unfit for

21

 

	 	 	occupation or use then (unless the policy moneys for loss of rent
shall have been wholly or partly withheld due to any act neglect or
default of the Tenant or anyone at the Premises expressly or
impliedly with the authority of the Tenant or any undertenant or due
to any exclusion or limitation to which the policy of insurance may
be subject) the Rent or a fair proportion thereof according to the
nature and extent of the damage sustained shall be suspended
until the Premises shall again be fit for occupation and use or
access shall be restored or until the expiration of the period for
which insurance for loss of Rent is effected whichever shall be the
earlier and any dispute shall be referred to the award of a single
arbitrator to be appointed in default of agreement upon the
application of either party by the President for the time being of
the Royal Institution of Chartered Surveyors in accordance with the
provisions of the Arbitration Act 1996
	 
	5.3	 	Determination
	 
	 	 	If the Premises is destroyed or damaged such that the Premises are
unfit for occupation for the Permitted Use or incapable of any
access and if the Premises are not made fit for occupation for the
Permitted Use or capable of any access within 3 years after that
destruction or damage occurs then either party may by six months’
notice to the other determine this Lease and on the expiry of that
notice this Lease shall determine.
	 
	5.4	 	Insurance proceeds
	 
	 	 	Subject to the provisions for reinstatement of the Premises
contained in Clause 4.2.3 the building insurance proceeds shall
belong to the Landlord for its own use and benefit absolutely.
	 
	5.5	 	Disputes
	 
	 	 	Any dispute arising as between the Tenant and the lessee or occupier
of any part of the Building or any adjacent or neighbouring premises
belonging to the Landlord as to any easement right or privilege
enjoyed or used in common shall be decided by the Landlord whose
decision shall be binding upon all parties to the dispute.
	 
	5.6	 	Service of notices

	 	5.6.1	 	Any demand or notice under this lease shall be properly
served if left at or sent by fax or post to:

	 	5.6.1.1	 	the recipient’s address herein contained (or such
substituted address as shall have been notified in writing) or

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	 	5.6.1.2	 	its registered office where the recipient is a company or
	 
	 	5.6.1.3	 	the Premises where the recipient is the Tenant

	 	5.6.2	 	The provisions as to service by post as contained in section 196
of the Law of Property Act 1925 as amended by the Recorded Delivery Service
Act 1962 shall apply.

	5.7	 	Compensation for disturbance
	 
	 	 	So far as the Landlord and Tenant Act 1954 shall allow no
compensation shall be payable on determination of the tenancy
hereby created.
	 
	5.8	 	Rights and easements
	 
	 	 	The operation of section 62 of the Law of Property Act 1925 is
excluded from this lease and the only rights granted to the Tenant
are those set out in Schedule 1.
	 
	5.9	 	Jurisdiction
	 
	 	 	This lease is governed by the laws of England and (save where
otherwise provided herein) the parties hereto submit to the
exclusive jurisdiction of the English courts in relation to any
claim dispute or difference which may arise hereunder.
	 
	5.10	 	Landlord’s liability
	 
	 	 	Only the landlord for the time being shall be liable to observe and
perform the Landlord’s covenants herein.
	 
	5.11	 	The Superior Landlord and mortgagee

	 	5.11.1	 	Where the Landlord’s title to the Premises derives from a Superior Lease
or is subject to a mortgage:

	 	5.11.1.1	 	the tenancy hereby created is subject to any exceptions and
reservations in the Superior Lease and
	 
	 	5.11.1.2	 	the rights exercisable by the Landlord shall also
be exercisable by the Superior Landlord and the mortgagee

	 	5.11.2	 	Where the Tenant seeks the Landlord’s consent to any matter:

	 	5.11.2.1	 	the Landlord will use its reasonable endeavours to obtain any
requisite consent of the Superior Landlord and of the mortgagee

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	 	5.11.2.2	 	the Landlord shall be entitled to withhold its own consent
unless it has obtained such requisite consents and
	 
	 	5.11.2.3	 	the Tenant shall bear the reasonable cost to the Landlord
(including the costs of the Superior Landlord and the mortgagee) of
obtaining such requisite consents

	 	5.11.3	 	Where any matter is to be carried out to the reasonable satisfaction of the
Landlord it shall also if required be carried out to the reasonable
satisfaction of the Superior Landlord and the mortgagee

	6.	 	EXCLUSION OF THE 1954 ACT
	 
	6.1	 	The Landlord and the Tenant agree to exclude the provisions of sections 24 to 28 of
the 1954 Act in relation to the tenancy created by this Lease. The Tenant confirms
that before the date of this Lease:

	 	6.1.1	 	the Landlord served on the Tenant a notice (“the Notice”) dated 14 December 2007
in relation to the tenancy created by this Lease in a form complying with the
requirements of Schedule 1 to the 2003 Order;
	 
	 	6.1.2	 	the Tenant, or a person duly authorised by the Tenant, in relation to the Notice
made a statutory declaration (“the Declaration”) dated 19 December
2007 in a form complying with the requirements of Schedule 2 to the
2003 Order;
	 
	 	6.1.3	 	where the Declaration was made by a person other than the Tenant, the
declarant was duly authorised by the Tenant to make the Declaration
on the Tenant’s behalf; and
	 
	 	6.1.4	 	it was not contractually bound to enter into the tenancy created by this Lease.

	7.	 	NEW TENANCY
	 
	 	 	The tenancy hereby created is a new tenancy as defined in the Landlord and Tenant (Covenants)
Act 1995.
	 
	8.	 	RIGHTS OF THIRD PARTIES
	 
	 	 	It is not intended that a third party should have the right to enforce a provision of this
lease pursuant to the Contracts (Rights of Third Parties) Act 1999.
	 
	9.	 	NO AGREEMENT FOR LEASE
	 
	 	 	It is hereby certified that there is no agreement for lease to which this lease gives effect

Delivered as a deed on the date hereof

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SCHEDULE 1

Rights Granted

	1.	 	Support
	 
	 	 	The right of support and protection for such parts of the Premises as require the same
from other parts of the Building and any adjoining or adjacent premises of the Landlord
capable of providing such support and protection.
	 
	2.	 	Passage of utilities
	 
	 	 	The right to passage of water soil gas and electricity and telephone lines (in common
with the Landlord and other tenants of the Building and all other persons entitled
thereto) through the Conduits and with the Landlord’s prior consent and upon reasonable
prior notice being given to all persons affected thereby the right to enter upon other
parts of the Building to make any necessary connections thereto or to cleanse repair and
renew any Conduits serving the Premises causing as little inconvenience as possible and
making good any damage thereby caused.
	 
	3.	 	Use of common parts
	 
	 	 	The right for the Tenant its agents employees and licensees in common with the Landlord
and all others entitled:
	 
	3.1	 	of access to and egress from the Premises over such parts of the Building and in
case of emergency to use such fire escapes as the Landlord shall from time to
time designate
	 
	3.2	 	of access with vehicles to and from the service yard and loading bay located
within the curtilage of the Building for so long only as shall be required for the
purpose of loading and unloading goods and equipment in connection with the
Tenant’s business provided that no obstruction is thereby caused and that this
right is exercised in strict compliance with any regulations made by the Landlord
	 
	3.3	 	of use of the lifts lavatories and cloakrooms in the Building designated by the
Landlord for the Tenant’s use
	 
	4.	 	Right to enter adjacent premises
	 
	 	 	With the Landlord’s prior consent and upon reasonable prior notice (except in emergency)
given to the Landlord and all other persons affected thereby of access into and upon the
adjacent premises forming part of the Building so far as may be requisite to enable the
Tenant to comply with the Tenant’s obligations

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	 	 	herein contained subject to causing as little inconvenience as possible and making good any damage
caused.

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SCHEDULE 2

Rights Reserved by the Landlord

	1.	 	Support
	 
	 	 	The right of support and protection from the Premises for such parts of the Building and
any adjoining or adjacent premises of the Landlord as require such support and protection.
	 
	2.	 	Passage of utilities
	 
	 	 	The right to uninterrupted passage of water soil gas electricity and telephone lines
through the Conduits for the time being belonging to or running through or under the
Premises or any land and premises over which the Tenant enjoys rights hereunder from and
to the remainder of the Building or any adjoining or adjacent premises of the Landlord AND
the right to enter upon the Premises or other land aforesaid at all reasonable times for
the purpose of making connections thereto or to inspect cleanse repair renew or remove the
same making good any damage thereby caused to the Premises.
	 
	3.	 	Easements
	 
	 	 	All rights and easements privileges in the nature of easements or quasi-easements now
existing in or over the Premises for the benefit of the Building or any adjoining or
adjacent premises of the Landlord.
	 
	4.	 	Right of entry
	 
	 	 	The right at reasonable times and on reasonable notice (except in emergency) to enter the
Premises for the purposes of:
	 
	4.1	 	inspecting the condition and state of repair thereof
	 
	4.2	 	carrying out any works for which the Landlord or the Tenant is liable under this
lease or by statute
	 
	4.3	 	carrying out any works to any property adjoining the Premises or to any party
structure Conduits or other thing used by the Tenant in common with others

subject to the persons so entering making good any physical damage to the Premises caused
by such entry to the reasonable satisfaction of the Tenant.
	 
	5.	 	Right to alter
	 
	 	 	The right at any time without making any compensation to build on alter or add to the
exterior of the Premises or build on alter add to extend erect demolish or redevelop any
other part of the Building or any adjoining or neighbouring

27

 

	 	 	premises notwithstanding any interference caused to the Premises or any access of light and air
thereto.

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SCHEDULE 3

SERVICES

Part 1(A)

Services provided

	1.	 	Complying with the Landlord’s repairing covenant hereinbefore contained and
cleaning down painting and decorating the exterior of the Building (including the
window frames) and the common parts as and when required.
	 
	2.	 	The provision maintenance repair and replacement (where beyond economic
repair) in the Building of:
	 
	2.1	 	a security alarm system
	 
	2.2	 	fire fighting alarm and prevention equipment
	 
	2.3	 	notices and signs deemed necessary by the Landlord for the health and safety of
all those in the Building and for the control of the Building
	 
	3.	 	Providing for the benefit of the Building or the tenants:
	 
	3.1	 	cleaning of the common parts
	 
	3.2	 	the periodic collection and removal of refuse
	 
	3.3	 	traffic control
	 
	3.4	 	porterage
	 
	3.5	 	security control
	 
	3.6	 	caretaker or other staff
	 
	3.7	 	general management
	 
	4.	 	Complying with the Landlord’s obligations under the deeds and documents
referred to in Schedule 5 and the Superior Lease (other than payment of rent)
if and insofar as they relate to the Building and are not by this lease expressly
assumed by the Tenant.
	 
	5.	 	Providing any other services or carrying out any other work which the Landlord
acting reasonably shall from time to time consider necessary for the benefit of
the Building or its environment.

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Part 1(B)

Service expenses

The Service Costs for each Service Charge Year shall (without limitation) include:

	1.	 	The salaries and all other employment costs of all staff and the cost of providing them with
necessary office space residential accommodation motor transport office equipment stationery
telephone facilities working clothes and all other equipment required for the proper
performance of their duties
	 
	2.	 	The fees and expenses payable to any independent professional or other person whom the
Landlord may from time to time employ in connection with the provision of the services
	 
	3.	 	All rates taxes (except taxes assessed on the Landlord solely due to its ownership
of the Building) and outgoings (including electricity gas and telephone charges) payable by
the Landlord in respect of whole or part of the Building
	 
	4.	 	The expenses of complying with all statutory requirements and the requirements of any
competent authority in relation to the Estate.
	 
	5.	 	The provision of a sinking fund in each year of a reasonable sum to cover the prospective
and contingent costs of carrying out repairs decorations and replacements to the
Estate the Landlord’s fixtures and fittings thereon or plant machinery equipment and other
items upon or serving the Estate
	 
	6.	 	The costs of administering the services including keeping the accounts and records thereof
(being initially a yearly sum equal to ten per cent (10%) of the other annual Service Costs)
whether carried out by the Landlord or its agent
	 
	7.	 	Any interest charges incurred on expenditure not covered by the interim advance payments
payable under Part 2 of this Schedule.

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Part 2

Service charge

	1.	 	The Service Charge to be paid by the Tenant shall be such fair proportion (which may if
appropriate be the whole amount) of the actual or anticipated Service Costs for each Service
Charge Year which shall be assessed by the Landlord or its Surveyor according to a reasonable
and proper basis for apportionment applicable from time to time to the Premises.
	 
	2.	 	The Landlord may make and send to the Tenant notice in writing of the Landlord’s
reasonable estimate of the anticipated Service Costs and the Service Charge applicable to the
Premises for the coming Service Charge Year and the Tenant shall pay such estimate of the
Service Charge by equal quarterly instalments in advance on the usual quarter days.
	 
	3.	 	The Landlord will (unless prevented by causes beyond its control) prepare and send to the
Tenant a statement of the actual Service Costs and Service Charge for each Service Charge Year
as soon as practicable after the end of such year and in the event of the Service Charge for
the Premises exceeding the aggregate amount paid by the Tenant for such year the Tenant will
pay the balance due to the Landlord forthwith and in the event of the aggregate amount being
greater the excess will be credited by the Landlord by way of set-off against the next
instalment of Service Charge due from the Tenant.
	 
	4.	 	The Landlord will not charge the Tenant any part of the Service Costs which shall be
attributable from time to time to such parts of the Building as shall be designed and
available for letting but which remain unlet or which are occupied by the Landlord (save for
the common parts of the Building and any staff accommodation) during the whole or
proportionately for any part of the relevant Service Charge Year.
	 
	5.	 	In the event of the Building being altered added to or extended the Service Charge may be
adjusted by the Landlord in such manner as the Landlord shall deem to be just and equitable.

31

 

SCHEDULE 4

Guarantee Covenants

The Guarantor covenants with the Landlord as principal debtor or covenantor that whilst the Tenant
is bound by the Tenant’s covenants in this lease:

	1.	 	The Tenant will pay the rents hereby reserved and observe and perform all its covenants
herein and that on default the Guarantor will pay the rents hereby reserved and observe and
perform the covenants in respect of which the Tenant is in default and indemnify the Landlord
against all claims demands damages proper costs losses and expenses arising directly or
indirectly out of such default and the liability of the Guarantor shall not be affected by
any:
	 
	1.1	 	time given to the Tenant or any neglect or forbearance by the Landlord in enforcing the
payment of the rents or the observance or performance of the Tenant’s covenants or any refusal
by the Landlord to accept rent at a time when the Landlord is entitled to re-enter the
Premises
	 
	1.2	 	variation of the terms of this lease
	 
	1.3	 	surrender of part
	 
	1.4	 	other act or thing by which (but for this provision) the Guarantor would have been released.
	 
	2.	 	If the tenancy hereby granted shall be prematurely determined (save where agreed by the
Landlord and the Tenant) or if the same shall be disclaimed the Guarantor will (if so
required by the Landlord) either (in the event of determination of the lease)
accept from the Landlord the grant of a new lease of the Premises from the date of such
determination or disclaimer for the residue of the Term then unexpired at the same rents
hereinbefore reserved and subject to the like covenants and provisos as are herein contained
(and in such event the Guarantor will execute and deliver to the Landlord a counterpart lease)
or (if the lease remains extant) accept the vesting of this lease and in either case the
Guarantor will pay the Landlord’s proper costs disbursements and value added tax.
	 
	3.	 	If the Landlord shall not require the Guarantor to take a lease of the Premises pursuant to
paragraph 2 above the Guarantor shall nevertheless upon demand pay to the Landlord a sum equal
to the rent and to all other payments that would have been payable under this lease but for
the determination or disclaimer in respect of the period from the date of the said
determination or disclaimer until the expiration of six months therefrom or until the Premises
shall have been relet by the Landlord whichever shall first occur.

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SCHEDULE 5

Deeds

Matters contained mentioned or referred to in the Landlord’s registered title No. WK268918 so far
as the same are subsisting and capable of being enforced and affect the Building or the Premises.

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SIGNED AS A DEED by KUC PROPERTIES

LIMITED acting by a director and its attorney

[ILLEGIBLE]
 

Director

 A. Mc Donald, Attorney

34

 

SIGNED AS A DEED by OCEAN POWER TECHNOLOGIES LIMITED acting by a director and its secretary

/s/ M. R. DRAPER
 

Director M. R. DRAPER

/s/ ERIC A. ASH
 

Director ERIC A. ASH

35

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