Document:

exv10w39

 

Exhibit 10.39

 

ZCM Asia Holdings Pty Limited

 

Zurich Capital Markets Asia Pty Limited

 

Heartware Limited

 

Royal Bank of Canada

 

Deed of Consent to

Assignment of Sublease

Premises: Suite 4, Level 46, 2 Park Street Sydney

 

Matthew Seymour Property Lawyer©

 

 

Contents

 

	 	 	 	 	 	 	 	 	 
	Commercial details
	 	 	 	 	 	 	 	4
	 
	 
	 	 	 	 	 	 	 	 
	Background
	 	 	 	 	 	 	 	6
	 
	 
	 	 	 	 	 	 	 	 
	1	 	Defined terms & interpretation	 	7
	 
	 
	 	1.1	 	Defined terms	 	 	 	7
	 
	 	1.2	 	Interpretation	 	 	 	7
	 
	 	 	 	 	 	 	 	 
	2	 	Precondition	 	8
	 
	 
	 	2.1	 	Headlessor consent	 	 	 	8
	 
	 	2.2	 	Seek consent	 	 	 	8
	 
	 	2.3	 	Deed of Consent to Sublease	 	 	 	8
	 
	 	2.4	 	Headlessor refusal	 	 	 	8
	 
	 	 	 	 	 	 	 	 
	3	 	Assignment Date	 	8
	 
	 
	 	 	 	 	 	 	 	 
	4	 	Consent	 	8
	 
	 
	 	 	 	 	 	 	 	 
	5	 	RBC’s obligations	 	8
	 
	 
	 	 	 	 	 	 	 	 
	6	 	Release	 	9
	 
	 
	 	 	 	 	 	 	 	 
	7	 	Indemnity	 	9
	 
	 
	 	7.1	 	From the Assignment Date	 	 	 	9
	 
	 	7.2	 	Prior to the Assignment Date	 	 	 	9
	 
	 	 	 	 	 	 	 	 
	8	 	Rent and adjustments	 	9
	 
	 
	 	8.1	 	Passing rent	 	 	 	9
	 
	 	8.2	 	Periodic payments	 	 	 	9
	 
	 	8.3	 	Reimbursements	 	 	 	9
	 
	 	8.4	 	Shortfall	 	 	 	10
	 
	 	 	 	 	 	 	 	 
	9	 	Bank Guarantee	 	10
	 
	 
	 	9.1	 	Replacement Bank Guarantee	 	 	 	10
	 
	 	9.2	 	Sublease applies	 	 	 	10
	 
	 	9.3	 	Return original Bank Guarantee	 	 	 	10
	 
	 	 	 	 	 	 	 	 
	10	 	Originals and registration	 	10
	 
	 
	 	10.1	 	Delivery	 	 	 	10
	 
	 	10.2	 	Stamping and registration	 	 	 	11
	 
	 	10.3	 	Original Sublease	 	 	 	11
	 
	 	 	 	 	 	 	 	 
	11	 	Access date	 	11
	 
	 
	 	11.1	 	Vacant possession	 	 	 	11
	 
	 	11.2	 	Late delivery	 	 	 	11
	 
	 	11.3	 	Licence terms	 	 	 	11
	 
	 	 	 	 	 	 	 	 
	12	 	Exercise of option	 	12
	 
	 
	 	12.1	 	Option	 	 	 	12
	 
	 	12.2	 	Giving effect to option	 	 	 	12

			
	 	 	 
	 
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	Contents	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	13
	 	Makegood	 	 	 	 	12	 
	 
	 
	 	13.1	 	Headlessor’s consent	 	 	12	 
	 
	 	13.2	 	Handover condition	 	 	12	 
	 
	 	13.3	 	Contribution	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	14
	 	General	 	 	 	 	12	 
	 
	 
	 	14.1	 	Costs	 	 	12	 
	 
	 	14.2	 	GST	 	 	13	 
	 
	 	14.3	 	Amendment	 	 	13	 
	 
	 	14.4	 	Counterparts	 	 	13	 
	 
	 	14.5	 	Entire understanding	 	 	13	 
	 
	 	14.6	 	Further assurance	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	Signing page	 	 	14	 
	 
	Annexure A – Fixtures and furnishings	 	 	16	 
	 
	Annexure B – Variation of Sublease	 	 	17	 
	 
	 

			
	 	 	 
	 
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Commercial details
 

	 	 	 
	Deed dated

	 	2007

	 	 	 	 	 
	Parties	 	 	 	 
	 
	Sublessor	 	ZCM Asia Holdings Pty Limited ACN 093 336 700
	 
	 	 	 	 
	Notice details
	 	Contact:	 	The Company Secretary,
	 
	 	 	 	Zurich Financial Services Australia Ltd
	 
	 	Address:	 	5 Blue St, North Sydney
	 
	 	Fax:	 	02 9995 1808
	 
	Assignor	 	Heartware Limited ACN 111 970 257
	 
	 	 	 	 
	Notice details
	 	Contact:	 	David Mclntyre
	 
	 	Address:	 	3351 Executive Way, Miramar, Florida USA 33025
	 
	 	Fax:	 	+1 954 874 1156
	 
	 	Email:	 	dmcintyre@heartware.com
	 
	Assignee	 	Royal Bank of Canada ARBN 076 940 880
	 
	 	 	 	 
	Notice details
	 	Contact:	 	Alan Downie
	 
	 	Address:	 	c/- RBC Capital Markets
	 
	 	 	 	Level 46, 2 Park Street
	 
	 	 	 	Sydney NSW 2000
	 
	 	Fax:	 	(02) 9033 3156
	 
	 	Email:	 	alan.downie@rbccm.com
	 
	 

			
	 	 	 
	 
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Commercial details
 

	 	 	 
	Items	 	 
	 
	Item 1
	 	Premises
	 
	 	 
	 
	 	Suite 4, Level 46, 2 Park Street Sydney and the parking
	 
	 	spaces referred to in the Sublease
	 
	Item 2
	 	Headlease
	(clause 1.1)
	 	 
	 
	 	Lease registered 7655894
	 
	Item 3
	 	Sublease
	(clause 1.1)
	 	 
	 
	 	Sublease registered AB545729 including a sublicence of
	 
	 	2 permanent car parking spaces
	 
	Item 4
	 	Assignment Date
	(clause 1.1)
	 	 
	 
	 	1 July 2007
	 
	Item 5
	 	Passing rent
	(clause 8)
	 	 
	 
	 	Rent (Item 7 of the Sublease):
	 
	 	$161,769.50 per annum plus GST
	 
	 	Parking fee (Item 13 of  the Sublease):
	 
	 	$840 per space per month plus GST
	 
	Item 6
	 	Bank Guarantee amount
	(clause 9)
	 	 
	 
	 	$106,399
	 

			
	 	 	 
	 
	 
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Background
 

	 	 	 
	A

	 	The Headlessor is the owner of the building known as 2 Park Sydney
(Building).
	 
	 	 
	B

	 	The Headlessor leases Levels 46 and 47 of the Building to Zurich Capital
Markets Australia Limited ACN 095 545 887 under the Headlease.
	 
	 	 
	C

	 	Zurich Capital Markets Australia Limited delisted and changed its name to
Zurich Capital Markets Asia Pty Limited.
	 
	 	 
	D

	 	Zurich Capital Markets Asia Pty Limited sublet the Premises to Heartware.
	 
	 	 
	E

	 	Zurich Capital Markets Asia Pty Limited assigned the Headlease to ZCM Asia
Holdings Pty Limited ACN 093 336 700 effective 1 June 2007.
	 
	 	 
	F

	 	Heartware wants to assign the Sublease to RBC but requires the Sublessor’s
consent to do so.
	 
	 	 
	G

	 	The Sublessor consents to the assignment of the Sublease on the terms of
this deed.
	 
	 	 
	H

	 	As the assignment of the Headlease referred to in recital E has not yet
been registered, Zurich Capital Markets Asia Pty Limited (as previous
sublessor) is also a party to this deed for the purpose of confirming its
consent to the assignment of the Sublease.

			
	 
	 	 	 
	 
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Consent terms

 

	1	 	Defined terms & interpretation
	 
	1.1	 	Defined terms
	 
	 	 	The following terms and expressions have a specific meaning in
this deed.
	 
	 	 	Assignment Date means the date in Item 4.
	 
	 	 	Commercial details means the part of this deed described as the
Commercial details at the front of this deed.
	 
	 	 	Headlease means the lease described in Item 2.
	 
	 	 	Headlessor means the lessor under the Headlease.
	 
	 	 	Heartware means the existing tenant of the Premises under the Sublease,
being the party identified as the ‘Assignor’ in the Commercial details.
	 
	 	 	Item means an item in the Commercial details.
	 
	 	 	Premises means the premises described in Item 1.
	 
	 	 	RBC means the party identified as the ‘Assignee’ in the Commercial details.
	 
	 	 	Sublessor means the lessee under the Headlease, being the party identified
as ‘Sublessor’ in the Commercial details.
	 
	 	 	Sublease means the sublease described in Item 3.
	 
	 	 	Transfer means a form required by the Department of Lands – Land &
Property Information to register the transfer of Sublease from Heartware
to RBC.
	 
	 	 	Variation of Sublease means the variation of the Sublease in the form set
out in Annexure B.

	1.2	 	Interpretation
	 
	 	 	In this deed:

	 	(a)	 	the singular includes the plural and vice versa;
	 
	 	(b)	 	a gendered noun or pronoun includes all genders;
	 
	 	(c)	 	a reference to:

	 	(i)	 	this deed includes its schedules and annexures;
	 
	 	(ii)	 	a party or person includes that person’s
executors, administrators, successors and permitted
assigns; and
	 
	 	(iii)	 	an institute, association or council
includes a reference to any replacement institute,
association or council;

	 	(d)	 	the use of the verb to ‘include’ (in any conjugation or
participle) or the
expressions ‘such as’ or ‘for example where used in this deed, are
always
intended to refer to a non-exclusive set as if the words ‘without
limitation’ were
included after their every use; and
	 
	 	(e)	 	headings are for convenience only and do not form part of
this deed or affect
its interpretation.

 

 

			
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Consent terms

	2	 	Precondition
	 
	2.1	 	Headlessor consent
	 
	 	 	The assignment in clause 3 and the Sublessor’s consent in clause 4 is
subject to and conditional on the Headlessor’s consent to the assignment
of the Sublease and to the Variation of Sublease.

	2.2	 	Seek consent
	 
	 	 	The Sublessor must use its best efforts to seek and obtain the
Headlessor’s consent to the assignment of the Sublease and to the
Variation of Sublease.

	2.3	 	Deed of Consent to Sublease
	 
	 	 	If required by the Headlessor, RBC and the Sublessor must enter into a
deed of consent to sublease with the Headlessor on terms reasonably
required by the Headlessor.

	2.4	 	Headlessor refusal
	 
	 	 	If the Headlessor:

	 	(a)	 	refuses to give its consent; or
	 
	 	(b)	 	fails to consent by the Assignment Date,

	 	 	to te assignment of the Sublease and or to the Variation of Sublease, any
party may terminate this deed by notice to the other parties.

	3	 	Assignment Date
	 
	 	 	Heartware assigns its right, title and interest in;

	 	(a)	 	the Sublease (including any personal covenants in favour of Heartware);
	 
	 	(b)	 	the Premises; and
	 
	 	(c)	 	any fitout and furnishings in the Premises itemised in
Annexure A,

	 	 	to RBC, on and from the Assignment Date.
	 
	 	 	RBC accepts the assignment.

	4	 	Consent
	 
	 	 	Each of the Sublessor and Zurich Capital Markets Asia Pty Limited
consents to Heartware assigning the Sublease to RBC.

	5	 	RBC’s obligations
	 
	 	 	On and from the Assignment Date, RBC must comply with the terms
of the Sublease as if it were:

	 	(a)	 	named in the Sublease as lessee; and
	 
	 	(b)	 	an original party to the Sublease.

 

 

			
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Consent terms

 

	6	 	Release
	 
	 	 	The Sublessor releases Heartware from any liability to the Sublessor
arising in connection with the Sublease after the Assignment Date.
	 
	 	 	Heartware releases the Sublessor from any liability to Heartware
arising in connection with the Sublease before or after the Assignment
Date.

	7	 	Indemnity
	 
	7.1	 	From the Assignment Date
	 
	 	 	On and from the Assignment Date, RBC is liable for and indemnifies each of
the Sublessor and Heartware against any losses, damages, claims, actions,
suits, proceedings, demands, costs and expenses Incurred by those parties
in connection with RBC not complying with its obligations under the
Sublease.

	7.2	 	Prior to the Assignment Date

	 	(a)	 	Each of Heartware and the Sublessor warrant, for the benefit
of RBC, that as
at the date of this deed neither party is aware of any subsisting
breach of the
Sublease by the other party.
	 
	 	(b)	 	Heartware is liable for and indemnifies RBC against any
losses, damages,
claims, actions, suits, proceedings, demands, costs and expenses incurred by
RBC in connection with Heartware not complying with its obligations under the
Sublease prior to the Assignment Date.

	8	 	Rent and adjustments
	 
	8.1	 	Passing rent
	 
	 	 	RBC acknowledges that the passing rent under the Sublease as at the
Assignment Date, reviewed in accordance with Item 8 of the Headlease is
the amount in Item 5.

	8.2	 	Periodic payments
	 
	 	 	Heartware and RBC must adjust periodic payments under the Sublease on
the basis that:

	 	(a)	 	Heartware is liable for any periodic payments becoming
due and payable
before the Assignment Date; and
	 
	 	(b)	 	RBC is liable for any periodic payments becoming due and
payable on or after
Assignment Date,

	 	 	without recourse to the Sublessor.

	8.3	 	Reimbursements
	 
	 	 	Heartware and RBC acknowledge that if the Sublessor is required, on or
after the Assignment Date, to reimburse any monies paid by Heartware
before the Assignment Date, then notwithstanding the assignment of the
Sublease, the Sublessor will make that payment to Heartware.

 

 

			
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Consent terms

 

	8.4	 	Shortfall
	 
	 	 	Heartware acknowledges that:

	 	(a)	 	any periodic payment made under the Sublease on an estimated basis will be
adjusted at the end of the year to which the periodic payment relates; and
	 
	 	(b)	 	notwithstanding the assignment of the Sublease, Heartware is liable for any
shortfall in the payment for any period before the Assignment Date. RBC has
no liability to the Sublessor for any shortfall in any payment made by
Heartware to the Sublessor on an estimated basis prior to the Assignment
Date,

	9	 	Bank Guarantee
	 
	9.1	 	Replacement Bank Guarantee
	 
	 	 	RBC must give the Sublessor a Bank Guarantee for the amount specified in Item 6, on or
before the date of this deed.

	9.2	 	Sublease applies
	 
	 	 	The provision in the Sublease relating to the bank guarantee required under the
Sublease apply to the Bank Guarantee provided by RBC in accordance with this deed.

	9.3	 	Return original Bank Guarantee
	 
	 	 	If:

	 	(a)	 	RBC provides the Sublessor with a replacement Bank Guarantee in
accordance with clause 9.1; and
	 
	 	(b)	 	the Sublessor, acting reasonably, is satisfied that Heartware has complied
with its obligations under the Sublease up to the Assignment Date,

	 	 	the Sublessor will return any bank guarantee that was provided by Heartware under the
Sublease, to Heartware or the issuing bank promptly after the Assignment Date.

	10	 	Originals and registration
	 
	10.1	 	Delivery
	 
	 	 	On or before the date of this deed, RBC must deliver:

	 	(a)	 	the Transfer (executed by Heartware and RBC); and
	 
	 	(b)	 	the Variation of Sublease (executed by RBC).

	 	 	to the Sublessor.

	 	 	The Sublessor will promptly execute the Variation of Sublease, and then return the
Transfer, the executed Variation of Sublease and all executed counterparts of this deed to
RBC.

 

 

			
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Consent terms

 

	10.2	 	Stamping and registration
	 
	 	 	Promptly after receipt of the documents from the Sublessor in accordance with clause
10.1, RBC must:

	 	(a)	 	stamp this deed;
	 
	 	(b)	 	stamp and register the Transfer; and
	 
	 	(c)	 	stamp and register the Variation of Sublease,
	 
	 	and return:
	 
	 	(d)	 	a stamped counterpart of this deed to Heartware and the Sublessor;
	 
	 	(e)	 	a stamped and registered counterpart Variation of Sublease to the Sublessor.

	10.3	 	Original Sublease
	 
	 	 	On the Assignment Date, Heartware must give RBC the original counterpart Sublease
and the original counterpart Deed of Consent to Sublease between Heartware, the
headlessor’s and the Sublessor’s predecessor in title.

	11	 	Access date
	 
	11.1	 	Vacant possession
	 
	 	 	Heartware must use its reasonable efforts to provide RBC with vacant possession of the
Premises on the Assignment Date.

	11.2	 	Late delivery
	 
	 	 	If, despite its reasonable efforts, Heartware is unable to give RBC vacant possession of
the Premises by the Assignment Date, then Heartware may remain in occupation of the
Premises on the terms specified in clause 11.3 for a maximum period of 30 days.
	 
	 	 	Heartware must give RBC at least 5 business days notice of the date on which it will
give RBC vacant possession.

	11.3	 	Licence terms
	 
	 	 	The licence is from day to day and terminates on the earlier of:

	 	(a)	 	31 July 2007; or
	 
	 	(b)	 	the date notified by Heartware to RBC and of which RBC has had at least two
business days notice.

	 	 	Heartware must pay RBC a licence fee at a daily rate of $600 plus GST for reach day or
part thereof until Heartware provides vacant possession of the Premises to RBC.
	 
	 	 	During the period of the licence, Heartware must comply with terms of the Sublease as if
it were the sublessee named in the Sublease (except as modified by this clause in relation
to the licence fee).

 

 

			
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Consent terms

 

	12	 	Exercise of option
	 
	12.1	 	Option
	 
	 	 	RBC gives the Sublessor notice in accordance with the terms of the Sublease (by reference
to clause 17 of the Headlease) that it exercises the option to renew the Sublease for a
further period of 2 years 11 months effective on the Assignment Date.

	12.2	 	Giving effect to option
	 
	 	 	The Sublessor and RBC agree to give effect to the exercise of the option under clause 12.1
and to further extend the term of the option lease to 29 June 2011 by entering into the
Variation of Sublease on the same date as this deed and to be effective on and from the
Assignment Date and to be registered by the Sublessor after the Transfer.

	13	 	Makegood
	 
	13.1	 	Head lessor’s consent
	 
	 	 	Heartware must do everything reasonably necessary to assist RBC to submit and pursue the
Headlessor’s approval of RBC’s fitout plans for the Premises. RBC agrees to pay any
reasonable costs incurred by Heartware in connection with fulfilling its obligations under
this clause.

	13.2	 	Handover condition
	 
	 	 	At the later of the Assignment Date or the access date under clause 11, the Premises must
be in the same or substantially similar condition to the condition they were in at the
date of this deed (subject to clause 9.5 of the Headlease — relating to destruction of the
Premises).

	13.3	 	Contribution
	 
	 	 	Heartware must contribute $40,000 plus GST to RBC’s makegood of Heartware’s fitout in the
Premises (makegood contribution).
	 
	 	 	Heartware must pay the makegood contribution to RBC on the date of this deed provided that
RBC has first provided a tax invoice from RBC or its contractor to Heartware.

	14	 	General
	 
	14.1	 	Costs
	 
	 	 	RBC must pay:

	 	(a)	 	the Sublessor’s reasonable legal costs in connection with the
transaction
contemplated by this deed;
	 
	 	(b)	 	the Headlessor’s reasonable legal costs in relation to the Deed of Consent
to
Sublease;
	 
	 	(c)	 	the duty on the Transfer;

 

 

			
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Consent terms

 

	 	(d)	 	the duty on this deed;
	 
	 	(e)	 	the duty on the Variation of Sublease;
	 
	 	(f)	 	the fee for registering the Transfer at the Department of Lands; and
	 
	 	(g)	 	the fee for registering the Variation of Sublease at the Department of Lands.

	14.2	 	GST
	 
	 	 	In this clause 14.2, a word or expression defined in the A New Tax System(Gods and
Service Tax) Act 1999 (Cth) has the meaning given to it in that Act.
	 
	 	 	If one party is required to pay for a taxable supply under this deed, then unless
otherwise stated, the consideration for that supply must be grossed up to include GST if
the supplier provides the payer with a tax invoice for the GST inclusive amount.
	 
	 	 	If one party reimburses the other for an expense, the reimbursement amount must be
netted down to the extent that the party being reimbursed is entitled to an input tax
credit for the payment.

	14.3	 	Amendment
	 
	 	 	This deed may only be varied or replaced by a document executed by the parties.

	14.4	 	Counterparts
	 
	 	 	This deed may consist of a number of counterparts and, if so, the counterparts taken
together constitute one document.

	14.5	 	Entire understanding
	 
	 	 	This deed, the Sublease and the Variation of Sublease contain the entire
understanding between the parties as to the subject matter of this deed.

	14.6	 	Further assurance
	 
	 	 	Each party must do, sign, execute and deliver all deeds, documents, instruments and acts
reasonably required of it by notice from another party to carry out and give full effect
to this deed and the rights and obligations of the parties under it.

 

 

			
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Signing page

 

Executed as a deed.

	 	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	EXECUTED by ZCM ASIA HOLDINGS 

PTY LIMITED

	 	 	)	 	 	 
	 

	 	 	 	 	 	 
	Company Secretary/Director

	 	 	 	 	 	Director
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name of Company Secretary/Director
(print)

	 	 	 	 	 	Name of Director (print)
	 
	 	 	 	 	 	 
	 

	 	 	)	 	 	 
	EXECUTED by ZURICH CAPITAL

	 	 	)	 	 	 
	MARKETS ASIA PTY LIMITED
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Company Secretary/Director

	 	 	 	 	 	Director
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name of Company Secretary
/Director (print)

	 	 	 	 	 	Name of Director (print)
	 
	 	 	 	 	 	 
	EXECUTED by HEARTWARE 

LIMITED

	 	 	)

)	 	 	 
	 
	 	 	 	 	 	 
	/s/ David J. Mclntyre

	 	 	 	 	 	/s/ Douglas E. Godshall
	 

	 	 	 	 	 	 
	Company Secretary

	 	 	 	 	 	Director
	 
	 	 	 	 	 	 
	David J. Mclntyre

	 	 	 	 	 	Douglas E. Godshall
	 

	 	 	 	 	 	 
	Name of Company Secretary (print)

	 	 	 	 	 	Name of Director (print)
	 
	 	 	 	 	 	 
	SIGNED, SEALED and DELIVERED for ROYAL BANK OF CANADA under power of attorney in the presence of:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Signature of attorney

	 	 	 	 	 	Signature of witness
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name of attorney (print)

	 	 	 	 	 	Name of witness
	 
	 	 	 	 	 	 
	Date of power of attorney                               
	 
	 	 	 	 	 	 
	Book                                No.                               
	 
	 	 	 	 	 	 
	Registration                                                        
	 
	 	 	 	 	 	 

 

 

			
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Annexure A — Fixtures and furnishings

 

 

 

			
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Annexure A

	 	 	 
	Description of Item	 	Quantity
	Board Table (Logon 4000xl300mmin Sycamore Veneer with cable box)

	 	1
	 
	 	 
	Projector Screen (Draper Baronet Motorised 2130x2130 Matt White)

	 	1
	 
	 	 
	Bar fridge in board room

	 	1
	 
	 	 
	Fridge for kitchen

	 	1
	 
	 	 
	Coffee machine S9AP

	 	1
	 
	 	 
	Microwave - LG

	 	1
	 
	 	 
	Double filing cabinets

	 	3
	 
	 	 
	Single filing cabinets

	 	1
	 
	 	 
	Single personal filing cabinet with orange/ red soft tops

	 	13
	 
	 	 
	Side tables (green)

	 	6
	 
	 	 
	Large meeting room table

	 	1
	 
	 	 
	Small meeting room table

	 	1
	 
	 	 
	Meeting room chairs - small

	 	1
	 
	 	 
	Chairs -  large

	 	21
	 
	 	 
	Workstations

	 	4

 

Annexure B — Variation of sublease

 

 

 

			
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	Form:       01TL 

Licence:   03-11-061

Licensee: Blake Dawson Waldron

	 	TRANSFER OF LEASE

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

New South Wales

Real Property Act 1900

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	STAMP DUTY	 	Office of State Revenue use only	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 
	(A)	 	LEASEMORTGAGE/

CHARGE	 	AB545729B	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	(B)	 	TORRENS TITLE	 	Folio identifier 12/1048563	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	(C)

	 	LODGED BY
	 	Delivery

Box

238N
	 	Name, Address or DX and Telephone

Blake Dawson Waldron

DX 355 Sydney

Tel: 02 9258 6000

Reference (optional): BLB.02-1417-6955
	 	CODE

TL

TM

TC	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	(D)	 	TRANSFEROR	 	HEARTWARE LIMITED

ACN 111 970 257	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	(E)	 	 	 	The transferor acknowledges receipt of the consideration of $

and transfers to the transferee all the transferor’s estate and interest in the lease specified above.	 
	 
	(F)	 	 	 	Encumbrances (if applicable): 1.                               2.                              3.	 
	 	 	 	 	 	 
	(G)	 	TRANSFEREE	 	ROYAL BANK OF CANADA

ARBN 076 940 880
 	 
	(H)	 	 	 	TENANCY:	 
	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	DATE
	 	 	 	/
	 	 	 	/	 	 	 	 
	 

	 	 	 	dd
	 	 	 	mm
	 	 	 	yyyy
	 	 

	 	 	 	 	 	 	 	 	 
	(I)	 	See annexure for execution.

					
	 	 	 	 	 
	 
	 	Page 1 of 2
	 	All handwriting must be in block capitals

 

ANNEXURE TO TRANSFER OF LEASE MORTGAGE OR CHARGE BETWEEN HEARTWARE LIMITED ACN
111 970 257 AND ROYAL BANK OF CANADA ARBN 076 940 880 DATED

Certified correct for the purposes of the Real Property Act 1900
and executed on behalf of the corporation named below by the
authorised person(s) whose signature(s) appear(s) below pursuant
to the authority specified: Corporation: HEARTWARE LIMITED ACN
111 970 257 Authority: section 127 of the Corporations Act
2001

	 	 	 	 	 
	/s/ Douglas E. Godshall	 	/s/ David J. Mclntyre
	 	 	 
	Signature of authorised person	 	Signature of authorised person
	 
	 	 	 	 
	DOUGLAS E. GODSHALL	 	DAVID J. MCLNTYRE
	 	 	 
	Name of authorised person	 	Name of authorised person
	 
	 	 	 	 
	MANAGING DIRECTOR	 	SECRETARY
	 	 	 
	Office held	 	Office held
	 
	 	 	 	 
	I certify that the attorney(s)
signing opposite, with whom
I am personally acquainted or as
to whose identity I am otherwise
satisfied, signed this transfer
of lease in my presence.	 	Certified correct for the purposes of the Real Property Act 1900
by the
attorney(s) named below who signed this transfer of lease pursuant to the power of attorney specified.
	 
	 
	 	 	 	 
	 	 	 
	Signature of witness	 	Signature of attorney(s)
	 
	 	 	 	 
	 	 	 
	 	 	Attorney’s name(s)
	 
	 	 	 	 
	 	 	Royal Bank of Canada
	 	 	 
	Name of witness	 	Signing on behalf of
	 
	 
	 	 	 	 
	 	 	 
	Address of witness	 	Power of attorney - Book
	 
	 	 	 	 

	 
	 	 	 	 
	 

	 	-No	 	 
	 

	 	 	 	 

					
	 	 	 	 	 
	 
	 	Page 2 of 2
	 	All handwriting must be in block capitals

 

I certify that the attorney(s) signing opposite,
with whom I am personally acquainted or as
to whose identity I am otherwise satisfied, signed this variation of lease in my presence.

/s/ Mark Linton Simpkins

 
Signature of witness

MARK LINTON SIMPKINS

 
Name of witness

C/- ROYAL BANK OF CANADA

 
Address of witness

LEVEL 46, 2 PARK ST. SYDNEY, NEW, 2000.

 

Certified correct for the purposes of the Real Property Act 1900 by the attorney(s) named below who
signed this variation of lease pursuant to the power of attorney specified.

/s/ Rodney Darren Ireland

 
Signature of attorney(s)

RODNEY DARREN IRELAND

 
Attorney[‘s/s’] name(s)

Royal Bank of Canada

 
Signing on behalf of

	 	 	 
	
Power of attorney - Book
	 	 
	 

	 	 
	 
	 	 
	No
	 	 
	 

	 	 

					
	 	 	 	 	 
	All handwriting must be in block capitals
	 	Page 3 of 3
	 	 

 

 

	 	 	 	 	 	 	 
	Form:

	 	01TL
	 	TRANSFER OF LEASE	 	 
	Licence:

	 	03-11-061
	 	MORTGAGE OR CHARGE
	 	Leave this space clear. Affix additional
	Licensee:

	 	Blake Dawson Waidron
	 	 	 	pages to the top left-hand corner.

New South Wales

Real Property Act 1900

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	STAMP DUTY	 	Office of State Revenue use only	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	(A)	 	LEASEMORTGAGE CHARGE	 	AB545729B	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	(B)	 	TORRENS

TITLE	 	Folio identifier 12/1048563	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	(C)

	 	LODGED BY
	 	Delivery Box

238N
	 	Name, Address or DX and Telephone

Blake Dawson Waldron

DX 355 Sydney

Tel: 02 9258 6000

Reference (optional): BLB.02-1417-6955
	 	CODE

TL
 TM 
TC

	 
	 	 	 	 
	(D)	 	TRANSFEROR	 	HEARTWARE LIMITED 
ACN 111 970 257	 	 	 	 
	 
	 	 	 	 
	(E)	 	 	 	The transferor acknowledges receipt of the consideration of $ 

and transfers to the transferee all the transferor’s estate and interest
in the lease specified
above.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(F)	 	 	 	Encumbrances (if applicable): 1.                  2.                    3. 	 	 	 	 
	 
	 	 	 	 
	(G)	 	TRANSFEREE	 	ROYAL BANK OF CANADA

ARBN 076 940 880	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(H)

	 	 	 	TENANCY:	 	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	DATE	 	               /               /

     dd          mm          yyyy	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	(I)	 	See annexure for execution.	 	 	 	 

					
	 	 	 	 	 
	 
	 	Page 1 of 2
	 	All handwriting must be in block capitals

 

 

ANNEXURE TO TRANSFER OF LEASE MORTGAGE OR CHARGE BETWEEN HEARTWARE LIMITED ACN
111 970 257 AND ROYAL BANK OF CANADA ARBN 076 940 880 DATED

I certify that the authorised officer signing opposite, with whom I am personally acquainted
or as to whose identity I am otherwise satisfied, signed this transfer of lease in my presence.

 
Signature of witness

 
Name of witness

 
Address of witness

 

I certify that the attorney(s) signing opposite, with whom I am personally acquainted or as to
whose identity I am otherwise satisfied, signed this transfer of lease in my presence.

/s/ MARK LINTON SIMPKINS

 
Signature of witness

MARK LINTON SIMPKINS

 
Name of witness

C/- ROYAL BANK OF CANADA

 
Address of witness

LEVEL 46, 2 PARK ST, SYDNEY, NEW, 2000.

 

Certified correct for the purposes of the Real Property Act 1900 by the authorised officer named
below.
 

 
Signature of authorised officer

 
Authorised officer’s name

 
Authority of officer

Heartware Limited

 
Signing on behalf of

Certified correct for the purposes of the Real Property Act 1900 by the attorney(s) named below who
signed this transfer of lease pursuant to the power of attorney specified.

/s/ Rodney Darren Ireland

 
Signature of attorney(s)

RODNEY DARREN IRELAND

 
Attorney[‘s/s’] name(s)

Royal Bank of Canada

 
Signing on behalf of

	 	 	 
	Power of attorney - Book
	 	4420
	 

	 	 
	 
	 	 
	No
	 	77
	 

	 	 

					
	 	 	 	 	 
	 
	 	Page 2 of 2
	 	All handwriting must be in block capitalsexv10w40

 

Exhibit 10.40

LEASE 

ARTICLE 1 - REFERENCE DATA

1.1     Subjects Referred To

          Each reference in this Lease to any of the following subjects shall be construed to
incorporate the date stated for that subject in this Section 1.1:

	 	 	 
	DATE:
	 	December 27, 2006
	 
	 	 
	LANDLORD:
	 	Atlantic-Philadelphia Realty LLC
	 
	 	 
	LANDLORD ADDRESS:
	 	c/o Atlantic Management

	 
	 	Corporation 205 Newbury Street

	 
	 	Framingham, Massachusetts 01701
	 
	 	 
	BUILDING:
	 	The building situated on Newbury Street, Framingham,

	 
	 	Middlesex County, Massachusetts, known as #205

	 
	 	Newbury Street (the “Premises”), upon the Lot (the “Lot”) 

	 
	 	more particularly described on Exhibit A attached hereto 

	 
	 	and made a part hereof.
	 
	 	 
	TENANT:
	 	HeartWare, Inc.
	 
	 	 
	TENANT SPACE:
	 	Those premises to be used as OFFICE SPACE located

	 
	 	on the first (1st) floor of the Premises, as shown on floor

	 
	 	plan attached here to as Exhibit B and identified as Suite
	 
	 	#101.
	 
	 	 
	RENTABLE FLOOR AREA
	 	 
	OF TENANT SPACE:
	 	3,530 rentable square feet
	 
	 	 
	TOTAL RENTABLE
	 	 
	FLOOR AREA OF
	 	 
	THE BUILDING:
	 	56,865 square feet
	 
	 	 
	TENANT’S
	 	 
	PROPORTIONATE
	 	 
	SHARE:
	 	6.2%
	 
	 	 
	TERM:
	 	Four (4) Years
	 
	 	 
	RENT AND TERM
	 	 
	COMMENCEMENT DATE:
	 	January 15,2007
	 
	 	 
	OCCUPANCY DATE:
	 	January 15, 2007

 

 

	 	 	 
	TERMINATION DATE:
	 	January 31, 2011
	 
	 	 
	ANNUAL FIXED RENT:
	 	The sum of $21.50/Sq.Ft., which equates to an Annual Fixed Rent of $75,895.00 per annum.
	 
	 	 
	MONTHLY FIXED RENT:
	 	Tenant shall pay the Annual Fixed Rent of $75,895.00 in EQUAL MONTHLY installments of $6,324.58. All such monthly installments are due ON OR BEFORE THE
1ST of each month, beginning with the first payment due on the Commencement Date.
	 
	 	 
	OPTION:
	 	Tenant shall have one (1) option to extend the term of this Lease for an additional three years.
	 
	 	 
	SECURITY DEPOSIT:
	 	Tenant shall deposit the sum equal to one (1) month’s rent or $6,324.58, which shall be held by Landlord as a Security Deposit. Said deposit shall be held by Landlord
in a non-interest bearing account and shall be due and payable by Tenant upon execution of this Lease.
	 
	 	 
	BASE YEAR FOR
	 	 
	CALCULATING
	 	 
	LANDLORD’S
	 	2007
	OPERATING
	 	 
	EXPENSE:
	 	 
	 
	 	 
	PERMITTED USES:
	 	First Class General Office Space
	 
	 	 
	PUBLIC LIABILITY
	 	 
	INSURANCE BODILY
	 	 
	INJURY:
	 	$1,000,000 Combined Single Limit Coverage
	 
	 	 
	BROKER:
	 	R.W. Holmes Realty Co., Inc.
	 
	 	 
	PARKING:
	 	Tenant will receive 3.8 parking spaces per 1,000 square feet of rented space, or 13 parking spaces, on a first come first serve basis.

1.2     Exhibits

          The Exhibits listed below in this Section 1.2 are incorporated in this Lease by
reference and are to be construed as part of this Lease:

Exhibit A - Description of Lot

Exhibit B - Floor Plan Showing Tenant’s Space

 

 

Exhibit C - Landlord’s Services

Exhibit D - Rules and Regulations

Exhibit E - Estoppel Certificate

Exhibit F - Landlord’s Work

1.3     Table of Contents by Article and Section;

1.      Reference Data

1.1       Subjects Referred To

1.2       Exhibits

1.3       Table of Contents

2.      Premises and Term

2.1       Premises

2.2       Common Facilities

2.3       Landlord’s Reservations

2.4       Term

2.5       Option to Renew

2.6       Holdover Penalty

3.      Alteration

3.1       Preparation of Premises for Occupancy

3.2       Tenant Changes and Additions

3.3       General Provisions Applicable to Construction

4.      Rent

4.1       Fixed Rent

4.2       Operating Expenses Including Real Estate Taxes

4.3       Lot

4.4       Accounting

4.5       Payment of Additional Rent

5.      Landlord’s Covenants

5.1      Landlord’s Covenants

5.2      Interruptions

6.      Tenant’s Covenants

6.1       Tenant’s Covenants

7.      Casually and Taking

7.1      Casualty and Taking

7.2      Reservations of Award

8.      Right of Mortgage

 

 

8.1       Subordination

8.2       Entry Other Than For Foreclosure

8.3       Entry For Foreclosure

8.4       No Prepayment

8.5       No Release or Termination

8.6       No Modification, Etc.

8.7       Continuing Offer

8.8       Implementation

8.9       Financing

9.      Defaults

9.1       Events of Default

9.2       Tenant’s Obligations After Termination

9.3       Landlord’s Default

10.      Miscellaneous

10.1       Measurement

10.2       Titles

10.3       Notice of Lease

10.4       Consent

10.5       Notice

10.6       Bind and Inure

10.7       No Surrender

10.8       No Waiver, Etc.

10.9       No Accord and Satisfaction

10.10     Cumulative Remedies

10.11     Partial Invalidity

10.12     Landlord’s Rights to Cure Tenant’s Default

10.13     Estoppel Certificate

10.14     Waiver of Subrogation

10.15     Brokerage

10.16     Security Deposit

11.      Arbitration

ARTICLE 2 - PREMISES AND TERM 

2.1     Premises

          Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this
Lease, Tenant’s Space in the Building on the Lot referred to in Section 4.3 below and described in
Exhibit A, excluding exterior faces of exterior walls, the common stairways, stairwells, elevators
and elevator wells, and pipes, ducts, conduits, wires and appurtenant fixtures serving exclusively
or in common other parts of the Building, and if Tenant’s space includes less than the entire
rentable area of any floor, excluding the central core area of

 

 

such floor. Tenant’s Space, with said exclusions, is hereinafter sometimes referred to as the
“Premises”. Tenant shall have access to the Premises twenty four hours a day, seven days a week.

2.2      Common Facilities

          Tenant shall have, as appurtenant to the Premises, rights to use in common with others now or
hereafter entitled thereto, subject to reasonable rules of general applicability to Tenants of the
Building from time to time made by Landlord of which Tenant is given notice: (1) the common
facilities of the Building and Lot including common walkways, driveways, lobbies, hallways, ramps,
stairways, elevators, loading platform and the parking area; (2) the common pipes, ducts,
conduits, wires and appurtenant equipment serving the Premises; and (3) if the Premises include
less than the entire rentable area of any floor, the common toilets and other common facilities in
the central core area of such floor

2.3    Landlord’s Reservations

          Landlord reserves the right, from time to time, without unreasonable interference with
Tenant’s use: (1) to install, repair, replace, use, maintain and relocate for service to the
Premises and to other parts of the Building, pipes, ducts, conduits, wires and appurtenant
fixtures wherever located in the Building, and (2) to alter or relocate any other common facility,
provided that the substitution are substantially equivalent or better. Installations, replacements
and relocations referred to in this Section 2.3 shall be located as far as practicable in the
central core area, above ceiling surfaces, below floor surfaces or within the perimeter walls of
the Premises.

2.4    Term

          To have and to hold for a period commencing on with the scheduled Term Commencement Date and
continuing for the Term unless sooner terminated as provided in Section 7.1 or in Article 9 below.
Notwithstanding anything contained in this Lease to the contrary, if Landlord’s Work (as
subsequently defined) is not completed by the scheduled Term Commencement Date, then the Term
Commencement Date and the Rent Commencement Date shall be adjusted so as to commence five days
after Landlord receives all governmental approvals reflecting that the Landlord’s Work (as
subsequently defined) has been completed according to the appropriate regulations and the Premises
is ready for Tenant to occupy and use the Premises to conduct business.

2.5     Option to Renew

          (a)      Subject to the conditions set forth below, Tenant is granted an Option to Renew this Lease
for one (1) consecutive (additional) term of three (3) years (the “Renewal Term”), such Renewal
Term commencing on the day following the expiration of this Lease. Said Option to Renew this Lease
shall be on the same terms and conditions and provisions and covenants as set forth herein (except
as specifically set forth hereunder). The Renewal Term shall be subject to and provided that Tenant
(a) is not is default beyond the expiration

 

 

of any applicable cure period or the monetary covenant, or a material non-monetary covenant under
this Lease; (b) this Lease is still in full force and effect; (c) Tenant shall not have sublet,
assigned, or otherwise transferred all or any portion of its interest under this Lease in
violation of the terms of this Lease; and (d) Tenant shall have exercised this Option at least
seven (7) months prior to the expiration of the Lease Term, then the Tenant may renew this Lease
as set forth below.

          (b)      The Base Rent during the Renewal Term shall be equal to the greater of the
Tenant’s then current rental rate, or the fair market value rent. For the purpose of this Section,
fair market value rent shall mean the Base Rent plus such additional financial terms in the nature
of rent and rent adjustments customarily then being included in leases for comparable premises
within a one mile radius of the Property. Tenant shall, during the Renewal Term, pay its
proportionate share of Landlord’s Operating Expenses and its proportionate share of Real Estate
Taxes. Said fair market value rent for the Premises shall be agreed upon by Landlord and Tenant;
provided, however, if Landlord and Tenant are unable to agree on said fair market value rent within
thirty (30) days of the date of the date of Tenant’s notice to extend, said fair value effective
rent shall be conclusively determined by three (3) appraisers. Within fifteen (15) days of the
expiration of such thirty (30) day period, Landlord and Tenant shall each select an appraiser, who
shall select a third. Should the two appraisers fail to agree on a third within fifteen (15) days
of the date on which such appraisers have been appointed, or if either Landlord or Tenant shall
fail to appoint an appraiser within the time provided, such appraiser shall be appointed by the
American Institute of Appraisers. Each party shall bear the cost of the appraiser selected by such
party, and the cost of the third appraiser shall be shared equally by Landlord and Tenant. If the
three appraisers are unable to agree upon such fair market effective rent within fifteen (15) days
of the appointment of the third appraiser, the fair market effective rent shall be that determined
by the appraiser not selected by either Landlord or Tenant.

          (c)      Except as provided above, all of the terms, covenants and agreements contained in this
Lease shall continue during the Renewal Term.

2.6     Hold-Over Penalty

          Tenant shall be liable to pay one and one-half times (1.50 times) the Base Rental Amount for
any hold-over period in the event Tenant fails to vacate on or before the applicable Expiration
Date.

ARTICLE 3 - ALTERATIONS 

3.1    Preparation of Premises for Occupancy

          Tenant shall accept the Premises in their “as is” and present condition, except that prior to
the Term Commencement Date, Landlord, at its expenses, shall perform the work

 

 

described on Exhibit F to Tenant’s satisfaction (“Landlord’s Work”). In connection with the
foregoing, Landlord represent, warrants and covenants that as of the date hereof, (a) the Premises
(including without limitation all structural and nonstructural systems, equipment and apparatus
therein and/or appurtenant thereto) is in good working order and condition and (b) the Premises is
in compliance with all local, state and federal laws, statutes, ordinances and regulations and the
Premises shall remain in such good working order and condition, and the Premises shall remain in
such condition and in such compliance up to and including the Term Commencement Date.

3.2     Tenant Changes and Additions

          Tenant may, from time to time, after commencement of the Term, make changes and additions to
the Premises in accordance with plans and specifications therefore first being approved by
Landlord, which Landlord will not approve if they will require unusual expense to readapt the
Premises to normal office use on lease termination or will increase the cost of insurance or taxes
on the Building or of Landlord’s services called for by Section 5.1, unless Tenant first gives
assurances acceptable to Landlord for payment of such increased cost and that such readaptation
will be made prior to such termination without expense to Landlord. In the event such changes
and/or additions are cosmetic in nature and cost less than $25,000, then Landlord’s consent shall
not be required. All such changes and additions shall be part of the Building except Tenant’s
business equipment, business furnishings and other special items relating to Tenant’s business.
Such other special items shall include only those items which the parties agree in writing at the
time of approval shall be removed by Tenant on termination of the Lease, or which Landlord agrees
in writing that Tenant may elect to remove or leave, provided that the Building is not damaged by
removal nor reduced below the then building standard. All of Tenant’s changes and additions and
installations of furnishings shall be coordinated with any work being performed by Landlord and in
such manner as to maintain harmonious labor relations and not to damage the Building or Lot or
interfere with Building operation and, except for installation of furnishings, shall be performed
by Landlord’s general contractor or by contractors or workmen first approved by Landlord. Except
for work by Landlord’s general contractor, Tenant, before its work is started shall: (a) secure all
licenses and permits necessary therefore, (b) deliver to Landlord a statement of the names of all
its contractors and subcontractors and the estimated cost of all labor and material to be furnished
by them, (c) cause each contractor to carry workmen’s compensation insurance in statutory amounts
covering all of the contractor’s and subcontractor’s employees, comprehensive public liability
insurance with limits in no event less than $1,000,000 combined single limited coverage and
property damage insurance with limits of not less than $1,000,000 (all such insurance to be written
insuring Landlord and Tenant as well as the contractor, and (d) deliver to Landlord certificates of
all such insurance. Tenant agrees to pay promptly, when due, the entire cost of any work done on
the Premises by Tenant, its agent, employees or independent contractors, and not to cause or permit
any liens for labor or materials performed or furnished in connection therewith to attach to the
Premises. Tenant agrees to immediately discharge any such liens which may be so attached.

 

 

3.4     General Provisions Applicable to Construction

          All construction work required or permitted by this Lease, whether by Landlord or Tenant,
shall be done in a good and workmanlike manner and in compliance with all applicable laws and all
lawful ordinances, regulations and orders of governmental authority and insurers of the Building.
Either party may inspect the work of the other at reasonable times, and shall promptly give notice
of observed defects.

ARTICLE 4 - RENT

4.1     Fixed Rent

          Tenant agrees to pay, without any offset or deduction whatever except as made in accordance
with the provisions of this Leased, Annual Fixed Rent at the rate set forth in Section 1.1 above in
equal monthly installments (“Monthly Fixed Rent”) at the rate set forth in Section 1.1 above, on
the first day of each calendar month including in the Term hereof and for any portion of a calendar
month at the beginning or the end of the Term, unless otherwise excluded hereunder, at the rate
payable in advance for such portion.

4.2     Operating Expenses - Including Real Estate Taxes

	 	(a)	 	If, with respect to any calendar year of the Term after the Base Year for
calculating Landlord’s Operating Expenses set forth in Section 1.1, or fraction
thereof, Landlord’s Operating Expenses for the Building and Lot either:
	 
	 	(i)	 	for a full calendar year exceed Landlord’s Initial Operating Expenses, as
defined below (as the same may be reduced from time to time pursuant to the following
sentence), or for any fraction of a calendar year exceed the corresponding fraction
of such Landlord’s Initial Operating Expenses; or

	 	   (ii)	 	for a full calendar year are less than Landlord’s Initial
Operating Expenses (as the same may be reduced from time to time pursuant to
the following sentence), or for any fraction of a calendar year are less than
the corresponding fraction of such Landlord’s Initial Operating Expenses;

	 	 	 	then, on or before the thirtieth (30th) day following receipt by Tenant of the
statement referred to below in this Section 4.2, Tenant shall, in the case of (i) pay
to Landlord, as additional rent, Landlord’s Operating Expenses allocable to the
Premises, as defined below in this Section 4.2, or in the case of (ii) Landlord
shall, if the Tenant is paying previously a monthly estimated operating expense
charge, credit over the next year such amount against monthly installments of
operating expense next coming due.

 

 

(b)      Within one hundred twenty days from the end of the calendar year, Landlord shall render to
Tenant an audited statement (“Statement”) in reasonable detail and according to usual accounting
practices showing for the preceding calendar year or fraction thereof, as the case may be,
Landlord’s Operating Expenses for the Building and Lot, excluding costs of special services
rendered to tenants (including Tenant) for which a special charge is made, but including without
limitation: real estate taxes on the Building and Lot; installments and interest on assessments for
public betterments or public improvements, whether or not deductible from any condemnation award,
such assessments to be paid over the longest period permitted by law; expenses of any proceedings
for abatement of taxes and assessments with respect to any calendar year or fraction of a calendar
year; premiums for insurance of any kind normally carried by owners of similar properties
(including insurance in case of fire or casualty against loss of up to eighteen monthly
installments of fixed and additional rent) or, if there be any mortgage of the Lot or Building, or
both, the insurance as may be required by the holder of the mortgage; compensation and all fringe
benefits, workmen’s compensation insurance premiums and payroll taxes paid by Landlord to, for or
with respect to all persons substantially engaged in the operating, maintaining or cleaning of the
Building or Lot; steam, water, sewer, electric, gas and telephone charges not chargeable to
tenants; cost of building and cleaning supplies and equipment; and cost of maintenance, cleaning
and repairs (other than repairs not properly chargeable against income or for which Landlord has
received reimbursement from contractors under guaranties); cost of snow removal and care of
landscaping; payments under service contracts with independent contractors; management fees at a
rate of five percent (5%) of total rent from all tenants; and all other reasonable and necessary
expenses paid in connection with the operation, cleaning and maintenance of the Building and Lot
and properly chargeable against income. Notwithstanding any provision to the contrary contained
herein, Landlord’s Operating Expenses shall not include (a) costs and expenses of a capital nature,
including but not limited to, original or new construction or installation of any capital
investments, or improvements, unless such capital investments or improvements are intended to
reduce operating expenses, in which event Landlord shall be entitled to charge the amortized value
of such capital investments or improvements; (b) any amounts incurred for labor, materials or
services that are not directly employed or used in the performance of Landlord’s obligations under
this Section; (c) any cost or expense for which Landlord or the Building is reimbursed by other
parties; (d) any repairs to the Common Area necessitated by any construction in the Building; (e)
costs and expenses incurred to the extent that the same are attributable to Landlord’s negligence
or breach of its obligations under this Lease or any other lease or premises in the Building; (f)
costs and expenses relating to or arising from correcting defects in, or the inadequacy of the
construction of, the Building or other improvements located in the Building; (g) costs of
alterations or improvements to the premises of other tenants in the Building; (h) interests,
principal payments, and other costs of any indebtedness encumbering the Building or any portion
thereof; (i) legal fees, space-planner’s fees, architectural fees, engineering fees, real estate
commissions, and marketing and advertising expenses incurred in connection with the development,
leasing, and construction of

 

 

the Building or any portion thereof; (j) any bad debt losses, rent losses or reserves for bad debt
or rent losses; (k) costs of selling, syndicating, financing, mortgaging, hypothecating, or ground
leasing any of Landlord’s interest in the Building; (1) the wages of employees who do not devote
the majority of their time to the Building; provided, however, the costs associated with such
employees who do not devote the majority of their time to the Building may be prorated and such an
amount may be included as a Landlord’s Operating Expense to the extent that such employees devote
their time to the Building; (m) the cost of utility installation and tap-in charges; (n) any
investigation, monitoring, remediation or other cost or expense arising from or relating to the
existence of Hazardous Substances in, on or under the Building; (o) the costs of compliance with
applicable legal requirements (including, without limitation, the cost of curing violations of or
contesting such legal requirements); (p) any costs which would have been reimbursed or paid for by
insurance proceeds had Landlord maintained the insurance required under this Lease and the amount
of any judgment or other charge entered or costs assessed against Landlord in excess of the policy
limits of the insurance maintained by Landlord pursuant to this Lease; (q) Landlord’s advertising,
entertainment and promotional costs for the Building (including, without limitation, holiday
decorations); (r) costs of acquiring, leasing, restoring, insuring or displaying sculptures,
paintings and other objects of art located within or outside the Building; (s) reserves for
anticipated future expenses; or (t) any costs or expense to the extent that such cost or expense
either exceeds the prevailing market rate for such product or service or relates to a type,
quality or quantity of service or product not customarily included within common area charges in
other Building of comparable size, quality and location to the Building. The term “capital
expenditure” as used herein shall mean an expenditure that (i) adds to the value of the component
of the Common Area in question, or (ii) appreciably prolongs the useful life of the component of
the Common Area in question, but shall specifically exclude expenditures that only serve to keep
such component of the Common Area in an ordinarily efficient operating condition. In addition, if
any tenant or other occupant of the Building pays directly for costs which would otherwise be
included in the Landlord’s Operating Expenses, then the costs associated with or attributable to
any of the foregoing shall be excluded from Landlord’s Operating Expenses.

	 	(c)	 	If some other method or type of assessment or taxation shall replace the current
method of assessment or the type of real estate taxes, Tenant agrees to pay an
equitable share of the same computed in a fashion consistent with the method
of computation herein provided, to the end that Tenant’s share thereof shall be,
to the maximum extent practicable, comparable to that which Tenant would
bear under the foregoing provisions. If a tax (other than a Federal or State net
income tax) is assessed on account of the rents or other charges payable by
Tenant to Landlord under this Lease, the Tenant agrees to pay the same within
ten (10) days after billing therefore, unless applicable law prohibits the
payment of such tax by Tenant.
	 
	 	(d)	 	Landlord’s Initial Operating Expenses shall be Landlord’s expenses for the Base
Year for Calculating Landlord’s Base Operating Expenses set forth in Section

 

 

	 	 	 	1.1. Landlord’s Operating Expenses Allocable to the Premises for any particular year shall
be determined by multiplying the difference between Landlord’s Operating Expenses for the
Building and Lot for the items covered by the foregoing statement for such year and
Landlord’s Initial Operating Expenses times a fraction, the numerator of which is the
Rentable Floor Area of Tenant’s Space and the denominator of which is the Total Rentable
Floor Area of the Building (“Tenant’s Proportionate Share”). In case of special services
which are not rendered to all areas on a comparable basis, the proportion allocable to the
Premises shall be the same proportion which Rentable Floor Area of Tenant’s Space bears to
the total rentable floor area of the Building to which such service is so rendered (such
latter area to be determined in the same manner as the Total Rentable Floor Area of the
Building).

	 	(e)	 	If Tenant questions a component of the Landlord’s Operating Expenses as
provided by Landlord, Landlord shall, within one (1) month of Tenant’s
request therefore, provide Tenant with a copy of the actual invoices or other
documentation reasonably acceptable to Tenant substantiating such component,
	 
	 	(f)	 	Landlord shall maintain accurate, detailed records of Landlord’s Operating
Expenses at Landlord’s office identified on page 1 of this Lease for at least two
(2) years after delivery of the Statement to Tenant. During the six (6) months
after a Statement is submitted to Tenant, Tenant may, upon ten (10) days’ prior
written notice to Landlord, inspect and/or audit Landlord’s records of
Landlord’s Operating Expenses for the period covered by such Statement. If
the audit shows that Tenant paid less of Tenant’s pro rata share of Landlord’s
Operating Expenses than was actually due, Tenant shall pay the amount of the
deficiency to Landlord within one (1) month after Tenant’s receipt of such
audit. If the audit shows that Tenant paid more of Tenant’s pro rate share of
Landlord’s Operating Expenses than was actually due, Landlord shall, at
Tenant’s election, pay said excess to Tenant within one (1) month after
completion of such audit or credit such excess to Tenant’s next installment of
Base Rent due. If such audit shows that such Statement contains an
overstatement of Landlord’s Operating Expenses exceeding five percent (5%)
of the actual Landlord’s Operating expenses for the period covered by such
Statement, then the reasonable third party fees and expenses actually incurred
by Tenant in conducting such audit shall be paid by Landlord; otherwise, such
fees and expenses shall be paid by Tenant. If Landlord protests the conclusions
of such audit, Landlord may contest Tenant’s determination by giving Tenant
written notice within one (1) month following Landlord’s receipt of the audit
report. If Landlord and Tenant cannot mutually agree as to Tenant’s pro rat
share of Landlord’s Operating Expenses due within one (1) month after
Tenant’s receipt of Landlord’s notice of protest, Landlord and Tenant shall
jointly               
   choose                  an   
               independent    
             Certified       
  
  
   
Public 
   
   
   
  Accountant, whose
determination shall be binding upon the parties hereto. If Landlord and Tenant
fail to agree upon an independent Certified Public Accountant, the parties agree
to proceed forthwith to arbitrate the issue in accordance with the Commercial

 

 

	 	 	Arbitration Rules of the American Arbitration Association. The cost of the
independent Certified Public Accountant or the cost of arbitration shall be borne
equally by the parties, but the cost of the audit shall be borne by either Landlord
or Tenant as aforesaid.

4.3    Lot

          “Lot” means all the land described in Exhibit A, or any part(s) thereof, plus any addition(s)
thereto resulting from the change of any abutting street line.

4.4    Accounting

          Landlord shall have the right, from time to time, to change the periods of accounting under
Section 4.2 to any annual period other than a calendar year, and upon any such change, all items
referred to in said Section 4.2 shall be appropriately apportioned. In all statements rendered
under Section 4.2 amounts for periods partially within and partially without the accounting
periods shall be appropriately apportioned. Any costs which are not determinable at the time of a
statement shall be included therein on the basis of Landlord’s estimate, and Landlord shall render
promptly after determination of such costs a supplemental statement and appropriate adjustment
shall be according thereto.

4.5    Payment of Additional Rent

          Except as otherwise specifically provided in this Lease, any sum, amount, item or charge
designated or considered as additional rent in this Lease shall be paid by Tenant to Landlord on
the first day of the month following the date on which Landlord notifies Tenant of the amount
payable, or on the thirtieth day after the giving of such notice, whichever shall be later. Any
such notice shall specify, in reasonable detail, the basis of such additional rent. On the first
day of each month following the thirtieth day in which notice of additional rent is given, Tenant
shall pay to Landlord one-twelfth (1/12) of the amount reasonably estimated by Landlord to be the
amount of additional rent which shall be payable by the Lessee for the then current year.
Reasonably estimated amounts shall, where possible, be based on actual cost experience. When the
actual, rather than reasonably estimated, amount(s) of such additional rent has been ascertained,
Landlord shall notify Tenant of the amount due, if any, giving credit for the monthly payments
theretofore made by Tenant and crediting the overage, if any, against additional rent to become
due. Tenant shall pay any balance due within thirty (30) days after Landlord’s notice.

 ARTICLE 5 - LANDLORD’S COVENANTS

5.1   Landlord’s Covenants

	 	(a)	 	to furnish, through Landlord’s employees or independent contractors, the
services listed in Exhibit C attached hereto and made a part hereof; and

 

 

	 	(b)	 	to furnish, through Landlord’s employees or independent contractors,
reasonable additional building operation services upon reasonable advance
request of Tenant at equitable rates from time to time established by Landlord
to be paid for by Tenant; and
	 
	 	(c)	 	except as otherwise provided in Article 7, to make such repairs to the roof,
exterior walls and glass, floor slabs and common areas and facilities of the
Building as may be necessary to keep them in serviceable and good and
working condition; and
	 
	 	(d)	 	that Landlord is the fee owner of the Building and the Lot and has the right to
enter into this Lease and that Tenant, on paying the rent and performing its
obligations in this Lease, shall peacefully and quietly have, hold and enjoy the
Premises throughout the Term, subject to all the terms and provisions hereof;
and
	 
	 	(e)	 	to defend, save harmless and indemnify Tenant from any liability or injury,
loss, accident or damage to any person or property and from any claims,
actions, proceedings and expenses and costs in connection therewith
(including, without limitation, reasonable counsel fees), (i) arising from the
omission, fault, willful act, negligence or other misconduct of Landlord or from
any use made or thing done or occurring on the Premises not due to the
omission, fault, willful act, negligence or other misconduct of Tenant, or (ii)
resulting from the failure of Landlord to perform and discharge its covenants
and obligations under this Lease.

5.2       Interruptions

	 	(a)	 	Landlord shall not be liable to Tenant for any compensation or reduction of
rent by reason of inconvenience or annoyance or for loss of business arising from power
losses and shortages, the necessity of Landlord’s entering the Premises for any of the
purposes in this Lease authorized, or for repairing the Premises or any portion of the
Building or Lot however the necessity may occur except as a result of Landlord’s
negligence, omission, fault, willful act or other misconduct. In case Landlord is
prevented or delayed from making any repairs, alterations or improvements, or
furnishing any services or performing any other covenant or duty to be performed on
Landlord’s part, by reason of any cause reasonably beyond Landlord’s control. Landlord
shall not be liable to Tenant therefore, nor, except as expressly provided in Section
7.1, shall Tenant be entitled to any abatement or reduction of rent by reason thereof,
nor shall the same give rise to a claim in Tenant’s favor that such failure constitutes
actual or constructive, total or partial, eviction from the Premises.

 

 

	 	(b)	 	Landlord reserves the right to stop any service or utility
system, when necessary, by reason of accident or emergency,
or until necessary repairs have been completed; provided,
however, that in each instance of stoppage, Landlord shall
exercise reasonable diligence to eliminate the cause(s)
thereof. Except in case of emergency repairs, Landlord will
give Tenant reasonable advance efforts to avoid unnecessary
inconvenience to Tenant by reason thereof.

ARTICLE 6 - TENANT’S COVENANTS

	6.1	 	Tenant’s Covenants

          Tenant Covenants during the Term hereof and such further time as Tenant occupies any part of
the Premises:

	 	(a)	 	to pay when due all fixed rent and additional rent, all taxes which
may be imposed on Tenant’s personal property on the Premises
(including, without limitation, Tenant’s fixtures and equipment)
regardless to whomever assessed, and all charges by Landlord or by
public utility companies for telephone, electricity, gas and any
other utility services and service inspections therefore, and all
charges by public utility companies for installation of metering
devices (which charges, if not separately metered or otherwise
apportionable, shall be apportioned on a floor area basis for
multi-tenanted floors) (electricity charges for the Premises,
however, are separately metered and Tenant shall be responsible for
paying such charges directly to the supplier thereof), and all
charges of Landlord for services rendered pursuant to Section 5.1;
and
	 
	 	(b)	 	except as otherwise provided in Article 7 and Section 5.1 (c), to
keep the Premises in good order, repair and condition, reasonable
wear and damage by fire and casualty only excepted, and at the
expiration or termination of this Lease peaceable to yield up the
Premises and all changes and additions therein in such order, repair
and condition, first removing all goods, effects and fixtures of
Tenant and any items the removal of which is required by any
agreement made pursuant to Section 3.2 hereof, or specified therein
to be removed at Tenant’s election and which Tenant elects to remove,
and repairing all damage caused by such removal and restoring the
Premises and leaving them clean and neat; and
	 
	 	(c)	 	not inure or deface the Premises, Building or Lot, nor to permit in
the Premises any auction sale, or nuisance, or the emission from the
Premises of any objectionable noise or odor, nor to use or devote the
Premises or any part thereof for any purpose other than the Permitted
Uses, nor any use thereof which is improper, offensive, contrary to
law or ordinance, or liable to invalidate or increase the premiums
for any insurance on the Building or its

 

 

	 	 	 	contents or liable to render necessary any alteration or addition
to the Building; and
	 
	 	(d)	 	not to obstruct in any manner any portion of the Building not
hereby leased or any portion thereof or of the Lot used by Tenant
in common with others; not without prior consent of Landlord to
permit the painting or placing of any signs or the placing of any
curtains, blinds, shades, awnings, aerials or flagpoles, or the
like, visible from outside the Premises; and to comply with the
Rules and Regulations set forth in Exhibit D attached hereto, and
all other reasonable rules and/or regulations hereafter made by
Landlord, of which Tenant has been given notice, for the case and
use of the Building and Lot and their facilities and approaches;
Landlord shall not be liable to Tenant for the failure of other
tenants of the Building to conform to such Rules and Regulations;
and
	 
	 	(e)	 	to keep the Premises equipped with all safety appliances required
by law or ordinance or any other regulation of any public
authority because of any use made by Tenant other than normal
office use, and to procure all licenses and permits so required
because of such use and, if requested by Landlord, to do any work
so required because of such use, it being understood that the
foregoing provisions shall not be construed to broaden in any way
Tenant’s Permitted Uses; and
	 
	 	(f)	 	not without prior consent of Landlord to assign this Lease or
sublet the Premises; as additional rent, to reimburse Landlord
promptly for reasonable legal and other expenses incurred by
Landlord in connection with any request by Tenant for consent to
a assignment or subletting up to $1,000; no assignment or
subletting and no consent of Landlord thereto shall affect the
continuing primary liability of Tenant (which, following
assignment, shall be joint and several with the assignee); no
consent to any of the foregoing in a specific instance shall
operate as a waiver in any subsequent instance; and not
withstanding Landlord’s consent, no assignment shall be binding
upon Landlord or any of Landlord’s mortgagees, unless Tenant
shall deliver to Landlord an instrument in recordable form which
contains a covenant of assumption by the assignee running to
Landlord and all persons claiming by, through or under Landlord,
but the failure or refusal of the assignee to execute such
instrument of assumption shall not release or discharge assignee
from its liability as Tenant hereunder nor shall execution of
such instrument of assumption affect the continuing primary
liability of Tenant; Landlord agrees not to unreasonably withhold
or delay its consent to an assignment or subletting, provided,
however, that with respect to any assignment or subletting, the
following provisions shall apply:

	 	(1)	 	Tenant shall give Landlord written notice of the assignment or
subletting no less than 45 days prior to the effective date thereof,
which notice shall set forth the identity of the proposed transferee,
and the nature of the proposed transferee’s business to be carried on
in the Premises.

 

 

	 	(2)	 	Tenant shall furnish Landlord (a) no less than 30 days
prior to the effective date of the assignment or
subletting, with a current financial statement of the
proposed transferee reasonably acceptable to Landlord,
and (b) within three (3) days following Landlord’s
demand, with all other information reasonably requested
by Landlord with respect to such transferee.

	 	 	In any case, where the Landlord shall consent to such assignment,
other transfer or subletting, the Tenant originally named herein shall
remain fully liable for Tenant obligations hereunder, including,
without limitation, the obligation to pay the rent and other amounts
provided under this Lease, and the Tenant also hereby agrees to pay to the
Landlord, within fifteen (15) days of billing therefore, all legal and
other fees incurred by the Landlord in connection with reviewing and
approving any such assignment, other transfer or subletting up to
$1,000. Any Assignment or subletting, whether or not Landlord’s prior
consent is required, shall be subject to any successor using the
Premises for the same use as Tenant’s use, or for a modified use only
if acceptable to Landlord. The Tenant shall give written notice to the
Landlord of terms of any such proposed assignment or sublease, and the
Landlord shall be entitled to 50% of all net profits from any such
sublease or assignment. Net profit shall be calculated by first
allowing Tenant to recover any reasonable construction and commission
inducement(s) given to the subtenant or assignee. It shall be a
condition of the validity of any permitted assignment or other
transfer or subletting that the assignee or transferee or subtenant agree
directly with the Landlord, in form satisfactory to the Landlord, to
be bound by all Tenant obligations hereunder, including, without
limitation, the obligation to pay rent and other amounts provided for
under this Lease and the covenant against further assignment or other
transfer or subletting.

	 	(g)	 	to defend, with counsel reasonably satisfactory to Landlord, save
harmless and indemnify Landlord from any liability or injury, loss,
accident or damage to any person or property and from any claims,
actions, proceedings and expenses and costs in connection therewith
(including without limitation reasonable counsel fees), (i) arising
from the omission, fault, willful act, negligence or other misconduct
of Tenant or from any use made or thing done or occurring on the
Premises not due to the omission, fault, willful act, negligence or
other misconduct of Landlord, or (ii) resulting from the failure of
Tenant to perform and discharge its covenants and obligations under
this Lease; and
	 
	 	(h)	 	to maintain public liability insurance on the Premises in the amounts
which shall, at the beginning of the Term, be at least equal to the
limits set forth in Section 1.1, and, from time to time during the
Term, shall be for such higher amounts, if any, as are customarily
carried in the area in which the Premises are located on property
similar to the Premises and used for similar purposes, and to furnish
Landlord with certificates thereof: and
	 
	 	(i)	 	to keep all Tenant’s employees working in the Premises covered by
workmen’s compensation insurance in statutory amounts and to furnish
Landlord with

 

 

	 	 	 	certificates thereof, if such workmen’s compensation insurance is
required under state law; and
	 
	 	(j)	 	to permit Landlord and Landlord’s agents to examine the
Premises at reasonable times and upon reasonable notice, and, if
Landlord shall so elect, to make any repairs or replacements
Landlord may deem necessary to avert an emergency, to remove, at
Tenant’s expense, any changes, additions, signs, curtains, blinds,
shades, awning(s), aerials, flagpoles, or the like, not consented
to in writing, and to show the Premises to prospective tenants
during six (6) months preceding the expiration of the Term hereof
and to prospective purchasers and mortgagees at all
reasonable times upon reasonable appointment with Tenant;
and
	 
	 	(k)	 	not to place a load upon the Premises exceeding an average rate of
80 pounds of live load per square foot of floor area; and not to
move any safe, vault or other heavy equipment in, about or out of
the Premises except in such manner and at such times as Landlord
shall in each instance authorize; Tenant’s business machines and
mechanical equipment which cause vibration or noise that may be
transmitted to the Building structure or to any other leased space
in the Building shall be placed and maintained by Tenant in
settings of cork, rubber, spring or other type of vibration
eliminators sufficient to eliminate all such vibrations or noise;
and
	 
	 	(l)	 	all the furnishings, fixtures, equipment, effects and property of
every kind, nature and description of Tenant and of all persons
claiming by, through or under Tenant which, during the continuance
of this Lease or any occupancy of the Premises by Tenant or anyone
claiming under Tenant, may be on the Premises or elsewhere in the
Building, shall be at the sole risk and hazard of Tenant, and if
the whole or any part thereof shall be destroyed or damaged by
fire, water or otherwise, or by the leakage or bursting of pipes,
steam pipes or other pipes, by theft or from any other cause, no
part of said loss or damage is to be charged to or borne by
Landlord; and
	 
	 	(m)	 	not to suffer or permit any liens to stand against the Premises by
reason of work, labor services or materials done for or at the
request of Tenant; Tenant shall cause any such liens to be
immediately discharged within thirty (30) days after the date of
any such lien(s) being filed thereof; and
	 
	 	(n)	 	in case Landlord shall, without any fault on its part, be made
party to any litigation commenced by or against Tenant or by or
against any parties in possession of the Premises or any party
thereof claiming under Tenant, to pay, as additional rent, all
costs including, without limitation, reasonable attorney fees,
incurred by or imposed upon Landlord in connection with such
litigation, and also to pay, as additional rent, all such costs
and fees incurred by Landlord in connection with the successful
enforcement by Landlord of any obligations of Tenant under this
Lease, however, Landlord shall pay to Tenant all such

 

 

	 	 	 	costs, fees and attorneys fees incurred by Tenant in
connection with any action in which Tenant prevails incurred
as a result of the Lease; and
	 
	 	(o)	 	not to allow any of the Tenant’s employees, agents, etc., to
park illegally, i.e. in fire lanes, traffic lanes, spaces
marked for visitors, handicapped or reserved parking, etc.;
and
	 
	 	(p)	 	not to allow any of Tenant’s employees, agents, etc. to
smoke anywhere in the building, including the Leased
Premises, hallways, corridors, bathrooms, etc., as the
Building is a “Smoke Free” building.

ARTICLE 7 - CASUALTY AND TAKING

	7.1	 	Casualty and Taking

	 	(a)	 	In case during the Term all or any substantial part of the Premises
are damaged materially by fire or other casualty or by action of
public or other authority in consequence thereof, or are taken by
eminent domain or Landlord receives compensable damage by reason of
anything lawfully done in pursuance of public or other authority (a
“Material Event” subject to Section 7.1 (c) below), this Lease shall
terminate at Landlord’s or Tenant’s election, which may be made
notwithstanding that Landlord’s entire interest may have been
divested, by notice given to the other within sixty (60) days after
the notice given by Landlord pursuant to Section 7.1(c) hereof,
which notice shall specify the effective date of termination. Tenant
shall also have the right to terminate as described above (i) in the
event of substantial damage to or taking of the Building or Lot that
renders Tenant unable to conduct its business in the Premises, or
(ii) in the event of damage to the Premises in the last ninety (90)
days of the Term, which damage renders the Premises untenantable for
more than fifteen (15) days.
	 
	 	(b)	 	In case, during the Term, all or any substantial part of the
Building or the Lot are damaged materially by fire or other casualty
or by action of public or other authority in consequence thereof, or
are taken by eminent domain or Landlord receives compensable damage
by reason of anything lawfully done in pursuance of public or other
authority (a “Material Event” subjection to Section 7.1 (c) below),
this Lease shall terminate at Landlord’s election, which may be made
notwithstanding that Landlord’s entire interest may have been
divested, by notice given to Tenant within sixty (60) days after the
occurrence of the notice given by Landlord pursuant to Section 7.1
(c) hereof, which notice shall specify the effective date of
termination.
	 
	 	(c)	 	The effective date of any termination by Landlord or Tenant under
this Section 7.1 shall not be less than fifteen (15) days nor more
than thirty (30) days after the date of such notice of termination.
For all purposes of this Section 7.1., no

 

 

	 	 	 	damage or taking shall be considered a “Material Event”
unless the time needed for Landlord to do the construction
work necessary to put the Premises, Building or Lot or the
remainder in proper condition for use and occupancy is
reasonably estimated by Landlord to exceed six (6) months,
or if more than thirty percent (30%) of the Lot, the
Building or the Premises are so taken. In case of any such
damage or taking, Landlord shall notify Tenant within
thirty (30) days after the occurrence thereof of Landlord’s
estimate of the time needed to do the construction work
necessary to put the Premises, Building or Lot or the
remainder in proper condition for use and occupancy, or of
the percentage of the Building, Lot or Premises taken.
	 
	 	(d)	 	If in any such case, the Premises are rendered unfit for
use and occupancy and the Lease is not so terminated,
Landlord shall use due diligence (following the expiration
of all periods in which either party may terminate this
Lease pursuant to the foregoing provisions of this Section
7.1 ) to put the Premises, or in case of taking what may
remain thereof (excluding any items installed or paid for
by Tenant that Tenant may be required to remove pursuant to
Section 3.2), into proper condition for use and occupancy
and a just proportion of the fixed rent and additional rent
according to the nature and extent of the injury shall be
abated until the Premises or such remainder shall have been
put by Landlord in such condition, and in case of a taking
that permanently reduces the area of the Premises, a just
proportion of the fixed rent and additional rent shall be
abated for the remainder of the Term.

	7.2	 	Reservation of Award

          Landlord reserves to itself all rights to receive awards made for damages to the Premises
and Building and Lot and the leasehold hereby created, or any one or more of them accruing by
reason of exercise of eminent domain or by reason of anything lawfully done in pursuance of
public or other authority.

          Tenant hereby releases and assigns to Landlord all Tenant’s rights to such awards, and
covenants to deliver such further assignments and assurances thereof as Landlord may from time
to time request, hereby irrevocably designating and appointing Landlord as its attorney-in-fact
to execute and deliver in Tenant’s name and behalf all such further assignment thereof. It is
agreed and understood, however, that Landlord does not reserve to itself, and Tenant does not
assign to Landlord, any damages payable for (i) movable trade fixtures installed by Tenant or
anyone claiming under Tenant at its own expense or fixtures or items the removal of which is
required or permitted by any agreement made pursuant to Section 3.2, (ii) relocation expenses
recoverable by Tenant from such authority in a separate action, or (iii) any award that does not
affect or reduces Landlord’s award.

ARTICLE 8 - RIGHTS OF MORTGAGEE

	8.1	 	Subordination

 

 

          The Lease shall be subject and
subordinate to any first mortgage on the
Building, now or at any time hereafter in
effect, unless the holder of such mortgage
elects by notice to Tenant to have this Lease
superior to its mortgage. In addition, Landlord
shall have the option to subordinate this Lease
to any other mortgage or deed of trust that
includes the Premises as part of the mortgaged
premises, provided that the holder thereof
enters into an agreement with Tenant by the
terms of which (i) in the event of acquisition
of title by such holder through foreclosure
proceedings or otherwise, and provided Tenant
is not in default hereunder, the holder will
agree to recognize the rights of Tenant under
this Lease and to accept Tenant as tenant of
the Premises under the terms and conditions of
this Lease, and (ii) Tenant will agree to
recognize the holder of such mortgage as
Landlord in such event. This agreement shall be
made to expressly bind and insure to the
benefit of the successors and assigns of Tenant
and of the holder and of anyone purchasing said
Premises at any foreclosure sale. Any such
mortgage to which this Lease shall be
subordinated may contain such terms, provisions
and conditions as the holder deems usual or
customary. The Lot or Building, or both, are
separately and together hereinafter in this
Article 8 referred to as “the mortgaged
premises”. The word “mortgagee” as used in this
Lease shall include the holder for the time
being whenever the context permits.

	8.2	 	Entry Other Than For Foreclosure

          Upon entry and taking possession of the mortgaged premises for any purpose
other than foreclosure, the holder of a mortgage shall have all right of
Landlord, and, during the period of such possession, the duty to perform all of
Landlord’s obligations under this Lease. No such holder shall otherwise be
liable to perform any other of Landlord’s covenants and obligations under this
Lease. . At all times prior to any foreclosure or loss of possession,
Landlord remains liable for the performance of Landlord’s obligations.

	8.3	 	Entry For Foreclosure

          Except as otherwise provided in Section 8.2 hereof, no such holder of a
mortgage shall be liable, either as mortgagee or as holder of a collateral
assignment of this Lease, to perform, or be liable in damages for failure to
perform, any of the obligations of Landlord unless and until such holder shall
enter and take possession of the mortgaged premises for the purpose of
foreclosing a mortgage. Upon entry for the purpose of foreclosing a mortgage,
subject to the provisions of Section 8.6 and subject to and with the benefit of
the provisions of Section 10.6, such holder shall be liable to perform all of
the subsequent obligations of Landlord, provided that a discontinuance of any
foreclosure proceeding shall be deemed a conveyance under said provisions to
the owner of the equity of the mortgaged premises. At all times prior to any
foreclosure or loss of possession, Landlord remains liable for the performance
of Landlord’s obligations.

	8.4	 	No Prepayment

 

 

     No fixed rent, additional rent, or any other charge shall be paid more than ten (10) days
prior to the due dates thereof except for payment of the Security Deposit and Tenant’s share of
Landlord’s Operating Expenses and other expenses required to be paid accordingly under the Lease,
and payments made in violation of this provision shall (except to the extent that such payments
are actually received by a mortgagee in possession or in the process of foreclosing its mortgage)
be a nullity as against such mortgagee, and Tenant shall be liable for the amount of such payments
to such mortgagee.

8.5 No Release or Termination

     No act or failure to act on the part of Landlord that would entitle Tenant under the terms of
this Lease or by law to be relieved of Tenant’s obligations hereunder or to terminate this Lease
shall result in a release or termination of such obligations or a termination of this Lease unless
(i) Tenant shall have first given written notice of Landlord’s act or failure to act to Landlord’s
mortgagee(s) of record, if any, specifying the act or failure to act on the part of Landlord that
could or would give basis to Tenant’s rights, and (ii) such mortgagee(s), after receipt of such
notice, have failed or refused to correct or cure the condition complained of within a reasonable
time thereafter; but nothing contained in this Section 8.5 shall be deemed to impose any
obligation on any such mortgagee to correct or cure any such condition. “Reasonable time” as used
above means and includes a reasonable time to obtain possession of the mortgaged premises, if the
mortgagee elects to do so, and a reasonable time to correct or cure the condition if such
condition is determined to exist, but in no event shall reasonable time exceed sixty (60) days.

8.6 No Modification Etc.

     No assignment of this Lease, no agreement to make or accept any surrender, termination or
cancellation of this Lease and no agreement to modify this Lease so as to reduce the rent, change
the Term, or otherwise materially change the rights of Landlord under this Lease or to relieve
Tenant of any obligations or liability under this Lease, shall be valid unless consented to in
writing by Landlord’s mortgagees of record, if any. Landlord will notify Tenant whenever Landlord
places a mortgage on the property of which the Premises are a part, and Landlord will be
responsible for obtaining any mortgagee consent required hereunder.

8.7 Continuing Offer

     The covenants and agreements contained in this Lease with respect to the rights, powers and
benefits of a mortgagee (particularly, without limiting the generality of the foregoing, the
covenants and agreements contained in this Article 8) constitute a continuing offer to any person,
corporation or other entity that by accepting or requiring an assignment of this Lease or by entry
or foreclosure assumes the obligations herein set forth with respect to such mortgagee; such
mortgagee is hereby constituted a part to this Lease as an obligee hereunder to the same extent as
though its name were written hereon as such, and such mortgagee shall be entitled to enforce such
provisions in its own name.

 

 

8.8 Implementation

     Tenant agrees, on request of Landlord, to execute and deliver from time to time any agreement
which may reasonably be deemed necessary to implement the provisions of this Article 8.

8.9 Financing

     In the event that any actual or proposed holder of a first mortgage on the Building or Lot
shall demand that this Lease be modified or amended in any respect, Tenant agrees to so modify or
amend this Lease within thirty (30) days after Landlord’s request, so long as such modification or
amendment does not materially adversely affect Tenant’s rights or obligations under this Lease in
Tenant’s reasonable opinion.

ARTICLE 9 - DEFAULTS 

9.1 Events of Default

	 	(a)	 	If Landlord contends that Tenant has neglected or failed to perform any of
Tenant’s covenants, agreements or obligations hereunder, Landlord shall notify Tenant
in writing accordingly, specifying the alleged neglect or failure. Such notice having
been given by Landlord, Tenant shall:

	 	(1)	 	in the case of alleged failure to pay fixed rent, make payment in
FULL within seven (7) days after notice thereof; and
	 
	 	(2)	 	in the case of alleged neglect or failure to perform any of
Tenant’s
covenants, agreements or obligations hereunder, other than the obligation
to pay fixed rent:

	 	(i)	 	correct the matters complained of in such notice
within thirty (30) days after notice thereof (or, if more than thirty
(30) days are reasonably required to complete such correction, begin such
correction within such thirty (30) days and thereafter prosecute the
correction to such default to completion with due diligence), or
	 
	 	(ii)	 	notify Landlord within such thirty (30) day period
that Tenant disputes the matters contained in such notice and at the same
time serve on Landlord a copy of a demand for arbitration of the matter
disputed and otherwise proceed to arbitration under Article 11 hereof. If
the decision of the arbitrator pursuant to Article 11 is adverse to
Tenant, in whole or in part, Tenant shall forthwith begin to correct the
matters complained of by Landlord or that portion thereof as to which the
decision shall have been adverse to Tenant, and Tenant shall complete the
same within thirty (30) days after

 

 

	 	 	 	such decision, or if more than thirty (30) days are reasonably required
to complete such correction, begin such correction within such thirty
(30) days and thereafter prosecute the correction of such default to
completion with due diligence. If so requested by either party, the
arbitrator shall establish the time in excess of thirty (30) days
reasonably required for such completion and the same shall be completed
within such time, subject to unavoidable delay.

	 	(b)	 	In the event that:

	 	(1)	 	Tenant fails to comply with subparagraph (1 ) above with respect to
fixed rent defaults or Tenant fails to comply with either subclause (i) or (ii) or
subparagraph (2) above with respect to non-performance of any other
covenant, agreement or obligation contained herein; or
	 
	 	(2)	 	any assignment shall be made by Tenant or any guarantor of Tenant
for the benefit of creditors; or
	 
	 	(3)	 	Tenant’s leasehold interest shall be taken on execution; or
	 
	 	(4)	 	a lien or other involuntary encumbrance is filed against
Tenant’s leasehold interest or Tenant’s other property, including said leasehold
interest, and is not discharged within ten (10) days thereafter; or
	 
	 	(5)	 	a petition is filed by Tenant or any guarantor of Tenant for
adjustment as a bankrupt, or for reorganization or an arrangement under any provision
of the Bankruptcy Act as then in force and effect; or
	 
	 	(6)	 	an involuntary petition under any of the provisions of said
Bankruptcy Act is filed against Tenant or any guarantor of Tenant and such
involuntary petition is not dismissed within sixty (30) days thereafter;

then, and in any of such case(s), Landlord and the agent and servants of Landlord may,
in addition to and not in derogation of any remedies for any preceding breach of
covenant, immediately or at any time thereafter and without demand or notice and with
or without process of law (forcibly, if necessary) enter into and upon the Premises or
any part thereof in the name of the whole or mail a notice of termination addressed to
Tenant at the Premises, and repossess the same as of Landlord’s former estate and
expel Tenant and those claiming through or under Tenant and remove Tenant and its
effect(s) (forcibly, if necessary) without being deemed guilty and manner of trespass
and without prejudice to any remedies which might otherwise be used for arrears of
rent or prior breach of covenant, and upon such entry or mailing as aforesaid, this
Lease shall terminate.

     9.2 Tenant’s Obligations After Termination

 

 

	 	(a)	 	In the event that this Lease is terminated under any of the provisions of Section
9.1 or is otherwise terminated for breach of any obligation of Tenant, Tenant
covenants to pay forthwith to Landlord, as compensation, the excess of the total
rent reserved for the residue of the Term (discounted over the balance of the
Term at a rate of seven percent (7%)) over the fair market rental value of the
Premises for said residue of the Term. In calculating the rent reserved there
shall be included, in addition to the fixed rent and all additional rent, the value
of all other considerations agreed to be paid or performed by Tenant for said
residue. Tenant further covenants as an additional and cumulative obligation
after any such termination to pay punctually to Landlord all the sums and
perform all the obligations which Tenant covenants in this Lease to pay and to
perform in the same manner and to the same extent and at the same time as if
this Lease had not been terminated. In calculating the amounts to be paid by
Tenant under paragraph 9.2(b) below, Tenant shall be credited with any
amount paid to Landlord as compensation in accordance with this Section 9.2
and also with the net proceeds of any rent obtained by Landlord by reletting the
Premises, after deducting all of Landlord’s expenses in connection with such
reletting, including, without limitation, all repossession costs, brokerage
commissions, fees for legal services and expense of preparing the Premises for
such reletting. Landlord shall have a duty to mitigate its damages. Tenant
agrees that Landlord may (i) relet the Premises or any part or parts thereof for a
term or terms which may, at Landlord’s option, be equal to, less than or greater
than the period which would otherwise have constituted the balance of the
Term and may grant such concessions and free rent as Landlord, in its sole
judgment, considers advisable or necessary to relet the same, and (ii) make
such alterations, repairs and decorations in or to the Premises as Landlord, in
its sole judgment, considers advisable or necessary to relet the same. Any
action of Landlord in accordance with this Section 9.2 or any failure of
Landlord to relet or to collect rent after reletting shall not operate or be
construed to release or reduce Tenant’s liability as aforesaid.
	 
	 	(b)	 	In lieu of any other damages or indemnity and in lieu of full recovery by
Landlord of all sums payable under paragraph 9.2(a) above, Landlord may, by
written notice to Tenant, at any time after this Lease is terminated under any of
the provisions contained in Section 9.1 or is otherwise terminated for breach of
any obligation of Tenant and before such full recovery, elect to recover, and
Tenant shall thereupon pay, as liquidated damages, an amount equal to the
aggregate of the fixed rent and additional rent accrued under Article IV in the
twelve (12) months ended next prior to such termination plus the amount of
fixed rent and additional rent of any kind accrued and unpaid at the time of
termination and less the amount of any recovery by Landlord under paragraph
9.2(a) up to the time of payment of such liquidated damages and Landlord shall
have no further right to recover any other damages from Tenant as a result of
any default, termination or any other provision under the Lease.

 

 

	 	(c)	 	Nothing contained in this Lease shall limit or prejudice the right of Landlord to
prove for an obtain in proceedings for bankruptcy or insolvency, by reason of the
termination of this Lease, an amount equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in which, the
damages are to be proved, whether or not the amount be greater than, equal to, or less
than the amount of the loss or damaged referred to above.

9.3 Landlord’s Default

     If Landlord violates or fails to perform or otherwise breaches any agreement, term, covenant
or condition herein contained, Landlord shall not be deemed to be in default hereunder unless its
default shall continue for thirty (30) days after written notice thereof has been given by Tenant
to Landlord specifying the nature of the alleged default, or such additional time as is reasonably
required to correct its default, provided that Landlord shall, subject to its arbitration rights
set forth below, begin such correction within such thirty (30) days period and thereafter
prosecute the curing of such default to completion with due diligence. Landlord shall have the
right to dispute Tenant’s allegation of default using the arbitration procedures set forth in
Article 11.

     Upon the occurrence of an event of default by Landlord, Tenant shall have the following
rights:

	 	(i)	 	To seek injunctive relief or specific performance to cure such default and to
seek reimbursement for those costs incurred by Tenant in curing any such default of
Landlord, including, without limitation, any fines, fees, reasonable attorneys fees
and any other charges, payments, costs and expenses so incurred by Tenant and any
losses or damages suffered by Tenant as a result of such default.
	 
	 	(ii)	 	To terminate this Lease and the term hereby created, whereupon Tenant
shall be entitled to recover the Security Deposit and any rent paid in advance to
Landlord hereunder.

ARTICLE 10 - MISCELLANEOUS

10.1 Measurement

     For all purposes of this Lease, all floor areas shall be computed generally in accordance with
the current standard method of floor measurement of office buildings used in the greater Boston
area. In such computation, common areas shall be included to the extent therein provided
notwithstanding their exclusion from the Premises.

10.2 Titles

 

 

     The titles of the Articles and Sections contained herein are for convenience only and are not
to be considered in construing this Lease.

10.3 Notice of Lease

     Upon request of either party, both parties shall execute and deliver after the Lease Term
begins, a Notice of Lease satisfactory in form to Landlord and appropriate for recording at the
Registry of Deeds, if applicable, and, if this Lease is terminated before the Lease Term expires, a
Termination of Lease or such other form shall be executed by Tenant and Landlord acknowledging the
date of Termination, in form satisfactory to Landlord and appropriate for recording, if applicable.

10.4 Consent

     Except where otherwise provided herein, whenever any approval, consent, authorization or the
like by Landlord or Tenant is expressly required by this Lease, the approval, consent,
authorization or the like shall not be unreasonably delayed or withheld.

10.5 Notices

     Whenever any notice, approval, consent, request or election is given or made pursuant to this
Lease, it shall be in writing. Communications and payments shall be addressed if to Landlord at
the Address of Landlord set forth in Section 1.1 hereof or at such other address as may have been
specified by prior notice from Landlord to Tenant. If said communication or payment is to Tenant,
to the Tenant at the Premises or at such other address as may have been specified by prior notice
to Landlord. Any communication or notice so addressed shall be deemed duly served if mailed by
registered or certified mail, return receipt requested. Any notice delivered to Tenant by Landlord
duplicate copy shall also be sent to:

Michael Steinberg, Esq.

HeartWare, Inc.

3351 Executive Way

Miramar, Florida 33025

10.6 Bind and Inure

     The obligations of this Lease shall run with the land, and this Lease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns, except
that only the original Landlord named herein shall be liable for obligations accruing before the
beginning of the Term, and thereafter the original Landlord named herein and each successive owner
of the Premises shall be liable only for the obligations accruing during this period of its
ownership except for the Security Deposit. Whenever the Premises are owned by a trustee or
trustees, the obligations of Landlord shall be binding upon Landlord’s trust estate, but not upon
any trustee or beneficiary of the trust individually.

 

 

10.7 No Surrender

     The delivery of keys to any employee or Landlord or to Landlord’s agent or any employee
thereof shall not operate as a termination of this Lease or a surrender of the Premises.

10.8 No Waiver, etc.

     The failure of Landlord or of Tenant to seek redress for violation of, or to insist upon the
strict performance of, any covenant or condition of this Lease or any of the Rules and Regulations
attached hereto shall not be deemed a waiver of such violation nor prevent a subsequent act that
would have originally constituted a violation from having all the force and effect of an original
violation. The failure of Landlord to enforce any of said Rules and Regulations against any other
tenant in the Building shall not be deemed a waiver of any such Rules or Regulations. The receipt
by Landlord of fixed rent or additional rent with knowledge of the breach of any covenant of this
Lease shall not be deemed to be a waiver in writing signed by the Party so waiving. No consent or
waiver, expressed or implied, by Landlord or Tenant to or of any breach of any agreement or duty
shall be construed as a waiver or consent to or of any other breach of the same or any other
agreement or duty.

10.9 No Accord and Satisfaction

     No acceptance by Landlord of a lesser sum than the fixed rent and additional rent then due
shall be deemed to be other than on account of the earliest installment of such rent due, nor
shall any endorsement or statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord’s right to recover the balance of such installment or pursue any other
remedy provided in this Lease.

10.10 Cumulative Remedies

     The specific remedies to which Landlord may resort under the terms of this Lease are
cumulative and are not intended to be exclusive of any other remedies or means of redress to which
it may be lawfully entitled in case of any breach or threatened breach by Tenant of any provisions
of this Lease. In addition to the other remedies provided in this Lease, Landlord shall be entitled
to the restraint by injunction of the violation or attempted or threatened violation of any of the
covenants, conditions or provisions of this Lease or to a decree compelling specific performance of
any such covenants, conditions or provisions.

10.11 Partial Invalidity

     If any term of this Lease, or the application thereof to any person or circumstances, shall
to any extent be invalid or unenforceable, the remainder of this Lease, or the application of such
term to persons or circumstances other than those as to which it is

 

 

invalid or unenforceable, shall not be affected thereby, and each term of this Lease
shall be valid and enforceable to the fullest extent permitted by law.

10.12 Right to Cure Default

	 	(a)	 	If Tenant shall at any time default in the performance of any
obligation under this Lease and Landlord has delivered to Tenant notice
of such default as provided herein, Landlord shall have the right, but
shall not be obligated, to enter upon the Premises and to perform such
obligation notwithstanding the fact that no specific provisions for
such substituted performance by Landlord is made in this Lease with
respect to such default. Except in case of emergency, these rights
shall be exercised only after thirty (30) days prior written notice
from Landlord to Tenant of Landlord’s intention to do so. In performing
such obligation, Landlord may make any reasonable payment of money or
perform any other act. All sums so paid by Landlord, together with
interest at the rate of twelve percent (12%) per annum, and all
necessary incidental costs and expenses in connection with the
performance of any such act by Landlord shall be deemed to be
additional rent under this Lease and shall be payable to Landlord
within thirty (30) days of receipt of an invoice stating the cost and
expenses incurred and the services performed. Landlord may exercise the
foregoing rights without waiving any other of its rights or releasing
Tenant from any of its obligations under this Lease.

10.13 Estoppel Certificate

     Both parties agree, from time to time, upon not less than fifteen (15) days
prior written request by the other party, to execute, acknowledge and deliver to
the other party a statement in writing certifying that this Lease is unmodified
and in full force and effect and that Tenant has no defenses, offsets or
counterclaims against its obligations to pay the fixed rent and additional rent
and to perform its other covenants under this Lease and that there are no uncured
defaults of Landlord or Tenant under this Lease (or, if there have been any
modifications, that the same is in full force and effect as modified and stating
the modifications and, if there are any defenses, offsets, counterclaims or
defaults, setting them forth in reasonable detail), and the dates to which the
fixed rent, additional rent and other charges have been paid. Any such statement
delivered pursuant to this Section 10.13 may be relied upon by any prospective
purchaser or mortgagee of the Premises or any prospective assignee of any
mortgagee of the Premises. Tenant agrees to execute one or more Estoppel
Certificates substantially in the form attached hereto as Exhibit e
 as so
requested by Landlord.

10.14 Waiver of Subrogation

     Any insurance carried by either party with respect to the Premises and
property therein or occurrences thereon shall, if the other party so requests and
if it can be so written

 

 

without additional premium, or with an additional premium with the other party
agrees to pay, include a clause or endorsement denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to occurrence of injury or loss. Each party, notwithstanding any
provisions of this Lease to the contrary, hereby waives any rights of recovery
against the other for injury or loss due to hazards covered by insurance
contained in such clause of endorsement to the extent of the indemnification
received thereunder.

10.15 Brokerage

     Tenant warrants and represents that it has dealt with no broker(s) in
connection with this transaction other than the broker named in Section 1.1
hereof. Tenant agrees to defend, indemnify and save Landlord from and against any
and all claims for a commission or other type broker’s fee arising as a result of
this Lease, other than from the aforesaid broker’s.

10.16 Security Deposit

     Upon the execution of this Lease, Tenant shall pay the Security Deposit set
forth in Section 1.1 to Landlord, which shall be held as security for Tenant’s
performance under this Lease. The Security Deposit shall be refunded to Tenant at
the end of the Term, subject to Tenant’s satisfactory compliance with the
conditions of this Lease and Landlord’s approval of the Premises after Tenant has
vacated same which shall occur within thirty (30) days after the end of the Term.
Tenant hereby agrees not to look to the mortgagee, as mortgagee, mortgagee in
possession, or successor in title to the property, for accountability for any
security deposit required by Landlord hereunder, unless said sums have actually
been received by said mortgagee as security for Tenant’s performance of this
Lease. Unless Landlord has given Tenant notice of the transfer of any security
deposit, Tenant will continue to have the right to look to Landlord for the return
of any security deposit.

     ARTICLE 11 - ARBITRATION

     In the event of a dispute between Landlord and Tenant with respect to any
matter set forth in Section 9.1(a)(2)(ii) or 9.3 hereof, such dispute shall be
arbitrated by three (3) arbitrators appointed as follows: Landlord and Tenant
shall each appoint a fit and impartial person as arbitrator who shall have at
least ten (10) years experience in the Boston Metropolitan Area in a calling
connected with the subject matter of the dispute. Written notice of such
appointment shall be given by each party to the other within fifteen (15) days of
the date upon which written notice is given by one party to the other demanding
arbitration and the arbitrators so appointed shall appoint a third arbitrator with
like experience as stated above. If the arbitrators fail to agree upon a third
arbitrator within fifteen (15) days of the date upon which the later of such
written notices of appointment of the first two arbitrators is given, such third
arbitrator shall be appointed by Justice of the Superior Court of the Commonwealth
of Massachusetts, Middlesex County District, upon ten (10) days notice of the
institution of proceedings for such Court appointment, or by any

 

 

other Court sitting in said Middlesex County succeeding to the jurisdiction and
functions exercised by the Superior Court of the Commonwealth of Massachusetts.
Any award that shall be made in such arbitration by the arbitrators, or a
majority of them, shall be binding and shall have the same force and effect as a
judgment made in a court of competent jurisdiction and both Landlord and Tenant
shall have the right to apply to the aforesaid Superior Court, or to any other
court sitting in Middlesex County succeeding to the jurisdiction and functions
exercised by said Superior Court, for a decree, judgment or order upon said
arbitration or award upon ten (10) days notice to the other party. The fees,
costs and expenses of arbitration, other than fees for attorneys for the parties,
expert witnesses and other witness fees, shall be borne equally between the
parties unless the arbitrators determine that some other division shall under the
circumstances be more equitable.

 

 

     EXECUTED as a sealed instrument, in two or more counterparts which constitute
only one instrument, on the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATLANTIC-PHILADELPHIA REALTY LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David A. Capobianco
	 	 	 	By:
	 	/s/ Douglas Godshall	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Print Name: David A. Capobianco	 	 	 	Print Name: Douglas Godshall	 	 
	Title: Manager	 	 	 	Title: President & CEO	 	 

 

 

EXHIBIT A

Description of Lot

     That certain parcel of land on Newbury Street in Framingham, Middlesex County, Massachusetts,
shown as Lots 2, 3 and 4 on a plan entitled “PLAN OF LAND IN FRAMINGHAM, MASS.”, dated April 2,
1984, prepared by McCarthy & Sullivan Engineering, Inc., recorded with the Middlesex South District
Registry of Deeds as Plan No. 524 of 1984 in Book 15583, Page 165 (the “Plan”), bounded and
described according to the Plan as follows:

	 	 	 
	WESTERLY:

	 	by Newbury Street by two courses together totaling two hundred
twenty-two and 19/100 (222.19) feet;
	 
	 	 
	NORTHEASTERLY:

	 	by an existing thirty-foot drain easement two hundred forty-nine
and 68/100 (249.68) feet;
	 
	 	 
	SOUTHEASTERLY:

	 	by land now or formerly of Zayre Eighth Realty Corp., two
hundred sixty-three and 84/100 (263.84) feet;
	 
	 	 
	NORTHEASTERLY:

	 	by land now or formerly of said Zayre, by two courses
together totalling two hundred fifteen and 80/100 (215.80)
feet;
	 
	 	 
	EASTERLY:

	 	by land now or formerly of Worcester Terminal Corporation one
hundred forty-three and 90/100 (143.90) feet;
	 
	 	 
	SOUTHWESTERLY:

	 	by land now or formerly of said Worcester and land now or formerly
of Rudolph F. and Ruth E. Recke, four hundred six and 18/100
(406.18) feet;
	 
	 	 
	WESTERLY:

	 	by Newbury Street one hundred fifty-six (156.00) feet;
	 
	 	 
	NORTHEASTERLY:

	 	by Lot 5 on said Plan, one hundred twenty (120.00) feet;
	 
	 	 
	SOUTHEASTERLY:

	 	by Lot 5 on said Plan, sixty-two (62.00) feet; and
	 
	 	 
	SOUTHWESTERLY:

	 	by Lot 5 on said Plan, one hundred thirty-six and 56/100 (136.56) feet.

Said property being known and numbered as 205 Newbury Street, Framingham, Mass.

 

 

EXHIBIT B

Floor Plan of Tenant’s Space - SEE ATTACHED

 

 

Exhibit B

 

 

EXHIBIT C

SERVICES BY LANDLORD

	1.	 	A heating and air conditioning system which will keep the entire Premises,
other than storage areas, file rooms, closets, etc., at a comfortable temperature
for general office use, during normal office/business operating hours.
	 
	 	 	If Tenant shall require heating or air conditioning outside said normal
office/business operating hours, Landlord may furnish such services and
Tenant shall pay for any charges related to same as may from time to time be
in effect.
	 
	 	 	In the event Tenant introduces into the Premises any type of equipment which
overloads the capacity of any building system(s) or in any other way
interferes with any such system(s) to perform adequately, supplemental
system(s) may, at Landlord’s option, be provided by Landlord at Tenant’s
sole cost and expense.
	 
	2.	 	(a) Overhead fluorescent light fixtures.
	 
	 	 	(b) Replacement of fluorescent tubes and starters, as needed.
	 
	3.	 	Hot and cold water for lavatory and drinking purposes.

	 
	4.	 	Toilet supplies in lavatories, including soap, paper or cloth towels and toilet tissue.
	 
	5.	 	Janitor services in accordance with the following schedule and to be
accomplished after normal business hours (after 6:00 P.M.):

	 	a)	 	Entrance Door glass will be cleaned nightly.

	 
	 	b)	 	Entrance Floor will be cleaned and/or polished nightly.
	 
	 	c)	 	Broadloom Carpet areas will be vacuumed nightly. Will be
shampooed upon request, at additional cost to Tenant.
	 
	 	d)	 	Wastepaper Containers will be emptied nightly. Plastic
liner bags for wastepaper containers will be provided and liners will be changed
once a week.
	 
	 	e)	 	Water Fountains will be cleaned/polished and sanitized nightly.
	 
	 	f)	 	Washrooms will be cleaned and serviced nightly. This
will include refilling paper towels, toilet tissue and soap dispensers. Emptying and
cleaning of all used towel and trash containers. Clean all stainless steel fixtures.
Clean toilets. Wash and sanitize all wash basins and shelves. Clean all
mirrors. Remove all disfigurations, such as ink marks, drawings, etc. from all
stool partitions and walls. Floors will be mopped nightly.
	 
	 	g)	 	Scuff Marks will be removed nightly from all scuff plates on doors.

 

 

	 	h)	 	Tile Floors will be swept nightly and a treated dust
preventable mop. All corridors and office floors will be cleaned
or polished, as needed, nightly. Floors will be stripped as
necessary.
	 
	 	i)	 	Time of Operation — Services to be performed five
(5) nights per week after end of normal working hours (after 6:00 p.m.)

	6.	 	Proper care of grounds surrounding the leased premises, including care of
lawns and shrubs and including maintaining such grounds neat, clean and free of
litter.
	 
	7.	 	Maintain and keep clean the sidewalks and parking areas in front of and
around the building and remove all snow therefrom.
	 
	8.	 	Maintain the Premises and Building in accordance with other first class
office buildings in the Framingham Area.

 

 

EXHIBIT D

RULES AND REGULATIONS

	1.	 	The Landlord should be notified at once of any trouble with heating, lighting or
plumbing fixtures. Tenants will make reasonable efforts to not leave windows of
premises open or unlocked and not to leave the doors of the premises unlocked at
night.
	 
	2.	 	The sidewalks, entries, halls and stairways shall not be obstructed by any of the tenants or used by them for any other purpose than for ingress and egress to and from
their respective premises, and no articles or rubbish, of any kind, shall be left therein.
	 
	3.	 	No toilet fixture shall be used for any purpose other than that which it is intended and no sweepings, rubbish, rags, ashes, or other substances shall be thrown therein;
any damage resulting from so doing shall be born by the tenant causing
	 
	4.	 	The weight and position of all safes shall be subject to the approval of Landlord.
	 
	5.	 	Lettering on doors, tablets and building directory shall be subject to the approval of
Landlord. No lettering shall be allowed on outside windows.
	 
	6.	 	No wires for telephone service, electric lights, messenger service or any other
purpose shall be put in the premises without the prior consent of Landlord, which
consent shall not be unreasonably delayed or withheld.
	 
	7.	 	No glass in doors or elsewhere through which light is admitted into any part of the
building shall be covered, nor such light obstructed.
	 
	8.	 	No animals or birds shall be kept in or about the building.
	 
	9.	 	All freight, furniture, etc., must be received and delivered through the SIDE entrance
unless otherwise pre-authorized by Landlord and an appointment MUST be made
with the Landlord to move furniture into or from the building, but special
arrangements MUST be made with the Landlord for the moving of all safes.
	 
	10.	 	Nothing shall be thrown or taken from the windows or doors or in the corridors, nor
shall anything be left outside the building on the window sills of the premises.
	 
	11.	 	No person shall loiter in the halls, corridors or lavoratories.
	 
	12.	 	The Landlord, its employees and other proper persons employed by Landlord shall
have access, at all reasonable times, to perform their duties in the upkeep and care of
the leased premises.

 

 

	13.	 	No tenant shall use any method of heating other than that provided for in the tenant’s
lease, without special arrangements pre-authorized by Landlord.
	 
	14.	 	The Landlord reserves the right to make any such other further rules and regulations
as in its judgment may, from time to time, be needful for the safety, care and
cleanliness of the premises and building and for the preservation of good order
therein. Landlord shall uniformly enforce all rules and regulations.
	 
	15.	 	Any damage done to the building or premises or person or property therein, in
consequence of any breach of any of the rules and regulations, shall be borne by the
tenant, if tenant is responsible for such damage(s).
	 
	16.	 	No person shall smoke in ANY of the common areas, halls, corridors, lavatories, stairwells, entry ways of the building, or in tenants respective leased premises the
Building is a “Smoke Free” building.
	 
	17.	 	Tenants, and all of their employees, agents, etc., shall not park illegally; i.e. no
parking in fire lands, traffic lanes, visitor or handicapped spaces, reserved spaces,
etc. Tenants so parked may be towed and the owner of any towed vehicle will be
solely responsible for the costs incurred for same.
	 
	18.	 	During the applicable holiday season, no “live” plants, trees, etc., shall be place in or
near the premises or anywhere in the Building by tenants.

 

 

EXHIBIT E

ESTOPPEL CERTIFICATE

	 	 	 	 	 
	TO:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 

	 	 	 	 

	 	 	 
	RE:

	 	Lease Dated:
	 

	 	Lease Amendments (if any) Dated:
	 

	 	Landlord: Atlantic-Philadelphia Realty LLC

Demised Premises:

Gentlemen:

     The undersigned (“Tenant”) is the Tenant under the above-captioned Lease
(said Lease, together with all amendments thereto (if any) hereafter the “Lease”),
and, understanding that the Lender will rely on the representations and agreements
below in granting a loan (the “Loan”) to the above-named Landlord to be secured by
a mortgage upon the premises of which the Demised Premises are a part, hereby
acknowledges, certifies and represents to the Lender that:

	1.	 	A true and accurate copy of the Lease is attached hereto. The Lease
represents the entire understanding between Landlord and Tenant with respect to the leasing
of the Demised Premises and, except as modified by the Lease Amendments noted above
(if any), has not been otherwise altered, modified or amended. The Lease has
been duly authorized, executed and delivered by Tenant, is in full force and
effect in accordance with its terms, and constitutes a legally valid instrument,
binding and enforceable against Tenant in accordance with its terms, subject only to
applicable limitations imposed by laws relating to bankruptcy and creditors’ rights.
	 
	2.	 	Tenant has accepted possession of the Demised Premises and is in occupancy under
the Lease. The initial term of the Lease commenced on                      and expires
on                     . Tenant has                      right to extend the original term of
the Lease as set forth in the Lease (or has no right, whichever is
applicable) and Tenant has no right to acquire or purchase the Demised
Premises or any portion thereof or interest therein.
	 
	3.	 	The obligation to pay rent under the Lease commenced on All rent payable by
Tenant through the date of this letter has been paid. Rent has not been paid
for any period beyond the now current monthly rent due, except as expressly provided
in the

 

 

	 	 	Lease including but not limited to the Security Deposit and Tenant’s proportionate share of
Landlord’s Operating Expenses. To the best of Tenant’s knowledge, there exists no default
with respect to any of the terms, covenants and conditions of the Lease by the Landlord or
the Tenant to be performed, and there is no condition or event which could ripen into a
default upon the lapse of time or the giving of notice. There are no offsets, deductions,
or credits against the rents due and payable under the Lease.

WITNESS the execution hereof under seal this                      day of

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BY:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(duly authorized)	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Print/Type Name & Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 

 

 

EXHIBIT F

DESCRIPTION OF LANDLORD’S WORK

     Landlord will create the space to be as shown on the attached plan, by building and
relocating the walls as shown on the plan, and will paint and carpet the Premises.

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