Document:

Exhibit 10.13

 

DATED 16 DECEMBER 2005

 

 

(1)           MURRAY INTERNATIONAL METALS LIMITED

 

 

(2)           KENNETH COCKBURN

 

 

 

SERVICE AGREEMENT

 

 

 

 

160 Queen Victoria Street, London  EC4V 4QQ

Tel:  020 7184 7000    Fax: 
020 7184 7001

 

 

THIS AGREEMENT  is made on 15
December 2005

 

BETWEEN:-

 

(1)                                                                                  MURRAY INTERNATIONAL METALS LIMITED
a company registered in England under number 01241058 whose registered office
is at 95 High Street, Edgware, Middlesex, HA8 7DB (“the Company”); and

 

(2)                                                                                  KENNETH COCKBURN of 6 East
Comiston, Edinburgh EH10 6RZ (“the Executive”).

 

1.                                                                                      DEFINITIONS

 

1.1                                                                                 In
this agreement and the schedules to it the following expressions shall, unless
the context otherwise requires or otherwise as expressly provided, have the
following meanings:-

 

1.1.1                                                                        “associated company” any company
(or subsidiary thereof as defined in clause 1.1.7) in which any company in the
Group is or shall be the holder of not less than 10% of the equity share
capital (as defined by Section 744 Companies Act 1985) or to which the
Company or any company in the Group renders or shall render substantial
managerial, administrative or technical services;

 

1.1.2                                                                        “basic salary” the annual salary
payable to the Executive pursuant to clause 4.1;

 

1.1.3                                                                        “Board” the Board of Directors of
the Company (or any director or committee of directors duly authorised by the
Board of Directors of the Company for the purposes of this agreement);

 

1.1.4                                                                        “Commencement Date” the date hereof;

 

1.1.5                                                                        “Confidential Information”:-

 

1.1.5.1                                                               any
trade secrets, customer lists, trading details or other information of a
confidential nature relating to the goodwill and secrets of any company in the
Group (including, without limitation, details of the activities, businesses,
expansion plans, business strategy, marketing plans, sales forecasts, forward
planning programmes, investments, prospective investments (and their terms),
research activities, inventions, ideas, computer programs, secret processes,
designs, manufacturing processes, financial information, results and forecasts

 

1

 

of any
such company and details of its employees and contractors and of the
requirements, terms of trade and identity of its suppliers and customers and
prospective suppliers and customers); and

 

1.1.5.2                                                               any
other information specifically designated by any company in the Group as
confidential; and

 

1.1.5.3                                                               any
information in relation to which any company in the Group owes a duty of
confidentiality to any third party;

 

1.1.6                                                                        “directly or indirectly” (without prejudice
to the generality of the expression) the Executive acting either alone or
jointly whether as principal, agent, shareholder, investor, director, partner,
consultant, contractor, manager, employee or otherwise;

 

1.1.7                                                                        “Group” together the Company, any
holding company of the Company and any subsidiary and subsidiary undertakings
of the Company and of such holding company within the meanings of sections 258,
736 and 736A of the Companies Act 1985 and any associated company;

 

1.1.8                                                                        “holiday year” a calendar year
commencing 1st January;

 

1.1.9                                                                        “Invention” (without prejudice to
the generality of the expression) any discovery, formula, database right,
invention, secret process, improvement in procedure, trade mark, service mark,
business name, registered design, design right, patent, copyright work or other
intellectual property right made, discovered, created, acquired or produced by
the Executive (whether alone or jointly with any other person) in the course of
the Executive’s employment or which relates to or is useful in connection with
the business or any product or service of the Company or any company in the
Group;

 

1.1.10                                                                  “Termination Date” the date of the
termination of this agreement;

 

1.1.11                                                                  “working days” weekdays excluding
Saturdays, Sundays, bank or other public holidays; and

 

1.1.12                                                                  “WTR” the Working Time Regulations
1998.

 

1.2                                                                                 The
headings to the clauses of this agreement and the paragraphs of the schedules
are for convenience only and have no legal effect and references to the
singular shall include a reference to the plural and vice versa where the
context so admits or requires.

 

2

 

1.3                                                                                 References
in this agreement to statutory provisions shall, where the context so admits or
requires, be construed as including references to the corresponding provisions
of any earlier statute (whether repealed or not) directly or indirectly
amended, consolidated, extended or replaced by such provisions, or re-enacted
in such provisions, or the corresponding provisions of any subsequent statute
directly or indirectly amending, consolidating, extending or replacing such
provisions, and shall include any orders, regulations, instruments or other
subordinate legislation made under the relevant statute.

 

1.4                                                                                 References
in this agreement to clauses and the schedules are references to clauses of and
the schedules to this agreement and references to this agreement include the
schedules the provisions of which form part of this agreement and are
incorporated herein.

 

1.5                                                                                 The
provisions of sections 324 and 328 of the Companies Act 1985 shall apply in
determining for the purpose of this agreement whether the Executive has an
interest in any shares or other securities.

 

2.                                                                                      TERM

 

2.1                                                                                 The
Company shall employ the Executive and the Executive shall serve the Company as
from the Commencement Date, subject to the terms and conditions of this
agreement, unless and until either party shall give to the other not less than twelve
months’ notice in writing to terminate this agreement.

 

2.2                                                                                 In
any event and without prior notice or compensation this agreement shall
determine on the last day of the month in which the Executive attains the age
of 65 years.

 

2.3                                                                                 The
Executive’s period of continuous employment with the Company began on 1 August 1977.

 

3.                                                                                      JOB
TITLE AND DUTIES

 

3.1                                                                                 The
Executive shall be employed as Managing Director or in such other capacity of
like status as the Board may agree with the Executive and shall report to
the Board or such other person as the Board may nominate from time to
time.

 

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3.2                                                                                 The
Executive shall be an executive director and, subject always to the control of
the Board, shall carry out such duties and (without further remuneration)
accept such offices and directorships, notwithstanding the Executive’s job
title but consistent with the Executive’s status, as may be assigned to
the Executive from time to time by the person to whom he reports and by the
Board and such duties and/or offices and/or directorships may relate to
the business of the Company or of any company in the Group.

 

3.3                                                                                 The
Executive shall (in addition to observing the Executive’s implied duty of
fidelity and duties as a director at law to which the Executive is subject):-

 

3.3.1                                                                        use
all proper means to the best of the Executive’s ability to maintain and improve
the business of the Company and the companies in the Group and further their
respective reputations and interests;

 

3.3.2                                                                        faithfully,
efficiently and diligently perform those duties and exercise such powers
as are consistent with them which shall from time to time be assigned to or
vested in the Executive;

 

3.3.3                                                                        comply
with all lawful and reasonable directions, restrictions, rules and
regulations from time to time laid down or adopted by the Board;

 

3.3.4                                                                        at
all times promptly give to the Board (in writing, if so requested) such
information, advice and explanations as it may require in connection with
matters relating to the Executive’s employment under this agreement or with the
business of the Company or any company in the Group;

 

3.3.5                                                                        immediately
disclose to the Board (in writing if so requested) all facts and matters which may or
do give rise to a conflict between the Executive’s personal interests and those
of the Company or the Group;

 

3.4                                                                                 The
Executive shall devote himself exclusively to the performance of his duties
during normal working hours (8.30am to 5.30pm Monday to Friday inclusive of one
hour for lunch daily) and at all other times which may be necessary for
the proper performance of his duties except in the case of illness or accident.
It is agreed and acknowledged that any additional hours worked by the Executive
outside normal business hours fall within Regulation 20(2) WTR on the
basis that they are not measured or predetermined and can be determined by the
Executive and accordingly that Regulation 4(1) WTR does

 

4

 

not
apply to such additional hours. In the event that any additional hours worked by
the Executive outside normal working hours are not covered by Regulation 20(2) WTR,
the Executive agrees that the limit in Regulation 4(1) WTR shall not apply
to the Executive. The Executive shall be entitled to withdraw such agreement by
giving 3 months’ prior written notice to the Company.

 

3.5                                                                                 The
Executive’s place of employment shall be within a radius of 50 miles of Murray
Works, Newbridge Industrial Estate, Midlothian. The Executive shall undertake
such travel both within and outside the United Kingdom as may be necessary
for the proper performance of the Executive’s duties but shall not be obliged
(except for occasional visits in the ordinary course of his duties) to reside
outside the United Kingdom.

 

3.6                                                                                 Notwithstanding
any other provision of this agreement, the Company shall not be under any
obligation to vest in or assign to the Executive any powers or duties and may without
the need to give any reason for so doing during any period of notice served or
purported to be served under this agreement:-

 

3.6.1                                                                        require
the Executive to perform:-

 

3.6.1.1                                                               all
his normal duties; or

 

3.6.1.2                                                               a
part only of his normal duties and no other; or

 

3.6.1.3                                                               such
other duties as it may require and no others; or

 

3.6.1.4                                                               no
duties whatever; and

 

3.6.2                                                                        suspend
or exclude the Executive from all or any premises of the Company and any
company in the Group; and

 

3.6.3                                                                        require
the Executive not to contact any customers, clients, suppliers or employees of
the Company or any company in the Group in connection with the business of the
Company or any Company in the Group; and

 

3.6.4                                                                        require
the Executive immediately to resign from any directorships which the Executive
holds in the Company and any company in the Group (and if the appropriate
resignation shall not be signed and delivered to the Board within seven days
after such request the Executive agrees that the Board may appoint any
director of the Company to sign such notice of resignation for and on behalf of
the Executive and in the Executive’s name for such purpose);

 

5

 

3.6.5                                                                        require
the Executive to return to the Company all documents and other materials
(including copies) belonging to the Company or any company in the Group.

 

3.6.6                                                                        The
Executive’s salary will not cease to be payable (in whole or in part) nor will
the Executive cease to be entitled to any other benefits under this agreement
nor will the Executive cease to be bound by any express obligations pursuant to
this agreement (save as specifically varied by this clause 3.6) by reason only
of such requirement as is described in this clause 3.6 and, for the avoidance
of doubt, the Executive shall remain bound by his duty of good faith to the
Company and the provisions of clause 12 of this agreement.

 

3.7                                                                                 If
the Executive fails to make himself available for work during any period of
notice of termination of the Executive’s employment, other than pursuant to
clause 3.6 or in accordance with clauses 6 or 7 or with the prior written
permission of the Board, the Executive shall not be entitled to any payment of
salary or to any benefits in respect of such absence.

 

3.8                                                                                 The
Executive shall under no circumstances whatsoever either directly or indirectly
receive or accept for his own benefit any commission, rebate, discount,
gratuity or profit from any person, company or firm having business
transactions with any company in the Group unless previously agreed with the
Board.

 

4.                                                                                      REMUNERATION

 

4.1                                                                                 The
basic salary (which shall accrue from day to day) shall be £300,600.00 per
annum payable by bank credit transfer in equal monthly instalments in arrears
not later than on the last day of each month. The basic salary shall be deemed
to be inclusive of any director’s fees and other emoluments which the Executive
may receive or be entitled to receive from the Company or any company
within the Group save as otherwise provided for in this Agreement. After the
first anniversary of the Commencement Date, the Executive’s salary shall be
reviewed and shall increase to not less than £334,000.00 per annum. Thereafter,
although the Company shall be under no obligation to increase the salary
payable hereunder, the salary shall be subject to review at least once in each
year.

 

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4.2                                                                                 Any
benefits provided by the Company or any company in the Group to the Executive
or the Executive’s family which are not expressly referred to in this agreement
shall be regarded as at the absolute discretion of the Company and shall not
constitute a contractual entitlement of the Executive under this agreement or
otherwise.

 

4.3                                                                                 In the absolute discretion of the Company the Executive may be paid
an annual bonus. The amount of any such bonus payment and the timing of any
such payment shall be in the absolute discretion of the Company. For the
avoidance of doubt, the Executive shall not be entitled to a bonus under this
clause if, for whatever reason, he is not in the employment of the Company or
he is under notice of termination (whether given or received) on the date when
the bonus is payable. It is also agreed that the payment of a discretionary
bonus in respect of any one year, or over a period of years, does not confer
any legal or moral entitlement to a bonus, or to compensation for the loss of
any bonus, in any subsequent year. 

 

5.                                                                                      EXPENSES

 

5.1                                                                                 The
Company shall repay to the Executive all expenses reasonably and properly
incurred by the Executive in the performance of the Executive’s duties under
this agreement upon appropriate evidence of such expenditure being provided to
the Company.

 

5.2                                                                                 The
Executive undertakes to observe the Company’s policy on expenses from time to
time.

 

6.                                                                                      HOLIDAYS

 

6.1                                                                                 The
Executive shall be entitled to paid holidays of 35 working days per calendar
year accruing pro rata over the holiday year in addition to all usual bank and
other public holidays.

 

6.2                                                                                 The
Executive shall obtain the consent of the person to whom the Executive reports
prior to taking any holiday and may not carry forward any unused part of
the holiday entitlement to a subsequent holiday year without the prior written
approval of the person to whom the Executive reports.

 

6.3                                                                                 Upon
termination of the Executive’s employment for any reason other than gross
misconduct or other breach of this agreement the Executive shall be

 

7

 

entitled
to pay in lieu of any accrued holiday entitlement at the rate of 1/260th of the
basic salary in respect of each day of holiday entitlement, fractions of a day
being rounded down to the nearest whole number of days. Upon termination of the
Executive’s employment for any reason, the Executive shall be required to make
a payment to the Company in respect of holiday taken in excess of the accrued
holiday entitlement at the rate described above in this clause. Any such sum
due to the Company may be deducted from any remuneration or other sums
otherwise payable by the Company to the Executive.

 

7.                                                                                      ILLNESS
OR ACCIDENT

 

7.1                                                                              The
Executive shall be entitled to receive the basic salary and other contractual
benefits to which the Executive is entitled under this agreement if prevented
from performing his duties through illness, accident or other such incapacity at
the rate of full pay for the first fifty-two weeks of such absence and at the
rate of half pay for the next fifty two weeks thereafter. The Executive’s
entitlement to basic salary and other benefits under this agreement shall cease
upon the expiry of the period referred to in this clause and any continuing
payments of salary after this period of one hundred and four weeks shall be at
the Company’s sole discretion. The Company may on such terms and
conditions as the Company shall determine appoint a replacement to undertake
some or all of the Executive’s duties in the event that the relevant period of
illness, accident or other incapacity exceeds 20 consecutive working days.

 

7.2                                                                              The
basic salary payable by the Company to the Executive in circumstances where
clause 7.1 applies shall abate by the amount of sickness or disability benefit which
the Executive receives under any scheme maintained by the Group or under any
relevant legislation.

 

7.3                                                                                 The
Executive shall notify the Company immediately of any illness, accident or
other incapacity in such form and thereafter at such intervals as the
Company may require.

 

7.4                                                                                 If
the Executive shall be prevented from performing his duties as a result of
illness, accident or incapacity for any period in excess of one hundred and
four weeks in the preceding forty eight months, the Company may,
notwithstanding

 

8

 

any
other provision of this agreement, terminate the Executive’s employment by
giving the statutory minimum period of notice, in which case the Executive
shall not be entitled to any additional compensation.

 

7.5                                                                                 In
circumstances where the Executive shall have been prevented from performing his
duties for the periods referred to in clause 7.4, the Company may in its
absolute discretion, if the Executive is a director of the Company or any
company in the Group, require the Executive to resign any such directorship (the
imposition by the Company and the compliance by the Executive with which
requirement shall not constitute a breach of contract on the part of the
Company) and, if the appropriate resignation shall not be signed and delivered
by the Executive to the Board within seven days of such request, the Executive
agrees that the Board may appoint any other director of the Company to
sign such notice of resignation for and on behalf of the Executive and in the
Executive’s name for such purpose.

 

7.6                                                                                 The
Executive may be required at the request of the Company during the course
of his employment to attend a doctor or clinic nominated by the Company for the
purpose of a comprehensive medical examination to determine his fitness for
continued employment and shall use his reasonable endeavours to ensure the
prompt delivery of the relative report to the Company. Notwithstanding the
provisions of the Access to Medical Reports Act 1988, the Executive will permit
the Company access to any medical report relating to the physical or mental
health of the Executive and which is relevant to the ability of the Executive
to perform his duties from a medical or other practitioner who is or has
been responsible for the clinical care or treatment of the Executive.

 

7.7                                                                                 In
the event that the Executive is incapable of performing his duties by reason of
injuries sustained wholly or partly as a result of actionable negligence,
nuisance or breach of any statutory duty or any criminal conduct on the part of
any third party all payments made to the Executive by the Company under this
clause in respect of any consequent absence shall, to the extent that
compensation is recoverable either from the third party and/or any other body
constitute loans by the Company to the Executive and shall be repaid to the

 

9

 

Company
in accordance with the provisions of this clause to the extent that the
Executive recovers compensation for loss of earnings. Where the Executive
recovers any compensation for loss of earnings as referred to in this clause,
he shall notify the Company in writing forthwith and shall repay the amount due
to the Company under this clause within 28 days of receipt of such
compensation.

 

8.                                                                                      OTHER
BENEFITS

 

8.1                                                                              Subject
to the Rules for the time being applicable thereto, which the Executive may obtain
on application to the Secretary of the Company, the Executive shall during the
continuance of the Executive’s appointment hereunder, be entitled to membership
of a Medical Care Scheme for the benefit of himself, his spouse and any
children under 25 years of age in full-time education. Changes in the Rules of
any such Scheme will be made available for inspection on application to the
Secretary of the Company.

 

9.                                                                                      AUTHORITY

 

The
Executive shall not without the prior consent of the Board:-

 

9.1                                                                                 incur
on behalf of the Company or any company in the Group any capital expenditure in
excess of such sum as may be authorised from time to time and notified to
the Executive; or

 

9.2                                                                                 enter
into on behalf of the Company or any company in the Group any commitment,
contract or arrangement otherwise than in the normal course of business or
outside the scope of his normal duties or of an unusual or onerous or long term
nature.

 

10.                                                                               INTELLECTUAL
PROPERTY

 

10.1                                                                           The
Executive shall immediately disclose any Invention to the Company and the
Invention shall belong to and be the absolute property of the Company or such
company in the Group as the Company may nominate for the purpose.

 

10.2                                                                           The
Executive shall, at the request and expense of the Company (or its nominee),
whether during or after the termination of this agreement, apply or join in
applying for patents, trade marks or other intellectual property protection in
the United Kingdom or any other part of the world for any Invention and
complete and execute all documents and do all things necessary

 

10

 

for vesting all right, title and interest to all
patents, trade marks or other intellectual property rights in the Invention to
the Company (or its nominee) absolutely as sole beneficial owner. The Executive
hereby irrevocably appoints the Company to be his attorney in his name and on
his behalf to complete and execute any such documents or do any such thing and
generally to use his name for the purpose of giving to the Company (or its
nominee) the full benefit of the provisions of this clause 10.

 

10.3                                                                           Until
such time as any Invention is fully vested in the Company pursuant to clause
10.2 the Executive shall hold all rights, title and interest in the Invention
in trust for the Company absolutely.

 

10.4                                                                           The
Executive acknowledges and agrees that the Executive will not (whether during
or after his employment) apply or join in applying for any patent, registered
design, trade mark or other intellectual property protection in respect of any
Invention without the prior written approval of the Company.

 

10.5                                                                           The
Executive hereby waives all moral rights as defined in Chapter IV of Part I
of the Copyright Designs and Patents Act 1988 in any works produced during the
period of his employment with the Company in which copyright is vested in the
Company or any company in the Group whether by virtue of this clause 10 or
otherwise.

 

11.                                                                               CONFIDENTIALITY

 

11.1                                                                           The
Executive shall not, whether during or after the termination of his employment,
except in the proper course of his duties, use or divulge and shall use his
best endeavours to prevent the use, publication or disclosure to any person,
firm or company of any Confidential Information which has or may come to
his knowledge in the course of his employment save that this obligation shall
not extend to any matters which are or shall be in the public domain otherwise
than due to the default of the Executive.

 

11.2                                                                           Any
Confidential Information as shall be made or received by the Executive during
the continuance of this agreement shall be the property of the Company and all
such property and copies thereof shall be surrendered by the Executive to the
Company immediately upon the termination of this agreement

 

11

 

(howsoever
occasioned) in accordance with clause 17 or at the request of the Board at any
time during the course of his employment.

 

11.3                                                                           The
Executive agrees that the provisions of this clause 11 are without prejudice to
any other duties of confidentiality owed by the Executive to the Company
whether express or implied and will remain in force after termination of his
employment with the Company for any reason.

 

11.4                                                                           Nothing
in this clause 11 shall restrict the Executive from disclosing (but only to the
proper recipient) any Confidential Information which the Executive is required
to disclose by law or any order of the court or any relevant regulatory body or
as permitted pursuant to the Public Interest Disclosure Act 1998, provided that
the Executive shall, unless otherwise permitted or obliged by law, have given
prior written notice to the Company of the requirement and of the information
to be disclosed and allowed the Company an opportunity to comment on the
requirement before making the disclosure.

 

12.                                                                               OUTSIDE
INTERESTS

 

Save
for any directorships which the Executive may currently hold with Murray
International Holdings Limited, any holding company of Murray International
Holdings Limited and any subsidiary and subsidiary undertakings of Murray
International Holdings Limited and of such holding company within the meanings
of sections 258, 736 and 736A of the Companies Act 1985 (together, “the Murray
Group”), the Executive shall not, when employed by the Company, be
directly or indirectly concerned or interested in any trade or occupation or
business other than the businesses of the Company and the Group except with
written permission pursuant to a resolution of the Board. On or before the
first anniversary of the Commencement Date, the Executive shall resign from the
Chairmanship of any company within the Murray Group. On a date to be mutually
agreed between the Executive and the Company, the Executive shall resign from
any directorships he currently holds with the Murray Group. In this clause 12
the expression “occupation” shall include membership of Parliament or of a
local authority, council or any other public or private work (whether for
profit or otherwise).

 

12

 

13.                                                                               DISCIPLINE
AND GRIEVANCES

 

13.1                                                                           There are no disciplinary or grievance procedures which form part of
this agreement. A copy of the Company’s non-contractual disciplinary and
grievance procedure is available on request to the Company Secretary. If the
Executive is dissatisfied with any disciplinary decisions relevant to his or if
he wishes to seek redress of any grievance relating to his employment, he
should apply in writing to the Company Secretary.

 

13.2                                                                           In
order to investigate a complaint or allegation against the Executive of
misconduct or some other serious issue relating to his employment and to allow
the Company to carry out whatever investigations it deems appropriate in relation
thereto, the Company may for whatever period it considers necessary suspend
the Executive on full pay and other contractual benefits and require the
Executive:-

 

13.2.1                                                                  not
to enter any premises of the Company or any company in the Group; and

 

13.2.2                                                                  to
abstain from contacting any customers, clients, employees or suppliers of the
Company or any company in the Group.

 

Save
as permitted pursuant to clause 12, the Executive shall not be employed by or
provide services to any third party during the period for which he is suspended
pursuant to this clause 13.2.

 

14.                                                                               RESIGNATION
OF DIRECTORSHIPS

 

14.1                                                                           If
the Executive shall be a director of the Company and shall resign, or otherwise
cease (other than by retirement and re-election in accordance with the Company’s
Articles of Association or in the circumstances referred to in clause 7.4)
through his own act or default to be a director of the Company the Executive
shall be in breach of the terms of this agreement which may be terminated
by the Company without notice.

 

14.2                                                                           If
required by the Board to act as a director of any company in the Group in
addition to the Company in accordance with clause 3.2 or if appointed by
agreement with the Board as a director of any corporation in which the Group may have
an interest, the Executive shall resign from any such directorship as the Board
may from time to time require. A request for any such resignation

 

13

 

shall
not constitute termination of this agreement or constructive dismissal of the
Executive.

 

15.                                                                               TERMINATION
BY DEFAULT

 

15.1                                                                           Notwithstanding
any other provision of this agreement, the Company may at any time in
writing terminate the Executive’s employment with immediate effect and without
notice or payment in lieu of notice and without prejudice to any rights or
claims which it may have against him if at any time:-

 

15.1.1                                                                  the
Executive shall be guilty of gross misconduct or gross neglect of his duties;
or

 

15.1.2                                                                  the
Executive shall commit any repeated or continued material breach of his
obligations under this agreement; or

 

15.1.3                                                                  the
Executive shall persistently fail or neglect to carry out his duties under this
agreement; or

 

15.1.4                                                                  the
Executive shall become of unsound mind, be or become a patient under any mental
health legislation, become bankrupt, have an interim receiving order made
against him or make any deed of arrangement or composition with his creditors
generally; or

 

15.1.5                                                                  the
Executive shall commit any act of dishonesty or be guilty of conduct (whether
or not connected with his employment) tending to bring the Company, any company
in the Group or himself into disrepute or otherwise to affect prejudicially the
interests of the Company or any company in the Group; or

 

15.1.6                                                                  the
Executive shall be disqualified from holding office in the Company or any company
by virtue of any legislation; or

 

15.1.7                                                                  the
Executive shall be convicted of any offence under Part V of the Criminal
Justice Act 1993 or under any order or regulation relating to insider dealing;
or

 

15.1.8                                                                  the
Executive shall be convicted of any criminal offence (excluding an offence
under road traffic legislation in the United Kingdom or elsewhere for which he
is not sentenced to any term of imprisonment whether immediate or suspended);
or

 

14

 

15.1.9                                                                  the
Executive shall commit a material breach of the rules of any relevant
regulatory authority in any jurisdiction in which the Company or any company in
the Group operates; or

 

15.1.10                                                            any
information relating to the Executive’s suitability for employment by the
Company and provided in the course of applying or being considered for
employment is found to be false or misleading; or

 

15.1.11                                                            become
addicted to or habitually under the influence of alcohol or any drug (not being
a drug prescribed for you by a medical practitioner for the treatment of a
condition other than drug addiction) the possession of which is controlled by
law; or

 

15.1.12                                                            commit
any unlawful act of discrimination or harassment.

 

15.2                                                                           The
Company’s right immediately to terminate the Executive’s employment under this
clause 15 is without prejudice to any rights it may have to do so derived
from common law.

 

15.3                                                                           The
Executive shall notify the Board immediately of any circumstances which would
entitle the Company to terminate the Executive’s employment under this clause.

 

16.                                                                               TERMINATION
BY REORGANISATION OR RECONSTRUCTION

 

If the
Executive shall have been offered in writing but shall unreasonably have
refused or unreasonably failed to agree to the transfer of this agreement by
way of novation to a company which as a result of a reorganisation amalgamation
or reconstruction has acquired or agreed to acquire the whole or substantially
the whole of the undertaking of the Company the Executive shall have no claim
against the Company in respect of the termination of his employment hereunder
by reason of the subsequent voluntary winding-up of the Company or of the
disclaimer or termination of this agreement by the Company within 3 months
after such unreasonable refusal or unreasonable failure to agree.

 

17.                                                                               EXECUTIVE’S
OBLIGATIONS UPON TERMINATION

 

On the
termination of the Executive’s employment for any reason:-

 

17.1                                                                           if
the Executive shall be a director of any company in the Group the Board may give
him notice in writing requesting him to and he shall forthwith resign any such
directorship and if the appropriate resignation shall not be signed and

 

15

 

delivered
by the Executive to the Board within seven days after such request the
Executive agrees that the Board may appoint any director of the Company to
sign such notice of resignation for and on behalf of the Executive and in his
name for such purpose; and

 

17.2                                                                           the
Executive shall forthwith deliver to the Company all correspondence books
materials records documents accounts letters papers and information of every
description (on whatever media and whoever located) within his possession or
control relating to the affairs and business of the Company or any company in
the Group and any magnetic disks on which information relating to such affairs
and business is stored and any keys or credit cards or other property belonging
to the Company or any company in the Group; and

 

17.3                                                                           the
Executive shall irretrievably delete any information relating to the business
of the Company or any company in the Group stored on any magnetic or optical
disk or memory and all matter derived therefrom which is in his possession,
custody, care or control outside the premises of the Company and shall produce
such evidence of compliance with this clause 17.3 as the Company may require;
and

 

17.4                                                                           the
Executive shall transfer to the Company or as it may direct all shares
held by him in any company in the Group as nominee or trustee for the Company
and deliver to the Company the certificates therefor and the Executive hereby
irrevocably appoints the Company his attorney to execute any such transfers on
his behalf.

 

18.                                                                               SURVIVAL
OF COVENANTS ON TERMINATION

 

18.1                                                                           The
Executive undertakes to observe the provisions of the first schedule to this
agreement.

 

18.2                                                                           Notwithstanding
the termination of this agreement, save as otherwise provided herein, it shall
remain in full force and effect to the extent that the obligations of the
Executive which are expressed to operate thereafter or are of a continuing
nature are concerned and may be enforced against the Executive
accordingly.

 

16

 

19.                                                                               WARRANTY

 

The
Executive warrants that by virtue of entering into this agreement and
performing the duties set out in this agreement he will not be in breach of any
contract of service or for the provision of services or any partnership
agreement and will, save as implied by law, be free from all agreements,
arrangements or other restrictions restricting his right to compete with any
person or to solicit clients or employees of any person or in any way
restricting him from performing this agreement in accordance with its terms.

 

20.                                                                               NOTICES

 

20.1                                                                           Any
notice to be given hereunder shall be in writing.

 

20.2                                                                           Any
notice to be given to the Company shall be sufficiently served either if
delivered personally or sent by first class post to the Company Secretary
at the Company’s registered office for the time being.

 

20.3                                                                           Any
notice to the Executive shall be sufficiently served if delivered to him
personally or sent by first class post to his usual or last known place of
abode.

 

20.4                                                                           Any
notice if posted shall be deemed to have been served at the time when in the
ordinary course of post such notice would have been received.

 

21.                                                                               GENERAL

 

21.1                                                                           Failure
or delay on the part of the Company in exercising any right or remedy of
the Company under this agreement shall not in any circumstances operate as a
waiver of it nor shall any single or partial exercise of any right or remedy in
any circumstances preclude any other or further exercise of it or the exercise
of any other right or remedy.

 

21.2                                                                           The
Executive shall be responsible for and shall pay any tax or statutory levy
assessed on him in respect of any benefit provided to him under this agreement.

 

21.3                                                                           Any
waiver of breach of, or default under, any of the terms of this agreement by
the Company shall not be deemed a waiver of any subsequent breach or default
and shall in no way affect the other terms of this agreement.

 

21.4                                                                           This
agreement shall be governed and construed in all respects in accordance with
the laws of Scotland and the parties agree to submit to the non-exclusive
jurisdiction of the Scottish Courts.

 

17

 

21.5                                                                           The
parties hereto agree and acknowledge that neither has, in entering into this
agreement, relied upon any representation made by the other save as set out in
this agreement.

 

21.6                                                                           For
the purposes of this agreement, and notwithstanding any of the other provisions
of this agreement, the Company will be entitled to carry out all or any of its
obligations under this agreement, whether as to payment of remuneration or
otherwise, through any company or companies in the Group as the Board may from
time to time expressly determine.

 

21.7                                                                           The Executive agrees and
acknowledges that the Company may monitor and/or record the Executive’s
use of electronic mail systems provided by the Company or Group in the course
of his employment.

 

21.8                                                                           For the purposes of the Data
Protection Act 1998, the Executive hereby gives his consent to the holding and
processing of personal data provided by him to the Company or other companies
in the Group for all purposes relating to his employment including, but not
limited to:-

 

(a)                                administering and maintaining
personal records;

 

(b)                               paying and reviewing salary
and other remuneration and benefits;

 

(c)                                providing and administering
benefits (including, if relevant, pension, life assurance, permanent health
insurance and medical insurance);

 

(d)                               undertaking performance
appraisals and reviews;

 

(e)                                sickness and other absence
records;

 

(f)                                  taking decisions as to the
Executive’s fitness for work;

 

(g)                               providing references and
information to future employees and, if necessary, governmental and quasi
governmental bodies for Social Security and other purposes, the Inland Revenue
and the Contributions Agency; and

 

(h)                               providing information to
future purchasers of the Company or any other companies in the Group or of the
businesses in which the Executive works.

 

18

 

22.                                                                               VARIATION

 

This
agreement:-

 

22.1                                                                           contains
the whole of the terms agreed in respect of the Executive’s employment as from
the Commencement Date;

 

22.2                                                                           is
in substitution for any other previous agreement or arrangement in respect of
his employment by any company in the Group; and

 

22.3                                                                           shall
only be capable of being varied by a supplemental agreement or memorandum in
writing signed by or on behalf of the parties hereto.

 

IN
WITNESS WHEREOF these presents on this and the 20 preceding pages and
the 4 subsequent pages are executed by the parties as follows:

 

 

	
  Subscribed by KENNETH COCKBURN

  	
  /s/ KENNETH A. COCKBURN

  	
   

  
	
   

  	
  Signature of Executive

  
	
  At Edinburgh on the 15

  	
   

  
	
  day

  	
   

  
	
  of December 2005 before the following witness:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Witness:  

  	
  Robert N. Lee

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  /s/ Robert N. Lee

  	
   

  	
   

  
	
   

  	
  (Please print)

  	
   

  	
   

  
	
  Address:

  	
  12 KETTLESTOWN MAINS

  	
   

  	
   

  
	
  LINLITHEON, WEST LOTHIAN, EH49 6SN

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Subscribed for and on behalf of MURRAY

  INTERNATIONAL METALS LIMITED

  	
   

  
	
   

  	
   

  
	
  At Edinburgh on the 16

  	
   

  
	
  day

  	
   

  
	
  of December 2005

  	
   

  
	
   

  	
   

  
	
  By:

  	
  DAVID KEMP

  	
   

  	
  /s/ DAVID KEMP

  	
   

  
	
  Name of Company Representative (Please print)

  	
  Signature of Company Representative

  
	
   

  	
   

  
	
   

  	
   

  
	
  Being a Director/Secretary/Authorised Signatory

  (delete as appropriate) of the Company
  before

  the following witness:

  	
   

  
	
   

  	
   

  
						

 

19

 

	
  Witness:  

  	
  /s/ PETER PENMAN

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  PETER PENMAN

  	
   

  	
   

  
	
   

  	
  (Please print)

  	
   

  	
   

  
	
  Address:

  	
  6/30 PORTLAND GARDENS

  	
   

  	
   

  
	
   

  	
  EDINBURGH

  	
   

  	
   

  
	
   

  	
  EH6 6NT

  	
   

  	
   

  

 

20

 

THE FIRST SCHEDULE

 

1.                                                                                      DEFINITIONS

 

In
this schedule unless the context otherwise requires the following
expressions shall have the following meanings:-

 

1.1                                                                                 “the Business” the business of the
Company or any part thereof and any other business or part thereof
carried on by any company in the Group as at the Termination Date and/or during
the Protected Period and to which the Executive has rendered services or about
which he has acquired Confidential Information or by which he has been engaged
at any time during the Protected Period;

 

1.2                                                                                 “Customer” any person, firm or
company who or which at any time during the Protected Period was a customer of
the Company or any other company in the Group with whom or which the Executive
dealt or for whom or which the Executive was responsible on behalf of the
Company or any other company in the Group at any time during the Protected
Period;

 

1.3                                                                                 “Prospective Customer” any person,
firm or company who or which was at any time during the Protected Period
engaged in negotiations, with which the Executive was personally involved, with
the Company or any other company in the Group with a view to purchasing or
obtaining goods and services from the Company or any other company in the Group;

 

1.4                                                                                 “Protected Period” the period of 12
months immediately preceding the earlier of the Termination Date and the
commencement of any Garden Leave Period;

 

1.5                                                                                 “Goods and Services” any goods and
services competitive with those supplied by the Company or any other Group
Company at any time during the Protected Period and in the supply of which the
Executive was involved or concerned or for which he was responsible at any time
during the Protected Period;

 

1.6                                                                                 “Restricted Territory” any
geographic area in which the relevant company in the Group conducts the
Business or part thereof;

 

21

 

1.7                                                                                 “the Restriction Period” the period
of 12 months following the Termination Date;

 

1.8                                                                                 “Senior Executive” a person who at
any time whilst the Executive was employed by the Company or engaged by any
company in the Group:-

 

1.8.1                                                                        is
engaged or employed (other than in a clerical, secretarial or administrative
capacity) as an employee director or consultant of that company; and

 

1.8.2                                                                        is
or was engaged in a capacity in which he obtained Confidential Information; and

 

1.8.3                                                                        is
so engaged at any time during the Protected Period; and

 

1.8.4                                                                        with
whom the Executive had dealings in the course of his duties during the
Protected Period; and

 

1.9                                                                                 “Garden Leave Period” any period
during which the Executive is excluded from his duties pursuant to clause 3.6
of the main body of this agreement.

 

2.                                                                                       The
parties to this agreement agree and acknowledge that it is reasonable and
necessary for the protection of the Confidential Information, goodwill, stable
workforce, trade secrets and trade connections of the Business that the
Executive should be restrained in the terms of the covenants set out in this schedule from
making available or using for the benefit of himself or a competitor or
potential competitor Confidential Information or trade connections which he has
obtained and is likely to obtain in the course of his employment as an
Executive of the Company.

 

3.                                                                                       The
Executive accordingly covenants with the Company that in view of the
circumstances referred to in paragraph 2 of this schedule, he will not (other
than for and on behalf of the Company or any company in the Group) without the
prior written consent of the Board (such consent to be withheld only so far as may be
reasonably necessary to protect the legitimate interests of the Group) directly
or indirectly:-

 

3.1                                                                                 at
any time during the Restriction Period:-

 

3.1.1                                                                        be
engaged or concerned or interested or participate in a business the same as or
in competition with the Business or relevant part thereof in any
Restricted Territory provided always that this paragraph shall not restrain the
Executive 

 

22

 

from
being engaged or concerned in any business concern in so far as the Executive’s
duties or work shall relate solely to:-

 

(a)                                                                                  geographical
areas where the business concern is not in competition with the Business; or

 

(b)                                                                                 services
or activities with which the Executive was not concerned to a material extent
during the Protected Period;

 

3.1.2                                                                        in
respect of any Goods and Services solicit, facilitate the solicitation of or
canvass the custom or business of any Customer;

 

3.1.3                                                                        in
respect of any Goods and Services, solicit, facilitate the solicitation of or
canvass the custom or business of any Prospective Customer;

 

3.1.4                                                                        in
respect of any Goods and Services, deal with or provide or supply any Customer;

 

3.1.5                                                                        in
respect of any Goods and Services, deal with or provide or supply any
Prospective Customer;

 

3.1.6                                                                        offer
employment to or employ or offer to conclude any contract for services with or
engage any Senior Executive;

 

3.1.7                                                                        solicit
or entice any Senior Executive to leave his employment with or cease his
directorship of or consultancy with the Company or any company in the Group;

 

3.2                                                                                 at
any time:-

 

3.2.1                                                                        solicit
or entice or endeavour to solicit or entice any person to breach his contract
of employment or contract for services with the Company or any company in the
Group or procure or facilitate such by any person firm or company;

 

3.2.2                                                                        do
or say anything likely or calculated to lead any person firm or company to
withdraw from or cease to continue offering to the Company or any company in
the Group any rights of purchase, sale, import, distribution or agency then
enjoyed by it;

 

3.2.3                                                                        disclose
to any person (except as required by law) or any regulatory authority or use to
the detriment of the Company or any company in the Group any Confidential
Information which he has acquired before the Termination Date provided always
that this obligation shall not extend to any matter which is or

 

23

 

shall
be in the public domain otherwise than through the default of the Executive; or

 

3.2.4                                                                        falsely
represent himself as being connected with or interested in the Company or any
company in the Group or in the Business.

 

4.                                                                                       The
Executive agrees that if, during his employment pursuant to this agreement or
the continuance in force of the restrictions set out in this schedule, he
receives an offer of employment or engagement in any capacity from any person,
he will immediately provide that person with a complete and accurate copy of
this schedule.

 

5.                                                                                       The
Executive hereby acknowledges and agrees with the Company that:-

 

5.1                                                                                 each
of the sub-clauses contained in paragraph 3 of this schedule constitutes
an entirely separate severable and independent covenant and restriction on him;

 

5.2                                                                                 the
duration, extent and application of each of the restrictions contained in
paragraph 3 of this schedule are no greater than is necessary for the
protection of the goodwill and trade connections of the Business; and

 

5.3                                                                                 in
the event that any restriction on him contained in paragraph 3 of this schedule shall
be found void but would be valid if some part thereof were deleted such
restriction shall apply with any such deletion as may be necessary to make
it valid and effective; and

 

5.4                                                                                 the
Company shall be entitled to seek to enforce such restrictions not only on
behalf of itself but also on behalf of any other company in the Group.

 

24Exhibit 10.16

 

EXECUTION
ORIGINAL

 

LEASE

 

 

DATED
[   ] DECEMBER, 2005

 

 

STEELS
(UK) QRS 16-58, INC.

(as
Landlord)

 

 

to

 

 

MURRAY
INTERNATIONAL METALS LIMITED

(as
Tenant)

 

 

Land
and 3 buildings located at

NEWBRIDGE
INDUSTRIAL ESTATE

NEWBRIDGE

MIDLOTHIAN

 

 

CONTENTS

 

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Lease
  Of The Premises

  	
  4

  
	
  2.

  	
  Definitions

  	
  4

  
	
  3.

  	
  Interpretation

  	
  9

  
	
  4.

  	
  The
  Grant; Rent

  	
  10

  
	
  5.

  	
  Lease
  Term

  	
  10

  
	
  6.

  	
  Condition;
  Single Lease Transaction

  	
  11

  
	
  7.

  	
  Insurance

  	
  11

  
	
   

  	
  7.2

  	
  Reinstatement

  	
  13

  
	
   

  	
  7.3

  	
  Landlord’s
  insurance

  	
  14

  
	
  8.

  	
  Tenant’s
  Obligations

  	
  15

  
	
   

  	
  8.1

  	
  Rent

  	
  15

  
	
   

  	
  8.2

  	
  Repair
  and Replacement

  	
  15

  
	
   

  	
  8.3

  	
  Alterations
  and additions

  	
  15

  
	
   

  	
  8.4

  	
  Signs
  and reletting notices

  	
  16

  
	
   

  	
  8.5

  	
  Use;
  Occupancy

  	
  16

  
	
   

  	
  8.6

  	
  Not
  to overload

  	
  16

  
	
   

  	
  8.7

  	
  Entry

  	
  17

  
	
   

  	
  8.8

  	
  Compliance
  with Law

  	
  18

  
	
   

  	
  8.9

  	
  Outgoings,
  costs and fees

  	
  18

  
	
   

  	
  8.10

  	
  Taxes

  	
  19

  
	
   

  	
  8.11

  	
  General
  requirements concerning use

  	
  19

  
	
   

  	
  8.12

  	
  Indemnity

  	
  20

  
	
   

  	
  8.13

  	
  Corporate
  and Financial Covenants

  	
  20

  
	
   

  	
  8.14

  	
  Environmental
  requirements

  	
  20

  
	
   

  	
  8.15

  	
  Post-Closing
  Obligations

  	
  21

  
	
   

  	
  8.16

  	
  The
  Construction (Design and Management) Regulations 1994

  	
  22

  
	
   

  	
  8.17

  	
  Compulsory
  Acquisition

  	
  23

  
	
   

  	
  8.18

  	
  Restoration

  	
  25

  
	
  9.

  	
  Landlord’s
  Obligations

  	
  26

  
	
  10.

  	
  Determination
  of Value

  	
  27

  
	
  11.

  	
  Procedures
  upon Purchase

  	
  28

  
	
  12.

  	
  Alienation

  	
  28

  
	
  13.

  	
  Breach
  Events

  	
  32

  
	
  14.

  	
  Breach/Irritancy

  	
  34

  
	
  15.

  	
  General Provisions

  	
  35

  
	
   

  	
  15.1

  	
  Service of notices

  	
  35

  
	
   

  	
  15.2

  	
  No liability in damages

  	
  36

  
	
   

  	
  15.3

  	
  Failure to perform
  obligations

  	
  36

  
	
   

  	
  15.4

  	
  Waiver of right to forfeit

  	
  36

  
	
   

  	
  15.5

  	
  Tenant’s goods left in
  Premises

  	
  37

  
	
   

  	
  15.6

  	
  Covenants relating to
  adjoining premises

  	
  37

  
	
   

  	
  15.7

  	
  Entire understanding;
  Schedules

  	
  37

  
	
   

  	
  15.8

  	
  Severance

  	
  37

  
	
   

  	
  15.9

  	
  Intentionally Deleted

  	
  37

  
	
   

  	
  15.10

  	
  Non-recourse

  	
  37

  
	
   

  	
  15.11

  	
  Option to Purchase

  	
  38

  
	
   

  	
  15.12

  	
  Amendments

  	
  38

  
	
   

  	
  15.13

  	
  Successors and Assignees

  	
  38

  
	
   

  	
  15.14

  	
  Governing Laws

  	
  38

  

 

 

	
   

  	
  15.15

  	
  Consent Standard

  	
  38

  
	
   

  	
  15.16

  	
  OFAC Representation

  	
  39

  
	
   

  	
  15.18

  	
  Consent to Registration

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule

  	
   

  
	
   

  	
   

  
	
  1.

  	
  Land

  	
  41

  
	
  2.

  	
  Title Conditions

  	
  42

  
	
  3.

  	
  Reserved Rights

  	
  43

  
	
  4.

  	
  Provisions for Rent Review

  	
  44

  
	
  5.

  	
  Corporate and Financial
  Covenants

  	
  46

  
	
  6.

  	
  Option to Purchase

  	
  47

  
	
  7.

  	
  Percentage Allocation of
  Basic Rent

  	
  48

  
	
  8.

  	
  Tenant’s Post Closing
  Obligations

  	
  49

  
	
  9.

  	
  Particulars

  	
  50

  
	
  10.

  	
  Guarantee

  	
  52

  

 

 

THIS LEASE is made

 

BETWEEN:

 

(1)                                  STEELS (UK) QRS 16-58, INC., a company incorporated under the laws of
the State of Delaware (United States) with its address at a/o W.P. Carey &
Co. LLC, 50 Rockefeller Plaza, Second Floor, New York, New York, 10020, USA,
Attn: Director, Asset Management (the Landlord); and

 

(2)                                  MURRAY INTERNATIONAL METALS LIMITED, incorporated under the Companies Acts with
company number 1241058 with its address at 95 High Street, Edgware, Middlesex
HAS 7BD (the Tenant).

 

IT IS AGREED AS FOLLOWS:

 

1.                                      LEASE OF THE PREMISES

 

Landlord hereby lets to
Tenant, and Tenant hereby takes and leases from Landlord the Premises for the Term and
upon the provisions hereinafter provided.

 

2.                                      DEFINITIONS

 

In
this lease agreement the following expressions have the following meanings:

 

Additional
Rent means any and
all sums whatsoever (other than the Basic Rent) payable by the Tenant to the
Landlord under the provisions of this Lease together with all VAT payable on
such sums;

 

Additional
Rights means all
wayleaves, servitudes, rights-of-way, rights, parts, privileges and pertinents,
in and to the Land, including wayleaves and servitudes over other lands formally
constituted by any express agreement;

 

Affected
Premises means the
Affected Premises as defined in clause 8.17.4;

 

Alteration
or Additions means
all alterations and additions made to any part of the Premises including
without limitation additions or alterations to the Plant, changes to the
existing design or appearance of the Premises or any alteration in or extension
to the electrical installations located in the Premises or the erection of any
new building;

 

Basic
Rent means £1,198,650
per annum from the Commencement Date as increased in accordance with the
provisions of Part 4 of the Schedule;

 

Breach Event means any of the events set out in clause 13;

 

Buildings means the 11,114 square foot, two-storey office building constructed on
the Land described in section (A) of Part 1 of the Schedule which is part of
the Office Premises; the 145,620 square foot
manufacturing building constructed on the Land described in section (B)
of Part 1 of the Schedule which is part of the Manufacturing 1 Premises; and
the approximately 56,660 square foot manufacturing facility constructed on the
Land described in section (C) of Part I of the Schedule which is part of the
Manufacturing 2 Premises;

 

CA
Termination Date
means the CA Termination Date as defined in clause 8.17.4.

 

Cash
Security Deposit
means Cash Security Deposit as defined in. clause 8.15.3;

 

Casualty means any damage to, or destruction of, any
Related Premises;

 

1

 

Commencement
Date means [    ]
December, 2005;

 

Competent
Authority means any
national or local governmental agency, body or other entity having enforcement
or regulatory powers in Scotland in respect of any Environmental Law;

 

Compulsory Acquisition means any expropriation or taking of all or a
portion of any Related Premises (1) in or by compulsory purchase, vesting order
or any other Acts or proceedings of Parliament, the Scottish Parliament, the
European Community, any local or governmental authority and any court or agency
pursuant to any Law, general or special, or (ii) by reason of any agreement
with any of the foregoing bodies in settlement of or under threat of any such
proceedings, or (iii) by any other means. The Compulsory Acquisitions shall be
considered to have taken place as of the later of the date actual physical
possession is taken by the acquirer, or the date on which the right to
compensation and damages accrues under the law applicable to the Premises;

 

Compulsory Acquisition Notice means notice or actual knowledge of the institution
of or intention to institute any proceeding for Compulsory Acquisition;

 

Credit
Entity means any
Person that immediately following such assignation or subletting and having
given effect thereto will have a
publicly traded unsecured senior debt rating of “Baa2” or. better from
Moody’s Investor Services, Inc. or a rating of “BBB” or better from Standard
& Poor’s Corporation (or, if such Person does not then have rated debt, a
determination that by either of such rating agencies its unsecured senior debt would
be so rated by such agency and will not be on “Negative Credit Watch”), and in
the event both such rating agencies cease to furnish such ratings, then a
comparable rating by any rating agency acceptable to Landlord.

 

Dangerous Substances means any substance (whether in the form of a solid, liquid,
gas or vapour) the generation, keeping, transportation, storage, treatment, use
or disposal of which gives rise to a risk of causing harm to man or to any
other living organism or causing damage to the environment and includes (but
without limitation) any controlled special, hazardous, toxic, radioactive or
dangerous waste;

 

Environmental Law means any and
all laws (including common law) or regulations existing, adopted, made,
commenced, introduced or otherwise brought into force in Scotland prior to or
after the date of this Lease and byelaws, judgments, notices, orders,
directions, instructions or awards of any Competent Authority and which have as
purpose or effect the protection of the environment and/or the prevention of
harm or damage to the environment, to human health or to the health of any
other living organism or to property;

 

Environmental Permits means any
and all consents, permits or authorisations required under Environmental Law in
connection with the Tenant’s use and occupation of the Premises;

 

Fair
Market Value means
the fair market value of each of the Related Premises as of the date of the
Option Exercise Notice and assuming that each Related Premises is (i) in the
condition required by this Lease and (ii) encumbered by this Lease and assuming
the Term has been extended for all extension periods provided herein as
described in clause 10. For all
purposes of this Lease, Fair Market Value shall be determined in accordance
with the procedure specified in clause 10;

 

Fair
Market Value Date
means the date when the Fair Market Value is determined in accordance with
clause 10;

 

GAAP means generally accepted accounting
principles, standards and practices in the United Kingdom consistently applied;

 

Guarantee means each of (i) the Guarantee of even date
granted by the Guarantor to Landlord 

 

2

 

and
(ii) the Guarantee to be granted by Murray International Metals PTE Limited,
incorporated under the Singapore Companies Acts with company number 2002201097M
with its registered address at 438 Alexandra Road #04-01, Alexandra Point,
Singapore 119958, to Landlord in the
form annexed hereto as Part 10 of the Schedule as provided in the provisions of
clause 8.15.2;

 

Guarantor means, jointly and severally, (i) the Guarantor defined in Part 9 of
the Schedule and (ii) subject to clause 8.15.2, Murray International Metals PTE
Limited, incorporated under the Singapore Companies Acts with company number
2002201097M with its registered address at 438 Alexandra Road #04-01, Alexandra
Point, Singapore 119958;

 

Holding Company has the meaning given to it in sections 736 of the Companies Act of
1985 (as amended);

 

Initial
Term means Initial
Term as defined in Part 9 of the Schedule and in clause 5.1;

 

Insurance Premiums means all
sums payable by the Tenant pursuant to clause 7;

 

Insured
Risks means the risks
insured to be against under clause 7.1.1;

 

Interest means interest at the Interest Rate payable from the date of demand by
the Landlord (or if earlier the date at which monies become due or at which the
Landlord expends monies in respect of which interest is required under this
Lease) until the date of payment to the Landlord compounded on an annual basis,
to the extent permitted by Law;

 

Interest
Rate means Interest
Rate as defined in Part 9 of the Schedule;

 

Invoice means any invoice issued by Landlord to Tenant for the payment of
Additional Rent or other amounts (except for Basic Rent) to be paid by Tenant
to Landlord under the terms of this Lease;

 

Land means the land described in Part 1 of the
Schedule;

 

Landlord means the Person first named herein as
Landlord and its successors and assignees;

 

Law includes any constitution, decree, judgment,
legislation, order, ordinance, regulation, statute, statutory instrument,
treaty or other legislative measure having effect in Scotland and any present
or future directive, regulation, guideline, practice, concession, request or
requirement issued by any Scottish or non-Scottish government body, agency or
department or any central bank or other fiscal, monetary, regulatory, self
regulatory or other authority or agency which has authority in Scotland;

 

Lease means this Lease;

 

Lease
Year means, with
respect to the first Lease Year, the period commencing on the Commencement Date
and ending at midnight on the last day of the twelfth (12th) full consecutive
calendar month following the month in which the Commencement Date occurred, and
each succeeding twelve (12) month period during the Term;

 

Lender means any Person (and its respective
successors and assignees) which may, on or after the date hereof, make a Loan
to the Landlord;

 

Letter
of Credit means
Letter of Credit as defined in clause 8.15.3;

 

Loan means any loan made by Lender to the Landlord;

 

Net
Award means the
entire award payable to the Landlord by reason of a Compulsory 

 

3

 

Acquisition
or insurance proceeds payable by reason of a Casualty whether pursuant to a
judgment or by agreement or otherwise, less any expenses incurred by the
Landlord in collecting such award or proceeds;

 

OFAC means the Office of Foreign Asset Control of
the Department of the Treasury of the United States of America, codified at 31
C.F.R. Part 500 (including those named on OFAC’s Specially Designated and Blocked
Persons list) or under any statute, executive order (including the September
24, 2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism);

 

Offer Amount means
the sum of the Fair Market Value of the Premises and the applicable Prepayment
Premium which the Landlord will be required to pay in prepaying any Loan with
proceeds of the Offer Amount;

 

Option means Option as defined in Part 6 of the
Schedule;

 

Option
Exercise Notice means
Option Exercise Notice as defined in Part 6 of the Schedule; Outgoings means
Outgoings as defined in clause 8.9.1;

 

Partial
Compulsory Acquisition means
any Compulsory Acquisition of a Related Premises which is, in the reasonable
opinion of the Landlord, of non-material part(s) of such Related Premises;

 

Permitted
Use means Permitted
Use as defined in Part 9 of the Schedule;

 

Person means an individual, legal person or other
entity having no legal personality under the Law;

 

Planning Acts means the Town
and Country Planning (Scotland) Act 1997, the Planning (Hazardous Substances)
(Scotland) Act 1997, the Planning (Listed Buildings and Conservation Areas)
(Scotland) Act 1997 and the Planning (Consequential Provisions) (Scotland) Act
1997 or any statutory modifications or re-enactments thereof for the time being
in force and any rules, regulations or others made thereunder or otherwise
relating to the development or use of properties;

 

Plant means all plant and machinery now in or
serving the Premises including (but without limitation) all window cleaning
plant and machinery, all electrical systems, all fire detection and fire
prevention systems, all cranes and all related control or monitoring systems
and installations and dock loading bays and together also with all plant and
machinery which may from time to time be installed to replace any item of the
foregoing and provided that all items comprising Tenant’s fittings, plant and
machinery used in the operation of its business (exclusive of any cranes at the
Premises on the Commencement
Date) shall not be included in this definition of Plant;

 

Post Closing
Obligations shall mean those
obligations of Tenant specified in Part 8 of the Schedule.

 

Preapproved
Assignee shall mean a
Credit Entity or any Person that is and continues for the balance of the Term
to be a member of Tenant’s Group.

 

Premises means the Office Premises, the Manufacturing
1 Premises and the Manufacturing 2 Premises, which shall include the portions
of the following items now or hereafter located thereon or therein and
appertaining thereto: (i) the Additional Rights, (ii) the Buildings, and (iii)
the Plant;

 

Prepayment
Premium means any
payment required to be made by the Landlord to a Lender 

 

4

 

under
a Loan solely by reason of any prepayment by the Landlord of any principal due
under a Loan;

 

Quarter days means the
Scottish Quarter Days, namely Candlemas (28 February), Whitsunday (28 May),
Lammas (28 August) and Martinmas (28 November) in each year;

 

Related
Premises means all or
any one of the Office Premises,
Manufacturing I Premises and Manufacturing 2 Premises;

 

Relevant
Person means Relevant
Person as defined in clause 12.11;

 

Remaining
Premises mean the
Related Premises which are not Affected Premises; Renewal Term means Renewal
Term as defined in clause 5.2;

 

Rent means Basic Rent and Additional Rent;

 

Rent
Payment Date means
(a) with respect to each payment of Basic Rent each Quarter day during the Term
and (b) with respect to any payment of Additional Rent which is to be made to
Landlord (as opposed to a third Person) within five (5) days following receipt
of an Invoice;

 

Rent
Review means an
adjustment of Rent in accordance with the provisions of Part 3 of the Schedule;

 

Rent
Review Date(s) are as
described in Part 4 of the Schedule;

 

Requisite
Notice means a notice
to the Tenant forty eight (48) hours before any entry is made on any Related
Premises provided that in the case of an emergency no notice will be required;

 

Schedules means the schedule in ten (10) parts annexed
and signed as relative hereto, which Schedule shall be treated as forming part
of this Lease;

 

Scottish
RICS means the
Scottish Branch of The Royal Institution of Chartered Surveyors; Secured
Creditor means Secured Creditor as defined in clause 13.1.2;

 

Security
Deposit means
Security Deposit as defined in clause 8.15.2;

 

Standard
Security means any
document which secures the
Landlord’s obligation repay a Loan;

 

Subsidiar(y)(ies) has the meaning given to it in sections 736
of the Companies Act 1985 (as amended);

 

Surviving
Obligations means any
obligations of Tenant under this Lease, actual or contingent, which arise on or
prior to the expiration or prior
termination of this Lease or which survive such expiration or termination by
their own terms.

 

Tenant shall mean the said Murray International
Metals Limited and successors in title which are permitted by the terms of this
Lease subject always to the provisions of clause 12.2;

 

Tenant’s
Group means the Tenant and all its subsidiaries,
from time to time, any Holding Company of the Tenant, from time to time, and
all subsidiaries of any such
Holding Company, from time to time;

 

Term means the Initial Term and any effective
Renewal Term;

 

Termination Date means the date
of expiration or sooner determination of the Term;

 

5

 

Termination
Event means a
Termination Event as defined in clause 8.17.4.

 

Termination
Notice means a three (3) month notice from the
Tenant to the Landlord under clause 8.17.4 that the Tenant is electing to
terminate the Lease as permitted thereunder;

 

Title
Condition means a
real burden, title condition, reservation, wayleave, condition, servitude or
provision or restriction contained in the title to the Premises or applicable
at common law or by statute affecting the Premises; and

 

VAT means Value Added Tax as defined in the
Value Added Tax Act 1983 and shall include any tax of a similar nature imposed
in substitution for on in addition to that tax.

 

3.                                      INTERPRETATION

 

In this Lease:

 

3.1                                 Where any act is prohibited the Tenant will
not allow or suffer such act to be done by someone

under the Tenant’s direction or control (which shall include any sub tenant or
assignee).

 

3.2                                 The clause headings (except for the
definitions) are for ease of reference and are not to be used for the purposes
of construing this Lease.

 

3.3                                 References to clause numbers or schedules or
paragraphs in schedules mean the clauses of or schedules to or paragraphs in
schedules to this Lease.

 

3.4                                 Words importing persons include farms,
companies and corporations and vice versa.

 

3.5                                 Words importing one gender will be construed
as importing any other gender.

 

3.6                                 Words importing the singular will be
construed as importing the plural and vice versa.

 

4.                                      THE GRANT; RENT

 

The Landlord LETS to the
Tenant ALL and WHOLE the Premises EXCEPTING AND RESERVING to the Landlord the
reserved rights specified in Part 2 of the Schedule from and including the Commencement
Date for the Term SUBJECT to all title conditions, rights, servitudes,
easements privileges restrictions, burdens and stipulations of whatever nature
affecting the Premises and FURTHER SUBJECT to the obligations and other matters
contained in or referred to in the Part 2 of the Schedule FOR WHICH CAUSES the
tenant undertakes to pay to the Landlord:

 

4.1                                 The Basic Rent during the Term annually and
from and including the Commencement Date. Basic Rent shall be paid quarterly,
i.e., for the next three (3) calendar months, in each case to be paid by
quarterly payments in advance on each Rent Payment Date in every Lease Year,
the first (1st) such payment to be made on the Commencement Date and
to be in respect of the period from and including the Commencement Date to and
including the day immediately preceding the next following Quarter day. For
avoidance of doubt, the Basic Rent is a net amount and each instalment will
therefore be increased by the applicable VAT. Basic Rent shall be deemed
allocated among the Premises in the percentages specified in Part 6 of the
Schedule.

 

4.2                                 From and including the Commencement Date the
Tenant shall pay Additional Rent, including all Outgoings, interest, VAT on all
such Additional Rent and Outgoings and any and all other taxes or sums
whatsoever as become payable or refundable by the Tenant to the Landlord or any
other Person under the provisions of this Lease.

 

4.3                                 If required by the Landlord the Tenant shall
pay the Basic Rent reserved by clause 4.1 and VAT 

 

6

 

by cleared funds transfer or
banker’s standing order to one (1) bank account in the United Kingdom which the
Landlord has notified in writing to the Tenant from time to time.

 

5.                                      LEASE TERM

 

5.1                                 The initial term of this Lease shall be for a
period of twenty-five (25) years (the Initial Term), commencing on the
Commencement Date.

 

5.2                                 The Initial Term will automatically be
extended for two further terms of ten (10) years each (each such period, a
Renewal Term) unless the Tenant gives written notice to the Landlord not less
than twelve (12) months prior to the end of the Initial Term with respect to
the first extension and twelve (12) months prior to the end of the first
Renewal Term with respect to the second extension that it does not wish to
extend the term, and the terms and conditions
in this Lease shall apply to any such extension (except that the Tenant shall
not be entitled to any additional extensions). For the sake of clarity, each
extension of the Initial Term shall be confirmed in writing by the Tenant and
the Landlord not later than one (1)
month following the beginning of such Renewal Term.

 

6.                                      CONDITION; SINGLE LEASE
TRANSACTION

 

6.1                                 The Tenant acknowledges that the Premises are in good and substantial condition
and repair at the inception of this Lease and in all respects fit for the
purpose for which they are let. THE LANDLORD LEASES AND WILL LEASE AND THE
TENANT TAKES AND WILL TAKE THE PREMISES AS IS AND WITH ALL FAULTS. THE TENANT
ACKNOWLEDGES THAT THE LANDLORD (WHETHER ACTING AS THE LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL THE LANDLORD BE
DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY OF THE PREMISES. THE TENANT ACKNOWLEDGES THAT THE PREMISES ARE
OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PREMISES HAVE BEEN
INSPECTED BY TEE TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF ANY D SECT
OR DEFICIENCY IN ANY OF TEE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT,
THE LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT
THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT
LIABILITY IN DELICT). THE PROVISIONS OF THIS CLAUSE 6.1 HAVE BEEN NEGOTIATED,
AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY
THE LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES.

 

6.2                                 THE LANDLORD AND THE TENANT AGREE THAT IT IS
THEIR MUTUAL INTENT TO CREATE, AND THAT THIS LEASE CONSTITUTES, A SINGLE
LEASE WITH RESPECT TO EACH AND EVERY PARCEL OF LAND, IMPROVEMENTS INCLUDED IN
ANY AND ALL OF THE PREMISES (WHEREVER LOCATED), THAT THIS LEASE IS NOT INTENDED
AND SHALL NOT BE CONSTRUED TO BE SEPARATE LEASES AND THAT ALL THE TERMS AND
CONDITIONS HEREOF SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF THE LANDLORD AND
TEE TENANT WITH RESPECT THERETO. ANY BREACH EVENT HEREUNDER IN CONNECTION WITH
ANY RELATED PREMISES SHALL BE DEEMED TO BE A BREACH EVENT WITH RESPECT TO THE
ENTIRE PREMISES (WHEREVER LOCATED). THE FOREGOING AGREEMENTS AND WAIVERS BY THE
TENANT IN THIS CLAUSE 6.2 ARE MADE AS A MATERIAL INDUCEMENT TO THE LANDLORD TO
ENTER INTO THE TRANSACTION CONTEMPLATED BY THIS LEASE AND THAT, BUT FOR TEE
FOREGOING AGREEMENTS AND WAIVERS BY THE TENANT, THE LANDLORD WOULD NOT
CONSUMMATE THIS LEASE TRANSACTION.

 

7.                                      INSURANCE

 

7.1                                 The Tenant shall:

 

7

 

7.1.1                        insure the Premises, pay the Insurance
Premiums and maintain the following insurance in the joint names of the
Landlord and the Tenant and if reasonably requested by the Landlord with cover
also being in the joint names of any Lender or with the interest of any Lender
being noted on the policy (and with the Lender being loss payee), for their
full reinstatement value, including the costs of demolition and site clearance,
temporary works, compliance with local authority requirements in connection
with any works of repair or reinstatement, architects’, surveyors’ and other
professional fees and other incidental expenses, and in each case with due
allowance for inflation and VAT, against;

 

(i)                                     loss or damage by fire, explosion, storm, tempest (including
lightning), flood, earthquake, burst pipes, impact, heave, subsidence and (in
peacetime) aircraft and articles dropped therefrom, riot, terrorism, civil
commotion and malicious damage impact by road vehicles and such other risks
against which the Landlord may from time to time deem necessary to insure (or
the Tenant may from time to time request in writing) acting reasonably;

 

(ii)                                  the loss of rent payable under this Lease
from time to time (having regard to the review of Basic Rent which may become due under this Lease) for three (3) years
or for such longer period as the Landlord and the Tenant may from time to time
agree to in writing as being sufficient or for the purposes of planning and
carrying out any reinstatement of the Premises following a Casualty or a
Partial Compulsory Acquisition;

 

(iii)                               civil liability in the joint names of the
Landlord and the Tenant arising out of or in connection with any matters
involving or relating to the Premises in an amount satisfactory to the
Landlord, acting reasonably; and

 

(iv)                              such other insurance coverage as the Landlord
shall reasonably request.

 

7.1.2                        at least one (1) month prior to modifying or
replacing any insurance required under clause 7.1, provide the Landlord with
full details of the proposed insurance for the Landlord’s approval including,
but not limited to, details of the insurer, the form of policy, any excesses
and deductible exclusions and limitations under the policy, details of the full
reinstatement value including all professional fees, and details of all
other amounts insured under the policy provided that in the absence of
the Tenant receiving an objection in
writing from the Landlord prohibiting the same, nothing shall prohibit the
Tenant from renewing, modifying or replacing any insurance required under
clause 7.1.1 as proposed;

 

7.1.3                        at all times that all insurance policies
contain

 

(i)                                     a clause whereby such insurance policy will
not be vitiated or avoided as against a Lender or a security holder in the
event or as a result of any misrepresentation, act or neglect or failure to
make disclosure on the part of the insured party or any circumstances beyond the control of any insured party;
and

 

(ii)                                  terms prohibiting the insurer from vitiating
or avoiding any insurance policy as against a Lender or a security holder in
the event of any misrepresentation, act or neglect or failure to make full
disclosure on the part of the Landlord, the Tenant or other insured party and a
waiver of all rights of subrogation in favour of Landlord and Lender.

 

7.1.4                        notify the Landlord of any material changes
in the risks covered and the terms of the insurance policy from time to time
and also, subject to the time period set out in 7.1.2 above, at any time at the
request of the Landlord, produce details to the Landlord of the terms of the
current insurance policy and evidence of the payment of the current premium;

 

7.1.5                        pay within ten (10) days of demand the
reasonable costs incurred or payable by the Landlord in connection with the
Landlord obtaining any valuation of the Premises for insurance purposes, as
long as such valuation is made at least three (3) years after any previous such
valuation;

 

8

 

7.1.6                        comply with the reasonable requirements of
the insurers relating to the Premises;

 

7.1.7                        promptly, but in any event within three (3)
days of the occurrence, give the
Landlord written notice of any damage to or destruction of the Premises;

 

7.1.8                        pay the Landlord within ten (10) days of
demand the reasonable costs incurred by the Landlord in connection with any
insurance claim relating to the Premises arising from any insurance taken out
by the Landlord pursuant to clause 7.3;

 

7.1.9                        provide to Landlord certificates and
certified copies of policies and receipts with respect to the payment of
premium within thirty (30) days following issue of certificates and policies;
and

 

7.1.10                  ensure that the Lender is entitled to the
right of subrogation under the policies.

 

7.2                                 Reinstatement

 

7.2.1                        If any part of any Related Premises is
damaged by any of the Insured Risks then subject to:

 

(i)                                     clauses 7.3;

 

(ii)                                  the Landlord receiving the Net Award;

 

(iii)                               the Tenant paying the difference, if any,
between the cost of reinstatement and the Net Award to the extent necessary in
order to complete reinstatement of such Related Premises;

 

(iv)                              the Tenant not being in arrears with the
Rent; and

 

(v)                                 there are no administrative, technical or
legal grounds that would render a reinstatement impossible.

 

upon receipt of any Net
Award the Landlord will in accordance with clause 8.18 make the Net Award
available to the Tenant (except those amounts relating to fees and loss of Rent)
for the Tenant to apply in reinstating the damaged Related Premises. The Tenant
will pay to the Landlord within fifteen (15) days of demand the amount
equivalent to any policy excess which may be applicable to such insurance.

 

7.2.2                        If the payment of any insurance monies is
refused for any reason, the Tenant will pay to the Landlord within fourteen
(14) days of demand the amount so refused.

 

7.2.3                        The Landlord will not be obliged to comply
with the obligations under clause 7.2.1 if payment of the insurance monies has
been refused in whole or in part by reason of any act or default of the Tenant
or anyone under its control and the Tenant has not complied with its
obligations in clauses 7.2.1 and 7.2.2.

 

7.2.4                        For the avoidance of doubt, nothing in this Lease
imposes an obligation on the Landlord at any time, for any reason, to reinstate
the damaged Related Premises.

 

7.2.5                        This lease shall not terminate as a result of
a Casualty but shall, notwithstanding any Casualty, damage or destruction and
any rule of law to the contrary, remain in full force and effect and the Tenant
shall not be entitled to terminate it. In addition, the Tenant shall, as soon
as possible, be obliged to arrange for the performance of construction work
aimed at reinstating the Premises. The detailed scope and the schedule for the
works, as well as the selection of a contractor, will be subject to the
Landlord’s approval. The Tenant shall ensure that such contractor grants a
construction quality guarantee (as to the performed reinstatement works) for
the joint benefit of the Landlord and the Tenant.

 

9

 

7.3                                 Landlord’s insurance

 

7.3.1                        If the Tenant fails to produce satisfactory
evidence that it is complying with clause 7.1, or the Landlord otherwise has
reasonable grounds for believing that the Tenant is or may be in breach of its
obligations in clause 7.1 or as may be required by a Lender, then the Landlord
may effect and maintain insurance of the Premises against any of the Insured
Risks at its discretion and the Tenant shall pay to the Landlord within five
(5) days of demand the cost to the Landlord of effecting such insurance.

 

7.3.2                        Immediately upon the Landlord giving notice
to the Tenant that the Landlord has insured the Premises against any of the
Insured Risks, the Tenant shall not maintain or take oat any insurance of the
Premises for such risks in its own name.

 

7.3.3                        All insurance monies payable under any
insurance taken out by the Landlord shall belong to the Landlord; provided, however,
that any Net Award shall be made available by the Landlord to the Tenant for
the restoration of the Premises pursuant to and in accordance with the
provisions of clauses 8.18.1 and 8.18.2, as applicable

 

7.4                                 If any part of the Premises is damaged by any
of the Insured Risks and becomes unfit for occupation or use and the policy or
policies of insurance shall not have been vitiated or payment refused in whole
or in part as a result of some act or default of the Tenant or anyone under its
control and the Landlord has received the monies in respect of loss of rent
referred to in clause 7.1.1 from the insurers then,

 

(i)                                     in the case of a total loss, the Tenant’s
obligation to pay Rent; and

 

(ii)                                  in the case of a partial loss, the Tenant’s
obligation to pay a fair proportion of the Rent,

 

will be suspended until the
earlier of the date on which Premises are fit for occupation or the date on
which the monies received by the Landlord in respect of loss of rent insurance
have been exhausted.

 

In relation to calculating
the fair proportion, the Basic Rent that shall be payable shall be based upon
the proportion of the usable portion of the damaged Related Premises. Any
dispute regarding the amount of said suspension of Basic Rent shall be referred
to the award of a single arbiter to be appointed in default of agreement upon
the application of either party by the Chairman (or other Senior Office Holder)
for the time being of the Scottish RIGS in accordance with the provisions of
the Arbitration Acts but further providing that under no circumstances shall the
amount of Basic Rent which ceases to be payable under this Lease exceed the
amount received by the Landlord in respect of loss of rent referred to in
clause 7.1.1.

 

8.                                      TENANT’S OBLIGATIONS

 

The Tenant undertakes to the
Landlord:

 

8.1                                 Rent

 

To pay the Rent and other
amounts reserved by this Lease in accordance with the Lease without deduction
or set-off and if the Basic Rent first reserved under this Lease is not paid on
the applicable Rent Payment Date or the Additional Rent under this Lease is not
paid within four (4) days of the applicable Rent Payment Date or any other sums
due under this Lease are unpaid for more than seven (7) days after the due date
or if any sums due under this Lease are refused as a result of any breach or
any anticipated breach of obligation by the Tenant to pay interest at the
Interest Rate.

 

8.2                                 Repair and Replacement

 

10

 

8.2.1                        At all times to repair or if necessary (in
the opinion of a surveyor from a nationally recognised firm of chartered
surveyors as chosen by the Landlord) to replace (including roof structure
mechanical and electrical installations and equipments) and to keep the
Premises (including any part unbuilt upon) in good and substantial repair and
condition irrespective of the cause of disrepair, damage and/or destruction and
whether arising as a result of any defect, whether patent, latent and/or
inherent or otherwise, and to yield up the same at the Termination Date in accordance
with the obligations by the Tenant contained in this Lease.

 

8.2.2                        To keep the Premises in a clean and tidy
condition and properly cleansed and free
from obstruction.

 

8.2.3                        To comply with the terms of all warranties,
guarantees or similar documents which apply to all or any part of the Premises.

 

8.2.4                        To repair or replace forthwith by articles of
similar kind and quality and at its own expense any Plant (other than the Tenant’s or trade fixtures and
fittings) in the Premises which shall become in need of repair or replacement.

 

8.25                           To keep any part of the Premises which may
not be built upon adequately surfaced in good condition swept clean and all
landscaped areas properly cultivated and free from weeds and to ensure all
grassed areas are mown and all parking spaces adequately stripped and surfaced
and free from ice and snow as and when necessary so that the same shall have a
neat and tidy appearance at all times.

 

8.3                                 Alterations and additions

 

8.3.1                        Not to make any Alterations or Additions to
any part of the Premises without (in all cases) obtaining the written prior
consent of the Landlord if the effect of such Alterations or Additions is
reasonably likely to adversely affect the market value of the Premises or any
part thereof and, in any event, the Landlord may require the security or
guarantee referred to in clause 8.3.3(ii) in respect of reinstatement.

 

8.3.2                        If the Tenant makes any Alterations or
Additions to the Premises in breach of this clause 8.3 then, in addition to any
other remedies and powers available to the Landlord (and without prejudice to
them) the Landlord may remove and reinstate such Additions or Alterations and
the proper cost of carrying out such work will be repaid to the Landlord by the
Tenant within fourteen (14) days of demand.

 

8.3.3                        Unless the Landlord directs the Tenant in
writing to the contrary, to remove no later than the Termination Date any
Alterations, Additions or improvements made to the Premises, remove any plant
and machinery installed by the Tenant at the Premises by the Tenant or any
other occupier and forthwith make good any damage caused by such removal to the
Landlord’s reasonable satisfaction provided that:

 

(i)                                     The Tenant shall irrespective of the
foregoing provisions be entitled to remove all the Tenant’s fixtures and
fittings and all plant and machinery at any time during the term provided that the Tenant makes good forthwith all
damage caused to the Premises by such removal to the Landlord’s reasonable
satisfaction.

 

(ii)                                  If the Landlord requires the Tenant shall
provide adequate security or guarantees to fully secure the liability to
reinstate any Alterations or Additions or improvements in accordance with the
tetras of this clause such security or guarantee to be provided at the time of
obtaining the Landlord’s consent in accordance with clause 8.3.1.

 

8.3.4                        If the Tenant makes any Alterations or
Additions to the Premises, Tenant shall (i) notify the Landlord in writing
prior to commencing any work in relation thereto, (ii) furnish to the Landlord 

 

11

 

copies of all statutory or
other consents or approvals required, (iii) otherwise comply in full with the
provisions of this Lease in relation to the carrying out of such work, and (iv)
provide Landlord with any statutory notice, if any (provided that prior written
consent to such Alterations or Additions shall only be required to the extent
set forth in clause 8.3.1).

 

8.4                                 Signs and reletting notices

 

At the end of the Term to
remove any signs at the Premises and make good any damage caused by that
removal to the reasonable satisfaction of the Landlord.

 

8.5                                 Use; Occupancy

 

8.5.1                        Not to use the Premises except for any use
falling within the Permitted Use.

 

8.5.2                        Not to vacate or leave unoccupied the
Premises, except as the Landlord may first approve in writing, or abandon the
Premises, provided, however, Tenant may vacate the Premises so long as Tenant
remains otherwise in compliance with this Lease.

 

8.6                                 Not to overload

 

Not to place or keep on in
the Premises any heavy articles or structures in such position or in such
quantity or weight or otherwise in such manner howsoever as to overload or
cause damage to or be likely to overload or cause damage to the Premises.

 

8.7                                 Entry

 

8.7.1                        To permit the Landlord and all persons
authorised by it at all reasonable times upon Requisite Notice to enter and
remain upon the Premises together with work people plant and materials:

 

(i)                                                     to examine their condition and to take
schedules of repairs and the like and inventories of

fixtures and fittings which are fixed to the Premises;

 

(ii)                                                  to execute any works of construction repair
decoration or of any other nature within the Premises or the Plant pursuant to
clause 8.7.2 and to carry out any repairs, decorations or other work which the
Landlord must or may carry out under the provisions of this Lease upon or to
the Premises;

 

(iii)                               to exercise without interruption or
interference any of the rights excepted or reserved to the Landlord by this
Lease;

 

(iv)                              in the last year before the Termination Date
to affix a sign or signs indicating that the Premises are to let or for sale
unless the Lease will automatically be renewed or the Tenant is actively
pursuing its right to renew the Lease; and

 

(v)                                 for any other purpose connected with the
interest of the Landlord in the Premises including (but without ]imitation) for
the purpose of valuing or disposing of any interest of the Landlord.

 

Landlord shall not
unreasonably interfere with Tenant’s business activities in connection with any
entry by Landlord upon the Premises (except in the case of an emergency) and
shall cause the least practicable inconvenience and make good any damage caused
by it or those for whom it is responsible to the reasonable satisfaction of the
Tenant.

 

8.7.2                        If as a result of an inspection or otherwise
the Landlord becomes aware of any breaches of the Tenant’s obligations under
this Lease the Landlord may give notice in writing thereof to the Tenant and
within a reasonable period (given the nature of the breach) after such notice
or 

 

12

 

immediately in respect of an
emergency notice, the Tenant will remedy such breach of obligation in
accordance with such notice and the obligations contained in this Lease to the
reasonable satisfaction of the Landlord and (subject to all required consents
having been obtained which the Tenant shall make all reasonable attempts to
ensure is done in a timely manner) if the Tenant fails within thirty (30) days
of such notice or immediately-in case of emergency notice to commence and
diligently and expeditiously to continue to comply with such notice or if the
Tenant at any time makes default in the performance of any of the obligations
contained in this Lease for or relating to the repair decoration or maintenance
of the Premises but such period shall not exceed one hundred twenty (120) days
from the giving of any such notice then (without prejudice to the right of
re-entry and irritancy contained in this Lease) the Landlord may enter upon the
Premises under clause 8.7.1 and carry out or cause to be carried out, all or
any of the works referred to in such notice or remedy the default of the Tenant
and in such circumstances the Landlord will be under no liability to make good
any damage whatsoever and all proper costs of all such works and all proper
expenses incurred in remedying such defaults in each case shall be paid by the
Tenant to the Landlord within fourteen (14) days of demand.

 

8.8                                 Compliance with Law

 

8.8.1                        To comply with all applicable Law including
(but without limitation) any planning legislation and regulation or the
carrying out by the Tenant of any operations on or use of the Premises.

 

8.8.2                        At the Tenant’s expense to obtain from the
appropriate authorities all licences, consents and permissions as may be
required for the carrying out by the Tenant of any operations on or use of any
part of the Premises.

 

8.8.3                        Not at any time during the Term to do or
permit or suffer anything which shall be a contravention of any applicable Law
or of any licences, consents, authorisations, permissions and conditions (if
any) from time to time granted or imposed under any applicable Law nor to
permit anything which would be a contravention thereof and to comply with the
same and to indemnify the Landlord in respect of such acts or omissions.

 

8.8.4                        Not to make any application for planning
permission without first producing a copy of the same and obtaining the prior
written consent of the Landlord to such application which consent will not be
unreasonably withheld or delayed.

 

8.8.5                        Unless the Landlord
directs otherwise in writing to carry out before the Termination Date any works stipulated to be carried out to
the Premises as a condition of any planning permission which may have been
granted during the Terra and implemented by the Tenant or any other person whether
or not the date by which the planning permission requires such works to
be carried out falls within the Term.

 

8.8.6                        In any case where a planning permission is
granted subject to conditions
and if the Landlord reasonably so requires to provide security for the
compliance with such conditions and such planning permission shall not be
implemented until such security has been provided.

 

8.8.7                        Not at any time during the Term to do permit
or suffer on the Premises any act or cause or permit to be present on the
Premises any matter or thing which may cause loss to the Landlord by reason of
any Environmental Law.

 

8.8.8                        Within seven (7) days of the receipt to give
full particulars to the Landlord of any permission, notice, order or proposal
relevant to the Premises or to the use thereof given to the Tenant or the occupier of the Premises (together
with a copy of any notice, permission, letter or document) under any applicable
Law and without delay to take all necessary steps to comply with such notice
insofar as it relates to the Tenant’s use and occupation of the Premises and
also at the reasonable request of the Landlord to make or join with the
Landlord in making such objections and representations against or in respect of any such notice,
order or proposal as aforesaid as the Landlord reasonably requires.

 

13

 

8.9                                 Outgoings, costs and fees

 

8.9.1                        To pay and discharge all existing and future
rates, taxes, duties, charges, assessments, impositions and outgoings
whatsoever and whether or not of a non-recurring nature (Outgoings) which now
are or may be charged, levied, assessed or
imposed upon the Premises, the Basic Rent or upon the Landlord or the owner
or any occupier thereof,
however nothing herein shall place any obligation on the Tenant to pay,
discharge, contribute or reimburse the Landlord or the owner or any occupier
amounts which represents that Landlord’s, owner’s or occupier’s general corporate
and/or income tax (and, for the
avoidance of doubt, “general corporate and/or income tax” shall not include any
taxes under clause 4.2) and to pay, bear and discharge the proportion properly
attributable to the Premises or the Rent of any outgoings as may be charged,
levied, assessed or imposed upon any premises of which the Premises or the Rent
form part (such proportion to be properly determined by the Landlord’s surveyor
acting reasonably) and in relation to either party making any claim for relief against
Outgoings payable in respect of the Premises, the parties agree to liaise with
a view to structuring such claims so as to try to optimize the overall benefit
to both parties of the same.

 

8.92                           In the absence of direct assessment on the
Premises, to repay to the Landlord the proportion properly attributable to the
Premises (such proportion to be properly determined by the Landlord’s surveyor
acting reasonably) within fourteen (14) days of demand all charges in respect
of gas, electricity, steam, soil, water, telephone, electrical impulses and
other services supplied to or consumed in the Premises to the extent that the
Landlord has paid the same.

 

8.9.3                        To pay to the Landlord all proper and
reasonable costs, charges and
expenses (including professional advisers’ costs and fees and Sheriff Officer’s
fees) properly incurred by the Landlord:

 

(i)                                     in the preparation and service of a schedule
of dilapidations at any time during or within six (6) months after the Term;

 

(ii)                                  in connection with any breath of the Tenant’s
obligations by or the recovery of arrears of Basic Rent or Additional Rent due
from the Tenant under this Lease; and

 

(iii)                               in respect of any application for consent
required by this Lease whether or not such consent is granted or the application
is withdrawn.

 

8.9.4                        To pay on all overdue amounts of Rent from
the respective due dates therefore (i) interest at the Interest Rate and (ii)
the reasonable costs, charges and expenses (including professional advisers’
costs and fees and Sheriff Officer’s fees) properly incurred by the Landlord in
connection with such failure to pay, to reimburse Landlord for its cost and
inconvenience incurred as a result of Tenant’s failure, provided, however, that
with respect to the first late payment of all or any portion of any instalment
of Basic Rent in any Lease Year, the whereof
payable as aforesaid shall not be due and payable unless the Basic Rent has not
been paid within five (5) days’ following the due date thereof

 

8.10                           Taxes

 

To pay any and all VAT
incurred or imposed on any payment made by the Tenant under this Lease to and
to pay any Stamp Duty Land Tax or other fees
assessed or assessable on this Lease.

 

8.11                           General requirements concerning use

 

8.11.1                  Not to use any part of the Premises for any
offensive trade or business nor for any illegal or immoral act or purpose nor for gaming and not to commit any
nuisance or do anything which may
cause damage or disturbance to the Landlord or any other person.

 

14

 

8.11.2                  Except where the Tenant has obtained and
complies with all Environmental Permits relating to the same, not to bring onto
nor to permit to remain upon the Premises any dangerous, hazardous, poisonous,
specially combustible or inflammable, explosive, noxious or offensive substance
and to take all necessary steps to ensure that any such substance does not
cause any injury or harm whatsoever and to prevent the escape of such
substances and to keep the Premises free from any pollution whatsoever,

 

8.11.3                  Not to use any part of the Premises in such
manner as to subject it to any strain or interference which is in excess of
that which the Premises were designed or have been subsequently modified to
bear and not to install machinery on the Premises which shall cause noise or
cause vibration in excess of statutory limits.

 

8.11.4                  Not to do anything on the Premises which
might reasonably be expected to produce directly or indirectly corrosive fumes
or vapors or moisture or humidity in excess of that which the Premises were
designed or have subsequently been modified to bear.

 

8.11.5                  Not to cause or permit to exist a nuisance.

 

8.12                           Indemnity

 

The Tenant will fully pay,
protect, defend, indemnify and hold harmless the Landlord from and against all
actions, demands, proceedings, claims, damages, losses, costs, expenses and
liabilities arising directly or indirectly out of the existence state of repair
or use of the Premises any breach of the Tenant’s obligations contained in this
Lease or any failure to comply with any applicable Law and against any
liability for any value added taxes, tax, stamp duty land tax or other fees
specifically imposed on the Landlord in connection with the Premises or the
Rent of whatsoever nature including penalties and interest on such overdue or
unpaid tax (and penalties for failure to give appropriate notices and
information under any applicable Law) for which the Landlord shall be liable as
a result of any development carried out on the Premises by the Tenant or its
permitted sub-tenant and shall within fourteen (14) days of demand pay to the
Landlord the amount of any such sum.

 

8.13                           Corporate and Financial Covenants

 

The Tenant undertakes and
obliges itself to the Landlord that the Tenant shall throughout the Term comply
with all the covenants and agreements on its part set out in Part 5 of the
Schedule.

 

8.14                           Environmental requirements

 

The Tenant undertakes and
obliges itself to the Landlord as follows:

 

8.14.1                  to ensure at all times throughout the Term
that the Premises and Tenant are in compliance in all respects with
Environmental Law in its use and occupation of the Premises and, in particular,
but without limitation, that the Tenant or any other occupier of the Premises
obtains and complies with all Environmental Permits required for the storage,
use or disposal of any Dangerous Substances at, on or from the Premises;

 

8.14.2                  not at any time during the Term to cause or
permit the deposit, spillage or release onto the surface or into the sub-soil
of the Premises of any Dangerous Substances otherwise than in accordance with
the terms of an Environmental Permit;

 

8.14.3                  not at any time during the Term to do or
permit to be done anything on
the Premises which could cause disturbance to the operation of or damage to the
fabric of any above ground or under ground storage tanks and associated lines
or pipe work at the Premises;

 

8.14.4                  in the event of a breach of its obligations
contained in 8.14.1, 8.14.2 or 8.14.3 above, to notify the Landlord immediately
in writing of same and forthwith and with all due speed and diligence to carry 

 

15

 

out such works of investigation and remediation as may be necessary to
remedy the consequences of the breach and to reinstate the Premises to their
condition prior to the occurrence of the breach (taking into account at all
times all proper requirements of the Landlord with regard to the nature and
scope of such works) provided that the Landlord shall have the option at its
sole discretion to assume conduct of any such works in which case the Tenant
shall reimburse the Landlord within seven (7) days of a written demand in
respect of all properly incurred costs, fees, (including professional fees) and
expenses incurred in carrying out such works;

 

8.14.5                  that it will assume full responsibility for
meeting all liabilities, claims, costs and expenses arising or incurred during
the Term in respect of or in
any way related to the presence in, on, over or under the Premises of any
Dangerous Substances (regardless of when such Dangerous Substances first came
to be present in, on, over or under the Premises) including liability for and
the costs of any works of remediation (including on going monitoring) which may
be required in order to mitigate or prevent a liability under Environmental Law
or as may be requested by a Competent Authority at any time in the future and that it will comply with all
requirements of any Competent Authority made at any time thereunder provided
that the Tenant shall have no responsibility or obligation where such
liabilities, claims, costs or expenses arose solely out of the gross negligence
or wilful misconduct of the Landlord, its servants, employees, agents or
independent contractors employed by the Landlord.

 

8.15                           Post-Closing Obligations.

 

8.15.1                  Pursuant to that certain Phase I
environmental audit report of the Premises performed by ENVIRON UK Limited and
dated October 20, 2005, Tenant shall complete the Post Closing Obligations
within the time periods specified in Part 8 of the Schedule.

 

8.15.2                  On the date hereof, Pipe Acquisition Limited
executed the Guarantee in favour of Landlord. In consideration for the
consummation for this Lease,
the Landlord and the Tenant have agreed that within forty (45) days after the
date of this Lease, Tenant shall use reasonable endeavours (and, if permitted
by law) to cause Murray International Metals PTE Limited to execute a Guarantee
in favour of Landlord in the form annexed hereto as Part 10 of the Schedule. If
Tenant shall fail to deliver such Guarantee for any reason whatsoever prior to
the end of such forty-five (45) day period, then the Tenant shall deliver to
the Landlord a security deposit (the Security Deposit) in the amount of
£599,325 at which time the Tenant shall have an additional period of forty-five
(45) days to use reasonable endeavours (and, if permitted by law) to deliver
the aforementioned Guarantee from Murray International Metals PTE Limited and
if the Tenant shall again fail to deliver such Guarantee for any reason
whatsoever prior to the end of such additional forty five (45) day period, the
Security Deposit shall be increased so that the total amount of the Security
Deposit shall be equal to £1,198,650. For the avoidance of doubt, the Tenant
shall be entitled to provide such Guarantee at any time after such additional
forty-five (45) day period and on the provision of such Guarantee the Security
Deposit shall be released in accordance with clause 8.15.5.

 

8.15.3                  The Security Deposit shall be in the form of
an irrevocable letter of credit (the Letter of Credit)
and shall be issued by a bank reasonably acceptable to the Landlord and having
a long-term unsecured debt rating of not less than “A” from Standard & Poor’s
Corporation and in form and substance reasonably satisfactory to the Landlord.
The Security Deposit shall remain in full force and effect during the Term,
subject to the provisions of clause 8.15.5, as security for the payment by the
Tenant of the Rent and all other charges or payments to be paid hereunder and
the performance of the covenants and obligations contained herein, and the
Letter of Credit shall be renewed at least thirty (30) days prior to any expiration thereof lithe Tenant fails to
renew the Letter of Credit by such date, time being of the essence, Landlord
shall have the right at any time after the thirtieth (30th) day before such
expiration date to draw on the Letter of Credit and to deposit the proceeds of
the Letter of Credit as a cash security deposit (the Cash Security Deposit) in
any account for the benefit of Landlord. The Cash Security Deposit shall not be
commingled with other funds of Landlord or other Persons and no interest
thereon shall be due and payable to the Tenant.

 

16

 

8.15.4                  If at any time a Breach Event shall have
occurred and be continuing, the Landlord shall be entitled, at its sole
discretion, to draw on the Letter of Credit or to withdraw the Cash Security
Deposit from the above-described account and to apply the proceeds in payment
of (i) any Rent or other charges for the payment of which the Tenant shall be
in default, (ii) prepaid Basic Rent, (iii) any expense incurred by the Landlord
in curing any Breach Event of the Tenant, and/or (iv) any other sums due to the
Landlord in connection with any default or the curing thereof, including,
without limitation, any damages incurred by the Landlord by reason of such Breach Event,
including any rights of the Landlord under clause 14 or to do any combination
of the foregoing, all in such order or priority as Landlord shall so determine
in its sole discretion and the Tenant acknowledges and agrees that such
proceeds properly applied in accordance with this Lease shall not constitute
assets or funds of the Tenant or its estate, or be deemed to be held in trust
for the Tenant, but shall be, for all purposes, the property of the Landlord.
Tenant further acknowledges and agrees that (1) Landlord’s application of the
proceeds of the Letter of Credit or Cash Security Deposit towards the payment
of Rent or the reduction of any damages due the Landlord in accordance with
clause 14 of this Lease, constitutes a
fair and reasonable use of such proceeds, and (2) the application of
such proceeds by the Landlord towards the payment of Rent or any other sums due
under this Lease shall not constitute a cure by the Tenant of the applicable
Breach Event provided that a Breach Event shall not exist if Tenant restores
the Security Deposit to its full amount within Eve (5) days and in accordance
with the requirements of this clause 8.15.3, so that the original amount of the
Security Deposit shall be again on deposit with Landlord.

 

8.15.5                  On the earlier of (i) the expiration of the
Term, (ii) after receipt by the Landlord of the aforementioned Guarantee in
clause 8.15.2, or (iii) on the assignment of this Lease in accordance with
clause 12 to either (1) a Credit Entity, (2) an Asset Credit Entity or (3) a
Person whose obligations are guaranteed by a Credit Entity or an Asset Credit
Entity pursuant to a Guarantee in the form annexed hereto as Part 10 of the
Schedule, the Letter of Credit or the Cash Security Deposit, as the case may
be, shall be promptly returned to the Tenant.

 

8.16                           The Construction (Design and
Management) Regulations 1994

 

8.16.1                  In this clause Regulations means the
Construction (Design and Management) Regulations 1994 and File means the Health
and Safety file for the Premises and works carried out to them, required by the
Regulations.

 

8.16.2                  In respect of any works carried out by or on
behalf of the Tenant or any undertenant or other occupier of the Premises
(including any works of reinstatement which may be carried out after the end of
the Term) to which the Regulations apply, to:

 

(a)                                  comply in all respects with the Regulations
and procure that any person involved in carrying out such works complies with
the Regulations; and

 

(b)                                 act as the client in respect of those works
and serve a declaration to that effect on the Health and Safety Executive
pursuant to Regulation 4 of the Regulations and give a copy of it to the
Landlord.

 

8.16.3                  To:

 

(a)                                  maintain and make the File available to the
Landlord for inspection at all times;

 

(b)                                 on request provide copies of the whole or any
part of the File to the Landlord; and

 

(c)                                  hand the File to the Landlord at the end of
the Term.

 

8.16.4                  To obtain copyright licences which are needed
for the Tenant lawfully to comply with this clause 8.16 and such licences
shall:

 

17

 

(a)                                  be granted on a royalty free non exclusive
basis;

 

(b)                                 allow the Landlord and any superior landlord
and anyone deriving title through or under them to take further copies of such
documents, to the extent permitted by such copyright licenses;

 

(c)                                  be obtained without cost;

 

(d)                                 allow any such person to grant sub-licences
on similar terms.

 

8.17         Compulsory Acquisition

 

8.17.1

 

(i)                                     The Tenant shall notify the Landlord
immediately upon receiving a Compulsory Acquisition Notice.

 

(ii)                                  The Landlord is authorized to collect, settle
and compromise, in its discretion (and, if no Breach Event exists, upon notice
to Tenant), the amount of any Net Award.

 

(iii)                               If no Breach Event has occurred and is
continuing, the Tenant shall be entitled to participate with the Landlord in
any Compulsory Acquisition proceeding or negotiations under threat thereof and
to contest the Compulsory Acquisition or the amount of the Net Award.

 

(iv)                              No agreement with any acquirer in settlement
or under threat of any Compulsory Acquisition shall be made by the Tenant
without the written consent of the Landlord.

 

(v)                                 Subject expressly to the Tenant’s absolute
right to the payments set out in (vi)
below, the Tenant hereby irrevocably undertakes to pay (or, if requested by the
Landlord, assign) to Landlord any award or payment to which the Tenant is or may
be entitled by reason of any Compulsory Acquisition, whether the same shall be
paid or payable for the Tenant’s leasehold interest hereunder or otherwise.

 

(vi)                              Nothing in this Lease shall impair the Tenant’s right to any award or
payment on account of the Tenant’s trade fixtures, equipment or other tangible
property which is not part of
the Plant, moving expenses or loss of business, if available, to the extent
that and so long as (A) the Tenant shall have the right to make, and does make,
a separate claim therefore against the acquirer and (B) such claim does not in
any way reduce either the amount of the award otherwise payable to Landlord for
the Compulsory Acquisition of the Landlord’s interest in the Premises or the
amount of the award (if any) otherwise payable for the Compulsory Acquisition
of the Tenant’s leasehold interest under this Lease.

 

8.17.2

 

(i)                                     If any Partial Compulsory Acquisition shall
occur to any Related Premises, this Lease shall continue, notwithstanding such
event, and Basic Rent shall continue to be payable in the amounts and on the
dates specified herein.

 

(ii)                                  Promptly after such Partial Compulsory
Acquisition, the Tenant shall commence and diligently continue to restore the
affected Related Premises as nearly as possible to its value, condition and
character immediately prior to such event (assuming the affected Related
Premises to have been in the condition required by this Lease) unless it is
physically impossible for the affected Related Premises to be reinstated as
confirmed by a surveyor from a nationally recognized firm of chartered
surveyors, in which event the terms of clause 8.17.4 shall apply).

 

18

 

(iii)                               So long as no Breach Event exists and provided that reinstatement as
aforesaid remains physically possible in terms set out in clause 8.17.2(ii),
any Net Award received by the Landlord up to and including £500,000 shall be
promptly paid by the Landlord to the Tenant pursuant to the provision of clause
8.18.1 and Tenant shall restore the Premises to the condition prior to the
Partial Compulsory Acquisition.

 

(iv)                              Any Net Award in excess of £500,000 received
by the Landlord shall be made available by the Landlord to the Tenant for the
restoration pursuant to and in accordance with the provisions of clause 8.18.2.

 

8.17.3                  Upon the expiration of the Term, any portion
of such Net Award which shall not have been previously credited to the Tenant
shall be retained by the Landlord (except for such portion of the Net Award
which the Landlord is obliged to make available to the Tenant for the
restoration of the Premises and to be
used to reimburse Tenant for any such restoration pursuant to and in accordance
with the provisions of clauses 8.18.1 and 8.18.2, as applicable).

 

8.17.4                  If either (i) all of any Related Premises
shall be taken by a Compulsory Acquisition or (ii) any substantial portion of
any Related Premises shall be
taken by a Compulsory Acquisition and, in any such case, Tenant certifies and
undertakes to Landlord that it will not be able to reasonably operate at the
Related Premises (any one or all of the Related Premises. described in clauses
(i) and (ii) above being hereinafter referred to as the Affected Premises and
each of the events described in the above clauses (i) and (ii) shall
hereinafter be referred to as a Termination Event), then Tenant shall have the
right, within ninety (90) days after Tenant receives a Compulsory Acquisition
Notice, to give to Landlord written notice (a Termination Notice) in the form
described in this clause 8.17.4 of the Tenant’s election to terminate this
Lease as to the Affected Premises. If Tenant elects not to give Landlord a
Termination Notice, then Tenant shall rebuild, restore or repair the Affected
Premises and any Net Award received by the Landlord shall be made available by
the Landlord to the Tenant for the restoration pursuant to and in accordance
with the provisions of clause 8.18.2. A Termination Notice shall contain notice
of Tenant’s intention to terminate this Lease as to the Affected Premises on
the first Basic Rent Payment Date that occurs thirty (30) days after receipt of
the Net Award (the CA Termination Date). This Lease shall terminate as to the
Affected Premises on the CA Termination Date. If Tenant has not satisfied all
Rent, all other monetary obligation and all other non-contingent obligations
and liabilities under this Lease which have arisen as to the Affected Premises
on or prior to the CA Termination Date, then Tenant shall pay such amounts on
the CA Termination Date. Upon such termination (1) all obligations of Tenant
hereunder as to the Affected Premises shall terminate except for any
obligations of Tenant under this Lease, actual or contingent, which arise on or
prior to the CA Termination Date or which survive such termination by their own
terms, (ii) Tenant shall immediately vacate and shall have no further right,
title or interest in or to the Affected Premises, and (iii) the Net Award shall
be retained by Landlord.

 

8.17.5                  Any such termination shall be without prejudice to either party’s rights
against the other for any breach of this Lease. This Lease shall remain in full
force and effect as to the Remaining Premises; provided, that the Basic Rent
for the Remaining Premises to be paid after such termination shall be the Basic
Rent otherwise payable hereunder with respect to the Premises multiplied by a
percentage equal to the percentage set forth on Part 7 of the Schedule for the
Remaining Premises.

 

8.18                           Restoration

 

8.18.1                  So long as no Breach Event exists, any Net
Award up to and including £500,000 in respect of any Casualty or Compulsory
Acquisition shall be paid by the Landlord or the Lender to the Tenant and the Tenant shall restore the Premises to
the condition required by this Lease.

 

8.18.2                  If any Net Award is in excess of £500,000 in
respect of any occurrence, the Landlord or Lender may hold the entire Net Award
in a fund (the Restoration Fund) and disburse amounts from the Restoration Fund
only in accordance with the
following conditions:

 

19

 

(i)                                     prior to commencement of restoration, (A) the
architects, contracts, contractors, plans and specifications and a budget for
the restoration shall have been approved by the Landlord and (B) the Landlord
shall be provided with workman’s lien insurance (if available) and acceptable
performance and payment bonds which insure satisfactory completion of and
payment for the restoration, are in an amount and form and have a guarantee
acceptable to the Landlord, and name the Landlord as additional
co-beneficiaries;

 

(ii)                                  at the time of any disbursement, no Breach
Event shall exist and no workman’s liens (other than those liens that arise
automatically under the Law) shall have been filed against any of the Premises
and remain undischarged;

 

(iii)                               disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects’
certificates, of the stage of completion, the estimated total cost of
completion and performance of the work to date in a good and workmanlike manner
in accordance with the contracts, plans and specifications, (B) waivers of
liens, (C) contractors’ and subcontractors’ statements as to completed work and
the cost thereof for which payment is requested, and (D) other evidence of cost
and payment so that the Landlord can verify that the amounts disbursed from
time to time are represented by work that is completed, in place and free and
clear of retention of title lien and other claims;

 

(iv)                              each request for disbursement shall be
accompanied by a certificate of the Tenant, signed by an authorised
representative of the Tenant, describing the work for which payment is
requested, stating the cost incurred in connection therewith, stating that the
Tenant has not previously received payment for such work and, upon completion
of the work, also stating that the work has been fully completed and complies
with the applicable requirements of this Lease;

 

(v)                                 the Landlord may retain ten per cent (10%) of
the Restoration Fund until the work is fully completed;

 

(vi)                              if the Restoration Fund is held by the
Landlord, the Restoration Fund shall not be combined with the Landlord’s other
funds and shall bear interest (which shall be added to the Restoration Fund) at
a rate available a bank selected by Landlord for day-in, day-out deposits; and

 

(vii)                           such other reasonable conditions as the
Landlord may impose.

 

8.18.3                  Prior to commencement of restoration and at any
time during restoration, if the estimated cost of completing the restoration
work free and clear of all liens, as determined by the Landlord and the Tenant,
exceeds the amount of the Net Award available for such restoration, the amount
of such excess shall, upon demand by the Landlord, be paid by the Tenant to the
Landlord to be added to the Restoration Fund. Any sum so added by the Tenant
which remains in the Restoration Fund upon completion of restoration shall be
refunded to the Tenant. For purposes of determining the source of funds with
respect to the disbursement of funds remaining after the completion of
restoration, the Net Award and/or the insurance
proceeds shall be deemed to be disbursed prior to any amount added by the
Tenant.

 

8.18.4                  If any sum remains in the Restoration Fund
after completion of the work and any refund to Tenant pursuant to clause
8.18.3, such sum shall be retained by the Landlord.

 

9.                                       LANDLORD’S OBLIGATIONS

 

The Landlord undertakes to
the Tenant that the Tenant paying the Rent and Additional Expenses reserved and
observing and performing its obligations and conditions contained in this Lease
may peaceably and quietly hold and enjoy the Premises without any lawful
interruption by the 

 

20

 

Landlord or any person
rightfully claiming through under or in trust for it.

 

10.                                 DETERMINATION OF VALUE

 

10.1                           Fair Market Value shall be determined in
accordance with the following procedure:

 

(i)                                     Landlord shall within fifteen (15) days
following the date on which Landlord receives an Option Exercise Notice select
a surveyor and notify Tenant in writing of the name, address and qualifications
of such surveyor. Within fifteen (15) days following Tenant’s receipt of
Landlord’s notice of the surveyor selected by Landlord, Tenant shall select a
surveyor and notify Landlord of the name, address and qualifications of such
surveyor. Such two surveyors shall endeavour to agree upon Fair Market Value
based on a written appraisal made by each of them as of the date of the Option
Exercise Notice. If such two surveyors shall agree upon a Fair Market Value,
the amount of such Fair Market Value as so agreed shall be binding and
conclusive upon Landlord and Tenant.

 

(ii)                                  If such two surveyors shall be unable to agree
upon a Fair Market Value within twenty (20) days after the selection of a
surveyor by Tenant then such surveyors shall advise Landlord and Tenant of then
respective determination of Fair Market Value,
the two appraisers shall select a third surveyor to make the
determination of Fair Market Value. The
selection of the third surveyor shall be binding and conclusive upon Landlord
and Tenant.

 

(iii)                               If such two surveyors shall be unable to agree upon the designation of
a third surveyor within ten (10) days after the expiration of the twenty (20)
day period referred to in clause (ii) above, or if such third surveyor does not
make a determination of Fair Market Value within twenty (20) days after his
selection, then such third surveyor or a substituted third surveyor, as
applicable, shall, at the request of either party hereto, be appointed by the
Chairman of the Scottish RIGS. If the said Chairman shall, for any reason, not
be available or shall be unable to make such appointment at the time of the
application therefor, then the appointment may be made by the next senior
officer of the Scottish RICS then available and able to make such appointment
or, if no such officer of the Scottish RICS shall be so available and able, by
such officer of such professional body of surveyors as the Landlord shall
designate (and any reference to the Chairman shall be deemed to include a
reference to such senior office holder or other officer). The determination of
Fair Market Value made by the third surveyor appointed pursuant hereto shall be
made within twenty (20) days after such appointment.

 

(iv)                              If a third surveyor is selected, Fair Market Value shall be the average
of the determination of Fair Market Value made by the third surveyor and the
determination of Fair Market Value made by the surveyor (selected pursuant to
clause 10.1(i) hereof) whose determination of Fair Market Value is nearest to
that of the third surveyor. Such average shall be binding and conclusive upon
Landlord and Tenant.

 

(v)                                 All appraisers selected or appointed pursuant
to this clause 10.1 shall (A) be independent qualified Scottish RICS surveyors
(B) have no right, power or authority to alter or modify the provisions of this
Lease, (C) utilize the definition of Fair Market Value set forth in clause 10.3,
and (D) be registered in the Scottish RICS. For all purposes, the third
surveyor shall be deemed an arbiter.

 

(vi)                              The Cost of the procedure described in this
clause 10.1 above shall be borne equally by Landlord and Tenant.

 

10.2                           If, by virtue of any delay, Fair Market Value
is not determined by the Option Purchase Date, then the Option Purchase Date
shall be extended to a date no later than ten (10) days following a
determination of Fair Market Value.

 

21

 

11.                               PROCEDURES UPON PURCHASE

 

11.1.1                  Unless otherwise agreed in writing, if the
Premises are purchased by the Tenant pursuant to clause (A) of Part 6 of the
Schedule, the Landlord need not convey any better title thereto than that which
was conveyed to the Landlord provided always that the Premises shall be sold
free and clear of all encumbrances effected or granted by the Landlord (other than servitudes,
wayleaves and others agreed to by the Tenant in accordance with the
requirements of Scottish law).

 

11.1.2                  Upon the date fused for any such purchase
pursuant to any provision of this Lease, the Tenant shall pay to the Landlord, or to any Person
to whom the Landlord directs payment, the Offer Amount specified herein, in
immediately available cleared funds, and the Landlord shall deliver to the
Tenant such instruments as shall be necessary to transfer to the Tenant or its
nominee any other property then required to be sold by the Landlord to the
Tenant pursuant to this Lease together with an amount equal to all Net Awards
and proceeds received and retained by the Landlord arising out of any insurance
claims dining the Term which the Landlord has not paid over to the Tenant or
has not used to reinstate the Premises or has not been applied in reducing the
Rent payable by the Tenant.

 

12.                               ALIENATION

 

12.1                           Except as otherwise expressly provided to the
contrary in this clause 12, Tenant may not (i) assign this Lease either in
whole or in part, voluntarily or involuntarily, whether by operation of law or
otherwise (including through merger or consolidation) to any Person, without
the prior written consent of Landlord, which consent may be granted or withheld
by Landlord in its sole and absolute discretion or (ii) enter into subleases.
Tenant shall have the right, with no consent of Landlord being required or
necessary (a Preapproved Assignation) to assign the whole of the Tenant’s
interest in this Lease by operation of law or otherwise to any Preapproved
Assignee. Any purported sublease or assignation in breach of this clause 12
shall be null and void. In addition, notwithstanding anything to the contrary
contained in this clause 12, Tenant shall not have the right to assign this
Lease (voluntarily or involuntarily,
whether by operation of law or otherwise), or sublet the Premises to any Person
at any time that a Breach Event exists.

 

12.2                           Notwithstanding any rule of law to the
contrary upon each assignation of all or any of the Tenant’s rights and/or
interests under the Lease:

 

12.2.1                  the assignee under such assignation shall
expressly assume all the obligations of Tenant hereunder, actual or contingent,
including obligations of Tenant which may have arisen on or prior to the date
of such assignation, by a written instrument delivered to Landlord at the time
of such assignation;

 

12.2.2                  if such assignation is a permitted
assignation of the whole of the Tenant interest in this Lease to either (i) a
Credit Entity, (ii) an Asset Credit Entity or (iii) a Person whose obligations
are guaranteed by a Credit Entity or an Asset Credit Entity pursuant to a
Guarantee in the form annexed hereto as Part 10 of the Schedule (but in no
other circumstances), then the assignor thereunder and its predecessors in
title and any guarantor of this Lease shall, on the date of the entry thereunder
be discharged from all liability under this Lease and any guarantee of this
Lease, as applicable, but that entirely without prejudice to the Landlord’s
right and any assignees obligations hereunder, including those assumed by
virtue of the instrument specified at 12.2.1 hereof;

 

12.2.3                  if such assignation is a permitted
assignation of the whole of the Tenant interest in this Lease to any Person
that is and continues for the balance of the Term to be a member of Tenant’s
Group (but in no other circumstances) then the Guarantor shall not be
discharged from any liability under the Guarantee, and if required by the
Landlord, the Guarantor shall again execute the Guarantee concurrently with
such assignation;

 

22

 

12.2.4                  if such assignation is an assignation other
than that set out in 12.2.2 hereof the assignor thereunder shall remain jointly
and severally liability for the performance and implementation of the
obligation and conditions contained in the Lease and on the part of the Tenant
and the assignation shall not affect or reduce any of the obligations of the
assignor nor the Tenant (for the time being) hereunder or of the Guarantor and
without prejudice to the provisions of clause 12.2.2 any discharge by the
Landlord of the Tenant and for the assignor or their predecessors in title
shall only be validly given if executed by the Landlord in self proving manner.

 

12.3                           Tenant shall have the right, upon thirty (30)
days prior written notice to Landlord, to enter into one or more subleases with
any third parties that let, in the aggregate, up to, but not to exceed
twenty-five percent (25%) of the gross lettable area of the Buildings at the
Premises, with no consent or approval of Landlord being required or necessary
(each, a Preapproved Sublease). Other
than pursuant to Preapproved Sublease, at no time during the Term shall
subleases exist for more than twenty-five percent (25%) of the gross lettable
area of the Buildings at the Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed. Any
Preapproved Sublease and any other sublease consented to by Landlord in
accordance with this clause 12.3 shall provide that, as a condition thereto and
shall not be effective unless, the applicable subtenant enter into a direct
contract with the Landlord to enable the Landlord to achieve the intents of the
provisions set forth in clause 12.7.

 

12.4                           Each sublease of the Premises shall (A) not
extend beyond the then current Term minus one day; (B) terminate upon any
termination of this Lease, unless Landlord elects in writing, to cause the
subtenant to recognize Landlord as the Landlord under such sublease, whereupon
such sub tenant shall continue as a direct lease between sub tenant and
Landlord upon all the terms and conditions of such sublease; and (C) bind the
sub-tenant to all undertakings contained in clause 8.14 with respect to sublet
premises to the same extent as if the sub-tenants were Tenant.

 

12.5                           Notwithstanding any provision in this clause
12 or elsewhere in this Lease to the contrary, including any right or option
Tenant may have to assign this Lease or sublease all or any portion of the
Premises without Landlord’s consent, Tenant shall, upon the request of Landlord,
provide and cause such assignee or sub-tenant to provide, such information
(including, without limitation, any certification) as to any proposed assignee
or sub-tenant and its principals as may be required for Landlord and Tenant to
comply with regulations administered by OFAC or other governmental action
regarding persons or entities with whom U.S. persons or entities are restricted
from doing business.

 

12.6                           Tenant shall, within ten (10) days after the
execution and delivery of any assignation or sublease, deliver a duplicate
original copy thereof to Landlord which, in the event of an assignation, shall
be in a form capable of registration in the Books of Council and Session or an
Extract Registered Copy of same. With respect to any assignation to any Preapproved
Assignee or any Preapproved Sublease, at least
thirty (30) days prior to the effective date of such assignation or
sublease, Tenant shall provide to Landlord information reasonably required by
Landlord to establish that the Person involved in any such proposed assignation
or sublease satisfies the criteria set forth in this Lease for a Preapproved
Assignation or Preapproved Sublease.

 

12.7                           During the continuation of any Breach Event,
Landlord shall have the right upon notice to Tenant and any subtenants to
collect all rents, issues and profits in connection with any subleases now in
existence or hereafter entered into for any or all of the Premises, including
any and all extensions, modifications and renewals thereof. Any amounts
collected shall be applied to Rent payments next due and owing with any excess
amounts paid to Tenant hereunder. Tenant shall not consent to, cause or allow
any modification or alteration of any of the terms, conditions or undertakings
of any of the subleases or the termination thereof, without the prior written
approval of Landlord which consent shall not be unreasonably withheld nor shall
Tenant accept any rents more than thirty (30) days in advance of the accrual
thereof.

 

12.8                           Tenant shall not have the power to grant any
standard security, charge, pledge or otherwise 

 

23

 

encumber its interest under this Lease or any sublease of the Premises,
and any such standard security, charge, pledge or encumbrance made in breach of
this clause 12 shall be void and of no force and effect provided that, for the
avoidance of doubt, nothing in this clause 12.8 shall prevent the Tenant from
including its interest in the Lease in a floating charge over all or
substantially all of its assets in the case of a bank or major financial
institution. Notwithstanding the foregoing, Tenant shall be entitled to grant a
security over the whole of Tenant’s interest under this Lease provided that
Landlord’s consent is first obtained, which consent shall require, without
limitation, that (1) the terms of the security are first approved by Landlord,
(ii) any conflict between the terms of the security and the terms of this Lease
is resolved in favour of the terms of this Lease, and (iii) the security is granted
in favour of a bank or other major financial institution.

 

12.9                           Landlord may sell or transfer the Premises at
any time without Tenant’s consent to any third party (each a Third Party
Purchaser). In the event of any such transfer, Tenant shall be bound and
obliged to any Third Party Purchaser as Landlord so long as such Third Party
Purchaser and Landlord notify Tenant in writing of such transfer. At the
request of Landlord, Tenant will execute such documents confirming the
agreement referred to above and such other agreements as Landlord may
reasonably request, provided that such agreements do not increase the
liabilities and obligations of Tenant hereunder.

 

12.10                     Tenant shall not, in a single transaction or
series of transactions (including any merger or consolidation), sell or convey,
transfer or lease all or substantially all of its assets (an Asset Transfer) to
any Person, and any such Asset Transfer shall be deemed an assignation in
breach of this Lease; except that Tenant shall have the right to conduct an
Asset Transfer to a Person without Landlord’s consent if the following
conditions are met: the Asset Transfer is to a Person that (i) (A) immediately
following such transaction or transactions, taken in, the aggregate, is (or
would be, on a pro forma basis) a Credit Entity or (B) is approved in writing
by Landlord in its sole and absolute discretion or (C) (1) purchases all or
substantially all of the assets of Tenant with the stated intention of
continuing to operate the business of Tenant and (2) immediately after such
transaction or transactions, taken in the aggregate, such Person has on a
consolidated basis (or would, on a consolidated pro forma basis, have) for the
Applicable Period (x) a Fixed Charge Coverage Ratio of not less than 1.5 to 1.0
and (y) a Total Debt to EBITDAR Ratio of not more than 4.75 to 1.0 (any such
other Person under this clause 12.10(i)(C), an Asset Credit Entity); and (ii)
this Lease is assigned to and assumed by such Person as a part of such Asset
Transfer. In the event of an Asset Transfer to a member of Tenant’s Group, any
subsequent sale of the assets of the original Tenant named herein by such
member of Tenant’s Group shall be governed by the requirements of this clause
12.10 irrespective of whether or not such sale would be considered a sale of
all or substantially all of the assets of such member of Tenant’s Group. For
the purpose of this clause 12.10 the following terms shall have the following
meanings:

 

12.10.1            Applicable Period
shall mean with respect to any calculation, the twelve consecutive months
immediately preceding the date of the Asset Transfer.

 

12.10.2            Capital Lease shall
mean any lease of any property (whether real, personal or mixed) by any Person
as lessee that, in conformity with GAAP, is or would be accounted for as a
capital lease on the balance sheet of that Person.

 

12.10.3            Capitalized Lease Obligation shall mean the amount of the liability of
any Person which in accordance with GAAP is or should be capitalized or
disclosed on the balance sheet of such Person in respect of a Capital Lease.

 

12.10.4            EBITDAR shall mean, for any Applicable Period, Net
Income Less (in each case to the extent included in the calculation of Net
Income, but without duplication) income tax credits, interest income, gain from
extraordinary items (net of less from extraordinary items) net of related tax
effects, any aggregate net gain (or aggregate net loss) arising from
non-recurring sale, exchange or other disposition of capital assets (including
any fixed assets, whether tangible or intangible, all 

 

24

 

inventory sold in conjunction with the disposition of fixed assets and
all securities) net of related tax effects, any other non-cash gains (losses),
plus (in each case to the extent deducted in the calculation of Net Income, but
without duplication) any provision for income taxes, interest expense,
depreciation and amortization, reasonable management and director fees, rental
expense and reasonable out-of-pocket expenses.

 

12.10.5            Fixed Charge Coverage Ratio shall
mean, for any Applicable Period, the ratio of (i) EBITDAR to (ii) the sum of
(a) rental expense paid during such period (including, but not limited to, Rent
under this Lease) and (h) Interest Expense.

 

12.10.6            Indebtedness shall mean, for any Person, (i) all
outstanding obligations for borrowed money or for the deferred purchase price
of property or services or in respect of reimbursement obligations under
letters of credit, (ii) all obligations represented by debentures, notes, or
similar instruments, or accepted drafts that represent extensions of credit,
(iii) all obligations (including, during the non-cancelable term of any lease
in the nature of a title retention agreement, all future payment obligations
under such lease discounted to their present value in accordance with GAAP, but
excluding obligations under leases which, in accordance with GAAP, are
operating leases and are not in the nature of a title retention agreement)
secured by any lien to which any property or asset owned or held by such Person
is subject, whether or not the obligation secured thereby shall have been
assumed by such Person, (iv) all obligations for which such Person is obligated
pursuant to a guaranty, including, but not limited to, all obligations of such
Person consisting of recourse liability with respect to accounts receivable
sold or otherwise disposed of by such Person, (v) all outstanding obligations
under the capitalized portion of any lease obligations under capitalized
leases, and (vi) the loans with respect to such Person and its Subsidiaries
(without duplication).

 

12.10.7            Interest Expense
shall mean, for any Applicable Period, consolidated total interest expense
(including, without limitation, that portion of any Capitalized Lease
Obligations attributable to interest expense in conformity with GAAP and
amortization of capitalized interest) payable in cash during such period with
respect to all outstanding Indebtedness of such Person and its Subsidiaries,
including all commissions, discounts and other fees and charges owed with
respect to letter of credit and bankers acceptance financing, prepayment
charges, agency fees, administrative fees, commitment fees, net payment owed
under any interest rate hedging, cap or similar agreement or arrangement, all
as determined for such Person and its Subsidiaries on a consolidated basis for
such period in accordance with GAAP.

 

12.10.8            Net Income or Net Loss
shall mean, as applied to any Person, the net income (or net loss) of such
Person for the period in question after giving effect to deduction of or
provision for all operating expenses, all taxes and reserves (including
reserves for deferred taxes and all other proper deductions), all determined in
accordance with GAAP.

 

12.10.9            Total Debt to EBITDAR Ratio shall mean, for any Applicable Period, the
ratio of Indebtedness to EBITDAR

 

12.11                     Notwithstanding anything in clause 12.1 or
12.10 to the contrary, if a Relevant Person shall have given (i) the
undertaking and (ii) the caution
(if any) required pursuant to clause 13.1.2, a Secured Creditor or any
receiver, administrative receiver, liquidator, administrator or other
insolvency practitioner appointed by such Secured Creditor then notified in
writing to the Landlord shall have the right, without the Landlord’s consent,
to conduct an Asset Transfer with respect to Tenant to a Person provided (i)
such Person is demonstrably capable of performing the obligations of Tenant
under the Lease, (ii) such Person purchases all or substantially all of the assets
of Tenant, and (iii) this Lease is assigned to and assumed by such Person as a
part of such Asset Transfer.

 

13.                                 BREACH EVENTS

 

13.1.1                  The occurrence of any one or more of the
following (after expiration in the case of any breach of 

 

25

 

the provisions of this Lease
which is capable of being remedied (albeit late) of any period allowed for the
remedying of the same as provided in clause 14) shall, at the sole option of
Landlord, constitute a Breach Event
under this Lease:

 

(i)                                     a failure by Tenant to make any payment of
Rent or any other monetary obligation on or prior to its due date, regardless
of the reason for such failure;

 

(ii)                                  a failure by Tenant duly to perform and
observe, or a breach of, any other provision hereof not otherwise specifically
mentioned in this clause 13, and such failure is not cured within the period
specified in clause 8.7.2;

 

(iii)                               any representation or warranty made by Tenant
herein or in any certificate, demand or request made pursuant hereto proves to
be incorrect in any material respect;

 

(iv)                         a default beyond any applicable cure period
or at maturity by Tenant or any Guarantor in any payment of principal or
interest on any obligations for borrowed money having an original principal
balance of $3,500,000 or more in the aggregate, or in the performance of any
other provision contained in any instrument under which any such obligation is
created or secured (including the breach of any covenant thereunder), (x) if
such payment is a payment at maturity or a final payment, or (y) if an effect
of such default is to cause such obligation to become due prior to its stated
maturity;

 

(v)                            Tenant’s failure to timely comply with any of
Tenant’s Post Closing Obligations and such failure continues for ten (10) days
after written notice from Landlord;

 

(vi)                         Tenant shall become apparently insolvent or
shall make any arrangement with its creditors or, being a firm shall be unable
to pay its debts as they mature;

 

(vii)                           a receiver or manager shall be appointed in
respect of Tenant or a petition shall be made or other steps are taken for the
making of an administration order in respect of Tenant or a Company Voluntary
Arrangement shall be made relating to Tenant in respect of which Landlord is not
a consenter or withdraws its consent;

 

(viii)                        Tenant shall go into liquidation (whether
voluntary or compulsory) or be dissolved or struck off or proceedings shall be
begun for such liquidation or dissolution or being a firm, shall be
sequestrated or dissolved;

 

(ix)                                the interest of Tenant in the Premises or any
part thereof shall be subject to any diligence or any of Tenant’s property
there shall be poinded or subject to other diligence following the obtaining of
decree or summary warrant against Tenant;

 

(x)                                   it is or becomes unlawful for Tenant to
perform any of its obligations under this Lease, as applicable;

 

(xi)                                Tenant shall fail to provide, maintain and,
if necessary, replenish the Security Deposit in accordance with the
requirements of clause 8.15; or

 

(xii)                             a Breach Event exists under the Guarantee.

 

13.1.2                  Notwithstanding the foregoing, the Landlord
will not exercise its option of forfeiture pursuant to clause 14.1 by reason of
a Breach Event unless and until the Landlord has first given notice of the
occurrence of such Breach dent to any secured creditor (the Secured Creditor)
under any standard security or floating charge then notified in writing to the
Landlord granted over the Tenant’s interest under this Lease and to any
receiver or administrative receiver appointed by such Secured Creditor then
notified in writing to the Landlord (together with the Secured Creditor, a
Relevant Person) (provided that in any event the Landlord shall not be
obligated to provide such 

 

26

 

notice to more than one
Relevant Person) and shall have allowed a period of fourteen (14) days for such
Relevant Person to give the undertaking aftermentioned (and if the Relevant
Person shall deliver to Landlord within fourteen (14) days after the date of
such notice an undertaking (in a form and in terms acceptable to the Landlord
(acting reasonably)) personally to implement full responsibility for payment of
the Rent (whether due in respect of the period occurring before or after the
date of the calling up) and performance of all other obligations of Tenant
under this Lease (whether due in respect of the period occurring before or
after the date of such Landlord’s notice) and in both cases to the earlier of
(1) the date of a permitted assignation of this Lease, or (2) the date of
expiry of such six (6) month period and shall thereafter fully implement such
undertaking, the Landlord shall allow the Relevant Person. a period of six (6)
months in which to dispose of Tenant’s interest in this Lease but shall be
entitled to terminate this Lease if the Relevant Person shall have failed to
dispose of the Tenants’ interest at the end of the six (6) month period; and,
if such Relevant Person shall not itself be a Credit Entity, the Landlord shall
not be obliged to allow such six (6) month period unless the Relevant Person
shall, within the said fourteen (14) day period, find caution for such payment
and performance in an amount acceptable to Landlord (acting reasonably); and it
is further agreed that Landlord shall deal with any request for consent to
assign this Lease made by such Relevant Person in such manner as if the request
had been made by Tenant).

 

14.                                 BREACH/IRRITANCY

 

14.1                           Subject always to the provisions of the Law
Reform (Miscellaneous Provisions) (Scotland) Act 1985 which shall prevail in
the event of any inconsistency with this Lease, if the Breach Event has not
been cured within the applicable cure period provided in clause 13.1.1, then
and in any such case it shall be lawful for Landlord by notice to Tenant to
bring this Lease to an end forthwith and to repossess the Premises as if this
Lease had not been granted but without prejudice to any right of action or
remedy of Landlord in respect of any breach of any of the obligations undertaken
by Tenant under this Lease and any Surviving Obligations.

 

14.2                           Notwithstanding anything to the contrary
herein contained, in addition to any of the foregoing remedies arising relative
to any Breach Event, it shall be a breach of Tenant’s obligations to Landlord
to allow any Such Breach Event or prospective Breach Event to occur and to
continue and Tenant shall be liable to Landlord, to the maximum extent
applicable at law, for damages available to it at law and it shall be, to the
maximum extent so applicable a surviving obligation of Tenant to free, relieve
and indemnify Landlord in respect of all costs and losses arising from the
breach and/or any irritancy following upon it.

 

14.3                           If any Law shall validly limit the amount of
any damages provided for herein to an amount which is less than the amount
agreed to herein, Landlord shall be entitled to the maximum amount available
under such Law.

 

14.4                           No termination or irritancy of this Lease,
repossession or reletting of the Premises, exercise of any remedy or collection
of any damages pursuant to this clause 14 shall relieve Tenant of any Surviving
Obligations.

 

14.5                           Upon the occurrence of any Breach Event,
Landlord shall have the right (but no obligation) to perform any act required of Tenant hereunder
(and Tenant shall within ten (10) days of written demand, reimburse Landlord
for all costs and expenses incurred by Landlord in connection with such
performance) and, if performance of such act requires that Landlord enter the
Premises, Landlord may enter the Premises for such purpose.

 

14.6                           Where Tenant is a company incorporated under the
Companies Acts then in the event that Tenant is dissolved or struck off the
Register of Companies by administrative action pursuant to Section 652 of the
Companies Act 1985 or any statutory modification or re enactment thereof from
time to time or steps analogous to the foregoing are taken against Tenant then
Landlord shall have the option to terminate this Lease by written notice sent
to the last Registered Office of 

 

27

 

Tenant, said termination to be effective notwithstanding that Tenant is
subsequently restored to the Register of Companies.

 

14.7                           No failure of Landlord (i) to insist at any
time upon the strict performance of any provision of this Lease or (ii) to
exercise any option, right, power or remedy contained in this Lease shall be
construed as a waiver, modification or relinquishment thereof A receipt by
Landlord of any sum in satisfaction of any monetary obligation with knowledge
of the breach of any provision hereof shall not be deemed a waiver of such
breach, and no waiver by Landlord of any provision hereof shall be deemed to
have been made unless expressed in a writing signed by Landlord.

 

14.8                           Except as otherwise provided herein, all
remedies are cumulative and concurrent and no remedy is exclusive of any other
remedy. Each remedy may be exercised at any time a Breach Event has occurred
and is continuing and may be exercised from time to time. No remedy shall be
exhausted by any exercise thereof.

 

15.                                 GENERAL PROVISIONS

 

15.1                           Service
of notices

 

(i)                                     Any demand or notice to be served on the
Tenant or any Guarantor under this Lease will be validly served if sent by
First Class Recorded Delivery, internationally recognised over night delivery
service or facsimile addressed to the Tenant or the Guarantor respectively (and
if there is more than one of them then any of them) at its registered office or
its last known address or at the Premises.

 

(ii)                                  Any notice to be served on the Landlord will
be validly served if sent by First Class Recorded Delivery, internationally
recognised over night delivery service or facsimile addressed to the Landlord
at its registered office or its last known address together with a copy to each
of the following:

 

	
  Landlord:

  	
  W.P. Carey & Co. LLC

  
	
   

  	
  50 Rockefeller Piazza,
  Second Floor

  
	
   

  	
  New York, NY 10020

  
	
   

  	
  USA

  
	
   

  	
  Attention:
  Director, Asset Management

  
	
   

  	
  Fax:
  001-212-492-8922

  
	
   

  	
   

  
	
  with a copy to:

  	
  Reed Smith LLP

  
	
   

  	
  2500 One Liberty Place

  
	
   

  	
  Philadelphia PA 19103-7301

  
	
   

  	
  USA

  
	
   

  	
  Attention: Chairman, Real
  Estate

  
	
   

  	
  Fax: 001-215-851-1420

  
	
   

  	
   

  
	
  Tenant:

  	
  Murray International
  Metals Limited

  
	
   

  	
  Newbridge Industrial
  Estate

  
	
   

  	
  Newbridge, Midlothian

  
	
   

  	
  Edinburgh EH28 8PJ,
  Scotland, United Kingdom Attention: Managing Director

  
	
   

  	
  Facsimile Number: 011-
  44-(0)131-333-4477

  
	
   

  	
   

  
	
  With a copy to:

  	
  Dechert LLP

  
	
   

  	
  160 Queen Victoria Street

  
	
   

  	
  London EC4V 4QQ

  

 

28

 

	
   

  	
  Attention: DW/354509

  
	
   

  	
  Facsimile Number:
  011-44-(0)20-7184-7001

  

 

(iii)                               Any demand or notice sent by post or
facsimile will be conclusively treated as having been served

 

(a)                                  if in writing, when delivered or refused;

 

(b)                                 if by facsimile, when confirmed by an
activity report confirming the facsimile number to which such notice was sent,
the number of pages transmitted and that such transmission was successfully
completed.

 

(iv)                              However, a notice given in accordance with
the above but received on a non-working day or after business hours in the
place of receipt will only be deemed to be given on the next working day in
that place.

 

(v)                                 The address and facsimile number of each
party for all notices under or in connection with this Lease are:

 

(a)                                  those notified by that party for this purpose
to the other parties on or before the date of this Lease; or

 

(b)                                 any other notified by that party for this
purpose to the other parties by not
less than 10 days’ notice.

 

15.2                           No liability in damages

 

Except where the same is
covered by an insurance policy in the name of the Landlord so far as permitted
by law, the Landlord will not in any circumstances incur liability in respect
of damage to person or property or otherwise howsoever by reason of any act or
default or misfeasance of the landlord its servants, employees, agents or
independent contractors or by
reason of any accidental damage which may at any time be done to the Premises
or to any of the goods, persons or property of the Tenant or any other person
Provided that this clause shall not apply where such damage is a direct result
of any affirmative act on the part of the Landlord, its contractors, agents or
employees or to any breach of the Landlord’s obligations in this Lease relating
to insurance.

 

15.3                           Failure to perform obligations

 

The Landlord will not in any
event be liable to the Tenant in respect of any failure of the Landlord to,
perform any of its obligations to the Tenant under this Lease whether express
or implied unless the Tenant has so notified the Landlord and the Landlord has
failed within a reasonable time to remedy the same and then in such case the
Landlord will be liable to compensate the Tenant only for loss or damage
sustained by the Tenant after such reasonable lime has elapsed.

 

15.4                           Waiver of right to forfeit

 

That no demand for or
acceptance or receipt of any part of the Basic Rent or Additional Rent shall
operate as a waiver by the Landlord of any right which the Landlord may have to
irritate this Lease by reason of any breach of the Tenant’s obligations
notwithstanding that the Landlord may know or be deemed to know of such breach
at the date of such demand, acceptance or receipt.

 

15.5                           Tenant’s goods left in Premises

 

If after the Termination
Date any property of the Tenant remains in the Premises and the Tenant fails at
the Termination Date to remove the same within thirty (30) days after being
requested in 

 

29

 

writing by the Landlord so
to do the Landlord may as the agent of the Tenant (and the Landlord is hereby
appointed by the Tenant to act as such) sell such property and will then hold
the proceeds of sale (after deducting the costs and expenses of removal storage
and sale reasonably and properly incurred by it) to the order of the Tenant
provided that the Tenant will indemnify the Landlord against any liability
incurred by the Landlord to any third party whose property has been sold by the
Landlord in the bona fide mistaken belief (which will be presumed unless the
contrary is proved) that such property belonged to the Tenant and was liable to
be dealt with as such under this clause 15.5.

 

15.6                           Covenants relating to adjoining
premises

 

Nothing contained in or
implied by this Lease places any obligation on the Tenant or gives the Tenant
the benefit of or the right to enforce or to prevent the release or modification
of any obligation agreement or condition entered into by any tenant of the
Landlord in respect of any property not comprised in this Lease.

 

15.7                           Entire understanding;
Schedules

 

This Lease, together with
all agreements specifically referred to herein, embodies the entire
understanding of the parties relating to the Premises and to all the matters
dealt with by the provisions of this Lease. The schedules attached to this
Lease are incorporated herein as if fully set forth. Landlord and Tenant are business
entities having substantial experience with the subject matter of this Lease
and have each fully participated in the negotiation and drafting of this Lease.
Accordingly, this Lease shall be construed without regard to the rule that
ambiguities in a document are to be construed against the drafter.

 

15.8                           Severance

 

Each of the clauses of this
Lease is distinct and severable from the others and if at any time one or more
of such provisions is or becomes illegal, invalid or unenforceable the
validity, legality and enforceability of the remaining provisions will not in
any way be affected or impaired.

 

15.9                           Intentionally Deleted

 

15.10                     Non-recourse

 

Anything contained herein to
the contrary, notwithstanding any claim based on or in respect of any liability
of the Landlord under this Lease, shall be enforced only against the Landlord
or the Premises and not against any other assets, properties or funds of:

 

15.10.1            any director, officer, member, shareholder,
employee or agent of the Landlord or any general partner of the Landlord or any
of its members (or any legal representative, heir, estate, successor or
assignee of any thereof);

 

15.10.2            any predecessor or successor partnership or
corporation (or other entity) of the Landlord or any of its general partners,
shareholders, officers, directors, members, employees or agents, either
directly or through the Landlord or its shareholders, officers, directors,
employees or agents or any predecessor or successor partnership or corporation
(or other entity); or

 

15.10.3            any person affiliated with any of the
foregoing, or any director, officer, employee or agent of any thereof.

 

15.11                     Option to Purchase

 

Tenant shall have the
benefit of an option to purchase the Landlord’s reversionary interest in the
Premises on the terms contained in Part 6 of the Schedule.

 

30

 

15.12                     Amendments

 

This Lease may be modified,
amended, discharged or waived only by an agreement in writing signed by both
the parties under the penalty of invalidity.

 

15.13                     Successors and Assignees

 

The obligations under this
Lease shall bind Tenant and Landlord and their successors and assignees and all
sub-tenants of any of the Premises, and shall inure to the benefit of Landlord
and Tenant and their respective successors and assignees. Tenant hereby
consents to any assignation of the Landlord’s interest in this Lease to a
Lender.

 

15.14                     Governing Laws

 

This Lease shall be governed
by and construed and enforced in accordance with the laws of Scotland and the
parties prorogate the jurisdiction of the Scottish courts for the area in which
the Premises are situated and also of the Court of Session.

 

15.15                     Consent Standard

 

Landlord shall not
unreasonably withhold or delay its consent whenever such consent is required
under this Lease, except as otherwise specifically provided herein and except
that with respect to any assignation of this Lease not expressly-permitted by
the terms of this Lease, Landlord may withhold its consent for any reason or no
reason.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.]

 

31

 

15.16                     OFAC Representation

 

15.17                     Tenant is not, nor will Tenant become, a
Person with whom U.S. persons or entities are restricted from doing business
under regulations of OFAC or other governmental action and Tenant not will
engage in any dealings or transactions or be otherwise associated with such
persons or entities.

 

15.18                     Consent to Registration

 

The Landlord and the Tenant
consent to the registration hereof and
of any certificates issued pursuant hereto for preservation and execution

 

IN WITNESS WHEREOF, Landlord and Tenant have
caused this Lease to be duly executed on the date set out below:

 

	
  LANDLORD:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STEELS (UK) QRS 16-58,
  INC.,

  	
   

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  at
  [             ]
  on [            ]

  	
   

  	
  IN THE PRESENCE OF:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ EDWARD LA PUMA

  	
   

  	
  By:

  	
  /s/ VICTORIA PEEL

  	
   

  
	
  Name:

  	
  EDWARD LA PUMA

  	
   

  	
  Name:

  	
  VICTORIA PEEL

  	
   

  
	
  Title:

  	
  MANAGING DIRECTOR

  	
   

  	
  Address:

  	
  18 PROSPECT ROAD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  S. ORANGE, NJ

  07079

  	
   

  

 

TENANT:

 

MURRAY INTERNATIONAL METALS LIMITED

incorporated
under the Companies Acts

with
Company Number 1241058

 

	
  at
  [             ]
  on [            ]

  	
   

  	
  IN THE PRESENCE OF:

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ R.N. LEE

  	
   

  	
  By:

  	
  /s/ GRIGOR LEWIS MILNE

  	
   

  
	
  Name:

  	
  R.N. LEE

  	
   

  	
  Name:

  	
  GRIGOR LEWIS MILNE

  	
   

  
	
  Title:

  	
  DIRECTOR

  	
   

  	
  Title:

  	
  86 BRAID ROAD

  	
   

  

 

32

 

SCHEDULE

 

This is the Schedule referred to in the foregoing
Lease between STEELS (UK) QRS 16-58, Inc. and Murray International Metals
Limited.

 

33

 

PART 1

 

LAND

 

(A)                              Office Premises - the whole subjects situated
at Newbridge Industrial Estate, Midlothian more particularly described in and
comprising the “Office Subjects” as defined in the Deed of Conditions by Murray
Group Management Limited, recorded in the Division of the General Register of
Sasines for the County of Midlothian on Fifteenth October Nineteen Hundred and
Ninety Nine, which Office Premises
form part of the subjects registered in the Land Register of Scotland
under Title Number MJD23708.

 

(B)                                Manufacturing 1 Premises - those subjects situated at Newbridge
Industrial Estate, Midlothian adjacent to and generally to the south and west
of the Office Premises and more particularly described in and comprising the
“MZM Subjects” as defined in the said Deed of Conditions, which Manufacturing 1
Premises also form part of the subjects registered
in the Land Register of Scotland under Title Number MID23708.

 

(C)                                Manufacturing 2 Premises - being the whole subjects
registered in the Land Register
of Scotland under Title Number MID 23710.

 

34

 

PART
2

 

TITLE
CONDITIONS

 

(A)                              Office Premises - those title conditions
applicable to the Office Premises under Title Number MID 23708.

 

(B)                                Manufacturing 1 Premises - those title
conditions applicable to the Manufacturing 1 Premises under Title Number MID
23708.

 

(C)                                Manufacturing 2 Premises - those title
conditions applicable to the Manufacturing 2 Premises under Title Number MID
23710.

 

35

 

PART
3

 

RESERVED
RIGHTS

 

(A)                              Office Premises - those reserved rights
applicable to the Office Premises under Title Number MID 23708.

 

(B)                                Manufacturing 1 Premises - those reserved
rights applicable to the Manufacturing 1 Premises under Title Number MID 23708.

 

(C)                                Manufacturing 2 Premises - those reserved
rights applicable to the Manufacturing 2 Premises
under Title Number MID 23710.

 

36

 

PART
4

 

PROVISIONS FOR RENT REVIEW

 

In
this Part 4 of the Schedule the following expressions have the following
meanings:

 

Beginning Index means the average Index for the calendar
month in which the Commencement Date occurs;

 

First Rent Review Date means the fifth anniversary of the
Commencement Date.

 

Index means the index known as the UK Consumer
Price Index or the successor index that most closely approximates the Index;

 

Index Adjustment means an adjustment of Basic Rent for the
Index as calculated in accordance with clause 3 below;

 

Relevant Rent Review Date means the Rent Review Date in respect of
which the Basic Rent is to be adjusted;

 

Rent Review Dates means the First Rent Review Date and each
second anniversary of the First Rent Review Date thereafter during the Term.

 

Review means a review of Basic Rent for Index as
calculated in accordance with clause 3 below;

 

1.                                       At each Relevant Rent Review Date the annual
Basic Rent then in effect shall be increased by the Index Adjustment. In no
circumstances shall the annual Basic Rent be reduced from the annual Basic Rent
in effect immediately prior to each such review.

 

2.                                       If the Index shall be discontinued with no
successor or comparable successor Index, the Landlord and the Tenant shall
attempt to agree upon a substitute Index or formula, but if they are unable to
so agree, then the matter shall be finally determined in the English language
by an international accounting firm with offices in Scotland provided that if
the Landlord and Tenant cannot agree on such firm, the Landlord and the Tenant
shall have a coin toss and the winner of the coin toss shall make the selection
of the accounting firm. Any decision or award resulting from such arbitration
shall be final and binding upon the Landlord and the Tenant and judgement
thereon may be entered in any court of competent jurisdiction.

 

3.                                       As of each Rent Review Date, an Index
Adjustment shall be calculated as follows: when the average Index determined in clause (i) below exceeds, in the
case of the first Review, the Beginning Index or, in the case of any subsequent
Review, the Index as of the previous Rent
Review Date, the Basic Rent in
effect immediately prior to the applicable Rent Review Date shall be
multiplied by a fraction, the numerator of which shall be the difference between (i) the Index
for the most recent calendar month (the Prior Month) ending prior to such Rent
Review Date for which the Index
has been published on or before the forty-fifth (45th) day preceding such Rent
Review Date and (ii) in the case of the first Review, the Beginning Index or, in the case of any subsequent Review,
the Index as of the previous Rent Review Date, and the denominator of which
shall be, in the case of the first Review, the Beginning Index or, in the case
of any subsequent Review, the Index as of the previous Rent Review Date. The
product of such multiplication shall be added to the Basic Rent in effect
immediately prior to such Rent Review Date. If the average Index determined in
clause (i) is the same or less than, in the case of the first Review, the
Beginning Index or, in the case of any
subsequent Review, the Index as of the previous Rent Review Date, the
annual Basic Rent will remain the same until the next Relevant Rent Review
Date.

 

4.                                       Effective as of a given Rent Review Date,
Basic Rent payable under this Lease until the next 

 

37

 

succeeding Rent Review Date
shall be the Basic Rent in effect after the adjustment provided for as of such
Rent Review Date.

 

5.                                       Notice of the new annual Basic Rent shall be
delivered to the Tenant on or before the fifteenth (15th) day prior to each
Rent Review Date, but any failure to do so by the Landlord shall not be or be
deemed to be a waiver by the Landlord of the Landlord’s rights to collect such
sums. The Tenant shall pay to
the Landlord, within ten (10) days after a notice of the new annual Basic Rent
is delivered to the Tenant, all amounts due from the Tenant, but unpaid, where
notice of the stated amount as set forth
above was not delivered to the Tenant at least fifteen (15) days
preceding the Relevant Rent Review Date.

 

38

 

PART
5

 

CORPORATE
AND FINANCIAL COVENANTS

 

1.             CORPORATE EXISTENCE

 

1.1                                 The Tenant and the Guarantor shall maintain
their corporate existence, continue to have the power and authority to own
their respective assets and to conduct the business which they conduct and/or
propose to conduct.

 

1.2                                 Both the Tenant and the Guarantor shall
maintain a place of business within the United Kingdom.

 

1.3                                 Whilst this Lease is vested in MURRAY
INTERNATIONAL METALS LIMITED it shall at all times remain a wholly owned
subsidiary of the Tenant Group.

 

2.                                       BOOKS AND RECORDS

 

The Tenant and Guarantor
oblige themselves and agree:

 

2.1                                 To keep adequate records and books of account
with respect to the finances and business of the Tenant’s Group generally and
with respect to the Premises in accordance with accounting standards,
principles and practices generally accepted in Scotland consistently applied
and to discuss the finances and business of the Tenant’s Group with the
officers of the Landlord at such reasonable times as may be requested by the
Landlord.

 

2.2                                 To deliver to the Landlord within 180 days of
the close of each of the Tenant’s Group’s financial years (or such earlier
period as the auditor signs off annual audited financial statements) annual
audited financial statements of the Tenant’s Group prepared by a nationally
recognised firm of independent, suitable, professionally qualified accountants.

 

2.3                                 To furnish to the Landlord within 90 days
after the end of its half year its unaudited financial statements and all other
half yearly reports on the Tenant’s Group to the extent that they are produced
by the Tenant.

 

2.4                                 To ensure that all annual financial
statements shall be accompanied by an opinion of the said accountants stating
that (a) there are no qualifications as to the scope of the audit and (b) the
audit was performed in accordance with accounting standards, principles and practices
generally accepted in Scotland and (c) such statements give a true and fair
view of the Tenant’s Group’s financial condition and operations at the date and
for the year then ended.

 

2.5                                 To furnish the Landlord with any other
financial information as the Landlord shall reasonably require.

 

2.6                                 The Tenant confirms that the Landlord shall
be permitted to pass any information provided to it under the terms of this
clause 5 to any Lender.

 

39

 

PART
6

 

OPTION TO PURCHASE

 

(A)                              The Landlord hereby grants to the Tenant the option (the Option) to purchase the Premises (i)
for a purchase price equal to the Offer Amount as at the date of the Option
Exercise Notice (ii) on any date (the Option Purchase Date) during the last
three (3) years of the Initial Term or, if the Initial Term is extended, during
the last thirty (30) days of each effective Renewal Term which is mutually
agreeable to the Landlord and the Tenant, but in any event not sooner than
thirty (30) days after the Fair Market Value Date. If the Tenant intends to exercise such option, the Tenant shall
give to Landlord not less than nine (9) months prior written notice (the Option
Exercise Notice) to the Landlord to such effect. Promptly upon receipt of such
notice by the Landlord, the parties shall commence to determine Fair Market
Value.

 

(B)                                If the Tenant shall exercise the Option to
purchase the Premises, on the later to occur of (i) the Option Purchase Date or
(ii) the date when the Tenant has paid the Offer Amount and has satisfied all
other monetary obligations, the Landlord shall convey the Premises to the
Tenant in accordance with clause 11; provided, that if an Breach Event has
occurred and is continuing on the Option Purchase Date, the Landlord, at its
sole option, may terminate the Tenant’s Option hereunder.

 

(C)                                If this Lease shall terminate for any reason
prior to the date originally fixed herein for the expiration of the Term or
where the Term has been extended, the date on which such extension of the Lease
ends, TIME BEING OF THE ESSENCE, the Option to purchase the Premises shall
cease and terminate and shall be null and void. Furthermore, if the Tenant shall fail to give the aforesaid Option Exercise Notice within the applicable time period specified above, TIME BEING OF
THE ESSENCE, the Option to purchase
the Premises on the applicable Option Purchase
Date for which such Option Exercise
Notice is required shall cease
and terminate and shall be null and void.

 

40

 

PART 7

 

PERCENTAGE ALLOCATION OF BASIC RENT*

 

	
  Office Premises

  	
   

  	
  7.50

  	
  %

  
	
  Manufacturing
  1 Premises

  	
   

  	
  64.00

  	
  %

  
	
  Manufacturing
  2 Premises

  	
   

  	
  28.50

  	
  %

  

 

*                                         If any of the Related Premises
ceases to be subject to this Lease, the percentage shown on this Part 7 of the
Schedule for each of the Related Premises that remain subject to this Lease
shall be adjusted proportionately so that the total of such percentages shall
be 100%.

 

41

 

PART
8

 

TENANT’S
POST CLOSING OBLIGATIONS

 

Tenant shall conduct the following actions
and provide Landlord with written and photographic evidence of satisfactory
completion of the activities listed below within ten (10) days of Tenant’s
completion of each activity. Tenant shall reimburse Landlord for all of
Landlord’s costs, including solicitors’ fees, incurred by Landlord in reviewing
Tenant’s progress in completing the activities listed below. Tenant’s failure
to timely comply with the Post-Closing Obligations below shall be deemed a
Breach Event.

 

A.            Asbestos Materials Survey - Within four (4)
months of the Commencement Date, Tenant shall have retained an experienced
environmental consulting firm and shall have conducted an asbestos survey in
compliance with the Control of Asbestos at Work regulations. If the results of
the survey indicate the presence of asbestos containing materials, Tenant
shall, within forty-five (45) days of the date of receipt of the survey report,
develop a management plan for implementation by the Tenant to manage and
remediate asbestos containing materials in accordance with the Control of
Asbestos at Work regulations. Tenant shall provide Landlord with copies of the
asbestos survey and with the asbestos management plan, if required, within ten
(10) days of Tenant’s receipt of such documents from the environmental
consultant.

 

B.            Secondary Containment - Within three (3)
months of the Commencement Date, Tenant shall repair the secondary containment
in the area of the two diesel aboveground storage tanks (ASTs). In addition,
Tenant shall also repair the hardstanding in the vicinity of the ASTs so that
it is properly levelled and does not collect or pond rainwater or releases from
the tanks. Tenant shall provide Landlord with photographs, as well as a written
report documenting the repair of the secondary containment and hardstanding.

 

Within three (3) months of
the Commencement Date, Tenant shall provide secondary containment for all
containers of lubricating and cutting oils stored in the warehouse as
referenced in the ENVIRON UK Limited Phase I report dated October 20, 2005 on
pages 16 and 17 thereof Tenant shall provide Landlord with photographs, as well
as a written report documenting the secondary containment provided.

 

C.            Building Warrants and Planning Consents -
Within six (6) months of the Commencement Date, Tenant shall use all reasonable
endeavours to obtain (where necessary) from appropriate authorities all
licences, consents and planning permissions with respect to (i) the internal
alterations completed to the partitioning and doors over both the ground and
the first floor of the building located at the Office ?remises and (ii) the
external condensers over the building and in the rear ground area located at
the Manufacturing 2 Premises and the adjacent Land.

 

D.            Tenant shall provide all communications
regarding the Post Closing Obligations, including Tenant’s proof of
satisfactory completion thereof to Landlord, addressed to:

 

Louis A. Naugle, Esquire Reed Smith LLP

435 Sixth Avenue

Pittsburgh, PA 15219

Tele:
412-288-8586

Fax: 412-288-3063

lnanzle@reedsmith.com

 

42

 

PART 9

 

PARTICULARS

 

	
  1.

  	
   

  	
  DATE OF THIS LEASE

  	
   

  	
  [    ]
  December, 2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  LANDLORD

  	
   

  	
  STEELS (UK) QRS 16-58,
  INC.

  c/o V.P. Carey & Co. LLC
50 Rockefeller Plaza, Second Floor
New York, New York, 10020
USA
Attn: Director, Asset Management

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  TENANT

  	
   

  	
  Murray International
  Metals Limited whose registered office is at 95 High Street, Edgware,
  Middlesex HA8 7BD

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Company Registration No.

  	
   

  	
  1241058

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  GUARANTOR

  	
   

  	
  Pipe Acquisition Limited
  whose registered office is at 2 Serjeants Inn, London, EC4Y 1LT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Company Registration No.

  	
   

  	
  05501083

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  PREMISES as shown edged
  red on the Plan for identification only and as more particularly described in
  the Part 1 of the Schedule

  	
   

  	
  Land at Newbridge
  Industrial Estate, Newbridge being the whole subjects registered in the Land
  Register of Scotland under Title Numbers MID 23708 and MID 23710

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  COMMENCEMENT DATE

  	
   

  	
  [    ]
  December, 2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  INITIAL TERM

  	
   

  	
  From and including the
  date of this Lease until and including 1 January, 2031

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  EXPIRY DATE OF INITIAL
  TERM

  	
   

  	
  1 January, 2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  INITIAL ANNUAL BASIC RENT

  (subject to increase under
  Part 3 of the Schedule)

  	
   

  	
  £1,198,650

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  RENT COMMENCEMENT DATE

  	
   

  	
  [    ]
  December, 2005

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  ADDITIONAL RENT
  COMMENCEMENT DATE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  RENT REVIEW DATE(S)

  	
   

  	
  As set out in Part 4 of
  the Schedule

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  INTEREST RATE

  	
   

  	
  Four per cent above Lloyds
  Bank Plc’s base rate from time to time

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  PERMITTED USE

  	
   

  	
  Any use permitted under
  the Town and Country Planning (Use Classes) (Scotland) Order 1997.

  

 

43

 

PART
10

GUARANTEE

 

 

GUARANTEE

 

by

 

PIPE
ACQUISITION LIMITED

 

in
favour of

 

STEELS
(UK) QRS 16-58, INC

 

of
the obligations of

 

MURRAY
INTERNATIONAL

METALS
LIMITED

 

in
relation to

 

Lease
of Premises at Newbridge,

Midlothian,
Scotland

 

44

 

GUARANTEE

 

by

 

PIPE ACQUISITION LIMITED
(Company No. 05501083) and having its Registered Office at 2 Serjeants Inn,
London, EC4Y 1LT (herein called the Guarantor)

 

in favour of

 

STEELS
(UK) QRS I6-58, INC., a Company incorporated
under the laws of the State of Delaware and having an address care of W P Carey
& Co LLC, 50 Rockefeller Plaza, Second Floor, New York, New York 10020, USA
(who, and, where the context so requires or admits, their successors as
landlord under the Lease aftermentioned are herein called the Landlord)

 

of the obligations of

 

MURRAY INTERNATIONAL METALS
LIMITED (Company No. 1241058) and having its Registered Office at 95 High
Street, Edgeware, Middlesex HA8 7BD (together with its successors as tenant
under the Lease aftermentioned herein called the Tenant)

 

in relation to

 

the Tenant’s obligations
under the Lease of office premises and two warehouses at Newbridge Industrial Estate, Midlothian, Scotland.

 

1.             The
Guarantor PIPE ACQUISITION LIMITED (Company No. 05501083) HEREBY UNDERTAKES to
the Landlord, (STEELS (UK) QRS 16-58, INC., a Company incorporated under the
laws of the State of Delaware and having an address care of W P Carey & Co
LLC, 50 Rockefeller Plaza, Second Floor, New York, New York 10020, USA and its successors as landlord under the
Lease aftermentioned) as guarantor, cautioner, co-obligant and principal debtor
that the Tenant (MURRAY INTERNATIONAL METALS LIMITED (Company No. 1241058)
having its Registered Office at 95 High Street, Edgeware, Middlesex HAS 7BD and
its successors as Tenant under the said
Lease) will observe and perform the obligations and conditions whatsoever
(present and future) undertaken by or binding on the Tenant directly or
indirectly under or by virtue of the Lease between the Landlord and the Tenant
dated [    ] December 2005 (which Lease, as the same may be
or may hereafter be amended or supplemented by agreement between the Landlord
and the Tenant is herein called the Lease) relative to office premises and two
warehouses (all with associated land and rights) at Newbridge Industrial Estate,
Midlothian and that if the Tenant shall make any default in observing and
performing the said obligations and conditions or any of them, then and in
every such case the Guarantor will pay and make good to the Landlord on demand
anything whatsoever which ought to be or have been paid, observed or performed
as aforesaid as well as all damages, losses, and costs properly sustained by
the Landlord through the default of the Tenant or the Guarantor PROVIDED ALWAYS
that any neglect, delay or forbearance of the Landlord in enforcing observance
of the Tenant’s obligations against the Tenant or the Guarantor or against any
other guarantors of the Tenant’s obligations or the unenforceability of the
obligations of the Tenant or any other guarantor (or the Tenant or any other
such guarantor acting outwith their respective powers either in the entering
into of the Lease or of the relevant Guarantee) or the giving of time by the
Landlord to in relation thereto or any other act, matter or thing whereby, (but
for this provision) the Guarantor would be exonerated either in whole or in
part from its obligations to the Landlord (other than a discharge of the
Guarantor’s obligations executed by the Landlord in writing) shall not release
or in any way lessen or affect the liability of the Guarantor hereunder.

 

2.             This
Guarantee will apply not only to the obligations of the Tenant under the Lease
but also to the obligations arising under any variation of the Lease executed
by the Tenant and the Guarantor agrees, if 

 

45

 

requested (but without prejudice to the
Guarantor’s obligations in the event that no such request is made), to be a
party to any such variation as consentor.

 

3.             The
Guarantor HEREBY FURTHER UNDERTAKES with the Landlord that if:-

 

(a)           The
Tenant shall go into liquidation or administration or receivership and the
Liquidator or Administrator or Receiver shall disclaim the Lease either
expressly or by reason of failing to provide to the Landlord the personal
undertaking required by Clause 13.1.2 of the Lease within the fourteen day
period referred to in that Clause; or

 

(b)           The
Tenant shall be wound up or cease to exist; or

 

(c)           an
event shall occur which shall entitle the Landlord to irritate the Lease
following due notice; then, at the option of the Landlord, the Guarantor will:-

 

(i)            procure
that the Tenant renounces its right to the Lease; and

 

(ii)           accept
a new lease of the property leased by the Lease for a period equal to the
remainder (which if there had been no disclaimer or if the Lease had continued
to have had effect as aforesaid would have remained) of the period of the Lease
at the same rent and subject to the like obligations and conditions as are
provided for and contained in the Lease (subject to any variation which may
then have occurred and to the provisions for further review of the rental
provided for in the Lease); which new lease will take effect as from the date
of the said disclaimer or entitlement to irritate; and

 

(iii)          pay
all costs properly and reasonably incurred by the Landlord in connection with
the grant of the new lease and the renunciation.

 

(and the Guarantor will continue, whether or
not such option is exercised and notwithstanding such renunciation, to be
responsible for all outstanding obligations and conditions in respect of the
Lease so renounced in respect of the period up to the date of commencement of
the new Lease and for all damages and others referred to in Condition 1 of this
Guarantee).

 

4.             Nothing
herein contained shall prevent the Landlord from exercising its rights in full
under the Lease relative to any default by the Tenant and nothing herein
contained will grant to the Guarantor any right of occupancy or other right to
the leased subjects other than pursuant to a request by the Landlord under
Condition 3 of this Guarantee.

 

5.             The
Guarantor in so far as it is not or may in the future not be subject to the
jurisdiction of the Scottish Courts and the English Courts hereby prorogates
and binds itself to submit to the non exclusive jurisdiction of both the
Scottish Courts and the English Courts in relation to all actions at the
instance of the Landlord arising out of or in connection with the Lease and
this Guarantee and also in relation to all lawful execution which may follow as
a result of the registration of the Lease and/or this Guarantee for execution
and accepts that the choice of jurisdiction (Scotland or England) in which to
bring or defend any proceedings or to take any enforcement steps shall in
relation to each of such proceedings (and without prejudice to the use of the
other jurisdiction for other proceedings or steps) be at the discretion of the
Landlord.

 

6.             The
Landlord shall have the right to assign this Guarantee to its successors as
landlords under the Lease.

 

7.             The Guarantor accepts that it shall not be
entitled to rank in the liquidation, bankruptcy or receivership of the Tenant
in respect of any payment made by it under the Lease , the new Lease or this
Guarantee nor to have any benefits of any securities held by the Landlord or of
any payments dividends or composition which the Landlord may receive until the
whole claims of the Landlord against the Tenant are satisfied.

 

8.             The Guarantor hereby waives any right to
require the Landlord to a proceed first (or at all) against the Tenant or any
of its assets or against any other Guarantor or any of its assets and neither
the non-exercise of 

 

46

 

nor
any delay in exercising on the part of the Landlord any right power or
privilege shall operate as a waiver of this Guarantee nor shall any single or
partial exercise of any right power or privilege preclude the further exercise
of such right or any other right power or privilege.

 

9.             The Guarantor shall, within seven days of
demand, pay to the Landlord the amount of all costs and expenses (including
legal fees) properly incurred by the Landlord in connection with the
enforcement of, or the preservation of any rights under, this Guarantee.

 

10.           All amounts payable to the Landlord are payable in Sterling or, on that
ceasing to be the lawful currency in Scotland, in the lawful currency which
replaces it. If, for the purpose of obtaining in any judgment in any court, it
is necessary to convert into lawful currency of Singapore (herein called
Singapore Dollars) a sum due hereunder in Sterling or the lawful currency of
Scotland, the rate of exchange used shall be that at which in accordance with
normal banking procedures, the Landlord could purchase Sterling or the lawful
currency of Scotland with Singapore Dollars at the spot exchange rate available
in New York, New York (USA) on the business day on which a final judgment is
given. The obligation of the Guarantor in respect of any such sum due hereunder
shall, notwithstanding any judgment in Singapore Dollars, be discharged only to
the extent that on the business day following receipt by the Landlord of any
sum adjudged to be so due in Singapore Dollars at the spot exchange rate
available in New York, New York (USA), the Landlord may, in accordance with
normal banking procedures, purchase Sterling or the lawful currency of Scotland
with Singapore Dollars; if the Sterling or the lawful currency of Scotland so
purchased are less than the sum originally due in Sterling or the lawful
currency of Scotland, the Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Landlord against such loss
and if Sterling or the lawful currency of Scotland so purchased exceeds the sum
originally due to the Landlord in Sterling or the lawful currency of Scotland,
the Landlord agrees to remit such excess to the Guarantor or its assigns.

 

11.           The
Guarantor makes (as at the date of this Guarantee only) the warranties set out
in this Clause 11 to the Landlord.

 

(a)           It
is a company, duly incorporated and validly existing under the law of its
jurisdiction of incorporation.

 

(b)           It
has the power to own its assets and carry on its business as it is being
conducted.

 

11.2         Subject
to any general principles of law limiting its obligations and referred to in
any legal opinion issued on behalf of the Guarantor with respect to this
Guarantee on the date hereof, the obligations expressed to be assumed by it in
this Guarantee are legal, valid, binding and enforceable obligations.

 

11.3         Subject
to any general principles of law limiting its obligations and referred to in
any legal opinion issued on behalf of the Guarantor with respect to this
Guarantee on the date hereof; the entry into and performance by it of this
Guarantee do not and will not conflict with:

 

(a)           any
law or regulation applicable to it;

 

(b)           its
constitutional documents; or

 

(c)           that certain Indenture executed by and
between the Tenant, the Guarantor
and The Bank of New York, as trustee, dated
[                ],
2005.

 

11.4         It has the power to enter into, perform and
deliver, and has taken all necessary action to authorise its entry into,
performance and delivery of this Guarantee.

 

11.5         All authorisations, consents, approvals,
resolutions, licences, exemptions, filings, notarisations and registrations
required:

 

(a)           to enable it lawfully to enter into, exercise
its rights and comply with its obligations in this Guarantee; and

 

47

 

(b)           to
make this Guarantee admissible in evidence in its jurisdiction of
incorporation, have been obtained or effected and are in full force and effect.

 

11.6         Its payment obligations under this Guarantee
rank at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by law
applying to companies generally.

 

11.7         Subject
to any general principles of law limiting its obligations and referred to in
any legal opinion issued on behalf of the Guarantor with respect to this
Guarantee on the date hereof:

 

(a)           the choice of Scottish law as the governing
law of this Guarantee will be recognised and enforced in its jurisdiction of
incorporation.

 

(b)           any judgment obtained in Scotland or England
in relation to this Guarantee will be recognised and enforced in its
jurisdiction of incorporation.

 

12.           The
Guarantor shall supply to the Landlord all documents required to be supplied by
the Tenant and the Guarantor pursuant to Clause 2 of part S of the
Schedule to the Lease.

 

13.

 

(a)           The
Guarantor shall make all payments to be made by it without any deduction,
withholding or set off whatsoever for or on account of any present and future
taxes levies imposts duties fees charges or withholdings of whatever nature and
wherever levied charged or assessed, together with any interest thereon and any
fines surcharge or penalties in respect thereof (herein called a Tax
Deduction), unless a Tax Deduction is required by law.

 

(b)           The
Guarantor shall promptly upon becoming aware that it must make a Tax Deduction
(or that there is any change in the rate or the basis of a Tax Deduction)
notify the Landlord accordingly. Similarly the Landlord shall notify the
Guarantor on becoming so aware in respect of a payment payable to it.

 

(c)           If a
Tax Deduction is required by law to be made by the Guarantor, the amount of the
payment due from the Guarantor shall be increased to an amount which, after
making any Tax Deduction) leaves an amount equal to the payment which would
have become due if no Tax Deduction had been required. PROVIDED THAT the
Guarantor shall not be liable to pay any such increase to the extent to which
the Tax Deduction in question arises by reason of the Landlord’s failure in (a)
completion of procedural formalities necessary to achieve the ability for
non-resident Landlords to receive rents gross of deduction of tax at source
under a scheme then capable of allowing the Landlord to achieve that on
completion of such formalities (including, for the avoidance of doubt, an
application to HM Revenue & Customs for a certificate that the Landlord may
receive rents gross of deduction at source) or (b) the provision to the Tenant
and/or the Guarantor of a certificate or other suitable evidence that these
formalities have been completed in reasonable time before the payment was
required to be made under this Guarantee.

 

(d)           If
the Guarantor is required to make a Tax Deduction, it shall make that Tax
Deduction and any payment required in connection with that Tax Deduction within
the time allowed and in the minimum amount required by law.

 

(e)           Within
thirty days of making either a Tax Deduction or any payment required in
connection with that Tax Deduction, the Guarantor shall deliver to the Landlord
evidence that the Tax Deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.

 

14.           The
Guarantor shall not, in a single transaction or series of transactions
(including any merger or consolidation), sell or convey, transfer or lease all
or substantially all of its assets (excluding (a) the disposal of stock or cash
on an arm’s length basis in the ordinary course of trading, (b) disposals of
obsolete or redundant assets which are no longer required for the business of
the Guarantor, (c) disposals of assets (other than any shares, heritable or
leased properties in Scotland or any trade or business) in exchange for
replacement assets 

 

48

 

comparable or superior as to type, value and
quality) (herein called a Guarantor Asset Transfer) to any Person (as such term
is defined in the Lease) unless this Guarantee is assigned to and assumed by
such Person as a part of such Guarantor Asset Transfer, including all the
obligations of the Guarantor hereunder, actual or contingent, and which may
have arisen on or prior to the date of such assignation by a written instrument
delivered to Landlord at the time of such Guarantor Asset Transfer. Upon any
such assignation and assumption by any Person as a part of such Guarantor Asset
Transfer in accordance with the foregoing sentence, the Guarantor hereunder
shall, on the date of such assignation and assumption, be discharged from all
liability under this Guarantee, but entirely without prejudice to the
Landlord’s right and any assignee’s obligations hereunder, including those
assumed by virtue of the instrument specified in this clause 14.
Notwithstanding the foregoing, if in connection with such Guarantor Asset
Transfer other than to a member of the Guarantor’s Group (i) immediately after
such transaction or transactions, taken in the aggregate, the Tenant has on a
consolidated basis (or would, on a consolidated pro forma basis, have) for the
Applicable Period (x) a Fixed Charge Coverage Ratio of not less than 1.5 to 1.0
and (y) a Total Debt to EBITDA Ratio of not more than 4.0 to 1.0; or (ii) the
Tenant shall deliver to the Landlord a security deposit (the Security Deposit)
in the amount of £599,325, then the Landlord shall not require that this
Guarantee be assigned to and assumed by such Person as a part of such Guarantor
Asset Transfer and the Guarantor hereunder shall on the date of the entry
thereunder be discharged from all liability accruing from and after the date of
such assignation under this Guarantee. If the Tenant shall deliver the Security
Deposit, then (A) the provisions of clause 8.15.3 and 8.15.4 shall apply with
respect to the Security Deposit, (B) clause 8.15.5 shall no longer apply except
that on the expiration of the Term the Security Deposit shall be promptly
returned to the Tenant, and (C) upon written request from the Landlord, the
Tenant shall execute an addendum to the Lease-provided by the Landlord amending
the Lease to memorialize the foregoing subclauses (A) and (B). For the purpose
of this Guarantee, the term Guarantor’s Group shall mean the Guarantor and all
its subsidiaries any Holding Company of the Guarantor and all subsidiaries of
any such Holding Company, the term EBITDA shall mean EBITDAR less rental
expenses, the term Total Debt to EBITDA Ratio shall mean, for any Applicable
Period, the ratio of Indebtedness to EBITDA, and the terms Applicable Period,
Capital Lease, Capitalized Lease Obligation, Credit Entity, EBITDAR, Fixed
Charge Coverage Ratio, Holding Company, Indebtedness, Interest Expense, Net Income or Net Loss and
Person shall have the meaning ascribed to such terms in the Lease.

 

15.           Notwithstanding anything in clause 14 to the contrary, a Secured
Creditor or any receiver, administrative receiver, liquidator, administrator or
other insolvency practitioner appointed by such Secured Creditor then notified
in writing to the Landlord shall have the right, without the Landlord’s
consent, to conduct a Guarantor Asset Transfer with respect to the Guarantor to
a Person provided (i) such Person is demonstrably capable of performing the
obligations of the Guarantor under this Guarantee, (ii) such Person purchases
all or substantially all of the assets of the Guarantor, and (iii) this
Guarantee is assigned to and assumed by such Person as a part of such Guarantor
Asset Transfer by a written instrument delivered to Landlord at the time of
such assignation. Notwithstanding anything in clause 14 to the contrary, a
Secured Creditor or any receiver, administrative receiver, liquidator,
administrator or other insolvency practitioner appointed by such Secured
Creditor then notified in writing to the Landlord shall have the right, without
the Landlord’s consent, to conduct a Guarantor Asset Transfer with respect to
the Guarantor to a Person provided (i) such Person is demonstrably capable of
performing the obligations of the Guarantor under this Guarantee, (ii) such
Person purchases all or substantially all of the assets of the Guarantor, and
(iii) this Guarantee is assigned to and assumed by such Person as a part of such
Guarantor Asset Transfer by a written instrument delivered to Landlord at the
time of such assignation, Provided that, for the avoidance of doubt, nothing in
this clause 15 shall prevent a Secured Creditor or any receiver, administrative
receiver, liquidator, administrator or other insolvency practitioner appointed
by such Secured Creditor then notified in writing to the Landlord from
conducting a Guarantor Asset Transfer with respect to the Guarantor without the
Landlord’s consent if the Tenant shall immediately after such transaction or
transactions, taken in the aggregate, no longer be a member of the Guarantor’s
Group.

 

16.           Any demand or notice to be served on the Guarantor under this Guarantee
will be validly served if sent by First Class Recorded Delivery,
internationally recognised over night delivery service or facsimile addressed
to the Guarantor at its address set forth above or its last known address
(Facsimile Number: 011- 44-(0)131-3334477) with a copy to the following:
Dechert UP, 160 Queen Victoria Street, London EC4V 4QQ, Attention: DW/354509,
Facsimile Number: 011-44-(0)20-7184-7001. Any notice to be served on the
Landlord will be validly served if sent by First Class Recorded Delivery, 

 

49

 

internationally
recognised over night delivery service or facsimile addressed to the Landlord
at its registered office or its last known address (Facsimile Number:
001-212-492-8922) together with a copy to the following: Reed Smith UP, 2500
One Liberty Place, Philadelphia PA, 19103-7301, USA, Attention: Chairman, Real
Estate, Facsimile Number: 001-215-851-1420. Any demand or notice sent by post
or facsimile will be conclusively treated as having been served either (a) if
in writing, when delivered or refused; or (b) if by facsimile, when confirmed
by an activity report confirming the facsimile number to which such notice was
sent, the number of pages transmitted and that such transmission was
successfully completed. However, a notice given in accordance with the above
but received on a non-working day or after business hours in the place of
receipt will only be deemed to be given on the next working day in that place.
The address and facsimile number of each party for all notices under of in
connection with this Guarantee are: (a) those notified by that party for this
purpose to the other parties on or before the date of this Guarantee; or (b)
any other notified by that party for this purpose to the other parties by not
less than 10 days’ notice. All notices or communications under or in connection
with this Agreement shall be in English.

 

17.           This
Guarantee shall be governed by and construed and enforced in accordance with
the laws of Scotland

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLAND.]

 

50

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