Document:

Exhibit
10.4

THIRD AMENDMENT TO LEASE

THIS THIRD AMENDMENT TO LEASE (this “Third Amendment”)
is made as of the 28th day of June, 2007 (the “Third Amendment Date”), by and
between THE REALTY ASSOCIATES FUND VI, L.P., a Delaware limited partnership (“Landlord”)
and CUBIST PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

RECITALS:

WHEREAS, by a lease (the “Original Lease”) dated as
of January, 2004, California State Teachers’ Retirement System (“Calsters”)
leased to Tenant approximately 15,475 rentable square feet of space, consisting
of a portion of the second (Suite 2201-55) and fourth (Suite 4201-55) floors in
the building known as 45-55 Hayden Avenue, Lexington, Massachusetts (the “Building”);
and

WHEREAS, Landlord has succeeded to the interests of
Calsters as landlord under the Lease; and

WHEREAS, the Original Lease has been amended by a
First Amendment to Lease between Landlord and Tenant, dated as of September 29,
2005 (the “First Amendment”), and by a Second Amendment to Lease between
Landlord and Tenant dated as of November 18, 2005 (the “Second Amendment”),
(the Original Lease, as so amended, being referred to as the “Lease”), pursuant
to which the size of the premises demised under the Original Lease was
increased to 53,078 rentable square feet (the “Existing Premises”). The
Existing Premises consist of Suites 2201-55, 2200-55, 4201-55 and 4200-55; and

WHEREAS, by letter dated as of April 27, 2006, and
pursuant to the Second Amendment, Tenant elected to include Suite 2200-55 (also
known as the Comet Space) in the Existing Premises for the remainder of the
Lease Term; and

WHEREAS, Landlord and Tenant now desire to further
amend the Lease to, among other things, expand the size of the Existing
Premises by adding thereto approximately 30,019 rentable square feet of space
in Suite 3000-55 on the third floor of the Building (the “Additional Space”),
and to adjust the rent and certain provisions, all on the terms and conditions
set forth below.

NOW, THEREFORE, in consideration of the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, Landlord and Tenant hereby agree as follows:

1.             Defined Terms. All of the foregoing recitals are true and
correct. Unless otherwise defined herein, all capitalized terms used in this
Third Amendment shall have the meanings ascribed to them in the Lease, the
Lease shall be amended to incorporate any additional definitions provided for
in this Third Amendment, and all references in the Lease to the “Lease” or “this
Lease” or “herein” or “hereunder” or similar terms or to any 

 1
 

section
thereof shall mean the Lease, or such section thereof, as amended by this Third
Amendment.

2.             Additional Terms and Definitions. (a) From and after the Third Amendment
Effective Date, the following terms set forth in “Article 1 Reference Data” of
the Lease are hereby amended or added, as applicable, to have the following
meanings:

PREMISES:                                                                                                                                                     The
following areas in the 55 Hayden Avenue portion of the Building: (i) Suite
2201-55 on the second floor and Suite 4201-55 on the fourth floor, (ii) Suite
4200-55 on the fourth floor of the Building, (iii) Suite 2200-55 on the second
floor of the Building, and (iv) Suite 3000-55 on the third floor of the
Building. All such spaces are shown on Exhibit A-3, attached hereto and
incorporated herein.

RENTABLE FLOOR AREA

  OF THE PREMISES:                                                                                           Approximately
83,097 square feet of the 55 Hayden Avenue portion of the Building as follows
(i) 6,755 rentable square feet on the second floor contained in Suite 2201-55,
(ii) 8,720 rentable square feet on the fourth floor contained in Suite 4201-55
and 31,453 rentable square feet on the fourth floor of the Building contained
in Suite 4200-55, (iii) 6,150 rentable square feet on the second floor of the
Building contained in Suite 2200-55, and (iv) 30,019 rentable square feet on
the third floor of the Building contained in Suite 3000-55.

(b)           From after the Third Amendment Effective Date,
the term “Annual Rent” for the Premises shall be as set on Schedule I to
this Third Amendment. Notwithstanding the foregoing, so long as the Lease
remains in full force and effect, and so long as no Actionable Event of Default
(as defined below) shall exist under the Lease, Landlord will waive the
requirement that Tenant pay Annual Rent on the Additional Space for the period
commencing on the Third Amendment Effective Date and ending on the one hundred
twentieth (120th) day after the Third Amendment Effective Date

3.             Credit. Landlord will allow a credit to Tenant in the amount of Sixty Thousand
Dollars ($60,000.00) against Annual Rent that otherwise would be payable under
the Lease, such credit to be applied to Annual Rent due on the Existing
Premises for the first full calendar month after the Third Amendment Effective
Date.

 2
 

4.             Operating Expenses and Real Estate Taxes. 
From and after the Third Amendment Effective Date, Tenant’s obligations
under Section 4.2 of the Lease to pay Operating Expenses with respect to the
Additional Space shall be computed using the calendar year ending December 31,
2008 as a base year; and Tenant’s obligations under Section 4.2 of the Lease to
pay increases in Real Estate Taxes with respect to the Additional Space shall
be computed using the fiscal year ending June 30, 2008 as the base year.

5.             Effective Date; Delivery and Condition. (a) The “Third Amendment Effective Date”
shall be the later to occur of (i) November 1, 2007 and (ii) the date on which
Motorola, Inc. (the “Existing Tenant”) vacates the Additional Space and
Landlord delivers possession thereof to Tenant. 
If the Third Amendment Effective Date is delayed due solely to a
holdover by the Existing Tenant, and if (without imposing on Landlord any obligation
to do so) Landlord actually recovers any premium rent or other additional
amount in the nature of rent from the Existing Tenant solely on account of such
holding over, Landlord shall pay Tenant fifty percent (50%) of any net excess
rent (i.e., after deducting Landlord’s
reasonable costs and expenses in recovering the same) above the Existing Tenant’s
base rent, actually received by Landlord due to such holdover.  Such payment shall be made within thirty (30)
days after Landlord’s receipt of such excess rent from the Existing Tenant. 

(b)           Tenant acknowledges that, except as explicitly
provided in this Third Amendment and the Lease, it is leasing the Additional
Space in its current AS IS condition, without any representation or warranty
whatsoever on the part of Landlord. Tenant currently occupies the Existing
Premises and is fully familiar with their condition and that of the common
areas of the Building, and Tenant acknowledges that, to the best of Tenant’s
knowledge (upon reasonable investigation and inquiry), the Existing Premises
and the Additional Space are in good condition and suitable for Tenant’s uses.
Without limiting the foregoing, Tenant agrees that Landlord has no obligation
to perform any work in or to either the Existing Premises or the Additional
Space to prepare the same for Tenant’s continued use and occupancy.

(c)           Landlord acknowledges that Tenant desires to
make certain alterations or improvements in the Additional Space to make the
same more suitable for Tenant’s occupancy. Such alterations or improvements may
include tenant improvements to the Additional Space, including to the bathrooms
within the Additional Space, installation of fixtures in the Additional Space,
and architectural and engineering expenses in connection therewith
(collectively, the “Additional Improvements”). All Additional Improvements
shall be undertaken by Tenant in strict accordance with the applicable
requirements of the Lease (including without limitation Sections 3.3 and 3.4).
The Additional Improvements shall be deemed substantially complete on that date
on which the Additional Improvements have been completed except for items of
work (and, if applicable, adjustment of equipment and fixtures) which can be
completed after Tenant has taken occupancy of the Additional Space, or any part
thereof, without causing undue interference with Tenant’s use of the Additional
Space or such part thereof. To the extent that (i) such work is substantially
completed in accordance with such Lease 

 3
 

requirements,
and (ii) receipted invoices (and other material required under the Lease such
as, but not limited to, lien waivers from any contractor or subcontractor
performing the Improvements) showing the actual cost thereof are presented to
Landlord during the Term of the Lease, and (iii) at the time of any advance of funds,
there then exists (A) no default on the part of Tenant under the Lease
continuing beyond the expiration of applicable notice and grace periods (an “Event
of Default”) nor (B) any failure to pay any sum of money due under the Lease of
which Tenant has been given notice (and of which Tenant has not notified
Landlord in writing that Tenant disputes, which notice shall set forth the
basis for such dispute) and which, with the passage of time, would constitute
an Event of Default (A and B, collectively, an “Actionable Event of Default”),
Landlord shall reimburse Tenant, within thirty (30) days after receipt of each
such invoice (together with lien waivers for all costs theretofore billed), for
costs actually incurred by Tenant (excluding the costs of furniture), as
evidenced by such invoices, in connection with the design and construction of
the Additional Improvements, but in no event shall Landlord be obligated to
reimburse Tenant more than the lesser of (x) such actual cost, or (y) Seven
Hundred Fifty Thousand Four Hundred Seventy-five Dollars ($750,475.00), or
$25.00 per square foot of Rentable Area in the Additional Space (the “Additional
Improvements Allowance”). No portion of the Additional Improvements Allowance
may be applied to costs of purchasing or installing furniture or wiring/cabling
for the Additional Space. If the Existing Tenant’s lease is terminated prior to
November 1, 2007, Landlord shall grant Tenant reasonable access to the
Additional Space from and after such termination (and the Existing Tenant
vacating the Additional Space) for the purpose of commencing the Additional
Improvements. Landlord further acknowledges that Tenant may desire to make
improvements in the bathrooms within Suite 4200-55 on the fourth floor of the
Building, and (subject to Tenant’s compliance with applicable requirements set
forth in the Lease relative to alterations or improvements), Landlord will not
withhold it consent to such improvements. So long as such work conforms to the
requirements set forth above, Tenant may include the cost of such fourth floor
bathroom work in the cost of the Additional Improvements. To the extent that
Tenant has not requested disbursement of any portion of the Additional
Improvements Allowance prior to the expiration or earlier termination of the
Lease, Landlord shall have no further obligation to reimburse Tenant for any
such costs incurred by Tenant.

6.             Right
of First Offer.  Notwithstanding any provision of the Lease to
the contrary, Tenant shall have no further rights under Exhibit G-1 to
the Lease (Right of First Offer) to the Lease (as inserted by the Second
Amendment) with respect to (i) the portion of the second floor of the Building
containing 8,017 rentable square feet (Suite 2500-45) which has been leased to
Celerant, or (ii) the portion of the third floor of the 45 Hayden Avenue
portion of the Building containing 19,815 rentable square feet (Suite 3000-45),
which has been leased to NitroMed. From and after the Third Amendment Effective
Date, Exhibit G-1 is hereby amended by deleting the schedule of Rights
of Existing Building Tenants in its entirety and replacing the same with Schedule
3 attached hereto. In addition, Tenant agrees that Exhibit G-1 to
the Lease shall be without any force or effect during the period commencing on the
Third Amendment Effective Date and ending on the second (2nd) 

 4
 

anniversary of the Third
Amendment Effective Date (the “G-1 Suspension Period”), it being the intent
hereof that Landlord will not be required to give any First Offer Notices
during the G-1 Suspension Period, and Tenant shall have no rights to lease
space that Landlord would otherwise be required to offer to Tenant pursuant to Exhibit
G-1 during the G-1 Suspension Period; provided that, Tenant’s
full rights under Exhibit G-1 shall be reinstated upon the expiration of
the G-1 Suspension Period.

7.             Security Deposit. 
Landlord and Tenant agree that, effective from and after the date
hereof, the Security Deposit referred to in Article XI of the Lease will be
changed to $352,555.84, and any references in Article XI to “$355,000.00” shall
be amended to read “$352,555.84.” Landlord is currently holding $88,750.00 as
the Security Deposit, and Tenant will deliver the balance of $263,805.84 within
fifteen (15) business days of the Third Amendment Effective Date. Landlord and
Tenant further agree that, effective from and after the date hereof, in the
sixth paragraph of Article XI of the Lease, any reference to “February 1, 2006”
shall be changed to “July 1, 2008,” and any reference to “August 1, 2006” shall
be changed to “January 1, 2009.”  All
other terms of Article XI of the Lease shall remain in full force and effect.

8.             Parking.  From and after the Effective
Date, Section 10.19 of the Lease shall be amended by, in the first sentence
thereto:

(a)           Replacing “one hundred and fifty-nine (159)” with “two hundred
forty-nine (249);” and

(b)           Replacing “53,078” with “83,097.”

9.             Brokers.  Tenant covenants, represents and
warrants to Landlord that Tenant has had no dealings or communications with any
broker or agent (other than Grubb & Ellis Company and Richards Barry Joyce
& Partners) in connection with this Third Amendment, and Tenant covenants
and agrees to pay, hold harmless and indemnify the Landlord from and against
any and all cost, expense (including reasonable attorneys’ fees) or liability
for any compensation, commission or charges to any broker or agent (other than
the foregoing named brokers) claiming through the Tenant with respect hereto.

10.           Exhibits.  Exhibit A-3 attached
hereto is hereby substituted for Exhibit A-2 to the Lease. All
references in the Lease to Exhibit A-1 or A-2 shall be replaced
by references to Exhibit A-3.

11.           Successors.  This Third Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, subject to the provisions of the Lease regarding
assignment or other transfers of each party’s rights under the Lease.

12.           Authority.  Each party represents and
warrants to the other that each person executing this Third Amendment on behalf
of such party has the authority to do so and 

 5
 

that
such execution has fully obligated and bound such party to all terms and
provisions of this Third Amendment.

13.           No Further Amendment.  It is
understood and agreed that all other conditions and terms contained in the
Lease not herein specifically amended shall remain unmodified and in full force
and effect, and the Lease, as modified by this Third Amendment, is hereby
ratified and confirmed.

14.           Tenant Representations. As a material inducement to Landlord entering
into this Third Amendment, Tenant represents and certifies to Landlord that as
of the date hereof: (i) the Lease, as modified hereby, contains the entire
agreement between the parties hereto relating to the Premises and that, except for
that certain Amended and Restated Declaration of Covenants and Easements
between the Landlord’s predecessor in title with respect to the Building and
Tenant, as amended to date (the “Declaration”) there are no other agreements
between the parties relating to the Premises, the Building or the Lease which
are not contained or referred to herein or in the Lease, (ii) to the best of
Tenant’s knowledge, Landlord is not in default (continuing beyond the
expiration of any applicable notice or grace periods) in any respect in any of
the terms, covenants and conditions of the Lease; (iii) Tenant has no existing
setoffs, counterclaims or defenses against Landlord under the Lease; (iv)
Tenant has not assigned or pledged its leasehold interest under the Lease, or
sublet or licensed or granted any other occupancy rights with respect to any or
all of the Premises; (v) no consent or approval of any third party or parties
is required in order for Tenant to enter into and be bound by this Third
Amendment; and (vi) Tenant is not, and the performance by Tenant of its
obligations hereunder shall not render Tenant, insolvent within the meaning of
the United States Bankruptcy Code, the Internal Revenue Code or any other
applicable law, code or regulation.

15.           Landlord Representations.  As a
material inducement to Tenant entering into this Third Amendment, Landlord
represents and certifies to Tenant that as of the date hereof: (i) the Lease,
as modified hereby, contains the entire agreement between the parties hereto
relating to the Premises and that, except for the Declaration, there are no
other agreements between the parties relating to the Premises, the Building or
the Lease which are not contained or referred to herein or in the Lease, (ii)
to the best of Landlord’s knowledge, there exists no Event of Default or
Actionable Event of Default on the part of Tenant in any respect in any of the
terms, covenants and conditions of the Lease; and (iii) no consent or approval
of any third party or parties is required in order for Landlord to enter into
and be bound by this Third Amendment.

16.           Governing Law. The Lease, this Third Amendment and the
rights and obligations of both parties thereunder and hereunder shall be
governed by the laws of The Commonwealth of Massachusetts.

 6
 

17.           Counterparts. This Third Amendment may be executed in
counterparts, each of which shall be an original and all of which counterparts
taken together shall constitute one and the same instrument.

18.           Motorola Fourth Floor Space.  Notwithstanding anything to the contrary in
this Third Amendment, nothing in this Third Amendment shall affect either party’s
rights or obligations, as they exist as of the Third Amendment Date, with
respect to the 25,405 square feet of space in the 45 Hayden portion of the
Building which is currently occupied by Motorola, Inc.

[Text Ends Here]

 7
 

IN WITNESS WHEREOF, the undersigned have hereunto se
their hands and seals as of the date first above written.

	
  

  	
  LANDLORD:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  

  	
  The Realty Associates Fund VI, L.P., a Delaware
  limited partnership

  	 

	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
  Realty Associates Fund VI LLC, a Massachusetts
  limited liability company, 

  	 

	
   

  	
   

  	
  general partner

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  By: 

  	
   

  	
  Realty Associates Advisors LLC, a Delaware limited
  liability 

  	 

	
   

  	
   

  	
  company, Manager

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Realty Associates Advisors Trust, a Massachusetts
  business trust, 

  	 

	
   

  	
   

  	
   

  	
   

  	
  Manager

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   /s/ James P.
  Raisides, Sr. Vice President

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Officer

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Realty Associates Fund VI Texas Corporation, a Texas
  corporation, general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James P. Raisides, Sr. Vice President

  	
   

  
	
   

  	
   

  	
  Officer

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  TENANT:

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  CUBIST PHARMACEUTICALS, INC.

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   /s/ David
  W.J. McGirr, Sr. VP, CFO

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
  Name: David W. J. McGill

  	 

	
   

  	
   

  	
   

  	
   

  	
  Title: Sr. Vice President, Chief Financial Officer

  	 

																			

 

 8

Exhibit A-3

Plans of Premises

 9
 

 10
 

 11
 

 12
 

 13
 

SCHEDULE I

Annual Rent

Annual Rent for the Premises
shall be the sum of the rents shown below for each portion of the Premises,
determined as of the date in question.

As to Suites 2201-55, 4201-55 and
4200-55:

(a)        For
the period from [Effective Date of First
Amendment], 2006 through July 31, 2009:

(i)
As to Suite 2201-55 and Suite 4201-55:

	
  Rental Period

  	
   

  	
  Total Annual Rent

  	
   

  	
  Monthly Payment

  	
   

  	
  Rental Rate/SF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5/1/06 – 1/31/07

  	
   

  	
  $

  	
  371,400.00

  	
   

  	
  $

  	
  30,950.00

  	
   

  	
  $

  	
  24.00

  	
   

  
	
  2/1/07 – 1/31/08

  	
   

  	
  $

  	
  386,875.00

  	
   

  	
  $

  	
  32,238.58

  	
   

  	
  $

  	
  25.00

  	
   

  
	
  2/1/08 – 7/31/09

  	
   

  	
  $

  	
  402,350.00

  	
   

  	
  $

  	
  33,529.17

  	
   

  	
  $

  	
  26.00

  	
   

  

 

plus (ii) as to Suite 4200-55:

	
  Rental Period

  	
   

  	
  Total Annual Rent

  	
   

  	
  Monthly Payment

  	
   

  	
  Rental Rate/SF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5/1/06 – 4/30/07

  	
   

  	
  $

  	
  723,419.00

  	
   

  	
  $

  	
  60,284.92

  	
   

  	
  $

  	
  23.00

  	
   

  
	
  5/1/07 – 4/30/08

  	
   

  	
  $

  	
  739,145.50

  	
   

  	
  $

  	
  61,595.46

  	
   

  	
  $

  	
  23.50

  	
   

  
	
  5/1/08 – 4/30/09

  	
   

  	
  $

  	
  754,872.00

  	
   

  	
  $

  	
  62,906.00

  	
   

  	
  $

  	
  24.00

  	
   

  
	
  5/1/09 – 7/31/09

  	
   

  	
  $

  	
  794,188.25

  	
   

  	
  $

  	
  66,182.35

  	
   

  	
  $

  	
  25.25

  	
   

  

 

(b)        For
the period after July 31, 2009, as to all of Suites 2201-55, 4201-55 and
4200-55:

	
  Rental Period

  	
   

  	
  Total Annual Rent

  	
   

  	
  Monthly Payment

  	
   

  	
  Rental Rate/SF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8/1/09 – 4/30/10

  	
   

  	
  $

  	
  1,184,932.00

  	
   

  	
  $

  	
  98,744.33

  	
   

  	
  $

  	
  25.25

  	
   

  
	
  5/1/10 – 4/30/11

  	
   

  	
  $

  	
  1,208,396.00

  	
   

  	
  $

  	
  100,699.67

  	
   

  	
  $

  	
  25.75

  	
   

  
	
  5/1/11 – 4/30/12

  	
   

  	
  $

  	
  1,231,860.00

  	
   

  	
  $

  	
  102,655.00

  	
   

  	
  $

  	
  26.25

  	
   

  
	
  5/1/12 – 4/30/13

  	
   

  	
  $

  	
  1,267,056.00

  	
   

  	
  $

  	
  105,588.00

  	
   

  	
  $

  	
  27.00

  	
   

  
	
  5/1/13 – 4/30/14

  	
   

  	
  $

  	
  1,325,716.00

  	
   

  	
  $

  	
  110,476.33

  	
   

  	
  $

  	
  28.25

  	
   

  
	
  5/1/14 – 4/30/15

  	
   

  	
  $

  	
  1,384,376.00

  	
   

  	
  $

  	
  115,364.67

  	
   

  	
  $

  	
  29.50

  	
   

  
	
  5/1/15 – 4/30/16

  	
   

  	
  $

  	
  1,419,572.00

  	
   

  	
  $

  	
  118,297.67

  	
   

  	
  $

  	
  30.25

  	
   

  

 

 14
 

As to Suite 2200-55:

	
  Rental Period

  	
   

  	
  Total Annual Rent

  	
   

  	
  Monthly Payment

  	
   

  	
  Rental Rate/SF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6/1/06 – 4/30/07

  	
   

  	
  $

  	
  140,415.00

  	
   

  	
  $

  	
  11,787.50

  	
   

  	
  $

  	
  23.00

  	
   

  
	
  5/1/07 – 4/30/08

  	
   

  	
  $

  	
  144,525.00

  	
   

  	
  $

  	
  12,043.75

  	
   

  	
  $

  	
  23.50

  	
   

  
	
  5/1/08 – 4/30/09

  	
   

  	
  $

  	
  147,600.00

  	
   

  	
  $

  	
  12,300.00

  	
   

  	
  $

  	
  24.00

  	
   

  
	
  5/1/09 – 4/30/10

  	
   

  	
  $

  	
  155,287.50

  	
   

  	
  $

  	
  12,940.63

  	
   

  	
  $

  	
  25.25

  	
   

  
	
  5/1/10 – 4/30/11

  	
   

  	
  $

  	
  158,362.50

  	
   

  	
  $

  	
  13,196.88

  	
   

  	
  $

  	
  25.75

  	
   

  
	
  5/1/11 – 4/30/12

  	
   

  	
  $

  	
  161,437.50

  	
   

  	
  $

  	
  13,453.13

  	
   

  	
  $

  	
  26.25

  	
   

  
	
  5/1/12 – 4/30/13

  	
   

  	
  $

  	
  166,050.00

  	
   

  	
  $

  	
  13,837.50

  	
   

  	
  $

  	
  27.00

  	
   

  
	
  5/1/13 – 4/30/14

  	
   

  	
  $

  	
  173,737.50

  	
   

  	
  $

  	
  14,478.13

  	
   

  	
  $

  	
  28.25

  	
   

  
	
  5/1/14 – 4/30/15

  	
   

  	
  $

  	
  181,425.00

  	
   

  	
  $

  	
  15,118.75

  	
   

  	
  $

  	
  29.50

  	
   

  
	
  5/1/15 – 4/30/16

  	
   

  	
  $

  	
  186,037.50

  	
   

  	
  $

  	
  15,503.13

  	
   

  	
  $

  	
  30.25

  	
   

  

 

As to Suite 3000-55:

	
  Rental Period

  	
   

  	
  Total Annual Rent

  	
   

  	
  Monthly Payment

  	
   

  	
  Rental Rate/SF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Through 4/30/08

  	
   

  	
  $

  	
  780,494.00

  	
   

  	
  $

  	
  65,041.17

  	
   

  	
  $

  	
  26.00

  	
   

  
	
  5/1/08 – 4/30/09

  	
   

  	
  $

  	
  810,513.00

  	
   

  	
  $

  	
  67,542.75

  	
   

  	
  $

  	
  27.00

  	
   

  
	
  5/1/09 – 4/30/10

  	
   

  	
  $

  	
  825,522.50

  	
   

  	
  $

  	
  68,793.54

  	
   

  	
  $

  	
  27.50

  	
   

  
	
  5/1/10 – 4/30/11

  	
   

  	
  $

  	
  840,532.00

  	
   

  	
  $

  	
  70,044.33

  	
   

  	
  $

  	
  28.00

  	
   

  
	
  5/1/11 - 4/30/12

  	
   

  	
  $

  	
  900,570.00

  	
   

  	
  $

  	
  75,047.50

  	
   

  	
  $

  	
  30.00

  	
   

  
	
  5/1/12– 4/30/13

  	
   

  	
  $

  	
  945,598.50

  	
   

  	
  $

  	
  78,799.88

  	
   

  	
  $

  	
  31.50

  	
   

  
	
  5/1/13– 4/30/14

  	
   

  	
  $

  	
  975,617.50

  	
   

  	
  $

  	
  81,301.46

  	
   

  	
  $

  	
  32.50

  	
   

  
	
  5/1/14– 4/30/15

  	
   

  	
  $

  	
  1,035,655.50

  	
   

  	
  $

  	
  83,304.63

  	
   

  	
  $

  	
  34.50

  	
   

  
	
  5/1/15– 4/30/16

  	
   

  	
  $

  	
  1,065,674.50

  	
   

  	
  $

  	
  88,806.21

  	
   

  	
  $

  	
  35.50

  	
   

  

 

 15
 

SCHEDULE 3

RIGHTS OF EXISTING BUILDING TENANTS

	
   

  	
   

  	
   

  
	
  Summit
  Mortgage

  	
   

  	
  Option to Extend

  
	
  2,805 sf — 2nd Fl (45)

  Expiration 2/28/09

  	
   

  	
  One 5 year term (thru February 28, 2014); 9 mos.
  notice prior to expiration of current term required

  
	
   

  	
   

  	
   

  
	
  Motorola

  	
   

  	
   

  
	
  25,405 sf — 4th Fl (45) Expiration 4/30/07

  	
   

  	
  Lease Expired 4/30/07 — LL sent Tenant a Right of
  First Offer on this space on January 9, 2007, and Tenant did not accept this
  Right of First Offer as provided in Exhibit G-1.

  
	
   

  	
   

  	
   

  
	
  Goodrich,
  LLC

  	
   

  	
  Option to Extend

  
	
  10,495 sf — 3rd Fl (55) Expiration 11/30/09

  	
   

  	
  One 7 year term (thru November 30, 2016); 12 mos.
  notice prior to expiration of current term required

  
	
   

  	
   

  	
   

  
	
  Aon
  Consulting

  	
   

  	
  Option to Extend

  
	
  5,528 sf — 2nd Fl (45) Expiration 7/31/06

  	
   

  	
  One 5 year term (thru July 31, 2011); 12 mos. notice
  prior to expiration of current term required

  
	
   

  	
   

  	
   

  
	
  Spaulding
  and Slye/JLL

  	
   

  	
  Option to Extend

  
	
  14,092 sf — 2nd Fl (55) Expiration 3/31/15

  	
   

  	
  Two extension of 5 year terms (thru March 31, 2020
  and March 31, 2025, respectively); each on 9 mos. notice prior to expiration
  of current term required

  
	
   

  	
   

  	
   

  
	
   Spaulding and Slye/JLL

  	
   

  	
  First Right to
  Lease

  
	
   

  	
   

  	
  During the term of Spaulding and Slye’s lease to the
  14,092 sf on the 2nd floor of the 55 Hayden Avenue portion of the
  Building, Spaulding and Slye holds a first right to lease the following
  spaces in the Building:

  ·  8,017 sf — 2nd Fl (45) (Celerant space) 

  ·  2,805 sf — 2nd Fl (45) (Summit Mortgage space) 

  ·  5,528 sf — 2nd Fl (45) (Aon Consulting space) 

  ·  3,089 sf — 2nd Fl (45) (FCG space) 

  Spaulding and Slye must
  respond to the Landlord’s notice of any such space becoming available within
  14 days of such notice.

  

 

 16Exhibit
10.3

SEPARATION & GENERAL
RELEASE AGREEMENT

This Separation and General Release Agreement (“Agreement”) is made by
and between Michael J. Henry (“Henry”) and Align Technology, Inc. (“Align”).  Henry and Align will hereinafter be referred
to as the “Parties.”

R E C I T A L S

 

WHEREAS, Henry has been for a time employed by Align;

WHEREAS, the Parties agree that his employment shall be terminated on
July 23, 2007 (the “Termination Date”);

WHEREAS, Henry and Align (together “the Parties”) wish permanently to
resolve all disputes that exist or may exist between them in the future arising
out of Henry’s employment with Align and the termination thereof;

NOW, THEREFORE, for and in consideration of the promises and
undertakings described below, the Parties agree as follows:

A G R E E M E N T S

 

A.                                    ALIGN.

1.     Severance Pay.  Beginning upon the first regular pay day
following the execution of this Agreement by Henry and after the expiration of
the revocation period referred to in Section C.7. below, Align shall pay to
Henry the total amount of One Hundred Twenty Three Thousand Seven Hundred and
Fifty Dollars ($123,750) to be paid in accordance with Align’s standard payroll
schedule and practices, less applicable deductions and withholdings, which
represents six months of Henry’s current base salary.  A Form W-2 shall be issued to Henry for each
year during which these payments are made and/or waivers are issued.

2.     COBRA Continuation.  Beginning after the execution of this
Agreement by Henry and after the expiration of the revocation period referred
to in Section C.7. below, if Henry is eligible and timely elects to continue
medical coverage for himself and his eligible dependents under COBRA, Align
will pay, on Henry’s behalf, the premiums to continue this group health
insurance, including coverage for Henry’s eligible dependents for a period of
six (6) months; provided, however, that Align will pay such premiums only for
the coverage for which Henry and his eligible dependents were enrolled
immediately prior to the Termination Date.

Align shall pay the premiums for such coverage until the earlier of (a)
six (6) months following the expiration of the revocation period; (b) the
effective date of Henry’s coverage by a health plan of a subsequent employer;
or (c) the date Henry is no longer eligible for COBRA coverage.  For the balance of the period that Henry is
entitled to coverage under COBRA, he shall be entitled to maintain coverage for
himself and his eligible dependents at his own expense.

B.                                    HENRY.

1.     Final Pay.  Henry represents and warrants that he has
received and reviewed his final paycheck and that he has been paid all salary,
wages and compensation of any type earned by him and owed to him by Align,
including, but not limited to, all accrued but unused vacation as well as any
reimbursable business 

expenses.  Henry further
acknowledges and agrees that he is not entitled to any additional payments from
Align except as set forth in this Agreement.

2.     General Release.  Henry hereby fully and forever releases, waives,
discharges and promises not to sue or otherwise institute or cause to be
instituted any legal or administrative proceedings against Align or any of its
current and former officers, directors, attorneys, shareholders, predecessor,
successor, affiliated or related companies, agents, employees and assignees
thereof (collectively, the “Company”), with respect to any and all liabilities,
claims, demands, contracts, debts, obligations and causes of action of any
nature, kind, and description, whether in law, equity or otherwise, whether or
not now known or ascertained, which currently do or may exist, including
without limitation any matter, cause or claim arising from or relating in any
way to Henry’ employment with Align or the termination therefrom, including,
but not limited to any claims for unpaid wages, severance, benefits, penalties,
breach of contract, breach of the covenant of good faith and fair dealing,
infliction of emotional distress, misrepresentation, claims under Title VII of
the Civil Rights Act, under the Age Discrimination in Employment Act, under the
California Fair Employment and Housing Act, under the California Labor Code,
under the Employment Retirement Income and Security Act and under any other
statutory or common law claims relating to employment or the termination
thereof, except any claims Henry
may have, which, as a matter of law, are not subject to waiver, such as:

a.                                       unemployment insurance benefits pursuant to
the terms of applicable law;

b.                                      workers’ compensation insurance benefits
pursuant to Division 4 of the California Labor Code, under the terms of any
workers’ compensation insurance policy or fund of Align;

c.                                       continued participation in certain of Align’s
group benefit plans on a temporary basis pursuant to the federal law known as
COBRA;

d.                                      rights or claims under the Age Discrimination
in Employment Act (“ADEA”) that may arise after the date this Agreement is
signed;

e.                                       the right to file an administrative charge
with the Equal Employment Opportunity Commission, the Department of Fair
Employment & Housing, the National Labor Relations Board and any other
governmental entity to which waiver of the right to file an administrative
claim is unlawful;

f.                                         claims for indemnification under California
Labor Code section 2802.

 With regard to Section B.2.e., Henry
understands and agrees that, in the event he files an administrative charge, he
shall not seek, be entitled to, or accept any financial remuneration of any
type as a result of the charge.  With
regard to Section B.2.f., Henry acknowledges that he is presently unaware of
any claims for indemnification that have not already been submitted to the
Company.

3.     Waiver – Civil Code
Section 1542.   Henry
understands and agrees that Section B.2., above, applies to claims, known and
presently unknown by Henry; and that this means that if, hereafter, Henry
discovers facts different from or in addition to those which Henry now knows or
believes to be true, that the releases, waivers, discharge and promise not to
sue or otherwise institute legal action shall be and remain effective in all
respects notwithstanding such different or additional facts or the discovery of
such fact.  Accordingly, Henry hereby
agrees that he fully and forever waives any and all rights and benefits
conferred upon his by the provisions of Section 1542 of the Civil Code of the
State of California which states as follows (parentheticals added):

A
general release does not extend to claims which the creditor [i.e., Henry] does not know or suspect to exist in his favor
at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor [i.e.,
the Company].

4.     Confidentiality &
Non-Disclosure.  Henry hereby agrees
that he will not, without compulsion of legal process, disclose to any third
party any of the terms of this Agreement, including the amount referred to
herein, either by specific dollar amounts or by number of “figures” or
otherwise, nor shall he disclose that the fact of the payment of said dollar
amount, except that he may disclose such information to his spouse and he may
disclose such information to his attorneys and accountants to whom, and only to
the extent, disclosure is necessary to effect the purposes for which Henry has
consulted such attorneys and accountants. 
Henry agrees that in connection with any disclosure permitted hereunder,
Henry shall cause such third party to whom disclosure has been made, including
his spouse, to agree to comply with this covenant of confidentiality and non-disclosure,
and in the event such third party breaches this covenant of confidentiality and
non-disclosure, such breach shall be deemed to have been committed by Henry.

5.     COBRA Continuation.  Henry hereby agrees that he will notify Align’s
human resources department when he becomes eligible for medical coverage with a
subsequent employer or otherwise.

6.     No Other Pending Claims.  Henry hereby represents and warrants that he
has neither filed nor served any claim, demand, suit or legal proceeding
against the Company.

7.     No Prior Assignments.  Henry hereby represents and warrants that he
has not assigned or transferred, or purported to assign or transfer, to any
third person or entity any claim, right, liability, demand, obligation,
expense, action or causes of action being waived or released pursuant to this
Agreement.

8.     Material Inducements.  Henry hereby agrees and acknowledges that the
releases, waivers and promises contained in this Agreement, including the
promises of confidentiality and non-disclosure, are material inducements for
the consideration described in Section A., above.

9.     Agreement Inures to
Align.  Henry hereby agrees and
understands that this Agreement shall bind him, and his heirs, executors,
administrators and agents thereof and that it inures to the benefit of Align
and its current and former officers, directors, attorneys, shareholders,
predecessors, successors, affiliated or related companies, agents, employees
and assignees thereof.

10.   Proprietary Information.  Henry hereby acknowledges and agrees that (a)
he is bound by, and has continuing obligations under, the Proprietary
Information and Inventions Agreement (“PIIA”) signed by him on November 28,
2005 and the Employment Agreement by and between Henry and Align dated December
12, 2005; (b) he has returned to Align all items of property paid for and/or
provided by Align for his use during employment with Align including, but not
limited to, any laptops, computer and office equipment, software programs, cell
phones, pagers, access cards and keys, credit and calling cards; and (c) he has
returned to Align all documents (electronic and paper) created and received by
him during his employment with Align, and he has not retained any such
documents, except he may keep his personal copies of (i) documents evidencing
his hire, compensation, benefits and termination (including this Agreement);
(ii) any materials distributed generally to stockholders of the Company, and
(iii) his copy of the PIIA.  The PIIA is
incorporated herein by this reference.

11.   Non-Disparagement.
Henry agrees not to make any derogatory statements about the Company and/or the
Company’s officers, directors, employees, investors, stockholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations and assigns.

C.                                    ALIGN AND HENRY.

1.     Attorneys Fees and
Expenses.  Each party to this
Agreement shall bear their own respective attorneys’ fees and expenses related
to the negotiation of this Agreement, and each agrees to hold the other
harmless from the payment of all such attorneys’ fees and expenses.

2.     No Admission.  Nothing contained in this Agreement shall
constitute, be construed or be treated as an admission of liability or
wrongdoing by Henry, by Align, or by any current or former employee, officer or
director of Align.

3.     Governing Law.  California law shall govern the construction,
interpretation and enforcement of this Agreement.

4.     Severability.  If any provision or portion thereof, of this
Agreement shall for any reason be held to be invalid or unenforceable or to be
contrary to public policy or any law, then the remainder of the Agreement shall
not be affected thereby.

5.     Arbitration of Disputes
Arising from Agreement.  Any and all
disputes that arise out or relate to this Agreement or any of the subjects
hereof shall be resolved through final and binding arbitration.  Binding arbitration will be conducted in
Santa Clara County in accordance with California Code of Civil Procedure
section 1282, et seq., and the
rules and regulations of the American Arbitration Association then in effect
for resolution of commercial disputes. 
Each of the Parties understands and agrees that arbitration shall be
instead of any civil litigation, each waives its right to a jury trial, and
each understands and agrees that the arbitrator’s decision shall be final and
binding to the fullest extent permitted by law and enforceable by any court
having jurisdiction thereof.   Each of
the Parties will bear their own respective attorneys’ fees and will equally
share the cost of arbitration, although the arbitrator may award the prevailing
party his/its reasonable attorneys’ fees and costs of arbitration except that
such fees and costs may not be recovered by Align that result from Align’s
defense against any claim by Henry challenging the waiver, release and
discharge of rights under the Age Discrimination in Employment Act.

6.     Counterpart Signatures.  Henry and Align hereby acknowledge that this
Agreement may be executed in counterpart originals with like effect as if executed
in a single original document.

7.     Time to Consider; Revocation Period;
Effective Date.  Henry understands and agrees that he may have
up to a full twenty-one (21) days after receipt of this Agreement within which
he may review, consider, and decide whether or not to sign this Agreement, and,
if Henry has not taken that full time period, that he expressly waives the
remaining time period and will not assert the invalidity of this Agreement or
any portion thereof on this basis.  Henry
further acknowledges and is hereby advised that he should discuss the terms of
this Agreement with an attorney of his choosing at his sole expense.  Henry
also understands that, for the period of seven (7) days after the date he signs
this Agreement, he may revoke the release of his claims under the Age
Discrimination in Employment Act (“ADEA”), in which case this Agreement shall
remain effective and enforceable in all other respects but the payments in
Section A.1. and 2. will each be reduced by 40%.  Henry understands that if he wishes to revoke
his release of claims under the ADEA, he must deliver written notice of
revocation, no later than the seventh day after he signs this Agreement, to:

Align Technology, Inc.

Attn.:  Human
Resources

881 Martin Ave.

Santa Clara, CA 
95050

Facsimile:
(408) 470-1024

Henry further understands that
the Effective Date of this General Release will be the eighth day after both of
the Parties have signed it and it has been delivered to Align.  Henry understands that he must deliver his
signed General Release to Align via the address, above.

8.  Results
of Negotiation; Knowing and Voluntary Execution.  The Parties hereby acknowledge that this
Agreement is the result of negotiation between them, that each were represented
by an attorney of their own choosing in deciding whether or not to sign this
Agreement and that each has read and understands the foregoing Agreement and
that each affixes their respective signature to this Agreement knowingly,
voluntarily and without coercion.

9.  Entire
Agreement; Modification.  The Parties
hereby acknowledge and agree that except for any pre-existing stock, stock
option and/or purchase agreement(s) between Henry and Align, and any amendments
and waivers thereto, no promises or representations were or are made which do
not appear written in this Agreement. 
The Parties agree that this Agreement contains the entire agreement by
Henry and Align, and that neither is relying on any representation or promise
that does not appear in this Agreement. 
The Parties further agree that the benefits provided in this Agreement
fully satisfy any obligations Align may have to provide any severance or other
benefits to Henry under that certain employment offer letter by and between
Henry and Align dated November 22, 2005, and the Employment Agreement by and
between Henry and Align dated December 12, 2005.  This Agreement may be changed only by another
written agreement signed by Henry and the Chief Executive Officer of Align.

10.  Enforcement
Costs.  If an action is brought by
either party for breach of any provision of this Agreement, the non-breaching
party shall be entitled to recover all reasonable attorneys’ fees and costs in
defending or bringing such an action.

	
   

  	
   

  	
  MICHAEL J. HENRY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: July 23,
  2007

  	
   

  	
  /s/ Michael J. Henry

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALIGN TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: July 23,
  2007

  	
   

  	
  /s/ Thomas M. Prescott

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Thomas M. Prescott

  
	
   

  	
   

  	
  Title: President and CEO

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