Document:

Exhibit 10.26

 

 

AGREEMENT

 

On
Lease

Entered
into on the date mentioned below between:

 

 

Technologický Park Brno,
a.s.

Technická 15, Brno 616
00, Czech Republic

 

 

And

FEI Czech Republic, s.r.o.

Podnikatelska 4, Brno 612 00

 

 

And

FEI Company (INC)

7451 Evergreen Parkway, Hillsboro, OR 97124

 

 

 

Contents

 

	 
	
  Article:

  	
   

  	 

	 
	
  I

  	
  Subject of the Agreement

  	 

	 
	
  II

  	
  Duration and Term

  	 

	 
	
  III

  	
  Agreed Use

  	 

	 
	
  IV

  	
  Rent

  	 

	 
	
  V

  	
  Service
  Charge

  	 

	 
	
  VI

  	
  Payment
  Conditions

  	 

	 
	
  VII

  	
  Lessee’s
  Covenants

  	 

	 
	
  VIII

  	
  Lessor’s
  Covenants

  	 

	 
	
  IX

  	
  Alienation Provisions

  	 

	 
	
  X

  	
  Guarantee

  	 

	 
	
  XI

  	
  Entire Agreement
  and Modifications

  	 

	 
	
  XII

  	
  Dispute
  Resolution

  	 

	 
	
  XIII

  	
  Notices

  	 

	 
	
  XIV

  	
  Confidentiality

  	 

	 
	
  XV

  	
  Force Majeure

  	 

	 
	
   

  	
   

  	 

	 
	
   

  	
   

  	 

	
  Appendices:

  	
   

  
	
  No. 1

  	
  Excerpts
  from the Commercial Register of the Parties to the Agreement

  
	
  No. 2

  	
  Plans and Specifications
  of the Leased Premises including Fit Out Phase I

  
	
  No. 3

  	
  Fit Out
  Phase II and the Business Process of the Lessee

  
	
  No. 4

  	
  Estate
  Management Area, Building, Zone B and Shared Infrastructure Plan

  
	
  No. 5

  	
  Geometric Plan of the Property, Deed of Title, Land Plots

  
	
  No. 6

  	
  Building Permit

  
					

 

1

 

Lease

 

	
  Technologický Park Brno, a.s.

  	
   

  
	
  seated at:

  	
  Technická
  15, Brno 616 00

  
	
  represented
  by:

  	
  Pavel Kuba
  Bc. - Chairman of the Board of Directors, and

  
	
   

  	
   

  	
  Ian Barnett
  - Member of the Board of Directors

  
	
  identification
  No.:

  	
   

  	
  48532215

  
	
  tax
  identification No.:

  	
  291-48532215

  
	
  bank
  connection:

  	
   

  	
  HVB Bank
  Czech Republic a.s. , Lidicka 59 Brno 602 00

  
	
   

  	
   

  	
  EURO account
  No. 1713284511/2700

  
	
   

  	
   

  	
  CZK account
  No. 1713287501/2700

  
				

 

registered in
the Commercial Register with the Regional Court in Brno in division B, file No.
1034. Hereinafter referred to as “the Lessor”

And

	
  FEI Czech Republic, s.r.o.

  	
   

  	
   

  
	
  Seated at :

  	
   

  	
  Podnikatelská 4, Brno 612 00

  	
   

  
	
  Represented by :

  	
   

  	
  RNDr. Jiří Očadlík - Executive

  	
   

  
	
   

  	
   

  	
  RNDr. Petr Střelec - Executive

  	
   

  
	
  Identification No.:

  	
   

  	
  46971629

  	
   

  	
   

  
	
  Tax identification No.:

  	
  290-46971629

  	
   

  	
   

  
	
  bank
  connection:

  	
   

  	
  CZK Account:

  	
  373519029/0400

  
	
   

  	
   

  	
  EURO Account

  	
  3429-15034/0400

  
							

 

registered in the Commercial Register with the
Regional Court in Brno in division C, file No. 7300. Hereinafter referred to as
“the Lessee”

And

	
  FEI Company (INC)

  
	
  seated at:

  	
   

  	
  7451
  Evergreen Parkway, Hillsboro, OR 97124

  
	
  represented
  by:

  	
   

  	
  Stephen
  Loughlin, Chief Financial Officer

  
	
  tax
  identification No.:

  	
  93-0621989

  
				

 

registered in
the Companies Register of the State of Oregon, USA reference number 101460 -17.
Hereinafter referred to as the ‘GUARANTOR’

 

Excerpts from
the Commercial Register of the Parties forms Appendix 1 of this Agreement.

 

conclude the
following Lease Agreement:

 

Definitions

 

In this Lease
Agreement the following expressions shall have the following meanings :

 

“Agreement” means this Agreement on Lease concluded between the Lessor, the
Lessee and the Guarantor;

 

“Agreement to Conclude a “Future Lease Agreement” means the Agreement to Conclude a Future Lease Agreement entered
into between the parties hereto on 18th February 2002;

 

Annual Rate of MUICP means the annual Rate of the Monetary Union Index of Consumer
Prices, which is published by Eurostat (the Statistical Office of the European
Communities in Luxemburg) on its official web site
www.europa.eu.int/en/comm/eurostat for each calendar month within the next
calendar month and which measures the change in the consumer prices in the
Euro-zone countries between the respective month and the same month of the
previous year, or the annual rate of an official index of consumer prices
replacing the Monetary Union Index of Consumer

 

2

 

Prices, as the
case may be. The report of Eurostat on Annual Rate of MUICP is also monthly
published on the official web site of Cesky statisticky urad.

 

“Associate Company” means any company
within the FEI Company group being either a direct or indirect subsidiary;

 

“Building” means
the building owned by the Lessor on the territory of the Czech Technology Park
on the parcels No. 4674/7, 4679/8, 4682/9, 4683/26, 4683/34, 4683/37, 4683/38,
4683/39, 4795/2, 5617/15 (or any part thereof) registered with the Cadastral
Office in Brno for the cadastral area of Královo Pole municipality of Brno and
edged Blue on the plan attached as Appendix 5. Specification of the Building
and premises contained therein including Technical Equipment being the integral
part of the Building (except for the Fit Out Phase I) is included in Appendix
No. 2 hereof. The Building is currently registered as an uncompleted
construction on the Deed of Title which is attached hereto in Appendix No.5;

 

“Building Permit” means
the effective approval permit(s) issued by the Planning Authority in relation
to the Specifications of the Leased Premises and the Business Process for which
the Leased Premises shall be used hereunder, which confirms that the Lessor
could construct the same. The Building Permit bearing the effectiveness clause
confirming that the Building Permit entered into effect is attached hereto as
Appendix No. 6 hereof;

 

“Building Management Charge” means such part of the Service Charge payable by  the
Lessee to the Lessor in accordance with Article V, paragraph 5.1.2 hereof;

 

“Business Process” means the process operations of FEI as more particularly specified
in Appendix No. 3 hereto;

 

“Car Parking Space” means parking spaces
situated on parts of the land plots No. 4683/4,  4683/10, 4683/11,
4683/12, 4683/36, 4684/4, 4684/5, 4685/1, 4795/1, 4799/1, 4800/10, 5617/3,
5617/5, 5617/6 cadastral territory Kralovo Pole, municipality Brno as
shown edged red on the plan in Appendix 2;

 

“Commencement Date” means the date of signature of this Agreement which shall evidence the
commencement of the Term as more particularly set out in paragraph 2.1 hereof;

 

“Compensation”
means the amount of DEM 60,000

 

“Common Parts” mean
all such parts of the Estate Management Area, as hereinafter defined, which are
not demised by the Lessor to the Lessee and which are not demised and shall not
be demised to any other third party and which are not intended for demise to
any third party and which are not and shall not be occupied exclusively by the
Lessor, as shown edged brown on the plan in the Appendix 2 hereof;

 

“Czech Technology Park” means the territory of the Czech Technology Park in Brno as it is
defined in the territory plan as of 1995, as amended, which forms a part of the
plan of development of the City of Brno; such territory including the parcels,
buildings and connected infrastructure being owned, leased and/or administered
by Technologický Park Brno, a.s. or its legal successors;

 

“CZK Exchange Rate”
means the official exchange rate between CZK and DEM, after 1.1.2002 between
CZK and EURO, published by the Czech National Bank for the date appropriate
payment hereunder is due.

 

“DPH” means
value added tax (in Czech “daň z přidané hodnoty “);

 

“Early Termination” means termination of this Agreement as referred to in paragraph 2.1
hereof;

 

“Estate Management Area” means the area within the Czech Technology Park as it is shown edged
green on the plan set out in Appendix 4 hereto situated on the land plots
4674/3, 4674/7, 4675/1, 4676/1, 4677/1, 4678/1, 4678/5, 4679/1, 4679/5, 4679/6,
4679/7, 4679/8, 4680/5, 4680/7, 4682/5, 4682/9, 4683/1, 4683/4, 4683/7, 4683/8,
4683/9, 4683/10,

 

3

 

4683/11, 4683/12, 4683/26, 4683/27, 4683/34, 4683/35, 4683/36, 4683/37,
4683/38, 4683/39, 4684/4, 4684/5, 4685/1, 4686/1, 4794/4, 4795/1, 4795/2,
4799/1, 4800/10, 5617/3, 5617/5, 5617/6, 5617/9, 5617/15, 5624/1 recorded in
the ownership portfolio registered in the Real Estate Cadastre maintained by
the Cadastral Office in Brno for the cadastral area of Kralovo Pole,
municipality of Brno;

 

“Estate Management Charge” means such part of the Service Charge payable by the Lessee to the
Lessor in accordance with Article V, paragraph 5.1.3 hereof;

 

“Estate Management Costs” means all costs and expenses incurred by the Lessor in relation to
the provision of services for Common Parts and for the general benefit of the
Estate Management Area and the Czech Technology Park as set out in Article V,
paragraph 5.1.3 hereof;

 

“Fit Out Phase I” means
the technical installations relating to the Business Process of the Lessee
which are installed within the Building by the Lessor, specification of which
is part of the Specifications as described in Appendix 2 hereof, the use of
which by the Lessee is inter alia the subject of this Agreement.

 

“Fit Out Phase II” means
the technical installations relating to the Business Process of the Lessee
which will be installed within the Building by the Lessee and which shall
remain the property of the Lessee, the specification of which is described in
Appendix 3 hereof;

 

“Fit Out Rent”  means rent which shall be paid by the Lessee to the Lessor
for the use of those elements of the Fit Out Phase I as more particularly
described in paragraph 4.2 hereof which shall not be the subject of the Asset
Transfer Agreement to be concluded between the Lessee and the Lessor;

 

“Fit Out Works”
means the fit out works to be undertaken by the Lessee for installation of Fit
Out Phase II described in Article I paragraph 1.6 of this Agreement;

 

“Guarantor” means the guarantor who’s obligations as more particularly described
in article X. hereof FEI Company (INC) or any legal successor to FEI Company
(INC);

 

“Land Plots” means land plots (and any part thereof) as shown edged yellow on the
plan in Appendix 5;

(i) on which the
Leased Premises shall be situated; and

(ii) to be
used for access to the Leased Premises and operation thereof

 

“Latent Defect”
means a significant defect of the Leased Premises resulting from an original
design or construction defect or used materials;

 

“Lease” means the
legal relationship between the Lessor, and the Lessee pursuant to this
Agreement governing the use of the Leased Premises and Fit Out Phase I
hereunder commencing on the Commencement Date;

 

“Leased Premises”
means the Building, the Car Parking Spaces and Service Yard the use of which is
inter alia the subject of this Agreement;

 

“Lessee” means
lessee of the Leased Premises and Fit Out Phase I - FEI Czech Republic, s.r.o.  (or
any legal successor to FEI Czech Republic, s.r.o.);

 

“Lessor” means
lessor of the Leased Premises and Fit Out Phase I - Technologický Park Brno,
a.s. (or any successor in title to Technologický Park Brno, a.s.);

 

“Non-Exclusively Used Parts” means
Common Parts, Property and Shared Infrastructure, payment for non-exclusive use
of which is included in the Rent and the non-exclusive use of which is
authorised and guaranteed by the Lessor to the Lessee for the duration of the
Term;

 

4

 

“Occupancy Permit” means the occupation certificate(s) (in Czech kolaudační
rozhodnutí ) to be issued by the Planning Authority in respect of the Building,
Car Parking Spaces and the Service Yard confirming that the Building is
completed in accordance with the Building Permit and effective legal regulations
and that the Car Parking Space and the Service Yard are completed in accordance
with appropriate building permit(s) and effective legal regulations and that
the Building and the Car Parking Space and the Service Yard may be used for the
Business Process agreed herein.

 

“Planning Authority” means the civic construction department in the cadastral area of
Kralovo Pole in Brno which issued the Building Permit and the Temporary Use
Permit and which is competent to issue the Occupancy Permit;

 

“Property” means
lots within the Estate Management Area under and adjacent to the Building as
shown in the geometric plan attached in Appendix no. 5. These lots include in
part or in whole lot no. 4674/3, 4674/7, 4675/1, 4676/1, 4677/1, 4678/1,
4678/5, 4679/1, 4679/5, 4679/6, 4679/7, 4679/8, 4680/5, 4680/7, 4682/5, 4682/9,
4683/1, 4683/4, 4683/7, 4683/8, 4683/9, 4683/10, 4683/11, 4683/12, 4683/26,
4683/27, 4683/34, 4683/35, 4683/36, 4683/37, 4683/38, 4683/39, 4684/4, 4684/5,
4685/1, 4686/1, 4794/4, 4795/1, 4795/2, 4799/1, 4800/10, 5617/3, 5617/5,
5617/6, 5617/9, 5617/15, 5624/1 recorded in the ownership portfolio registered
in the Real Estate Cadastre maintained by the Cadastral Office in Brno for the
cadastral area of Kralovo Pole, municipality of Brno;

 

“Proportionate Share” means such part of the Estate Management Charge herein before
defined and set out in Article V, paragraph 5.1.3 relating to costs incurred by
the Lessor in respect of the Czech Technology Park and equal in percentage
terms to the proportion represented by the total floor area of the premises
contained in the Building (which for the purposes hereof comprises of 8,600 m2)
in relation to the total building floor area constructed at any given time
within the area of the whole Czech Technology Park which as of the Commencement
Date for the purposes hereof comprises of 22,250 m2;

 

“Related Costs”
means such part of the Service Charge payable by the Lessee to the Lessor as
specified in Article V, paragraph 5.1.5 hereof;

 

“Rent”  means the financial obligation of the Lessee
to pay to the Lessor for the use of the Leased Premises in accordance with this
Agreement as more fully set out in Article IV. hereof;

 

“Service Charge” means
all costs and expenses specified in Article V, hereof, consisting of Building
Management Charge, Estate Management Charge, Shared Infrastructure Costs and
Related Costs;

 

“Service Yard” means
service yard situated on whole or part of the land plots No. 4675/1, 4676/1, 4677/1, 4678/5, 4679/7, 4794/4,
4799/1, cadastral territory Kralovo Pole, municipality Brno as shown
edged orange on the plan in Appendix 2;

 

“Shared Infrastructure” means the main entrance to the Czech Technology Park, the arrival
road and any other infrastructure, which is used for the benefit of the Estate
Management Area as it is shown edged yellow in Appendix 4 hereto;

 

“Shared Infrastructure
Costs” means the proportion of costs of
maintenance of the Shared Infrastructure incurred by the Lessor to be borne by
the Lessee equal, in percentage terms, to the proportion represented by the
total floor area of the premises contained in the Building as referred to
herein above in relation to the total building floor area constructed at any
given time within Zone B of the Czech Technology Park;

 

“Specifications” means the description and technical specification of the Building
and the Leased Premises constructed by the Lessor to be used for the Business
Process by the Lessee which includes the Fit-Out Phase I installed and
completed by the Lessor, such specifications being more particularly described
in Appendix 2 hereto;

 

5

 

“Structure” means
all structural framework of the Building, foundations, roof, walls and columns,
floor slabs, curtain walling system, external cladding, fire escapes, entrance
stairs, thresholds, internal stairways and corridors within the Building;

 

“Technical Equipment” means all installations and equipment of a technical nature within
the Building and Common Parts of the Property which will not form a part of the
Lessee’s Fit Out Phase I and Fit-Out Phase II including but not limited to all
electrical, gas, water, heating, lighting, ventilation, plumbing and sanitary
installations and connections, communications, security and alarm, fire
protection and parking control systems and apparatus, all roof top plant
apparatus and equipment including air handling plant, boiler, distribution
conduits and ductwork, chiller and air conditioning units, lift and lift motor
apparatus and any distribution networks associated with such installations;

 

“Technology Asset Transfer
Agreement” means an
agreement to be entered into between the Lessor and the Lessee concerning the
transfer of ownership of those elements of Fit Out Phase I which comply in all
respect with the qualification of process technology set out in Income Tax Act
No.586/1992 as amended which shall be concluded following completion of Fit Out
Phase I and its connection to Fit Out Phase II and hand over to the Lessee by
the Lessor;

 

“Technology Asset Transfer
Payment” means
the payment by the Lessee to the Lessor for the transfer of ownership of Fit
Out Phase I to be paid by the Lessee to the Lessor upon completion and hand
over of Fit Out Phase I by execution of the Technology Asset Transfer
Agreement;

 

“Temporary Use Permit” means the consent or permit, as the case may be, which was issued by
the Planning Authority (in Czech Povolení, popřípadě Souhlas
k prozatímnímu užívání ke zkušebnímu provozu) in accordance with paragraph
84 of The Construction Act No. 50/1976 which confirmed that the Lessee can
occupy and use the Building for the Business Process (including the
installation and use of the Fit Out Phase II), a certified copy of which was
served by the Lessor upon the Lessee and the GUARANTOR prior to execution of
this Agreement;

 

“Term” means a
fixed term for the duration of this Agreement as more particularly defined in
Article II, paragraph 2.1 hereof;

 

“Zone B” means the area within the Czech Technology Park shown edged pink on
the plan in Appendix 4 hereof.

 

 

I

Subject of the Agreement

 

1.1                                 The Lessor hereby confirms that it is the sole owner of the Leased
Premises and that it has the right to erect, complete, use and lease the Leased
Premises including the Technical Equipment for the period of 10 (ten)
consecutive years as the minimum commencing by the execution hereof. The Lessor
represents that the Leased Premises including Fit Out Phase I comply with all
statutory and departmental regulations in respect of the Leased Premises and
Fit Out Phase I and that the use of the Leased Premises and Fit Out Phase I for
the Business Process using inter alia Fit Out Phase II is subject to the terms
and conditions specified in the Temporary Use Permit prior to the issue of the
Occupancy Permit. The Lessor further confirms that it has full legal rights to
enter into this Agreement under the terms herein set forth.

 

1.2                                 The Lessee hereby confirms that it has full legal rights to enter
into this Agreement under the terms herein set forth. The Lessee represents
that Fit Out Phase I (if duly completed) and the Business Process will comply
with all statutory and departmental regulations using inter alia Fit Out Phase
II.

 

1.3                                 The Subject of the Agreement is the lease by the Lessor and use by
the Lessee of the Leased Premises including Technical Equipment for the
Business Process using inter alia Fit Out Phase I and Fit Out Phase II subject
to the terms and conditions set forth in this Agreement for the duration of the
Term.

 

6

 

1.4                                The Leased Premises are leased in accordance with the Specifications
attached to this Agreement as Appendix 2 including Technical Equipment.

 

1.5                                At the commencement of the Term the Lessor is obliged to hand over
to the Lessee the Leased Premises in a structurally, functionally and
hygienically suitable state for the Lessee’s occupation in accordance with this
Agreement. The said hand over shall be evidenced by a hand over protocol signed
by the duly authorised representatives of the Lessor and the Lessee.

 

1.6                                 The Lessor agrees that Fit Out Phase II is installed
in the Building under the conditions specified in paragraph 3.7 below and that
it is used inter alia for the Business Process and confirms that the Leased
Premises are fully fit to be used for the Business Process using Fit Out Phase
II. It is however fully the obligation of the Lessee to install Fit Out Phase
II and to ensure that the Business Process using inter alia Fit Out Phase I and
Fit Out Phase II fully complies with all relevant and necessary statutory consents
and approvals and to ensure that the Business Process using inter alia Fit Out
Phase I (if duly completed by the Lessor) and Fit Out Phase II (if duly
completed by the Lessee) enables issue of the Occupancy Permit.

 

1.7                                 Within seven days of the Occupation Permit entering
into effect, the Lessor shall submit a complete application for registration of
the Building as a completed construction in the name of the Lessor as an
unrestricted owner in the Real Estate Cadastre. Within seven days upon the Building
being registered in the Real Estate Cadastre in the name of the Lessor as an
unrestricted owner the Lessor shall submit an Ownership Deed (in Czech List
Vlastnictví), evidencing that fact, with the Lessee.

 

 

II.

Duration and Term
of the Lease

 

2.1                                 This Lease is
concluded for a definite fixed period of time which shall be 10 consecutive
years commencing on the date of signature of this Agreement. The Lessee shall
have the right to terminate this Agreement at the expiry of the fifth year of
the Term (hereinafter referred to as “Early Termination”) by serving no less
than twelve months prior written notice upon the Lessor and upon payment of a
penalty sum amounting to DEM 4,219,691. The Lessee shall fully comply and
discharge all undisputed (acting reasonably in all circumstances) financial
liabilities arising from this Agreement by the effective termination date. For
these purposes the Lessor and the Lessee undertake to confirm no later than 45
days prior to the effective termination date a schedule of financial
liabilities due by either party by the effective termination date.

 

2.1.1                        All other liabilities of the Lessee arising from this Agreement
including the removal of those elements of Fit Out Phase I marked on the
schedule in Appendix 2, as the case may be, and Fit Out Phase II and all other
repair and maintenance obligations of the Lessee as set out in this Agreement
shall be fully discharged by the effective termination date.

 

2.1.2                        Failure of the
Lessee to comply with the obligations mentioned in 2.1.1 shall result in a
contractual penalty payable by the Lessee to the Lessor in the amount of DEM
5,000 for every day of delay beyond the prescribed time limits set out in
article 2.1.1 to a total maximum amount of DEM 600,000. Defects of the Leased
Premises of a minor character which are to be removed by the Lessee not removed
within such a period shall not be a reason for application of the contractual
penalty.

 

2.2                                 This Agreement shall terminate when the Term of this Agreement
elapses or under terms and conditions stated herein.

 

2.3                                 Without prejudice to the generality of the foregoing or to its
statutory rights, the Lessor may terminate this Agreement by a written notice
given one month in advance provided:

 

2.3.1                                                the Lessee does not fulfil its obligations under this Agreement,
however, the Lessee may remedy any

7

 

breach within 45 days from the Lessor’s appeal notice to remedy such
breach;

 

2.3.2                                                the Lessee does not duly and timely pay the Rent, the Fit Out Rent
the Service Charge or any other financial obligation due under this Agreement
for at least one month from the due payment date and further unreasonably
withholds such payments; or

 

2.3.3                                                the Lessee uses the Leased Premises for any illegal purposes or for
any purpose other than that stated in Article III hereof despite being notified
thereon by the Lessor;

 

(i)                                     Without prejudice to the generality of the
foregoing or to its statutory rights, the Lessee may withdraw from this
Agreement (taking effect by delivery of the withdrawal notice to the Lessor) in
casethe Leased Premises or the Property (or any part thereof that is material
to the Lessee ́s operation) shall become substantially unusable for the Business
Process set out herein (“Situation”) to the extent it is not caused by failure
of the Lessee and such Situation is not remedied within 45 days upon
notification thereof to the Lessor by the Lessee;

(ii)                                  the Lessor materially breaches any of its
obligations stipulated herein and such breach is not remedied by the Lessor
within 45 days of the delivery of a notice thereof by the Lessee to the Lessor;

 

2.4.1                                                In case the Situation mentioned in 2.4 (i) occurs and the Lessor
fails to remedy and remove any defects for which it is liable within 45 days or
in the event of an emergency within a reasonable period of time from receipt of
the Lessee’s notice, the Lessor irrevocably agrees that the Lessee may remedy
and remove such defects on behalf of the Lessor (and gives hereby a Power of
Attorney to the Lessee for any acts connected therewith) provided that the
Lessee notifies the Lessor of its intention to do that in writing
(“Notification to Remedy”). The Lessor undertakes that it will compensate the
Lessee for any reasonable expenses and costs incurred by the Lessee connected
with the remedy and removal. The authorisation of the Lessee mentioned in this
paragraph may in no event be construed as the Lessee’s obligation. If a
Notification of Remedy by the Lessee is delivered to the Lessor the Lessee will
be deemed to have waived any termination rights and may not withdraw from this
Agreement and will further be obliged to complete the necessary remedy.

 

2.5                                 Without prejudice to the generality
of the foregoing or to their respective statutory rights both the Lessor and
the Lessee shall have the right to terminate this Agreement if for any reason
the Occupancy Permit has not been issued confirming that the Leased Premises
may be used for the Business Process by the time 12 months have expired from
the Commencement Date.

 

2.6                                 The Lessee
expressly confirms and agrees that the Lessee’s right to terminate this
Agreement upon any change in ownership of the Building in accordance with
Section 680 paragraph 3 of Act No. 40/1964 Coll., the Civil Code, as amended,
Act No. 47/1992 shall not be exercised so long as the new owner is a corporate
entity of reputable character and sufficient financial standing and not a
direct or indirect competitor of the Lessee, all of which is in the opinion of
the Lessee, acting reasonably in all circumstances.

 

2.7                                 Lessee shall
further have the right to terminate this Agreement by giving a notice with
three month notice period in case, as a consequence of Force Majeure the Lessee
loses the qualification for using the Leased Premises for the Business Process.

 

 

III.

Agreed Use

 

3.1                                 The Leased Premises shall be used for the Business Process and
further stated:

 

3.1.1                        part of the Leased Premises for the development and production of
electron microscopes and any

 

8

 

activities associated therewith (see Appendix No.3);

 

3.1.2                        part of the Leased Premises as offices and following the date upon
which the effective Occupancy Permit enters into effect as the place of seat of
the Lessee (see Appendix No.3)

 

3.2                                 As soon as practically possible
following execution of this Agreement the Parties undertake to co-operate with
each other so that the Lessor may processes and submit a complete application
for the issue of the Occupancy Permit (in Czech Kolaudacni Rozhodnuti) under
the conditions more particularly set out in the following procedure:

 

3.2.1                        The Lessee undertakes to complete the Fit Out Phase II and provide
the Lessor and competent state authorities with information and co-operation
regarding the Business Process to be undertaken within the Leased Premises,
however only to the extent;

(i)                                     it is necessary under law for the issue of the Occupancy Permit; and

(ii)                                  it is necessary in order to fulfil the Subject of the Agreement set
out in Article I hereunder

 

3.2.2                        Once the matters necessary for submission of the application for the
Occupancy Permit have been completed, the Lessor shall submit an application
for the issue of the Occupancy Permit with the Planning Authority as
expeditiously as reasonably possible.

 

3.2.3                       In
case any issue preventing the issue of the Occupancy Permit relating to any
defect of any element of the Leased Premises including the Fit Out Phase I or
any defect in element of the Specifications is identified it is considered to
be a failure by the Lessor taking into consideration obligations of the Lessor
mentioned in Article 2 of the Agreement to Conclude a Future Lease Agreement to
the extent it is not caused by any failure of the Lessee taking in into
consideration obligations of the Lessee mentioned in Article 2 of the Agreement
to Conclude a Future Lease Agreement and the Lessor undertakes to remedy any
such issue without undue delay at its own cost. In case the issue of the
Occupancy Permit is prevented due to any issue related to the Business Process
using also Fit Out Phase II it is considered to be a failure by the Lessee
taking into consideration obligations of the Lessee mentioned in Article 2 of
the Agreement to Conclude a Future Lease Agreement to the extent it is not
caused by any failure of the Lessor taking into consideration obligations of
the Lessor mentioned in Article 2 of the Agreement to Conclude a Future Lease
Agreement and the Lessee undertakes to remedy any such issue without undue
delay at its own cost.

 

3.2.4                        Upon
receipt of the Occupancy Permit, the Lessor shall serve notice upon the Lessee
and the GUARANTOR together with a certified copy of the Occupancy Permit.

 

3.3                                 If,
for any reason, the Occupancy Permit in respect of the Leased Premises is not
issued or is issued but does not come into effect by the time 12 months have
expired from the date of signature of this Agreement or the effective Occupancy
Permit contains restrictions or conditions which would have a material impact
on the Business Process then the parties hereby undertake to discuss in good
faith any possible means of resolving any issues;

(i)                                     preventing
the entering into effect of the Occupancy Permit, or

(ii)                                  necessary
to resolve any matter which would impact materially upon the Business Process,

the duration of such discussions in any
event not to exceed 30 days from the expiry of the initial period of 12 months.
The same applies in case the Occupancy Permit is not issued within 12 months
upon the execution hereof.

 

3.4                                 In the event that the parties are unable to reach any agreement or
resolution on any issue mentioned in paragraph 3.3 above within the time limits
provided then, upon expiry of such time limit, either party shall at any time
thereafter be entitled to terminate this Agreement by serving written notice
upon the other. Such notice of

 

9

 

termination
shall be effective on the date of delivery of the same. In case the Occupancy
Permit is not issued due to failures on part of the Lessor the Lessor shall pay
to the Lessee, under the request of the Lessee, a contractual penalty in the
amount of DEM 2,250,000 . In case the Occupancy Permit is not issued due to
failures on part of the Lessee the Lessee shall pay to the Lessor, under the
request of the Lessor, a contractual penalty in the amount of DEM 2,250,000 .

 

3.5                                The Lessor hereby grants to the Lessee also a non-exclusive right to
use the Non-Exclusively Used Parts for the Term, as necessary to use and enjoy
the Leased Premises.

 

3.6                                 The Lessee shall use the Leased
Premises for the Business Process in a manner which shall not cause disturbance
to other occupiers of the Czech Technology Park or to adjacent and neighbouring
owners and occupiers. Nevertheless, the Lessee shall be fully entitled to carry
out its Business Process in compliance with statutory regulation parameters set
out in any applicable permit approvals.

 

3.7                                 The Lessee is obliged to remove those elements of Fit Out Phase II
marked on the schedule in Appendix 2 at the termination of the Lease and hand
over the Leased Premises to the Lessor in a duly renovated condition having
made good any damage to the Leased Premises caused by the aforesaid removal.

 

 

IV

Rent

 

4.1                                 For the first year of the Term of the Lease the Lessee shall pay to
the Lessor the annual Rent amount of 2,009,661 DEM (German Marks), or EURO
equivalent at the official exchange rate for the use of the Leased Premises. In
the event that TPB transfers its ownership right of any part of the Leased
Premises then it shall be obliged to secure that FEI will not be required to
make additional payments for the use of such parts to any such transferee and
if FEI is required to do so then the Rent will be automatically reduced by the
amount corresponding to the additional payment(s).

 

4.2                                 For the use of those elements of the Fit Out Phase I not subject to
the Technology Asset Transfer Agreement the Lessee shall pay to the Lessor the
Fit Out Rent in the amount of 1,214,535 DEM (German Marks) to be invoiced by
the Lessor to the Lessee following confirmation of final costs at completion
and hand over, or EURO equivalent at the official exchange rate.

 

4.3                                At the beginning of the second year of the Term and at the beginning
of every year thereafter until the expiry or sooner termination of the Term the
preceding year’s Rent shall be subject to an annual increase according to the
annual German General Index of Consumer Prices/EUROLAND inflation if EURO
payment according to the Annual Rate of MUICP published for December of the
preceding calendar year and the Lessee shall pay such increased amounts to the
Lessor.

 

 

V.

Service
Charge

 

5.1                               In addition to the Rent, the Lessee
shall be required to pay a Service Charge set out in this Article, including
but not limited to the following:

 

5.1.1        All costs and
expenses relating exclusively to the Lessee’s occupation of the Leased Premises
incurred and paid for the Lessee by the Lessor including, but not limited to
the following :

(I)                                    heating charges,

(II)                                water and sewage charges,

(III)                            electricity charges,

(IV)                            gas charges,

(V)                                garbage disposal.

 

10

 

All such costs
shall be recharged to the Lessee by the Lessor (excluding any costs and
expenses incurred directly by the Lessee).

 

5.1.2                        A Building Management Charge representing 100 % of the costs
incurred by the Lessor in respect of maintaining, repairing and servicing the
Building, its Structure and Technical Equipment as more particularly set out in
Article VIII, paragraph 8.3 hereof.

 

5.1.3                        An Estate Management Charge representing a Proportionate Share of
the costs incurred by the Lessor in respect of the Czech Technology Park, in so
far as these are not already included in any payment to be done by any lessee
within the Czech Technology Park, and 100% of the costs incurred by the Lessor
in respect of the Estate Management Area in so far as these are not already
included in the Proportionate Share of the costs; double counting of the same
costs (or any part thereof) is strictly prohibited, including but not limited
to the cost of providing the following services:

 

(I)                                    inspecting, maintaining, repairing, renewing, cleaning, emptying and
replacing and keeping in a reasonably neat and tidy condition, the roads,
pathways, car parking areas and loading bays including winter cleaning as
necessary, snow removal and gritting and all conducting media and any other
pipes, sewers, drains, conduits, cables and wires from time to time within and
serving the Estate Management Area and the external Common Parts together with
any private roads, sewers and drains or any of them intended for adoption until
the same shall be adopted by the relevant authority and any associated costs
shall include any fees or charges imposed by such authority in connection
therewith with the exception of any fines or penalties the liability for which
has been caused by the Lessor;

 

(II)                                inspecting, maintaining and keeping in such reasonably neat and tidy
condition, including cutting of grass and maintenance of trees and shrubs, all
landscaped areas within the Estate Management Area including planting and
renewing all turf, trees, shrubs and plants as necessary to maintain an
acceptable level of landscape provision;

 

(III)                            providing and maintaining the entrance, directional and corporate
signage and keeping neat and tidy notice boards providing details of the
tenants of the Czech Technology Park and such other information as the Lessor
may in its discretion deem appropriate. The said signs are to be placed at the
entrance to the Czech Technology Park and at any other suitable location within
the Czech Technology Park and any other location as deemed by the Lessor to be
beneficial to the occupiers of the Czech Technology Park;

 

(IV)                            in the interest of good estate management, maintaining, cleaning
decorating and repairing buildings and/or structures comprising the Common
Parts including constructing and fitting out such buildings or facilities as
the Lessor may in its discretion deem necessary for the purpose and for the
general benefit of the Estate Management Area;

 

(V)                                constructing, equipping and staffing a reception and security
service for the benefit of the Czech Technology Park, however only after prior
written approval of the Lessee which shall not be unreasonably withheld,
contract security, CCTV and security road barriers if deemed necessary;

 

(VI)                            providing lighting for the Common Parts;

 

(VII)                        the carrying out of such other services or works in connection with
the Czech Technology Park which are in the interests of good estate management
of the Estate Management Area and for the benefit of the Lessee. The costs of
any consultants, surveyors, accountants and lawyers properly and reasonably
employed by the Lessor or its agents will only be included into the Estate

 

11

 

Management
Charge after prior written approval of the Lessee which shall not be
unreasonably withheld;

 

(VIII)                    the payment of all water and/or drainage charges, insofar as these
are not already borne by the Lessee in accordance with sub-paragraph 5.1.1(II)
above;

 

(IX)                           insuring the Estate Management Area as more particularly set out in
Article VIII, paragraph 8.6 hereof.

 

5.1.4                        Shared Infrastructure Costs, insofar as these are not already borne
by the Lessee in accordance with sub-paragraph 5.1.3 above.

 

5.1.5                        Costs incurred by the Lessor related to the ownership, operation and
administration of the Leased Premises and the Property (the Related Costs)
including:

 

(I)                                    insurance of the Leased Premises, Structure, Technical Equipment and
associated infrastructure within the Estate Management Area and Common Parts of
the Property together with Public Liability insurance cover for damages to
health and property of third persons in respect of the same;

(II)                                real property taxes,

 

5.1.6                        Management administration fees charged at 4% of the reconciled total
of the Service Charge and any other costs applicable under this Article V.

 

5.2                                 For the purposes of this Article V, the Lessor shall use all
reasonable endeavours to ensure that all the costs to borne by the Lessee under
the Service Charge shall wherever possible be at competitive prices and that
all such expenditure shall be reasonably necessary for the purposes of good
estate management and further that;

(i)                                     the Lessee shall not be obliged to pay any sums incurred or imposed
upon the Lessor by way of penalties as a result of any breach of the Lessor’s
obligations under any of the trade contracts entered into for performance of
the services set out in preceding clauses 5.1.2 and 5.1.3;

(ii)                                  unless as a direct result of the actions of the Lessee, the Lessee
shall not be obliged to pay for performance of any obligations stipulated by
the Occupancy Permit. This does not apply in case of costs of testing,
examination and approval of the Business Process; or

(iii)                               the Lessee shall bear no costs of any change of ownership or right
to use the Land Plots or any part thereof during the Term or incurred in
connection therewith.

 

5.3                                 The Service Charge does not include telephone
charges. In the event that the Lessee shall use the Lessor’s telephone lines
allocated to it by the Lessor from any central switchboard equipment owned or
operated by the Lessor (excluding the Lessor’s private phone lines), after the
end of each calendar month and based on local switchboard data the Lessor shall
issue to the Lessee an invoice for telecommunication fees equal to the actual
costs. The Lessor also reserves the right to assign the operation of the local
switch board to any third person under the terms and conditions set forth in
this paragraph.

 

5.4                                 The
Lessee shall not be liable nor shall pay any sum for any Latent Defect of the
Leased Premises to the extent successfully covered by the quality guarantee
(see art. 8.8 hereof).

 

 

VI

Payment Conditions

 

6.1                                 The Rent shall be paid in advance in regular and equal calendar
quarterly instalments. Such instalments shall be paid by the Lessee on the
Twenty fifth (25th) day of the month prior to each calendar quarter
of the Term. If the commencement of the Term, effective upon signature of this
Agreement, is not the first day of a calendar quarter

 

12

 

the first
payment of Rent shall be adjusted pro rata on a per diem basis in respect of
the period from the date of signing until the beginning of the next calendar
quarter. Rent for the fraction of a calendar quarter at the end of the Term
shall be adjusted pro rata on a per diem basis and paid to cover for the period
from the beginning of the last calendar quarter up to the end of the Term.

 

6.2                                 The Fit-Out Rent and Technology Asset Transfer Payment shall each be
paid in one instalment calculated in the following manner within 14 days of
receipt by the Lessee of an invoice submitted by the Lessor:

 

(I) The Fit
Out Rent total shall be calculated following confirmation of the overall
capital costs the of the Fit Out Phase I, as confirmed between the technical
representatives of the Lessor and the Lessee on open book accounting
principles, including any associated professional fees in respect of those
elements not subject to the Technology Asset Transfer Agreement

 

(II) The
Technology Asset Transfer Payment shall be calculated following confirmation of
the overall capital costs the of the Fit Out Phase I, as confirmed between the
technical representatives of the Lessor and the Lessee on open book accounting
principles, including any associated professional fees in respect of those
elements subject to the Technology Asset Transfer Agreement

 

6.3                                 The Lessor shall estimate the Service Charge yearly in advance
taking all reasonable care and due diligence and the Lessee shall pay such
estimated amount in Czech Crowns  to the Lessor’s CZK bank account as
specified on the first page hereof, or such other bank account as may be
notified in writing by the Lessor to the Lessee, in four equal instalments at
the same times and in the same manner as the Rent. At the end of each elapsed
calendar quarter of the Term and at the end of the Term the Lessor shall
calculate the actual operating costs to be borne by the Lessee partially or
wholly hereunder in such a calendar quarter or its part, make an account of the
amount of advance payment for the Service Charge paid by the Lessee for such a
calendar quarter or its part, and amount of the mentioned costs and shall deliver
such account to the Lessee within one month of the end of the appropriate
calendar quarter of the Term and one month from the end of the Term and at the
same time shall issue to the Lessee a reconciliation invoice advising of any
overpayment or underpayment. Any credit balance in favour of the Lessee shall
be re-paid to the Lessee by the Lessor within 14 days from the date of the
reconciliation invoice. Any underpayment will be payable by the Lessee to the
Lessor within 14 days of the Lessee’s receipt of the reconciliation invoice.
All costs to be paid by the Lessee under Article V through the Service Charge
shall be upon the Lessee’s request reviewed by the Lessee. The Lessor shall
within 14 days, upon the Lessee’s request, provide to the Lessee copies of invoices,
tenders for work and any other documentation relevant to and in support of the
said calculation of actual operating costs. In case the Lessee indicates any
payment for any service calculated in the account to be disputed or not
sufficiently evidenced (acting reasonably in all circumstances) the Lessee may
withhold payment due for such service (also from the instalment for Service
Charge any time thereafter due) until such issue is duly evidenced or agreement
on its amount is reached between the parties. In such case the Lessor may
terminate the provision of such a service, payment for which is indicated by
the Lessee as disputed or not sufficiently evidenced, and if the Lessor
proceeds this way it shall notify such fact to the Lessee immediately in
writing. Once the Lessor terminated the providing of such service:

(i)                                    it may no longer provide such service to the Lessee nor with respect
to the Lessee; and

(ii)                                 the Lessee may secure providing such service by any third party but
for the avoidance of doubt the responsibility for providing communal services
for the Czech Technology Park will always remain with the Lessor; and

(iii)                              the Lessee will not be obliged to pay to the Lessor any sum with
respect to such termination of the providing of such a service nor for any
costs or damage incurred by the Lessor in connection therewith.

(iv)          The Lessor shall in
such circumstances not be held liable by the Lessee for any loss or damage
incurred by the Lessee as a consequence of the termination of the provision of
any such service and furthermore the Lessee shall not rely upon the non
provision of any such service terminated hereunder as a reason to claim any
breach of duty of the Lessor or rely on the non provision of any such service
terminated hereunder as a reason to exercise any rights of termination which
the Lessee may have under

 

13

 

this Agreement
or under law.

 

6.4                                 All payments of the Rent and any other monies due under this
Agreement are to be made to the Lessor’s bank account as specified on the first
page hereof or such other bank account as may be notified in writing by the
Lessor to the Lessee 10 business days before payment is due. All such payments
are deemed to have been made only when received into such bank account.

 

6.5                                 The parties hereto have agreed that
if the Lessee fails to pay the Rent, Service Charge or Related Costs or any
other financial obligation due under this Agreement when due then any such
outstanding amount shall bear delay interest equal to 4%  per annum above the three
month EURIBOR interest rate as published from time to time by the European
Central Bank for the relevant date when such payment became due. The said
penalty interest shall be charged at a daily rate on all amounts outstanding
until the same are paid in full including the payment of all interest thereon.

 

6.6                               All figures in respect of the Rent, Fit Out Rent, Service Charge and
any other payments due under this Agreement are exclusive of DPH which shall be
charged separately and paid by the Lessee to the Lessor against a tax invoice
issued by the Lessor. The Lessee shall not take voluntarily any steps that may
lead to cancellation of the Lessee being registered as a DPH tax payer. 

 

6.7           Notwithstanding anything to the contrary
contained in this Agreement the Lessor shall deliver to the Lessee an
appropriate invoice (or tax invoice, as the case may be) with bank account
payment details in regard to any payment to be made by the Lessee under this
Agreement.

 

6.8                                 All invoices issued by the Lessor in accordance with this Agreement
shall be payable not later than 14 days from their receipt by the Lessee if not
otherwise stated in this Agreement or longer period of time is stated on the
particular invoice. In case any invoice is not delivered to the Lessee within
the mentioned period of time, period for payment appropriately extends.

 

 

VII

Lessee’s Covenants

 

In addition to the other obligations of the Lessee set
forth in this Agreement, the Lessee hereby covenants that it shall throughout
the Term comply with the following:

 

7.1                                 To pay the Rent, Fit Out Rent and Service Charge and any other
payments provided for in this Agreement in the amounts on the date and in the
manner as set out herein.

 

7.2                                 To use the Leased Premises for the Business Process in accordance
with the provisions of Article III hereof and in compliance with the Building
Permit, the Temporary Use Permit and the Occupancy Permit and not to change
such use without the prior written consent of the Lessor which may not be
unreasonably withheld.

 

7.3                                 To arrange for direct supply of the
services set out in Article V, paragraph 5.1.1 herein at the commencement of
the Term and to arrange for independent meters in the name of the Lessee in
direct contract with the relevant utility companies or such other suppliers as
appropriate which shall be a condition for the Lessee being continuously
supplied with the said services within the Leased Premises. The Lessee accepts
that supply of telecommunications services is subject to the conditions
specified in Article V, paragraph 5.3 of this Agreement.

 

7.4                                 To treat the Leased Premises with
reasonable care.

 

7.5                                 To the extent it is not an obligation of the Lessor to keep the
Leased Premises and all its accessories including 

 

14

 

Lessor’s fixtures and fittings and all
exclusive means of escape therefrom in case of fire or other emergency and
conducting media forming part of and serving exclusively the Leased Premises in
good and substantial repair and condition and well and substantially amended,
renewed and maintained, decorated and cleaned. The Lessee shall be responsible
at its own cost for maintenance, repair, cleaning and redecoration of the
internal elements of the Leased Premises including but not limited to internal
plaster finishes to the walls and columns, decorative coatings, all internal
and entrance doors, trunking conduits, suspended ceiling systems, floor screeds
and coverings, raised flooring systems, internal elements of the cladding
system. Such maintenance and repair shall include cleaning, redecorating,
repairing and maintaining the aforementioned items and periodic replacement of
damaged and malfunctioning elements and as often as may be necessary to renew
any of the Lessor’s fixtures and fittings in the Leased Premises or substitute
new ones of equivalent quality and value to the Lessor’s reasonable
satisfaction in the event of damage to or destruction of the said fixtures and
fittings.

 

7.6                                Any defects attributable to Lessee’s operation which are to be
removed by the Lessee hereunder shall be removed within 45 days after any
notice from the Lessor (or immediately in case of emergency).
In case the Lessee fails to comply with the requirements of any such notice the
Lessor or its agents may enter the Leased Premises after prior written notice 5
business days in advance (or immediately in case of emergency) to execute such
repairs and the cost thereof (including any surveyor’s fees) shall be repaid by
the Lessee to the Lessor on demand.

 

7.7                                Notwithstanding the foregoing, the
Lessee shall be responsible for any damage to the Leased Premises caused by the
Lessee, its personnel, and any person for which the Lessee is proven liable
under this Agreement (however not if by the Lessor, its personnel, visitors,
customers, suppliers, contractors etc.), or by objects installed by the Lessee
within the Leased Premises either covered or not covered by the Lessee’s
insurance, and for any other damage not covered by such insurance. The Lessee
shall be required to arrange for the repair of such damages at its own cost. In
the event the Lessee does not do so within 1 month from the date such damage
has occurred, the Lessor may arrange for such repairs at the Lessee’s expense.
The Lessee undertakes to notify the Lessor of all damage, however caused, to
the Leased Premises of which it is aware or ought reasonably to be aware
without undue delay.

 

7.8                                Notwithstanding 1.6, not to carry out any modifications or
alterations to the Leased Premises nor to carry out works of any nature
affecting or intruding into the Structure of the Leased Premises without the
Lessor’s prior written consent which shall not be unreasonably withheld. All
such approved modifications or alterations shall be carried out at the Lessee’s
cost and on condition that the Lessee obtains all necessary planning, building
and other regulatory approvals in respect thereof. The Lessee shall not be
entitled to any compensation in respect of any such costs incurred by the
Lessee or in respect of any appreciation in value of the Leased Premises
resulting from such Lessee’s works except for the cases the Lease is
terminated/cancelled as a result of any failure of the Lessor or when the
Lessor shall terminate this for other reason than set forth in 2.3.
Notwithstanding the foregoing, the parties agree that the provisions of Section
667 of Act No. 40/1964 Coll., the Civil Code, as amended, is explicitly
excluded from and shall not apply to this Lease Agreement.

 

7.9                                To permit the Lessor and others provably authorised by the Lessor
(however not a direct or indirect competitor to the Lessee, all of that in the
opinion of the Lessee acting reasonably in all circumstances) upon prior notice
of 5 business days (except in the case of emergency when no notice need be
given) to enter upon the Leased Premises at a suitable time in order to:

 

(I)                                   view and inspect the same and ascertain how the same are being used
and occupied and the state and condition thereof;

 

(II)                                view and inspect any pipes, wires or other similar installations or
conducting media situated in or under the Leased Premises and, where necessary,
to repair, alter or remove the same provided that, in the event of any such
repair, alteration or removal carried out by the Lessor, the Lessor shall
endeavour not to interfere materially with the Lessee’s use and enjoyment of
the Leased Premises and the Lessor shall 

 

15

 

make good any damage caused to the Leased Premises as a result of such
repair, alteration or removal; and/or

 

(III)                            without prejudice to the generality of the foregoing to have full
and unrestricted access to all parts of the Structure of the Leased Premises
for the purpose of maintaining the Structure in accordance with the Lessor’s
obligation herein contained.

 

7.10                           In a good and workmanlike manner and to the reasonable satisfaction
of the Lessor no later than one week prior to the expiry of the Term, to paint
all interior parts of the Leased Premises which have been previously painted or
otherwise suitably decorate or treat with good quality materials as
circumstances may require all parts of the interior of the Leased Premises
which have previously been or ought to be so dealt with and as appropriate to
clean or renew all carpets, floor coverings and finishes within the Leased
Premises.

 

7.11                          Upon expiry of the Term or sooner termination of this Lease the
Lessee shall return the Leased Premises to the Lessor with full vacant
possession in good, and clean and presentable condition with all necessary
replacement of Lessor’s finishes, fixtures and fittings. The Lessee is obliged
to remove all the Fit Out Phase II, its furniture, fixtures and fittings,
papers and refuse and any other belongings. The Lessor may require the Lessee
to reinstate any alterations made by the Lessee upon termination of the Lease,
the reinstatement of which has not been specifically addressed in any consent
issued by the Lessor in accordance with clause 7.8 hereof, to be stipulated by
the Lessor 40 days prior to the termination, cancellation hereof, and make good
all damage caused by their removal.

 

7.12                          With respect to the fact that an integral part of the Specifications
is Fit Out Phase I constructed and completed by TPB, without TPB, however,
being interested to keep such Fit Out Phase I in the Leased Premises after the
Lease is terminated/cancelled prior to the expiration of the Term due to
failures on the part of FEI or due to Early Termination by FEI in accordance
with clause 2.1 herein (jointly hereinafter referred to as “Termination due to
FEI”). The Termination due to FEI shall not take effect prior to

 

(i)                                     payment by FEI and receipt by TPB of the Compensation; this payment
is due by the day of Termination due to FEI; in the event that FEI does not pay
the Compensation timely, than FEI is obliged to proceed pursuant to the Clause
7.12 (ii)

 

or

 

(ii)                                  removal of the duly completed elements of Fit Out Phase I which are
the subject of the Technology Asset Transfer Agreement on FEI’s own costs and
hand over the Leased Premises to the Lessor in a duly renovated condition
having made good any damage to the Leased Premises to the extent caused by the
aforesaid removal. The Lessor hereby gives to the Lessee its consent to perform
any works (including construction works) which are necessary for the removal of
the Fit Out Phase I and the making good any damage to the Leased Premises
caused by the removal. The Lessor undertakes that it will provide the Lessee
with all reasonable collaboration which is necessary therefor including any
approvals by the Lessor required to support any application submitted by the
Lessee for consent and approval by the Planning Authority required for the
removal of Fit Out Phase I. In case such consent by the Lessor is revoked or
collaboration by the Lessor is not duly provided the Lessee shall no more be
obliged to perform the obligations set out in this paragraph 7.12 (ii),
however, the Lessor shall have the right to remedy such lack of collaboration
within a period of 14 days from receipt of a notice from the Lessee advising
the Lessor of the lack of collaboration which is preventing the fulfilment of
the obligations.

 

In the event that the Lessee neither pays
the Compensation pursuant to the Clause 7.12 (i) nor removes the elements of
Fit Out Phase I mentioned above pursuant to the Clause 7.12 (ii) by the date on
which Termination due to FEI should have come into effect provided that the
Lessee had duly fulfilled its obligation as set out in Clause 7.12 (i) or 7.12
(ii), the Lessor may remove the Fit Out Phase I at the costs of the Lessee. In
such case the 

 

16

 

Lessee undertakes to pay to the Lessor
costs of the removal of the Fit Out Phase I and a contractual penalty equal to
the Compensation. In such case the Early Termination takes effect on the date
the Lessor notifies the Lessee in writing of its choice to proceed in the way
described in this paragraph.

 

7.13                           The Lessee shall not cause as a result of its use of the Leased
Premises for the Business Process any pollution or environmental damage
exceeding any limits permitted by law or competent state authority.

 

7.14                           Not to install, erect or affix any signs, plaques or advertisements
to the exterior of the Leased Premises or such parts of the interior of the
Leased Premises as are visible from the outside, without the prior written
consent of the Lessor. The Lessor’s consent shall not be unreasonably withheld
or delayed on condition that the Lessee’s proposed sign or advertisement and
the location thereof conforms with the signage system employed in relation to
the Czech Technology Park as a whole and is in reasonable proportion with
regard to the Building and other lessee’s signage within the Czech Technology
Park . All costs associated with the design, manufacture and affixing of any
such signs or advertisements shall be borne by the Lessee.

 

7.15                          The Lessee shall, throughout the
Term, observe all legal regulations and laws of general application governing
its activities on the Leased Premises and shall observe and
perform any obligations applicable to the Lessee as stipulated in the Occupancy
Permit.

 

7.16                          Throughout the Term, the Lessee shall maintain and keep in effect at
its own costs:

(I)                                    reasonable insurance against destruction or damage to or theft of
any furniture, machinery, equipment or other property belonging to the Lessee
or its employees and contained within or about the Leased Premises;

(II)                                reasonable insurance against claims for personal injury, including
death and property damage arising from any occurrence on, in or about the
Leased Premises.

 

7.17                           The Lessee shall, not later than 30 days from the date of
commencement of the Term or during the Term upon reasonable notice, supply to
the Lessor copies of the effective insurance policies required hereunder.

 

7.18                           The Lessee shall notify the Lessor
in writing within 15 business days of any insurance claim filed by the Lessee
in accordance herewith.

 

7.19                           The Lessee shall notify the Lessor
in writing of the commencement of any proceedings for insolvency, winding up or
liquidation commenced against the Lessee immediately the Lessee becomes aware
of such actions.

 

 

VIII

Lessor’s Covenants

 

In addition to the other obligations of the Lessor set
forth in this Agreement, the Lessor hereby covenants that it shall throughout
the Term comply with the following:

 

8.1                                 The Lessor
hereby covenants that the Lessee, may peaceably and quietly hold and enjoy the
Leased Premises for the duration of the Term for the operation of the Business
Process and in compliance with the Occupancy Permit using inter alia Fit Out
Phase I and Fit Out Phase II without any unjustified and unreasonable
interruption by the Lessor, its personnel, suppliers, visitors, customers and
tradesmen or any person for which the Lessor is liable under this Agreement
and/or under the applicable Czech law. The Lessor however reserves the right to
undertake necessary activities related to the further development of the Czech
Technology Park which may impact upon the strict application of this clause, on
the understanding that activities which will or may have any negative impact on
the operation of the Business Process will be discussed with the Lessee in good
time prior to the commencement of such activities. The Lessor is obliged to seek
to accommodate any reasonable requests from the Lessee which relate to periods
of work or limitations to disturbance which shall be discussed and agreed by
the Lessor and the Lessee, both acting reasonably in all circumstances.

 

17

 

8.2                                 The Lessor shall secure the connections of the
gas, electric, water supplies and sewerage services to the Leased Premises, but
shall not be responsible for the continuous supply of the said services unless
the Lessor, its personnel, or any person for which the Lessor is proven
liable under this Agreement through
some unlawful or negligent act shall have been responsible for the interruption
of such supply of the same or unless such supplies and services are contracted
by the Lessee from the Lessor and charged by the Lessor to the Lessee under
Article V, paragraph 5.1.1 hereof. All relevant fixtures shall be consistent
with security and operation regulations and norms.

 

8.3                                 The Lessor is obliged to maintain the Building
fit for use and free of any defects which would impair its use for the Term of
the Agreement by undertaking the following. The Lessor shall for the duration
of the Term be responsible for maintaining and repairing the Building,
Structure and servicing, maintaining and repairing or renewing all Technical
Equipment contained within or serving the Building, excluding Fit Out Phase I
and Fit Out Phase II. Such maintenance, repair and servicing shall include
cleaning, painting, repairing, renewing or rebuilding the Structure of the
Building, cleaning of the external elements of the Building, windows, cladding
system, parapets and fire escapes and entrance ways to the Building, conduction
media and other structures and appurtenances thereto used or enjoyed or capable
or being used or enjoyed by the Lessee as occupier of the Building and
servicing, maintaining, repairing, renewing or replacing all Technical
Equipment within and servicing the Building and the Leased Premises.

 

8.4                                 The Lessor shall throughout the Term provide
the Estate Management Area services as set out in Article V, paragraph 5.1.3
hereof subject to the conditions contained therein and shall maintain the
Shared Infrastructure.

 

8.5                                 The Lessor shall have the right to use and make
changes or additions to the pipes, wires and other installations in the Leased
Premises where necessary to serve other premises in the Common Parts after
prior written approval of the Lessee which shall not be unreasonably withheld.
In the course of such changes or repairs the Lessor shall endeavour not to
interfere materially with the use and enjoyment of the Leased Premises by the
Lessee and the Lessor shall furthermore make good any damage so caused to the
Leased Premises and/or the Lessee. The Lessor and other Lessees must be given
access by the Lessee to such pipes, wires and other installations together with
rising ducts and all other services within the Leased Premises immediately in
case that damage to property or to health is imminent and in other cases only
if prior notice has been given to the Lessee five working days in advance.

 

8.6                              Throughout the Term, the Lessor shall maintain and keep in effect :

(i)                                     insurance of the Leased Premises, Structure, Technical Equipment and
associated infrastructure within the Estate Management Area and Common Parts of
the Property against destruction or damage by fire, (terrorist attack if deemed
necessary by the Lessor) and other risks and perils including coverage of
damage by vandalism, malicious mischief, explosion, flood and rent insurance
and all other insurable risks reasonably relevant to the Leased Premises and
commonly insured in the Czech Republic in an amount equal to the full
replacement value of the Leased Premises;

(ii)                                  Public Liability insurance for damages to health and property of
third persons in or about the Leased Premises and within the Estate Management
Area and Common Parts of the Property.

 

and
shall supply to the Lessee at Lessee’s reasonable request copies of the
effective insurance policies required hereunder.

 

8.7                                The Lessor shall permit the Lessee, its employees, invites and
agents access to the Leased Premises 24 hours per day, 365 days per year. The
Lessor represents and warrants that the Land Plots and the Leased Premises are
accessible from public communications by foot, cars, trucks for 24 hours a day
and shall be accessible in the same extent for the period of at least 10 years
following the commencement of lease hereunder for the purposes of operation of
Leased Premises for the Business Process.

 

18

 

8.8                                 The Lessor hereby provides to the Lessee a full quality guarantee
against defective design and workmanship and used materials;

 

(i)                                     for the Fit Out Phase I in the duration of 12 months commencing by
the execution hereof; and

(ii)                                  for the Structure of the Building and roof and roof system of the
Building in the duration of 10 years commencing by the execution hereof; and

(iii)                               for the remaining parts of the Leased Premises in the duration of 5
years commencing by the execution hereof;

(iv)                              for individual periods in relation to “consumer” items such as light
bulbs, ventilation filters, technological fillings (Glycol medium for air
conditioning) as specified in individual supplier contracts;

(v)                                 for individual periods for “technological” items such as lift,
entrance barriers, warm air curtains, oil vapour ventilators and other items of
the Technical Equipment which is part of the Specifications but not a part of
or related to Fit Out Phase I or Fit Out Phase II as specified in individual
supplier contracts;

 

However only
to such extent that the Lessor shall use its best endeavours to use its right
to claim remedy of any such defect covered by any such guarantee by and/or at
the cost of the respective supplier. The obligation of the Lessee to pay the
costs of removal of the defect pursuant to clause 5.1.2 hereof or to remove the
defect at its own cost pursuant to clause 7.6 hereof shall apply only if the
Lessor proves to the Lessee that it has not been able to remove such defect by
and or at the cost of the respective supplier within a reasonable period of
time despite using its best efforts. The maximum amount of costs to be borne by
the Lessee in such case shall not exceed 50% of costs incurred in such a case
by the Lessor with the remaining amount to be borne by the Lessor.

 

8.9                                 The Lessor
shall notify the Lessee of any change of proportion represented by the total
floor area of the Building in relation to the total building floor area
constructed at any given time within the area of the whole Czech Technology
Park without undue delay and/or confirm on first demand of the Lessee without
undue delay thereupon that no such change has occurred.

 

8.10                           The Lessor
shall observe and perform any obligations applicable to the Lessor as
stipulated in the Occupancy Permit

 

 

IX.

Alienation Provisions

 

9.1                                 The Lessee shall not charge, mortgage or encumber this Lease or the
Leased Premises or any part thereof.

 

9.2                                 The Lessee shall be entitled to two sublettings of a part (or the
whole) of the Leased Premises to a third party subject to the prior written
approval of the Lessor which shall not be unreasonably withheld. The aforesaid
approval will be subject to confirmation that the guarantee provided by the
Guarantor under Article X of this Agreement remains in place in respect of the
obligations of the Lessee as head lessee and provided that any sub-tenant’s
business is in keeping with the Hi-Tech nature of the Czech Technology Park and
that the proposed sub division of the Leased Premises is acceptable. In
addition it shall be subject to presentation of the proposed sub-lease contract
and an absolute condition that the term of any sub letting will expire or
terminate prior to or at the same time as the Term hereunder howsoever
concluded and that the sub lessee will under no circumstances acquire any
continuing rights to occupation of the part or whole of the Leased Premises
beyond the Term herein stated howsoever concluded.

 

9.3                                 The Lessor
shall have the right to sell or charge or offer as security for finance the
Leased Premises to any third party during the Term of the Lease. The Lessor
shall secure that any such party and any further acquirer is fully bound hereby
as appropriate so that the Lessee may fully exercise its rights under this
Agreement.

 

19

 

ARTICLE X

Parent Company
Guarantee

 

10.1                           The GUARANTOR guarantees that in the event that the Lessee does not
fulfil any of its obligations as set forth in this Lease Agreement, the
GUARANTOR shall within 30 business days of the Lessor’s written demand pay or
indemnify the Lessor for all losses, damages, costs and expenses which the
Lessor may suffer as a result of any act, omission or default of the Lessee in
the performance or observance of each or all of its obligations, duties and
undertakings under or pursuant to this Lease Agreement (the “Guarantee”) to the
extent, such losses were not caused by Lessor).

 

(a)                                  The GUARANTOR shall be obliged to make payment to the Lessor in
respect of any claim made by the Lessor under the Guarantee provided that:-

the amount of such claim has been agreed
between the Lessor and Lessee,

or

in the case of a breach of the Lessee’s
financial obligations under the Lease Agreement, the amount of such claim has
been independently certified by Deloitte & Touche, Prague office or such
other firm of similar global standing as the Lessor may in its discretion
appoint and a true copy of such certificate is appended to the Lessor’s claim,

or

in the case of a breach of the Lessee’s
non-financial obligations under the Lease Agreement, the amount of such claim
as is the subject of a binding arbitration decision made in favour of the
Lessor.

 

The Lessor shall not be obliged to seek any remedy
from the Lessee prior to pursuing a claim under the Guarantee.

 

 

XI

Entire Agreement and
Modifications

 

11.1                           This Agreement is executed in three counterparts in English language
each having the validity of an original. Each party to this Agreement shall
receive one English counterpart

 

11.2                           This Agreement, including the appendices thereto, constitutes the
entire agreement of all parties and there are no other agreements, oral or
written, which govern the subject matter of this Agreement except for the
Agreement to Conclude a Future Lease Agreement. Any modifications of this
Agreement must be in a written document and signed by all parties.

 

11.3                           The parties hereby declare that they
have read this Agreement before its signing, that this Agreement was concluded
in a form which has been negotiated between them and based on their real and
free will, in earnest, in a definite and intelligible manner, not under any
pressure or unilaterally unfavourable conditions.

 

11.4                           The parties hereto shall observe and perform all terms and
provisions of this Agreement and shall not do or suffer to be done anything to
the contrary to any term or provision hereof. The parties hereto shall comply
with all Czech laws and regulations relating to this Lease.

 

11.5                           If any provision of this Agreement
is invalid or becomes ineffective, the validity and effectiveness of the
remaining provisions of this Agreement shall not be effected thereby. The
parties hereby undertake to replace any invalid or ineffective provisions by
new effective ones, such new provisions to be as close as possible in meaning
to the original provisions.

 

11.6                           This Agreement and all the disputes arising from it shall be
governed by the laws of the Czech Republic.

 

11.7                           In the event any relations between the parties to this Agreement are
not expressly governed by this Agreement generally binding Czech legal
regulations shall apply, in particular Act No. 40/1964 Coll., the Civil Code
and Act 

 

20

 

No. 513/1991 Coll., the Commercial Code, as amended.

 

11.8                           If either the Lessor or the Lessee shall overlook or excuse any
default, breach or non-observance by the other of any obligations hereunder,
such action shall not operate as a waiver of such obligation in respect of any
continuing or subsequent default, breach or non-observance and no such waiver
shall be applied, but shall only be effected if expressed in writing for each
such case.

 

11.9                           All rights and duties ensuing from
this Agreement shall be assumed by legal successors of the parties hereto.

 

11.10                     The parties hereto agree that as of
January 1, 2002 all amounts and sums herein set forth in German Marks shall be
recalculated to be set forth in EURO at the official exchange rate then in
effect.

 

11.11                     The
right to withdraw from the Agreement provided for by act. No. 513/1991 Coll.,
Commercial Code, as amended, shall be maintained by all the parties hereto. In
case any of the parties hereto effectively withdraws from this Agreement the
Agreement is deemed to be cancelled at the moment the withdrawal is delivered
to the last one of the other parties hereto.

 

11.12                     In
the event that

(i)                                     the
Lessor sells, disposes or otherwise transfers its ownership interest in the
parcels, buildings and connected infrastructure in the territory of the Czech
Technology Park concerning the Leased Premises or in the Leased Premises, or
such ownership interest is otherwise transferred, or any transition thereof
occurs, or the Lessor ceases to administer the project of the Czech Technology
Park then the Lessor shall on its own costs procure that all its rights and
obligations hereunder are immediately thereafter effectively transferred to any
such purchaser/ assignee/acquirer with such purchaser/assignee/acquirer being
fully and effectively bound by this Agreement;

 

(ii)                                 If
during the ten consecutive years following commencement of the lease hereunder
the right of the Lessor to use any of the Land Plots is terminated, cancelled,
or restricted, as a result of which the Lessee’s rights to use the Leased
Premises including Fit Out Phase I for the Business Process are materially
interfered with, restricted or terminated, the Lessor shall on its own costs
procure that the right of the Lessee to use the Leased Premises including Fit
Out Phase I for the Business Process and the right to use the Land Plots for
the operation of the Leased Premises including the car parking spaces and the
service yard, is fully maintained or in the event of termination, reinstated.
Should this prove impractical the Lessor may, subject to the prior written consent
of the Lessee (not to be unreasonably delayed or withheld) make suitable other
arrangements the result of which shall be that the rights of the Lessee are
fully maintained as appropriate by way of substitution.

 

 

XII

Dispute Resolution

 

The parties shall endeavour to
settle all disputes arising under this Agreement amicably. Any dispute arising
out of or in connection with this Agreement not settled amicably within 30 days
may be referred by either party for arbitration to the Arbitration Court of the
Economic Chamber of the Czech Republic and of the Agrarian Chamber of the Czech
Republic, without recourse to the ordinary courts of law. The Arbitration Court
consists of 3 arbitrators appointed in accordance with the rules of the said
Arbitration Court. Any arbitration proceedings shall be conducted in the Czech
language with English translators if required. Each party will pay its own
legal fees and other expenses associated with any arbitration proceedings
carried out in accordance with this Agreement.

 

21

 

XIII

Notices

 

13.1                           All notices which must be served pursuant to this Agreement shall be
in writing and may be given by hand delivery, facsimile (followed by a hard
copy to be delivered by any of the other means set out in this Article XIII) or
registered mail. Notice hereunder shall be deemed to be received by the
relevant addressee listed below, or such other addressee as such party may from
time to time designate by like notice, on the day after delivery if it was hand
delivered or sent by facsimile and within five business days if mailed by
registered mail.

 

ADDRESS OF THE LESSOR:  Technologický park Brno, a.s.

Technická
15

616 00
Brno

Czech
Republic

 

 

ADDRESS OF THE LESSEE:  FEI Czech Republic, s.r.o.

Podnikatelská
4

Brno 612 00

Czech
Republic

 

ADDRESS OF THE GUARANTOR:  FEI Company (INC)

7451
Evergreen Parkway

Hillsboro, OR
97124

 

13.2                           The parties are obliged to notify each other in writing within ten
business days about any changes in their respective addresses.

 

 

XIV

Confidentiality

 

14.1                           Unless otherwise agreed by the parties, the contents of and all
information pertaining to this Agreement shall be kept confidential and shall
not be disclosed to any party otherwise than to each other, except :

(I)                                    as may be required by law;

(II)                                as may be required by the Lessor for the purpose of the further
development of the Czech Technology Park, including the financing thereof;

(III)                            to any permitted sub-lessee or bona fide proposed sub-lessee;

(IV)                            to a party’s parent or holding company or to an Associate Company;

(V)                                to a party’s legal or financial advisor;

(VI)                            to an arbitrator or arbitrators appointed pursuant to Article XII
hereof.

(VII)                        as may be required by the Lessor for the purpose of a disclosure to
a third party investor or their advisors in case of any commercial transaction
related to the Building including the raising or securing of finance.

 

This Agreement
may be disclosed to the City of Brno.

 

14.2                           The foregoing obligations shall
continue to bind a party after it ceases to be a party to this Agreement.

 

14.3                           The confidential obligation shall
not be applied in case the Agreement is requested by any state, financial or
other authorities for the purpose of proving facts in relation to legal duties
of all contractual parties.

 

22

 

XV.

Force majeure

As a Force Majeure shall
be considered circumstances, excluding liability, concerning an obstacle which
arose independently of the liable party’s will and which prevent this party
from performing its obligations herein, provided it is not possible to
anticipate that the liable party could avert or overcome such an obstacle or
its consequences and further that the occurrence of such an obstacle was
unpredictable at the time the obligation arose to the liable party. An obstacle
which arose during the time when the liable party was in default with
performance of its obligation or which ensued from its financial situation
shall not exclude its liability. The Parties hereby explicitly exclude the
applicability of Section 300 of the Act No. 513/1991 Coll. The Commercial Code.

 

As a Force Majeure shall also be considered;

 

(i)                                    any
activity, inactivity, refusal, measurement step decision or indecision by a
competent authority or court which in its consequences limits the extent of or
prevents the issue of any permit or consent which prevents or limits FEI from
the use of the Building for the Business Process using also Fit Out Phase 2,
despite TPB having duly complied with all its obligations contained herein,
stipulated by law and ensuing from law and with the application procedures in
respect of such permits.

 

As a Force Majeure shall not be considered

 

(i)                                     any
right of any owner, co-owner or its representative regarding the Property or
any of the land plots it consists of;

 

(ii)                                  any
right of any other person or its representative which assumes right to the
Property or any of the land plots it consists of;

 

(iii)                               any
right of any other person concerning the Property or any of the land plots it
consists of (including also restitution rights as the case may be);

 

(iv)                              any
exercise of any of the aforementioned rights;

 

(vi)                              any consequence of any of the aforementioned
rights and/or exercise thereof;

 

In
Brno on 11th December 2002 For and on behalf of Technologický Park
Brno, a.s.

 

	
  /s/ Pavel
  Kuba Bc

  	
   

  	
  /s/ Ian
  Barnett

  	
   

  	
   

  
	
  Pavel Kuba
  Bc.

  	
   

  	
  Ian Barnett

  	
   

  
	
  Chairman of the Board of
  Directors

  	
   

  	
  Member of the Board of
  Directors

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Brno on 10-1-2003 For and on behalf of FEI Czech
  Republic, s.r.o

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ RNDr.
  Jiří Očadlík

  	
   

  	
  /s/ RNDr.
  Petr Střelec

  	
   

  	
   

  
	
  RNDr.
  Jiří Očadlík

  	
   

  	
  RNDr. Petr
  Střelec -

  	
   

  
	
  Executive

  	
   

  	
  Executive

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In Hillsboro on 6-1-2003 For and on behalf of FEI Company
  (INC)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Stephen
  Loughlin

  	
   

  	
   

  	
   

  
	
  Stephen
  Loughlin, Chief Financial Officer

  	
   

  	
   

  	
   

  

 

23

 

	
  Appendices (Omitted):

  
	
  No. 1

  	
   

  	
  Excerpts
  from the Commercial Register of the Parties to the Agreement

  
	
  No. 2

  	
   

  	
  Plans and
  Specifications of the Leased Premises including Fit Out Phase I

  
	
  No. 3

  	
   

  	
  Fit Out
  Phase II and the Business Process of the Lessee

  
	
  No. 4

  	
   

  	
  Estate
  Management Area, Building, Zone B and Shared Infrastructure Plan

  
	
  No. 5

  	
   

  	
  Geometric Plan of the Property, Deed of Title, Land Plots

  
	
  No. 6

  	
   

  	
  Building
  Permit

  

 

24Exhibit
4.13

 

 

SUPPLEMENTAL INDENTURE
NO. 11

 

by and between

 

HRPT PROPERTIES TRUST

 

and

 

STATE STREET BANK AND
TRUST COMPANY

 

as of December 6, 2002

 

SUPPLEMENTAL TO THE
INDENTURE DATED AS OF JULY 9, 1997

 

 

HRPT PROPERTIES TRUST

 

61⁄2%  Notes due 2013

 

 

This SUPPLEMENTAL INDENTURE NO. 11 (this “Supplemental
Indenture”) made and entered into as of December 6, 2002 between HRPT
PROPERTIES TRUST, a Maryland real estate investment trust (the “Company”), and
STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as Trustee
(the “Trustee”),

 

WITNESSETH THAT:

 

WHEREAS, the Company and the Trustee have executed and
delivered an Indenture, dated as of July 9, 1997 (the “Indenture”), relating to
the Company’s issuance, from time to time, of various series of debt
securities; and

 

WHEREAS, the Company has determined to issue debt
securities known as its 61⁄2% Notes due 2013; and

 

WHEREAS, the Indenture provides that certain terms and
conditions for each series of debt securities issued by the Company thereunder
may be set forth in an indenture supplemental to the Indenture;

 

NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE
WITNESSETH:

 

ARTICLE 1

 

DEFINED TERMS

 

Section 1.1             The following definitions
supplement, and, to the extent inconsistent with, replace the definitions in
Section 101 of the Indenture:

 

“Acquired Debt” means Debt of a Person or entity (i)
existing at the time such Person or entity becomes a Subsidiary or (ii) assumed
in connection with the acquisition of assets from such Person or entity, in
each case, other than Debt incurred in connection with, or in contemplation of,
such Person or entity becoming a Subsidiary or such acquisition. Acquired Debt
shall be deemed to be incurred on the date of the related acquisition of assets
from any Person or entity or the date the acquired Person or entity becomes a
Subsidiary.

 

“Annual Debt Service” as of any date means the maximum
amount which is expensed in any 12-month period for interest on Debt of the
Company and its Subsidiaries.

 

“Business Day” means any day other than a Saturday or
Sunday or a day on which banking institutions in the City of New York or in the
city in which the Corporate Trust Office of the Trustee is located, are
required or authorized to close.

 

“Capital Stock” means, with respect to any Person, any
capital stock (including preferred stock), shares, interests, participation or
other ownership interests (however designated) of such Person and any rights
(other than debt securities convertible into or exchangeable for capital
stock), warrants or options to purchase any thereof.

 

“Consolidated Income Available for Debt Service” for
any period means Earnings from Operations of the Company and its Subsidiaries
plus amounts which have been deducted, and

 

 

minus amounts which have been added, for the following (without
duplication): (i) interest on Debt of the Company and its Subsidiaries, (ii)
provision for taxes of the Company and its Subsidiaries based on income, (iii)
amortization of debt discount and deferred financing costs, (iv) provisions for
gains and losses on properties and property, depreciation and amortization, (v)
the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for such period and (vi)
amortization of deferred charges.

 

“Debt” of the Company or any Subsidiary means, without
duplication, any indebtedness of the Company or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness for borrowed money secured
by any Encumbrance existing on property owned by the Company or any Subsidiary,
to the extent of the lesser of (x) the amount of indebtedness so secured and
(y) the fair market value of the property subject to such Encumbrance, (iii)
the reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Debt hereunder) or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, or (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company’s consolidated balance sheet as a capitalized lease in accordance with
GAAP, to the extent, in the case of items of indebtedness under (i) through
(iii) above, that any such items (other than letters of credit) would appear as
a liability on the Company’s consolidated balance sheet in accordance with
GAAP, and also includes, to the extent not otherwise included, any obligation
by the Company or any Subsidiary to be liable for, or to pay, as obligor,
guarantor or otherwise (other than for purposes of collection in the ordinary
course of business), Debt of another Person (other than the Company or any
Subsidiary) (it being understood that Debt shall be deemed to be incurred by
the Company or any Subsidiary whenever the Company or such Subsidiary shall
create, assume, guarantee or otherwise become liable in respect thereof).

 

“Disqualified Stock” means, with respect to any
Person, any Capital Stock of such Person which by the terms of such Capital
Stock (or by the terms of any security into which it is convertible or for
which it is exchangeable or exercisable), upon the happening of any event or
otherwise (i) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise (other than Capital Stock which is redeemable solely in
exchange for common stock or shares), (ii) is convertible into or exchangeable
or exercisable for Debt or Disqualified Stock, or (iii) is redeemable at the
option of the holder thereof, in whole or in part (other than Capital Stock
which is redeemable solely in exchange for common stock or shares), in each
case on or prior to the stated maturity of the Notes.

 

“Earnings from Operations” for any period means net
earnings excluding gains and losses on sales of investments, extraordinary
items and property valuation losses, as reflected in the financial statements
of the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.

 

“Encumbrance” means any mortgage, lien, charge, pledge
or security interest of any kind.

 

2

 

“Make-Whole Amount” means, in connection with any optional redemption or accelerated payment
of any notes prior to July 15, 2012, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest
(exclusive of interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of such dollar if such
redemption or accelerated payment had been made on July 15, 2012, determined by
discounting, on a semiannual basis, such principal and interest at the Reinvestment
Rate (determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had been made on July 15, 2012, over (ii) the
aggregate principal amount of the Notes being redeemed or paid.  In the case of any redemption or accelerated
payment of notes on or after July 15, 2012, the Make-Whole Amount means zero. For
purposes of this Supplemental Indenture and the Notes, references in the
Indenture to the payment of the principal (and premium, if any) and interest on
the Notes shall be deemed to include the payment of the Make-Whole Amount, if
any, due upon redemption with respect to the Notes.  The Make-Whole Amount shall be calculated by the Company and set
forth in an Officer’s Certificate delivered to the Trustee, and the Trustee
shall be entitled to rely on said Officer’s Certificate.

 

“Notes” means the Company’s 61⁄2%  Notes due 2013, issued under this
Supplemental Indenture and the Indenture, as amended or supplemented from time
to time.

 

“Reinvestment Rate” means a rate per annum  equal to the sum of 0.50% (fifty
one-hundredths of one percent) plus the yield on treasury securities at
constant maturity under the heading “Week Ending” published in the Statistical
Release under the caption “Treasury Constant Maturities” for the maturity
(rounded to the nearest month) corresponding to the remaining life to maturity
(which, in the case of maturities corresponding to the principal and interest
due on the notes at their maturity, shall be deemed to be July 15, 2012), as of the payment date of
the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.

 

“Secured Debt” means Debt secured by any mortgage,
lien, charge, pledge or security interest of any kind.

 

“Statistical Release” means the statistical release
designated “H.15(519)” or any successor publication which is published weekly
by the Federal Reserve System and which establishes yields on actively traded
United States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination under
this Supplemental Indenture, then any publicly available source of similar
market data which shall be designated by the Company.

 

“Subsidiary” means any corporation or other entity of
which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests of which are owned, directly or
indirectly, by the Company or one or more other Subsidiaries of the Company.
For the

 

3

 

purposes of this definition, “voting equity securities” means equity
securities having voting power for the election of directors, whether at all
times or only so long as no senior class of security has such voting power by
reason of any contingency.

 

“Total Assets” as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Company and
its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).

 

“Total Unencumbered Assets” means the sum of (i) those
Undepreciated Real Estate Assets not subject to an Encumbrance for borrowed
money and (ii) all other assets of the Company and its Subsidiaries not subject
to an Encumbrance for borrowed money determined in accordance with GAAP (but
excluding accounts receivable and intangibles).

 

“Undepreciated Real Estate Assets” as of any date
means the cost (original cost plus capital improvements) of real estate assets
of the Company and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.

 

“Unsecured Debt” means Debt which is not secured by
any of the properties of the Company or any Subsidiary.

 

ARTICLE 2

 

TERMS OF THE NOTES

 

Section 2.1             Pursuant to Section 301 of the
Indenture, the Notes shall have the following terms and conditions:

 

(a)           Title;
Aggregate Principal Amount; Form of Notes. 
The Notes shall be Registered Securities under the Indenture and shall
be known as the Company’s “61⁄2%  Notes
due 2013.”  The Notes will be limited to
an aggregate principal amount of $200,000,000, subject to the right of the
Company to reopen such series for issuances of additional securities of such
series and except as provided in this Section and in Section 306 of the
Indenture. The Notes (together with the Trustee’s certificate of
authentication) shall be substantially in the form of Exhibit A hereto, which
is hereby incorporated in and made a part of this Supplemental Indenture.

 

The Notes will be issued in the form of one or more
registered global securities without coupons (“Global Notes”) that will be
deposited with, or on behalf of, The Depository Trust Company (“DTC”), and
registered in the name of DTC’s nominee, Cede & Co. Except under the
circumstance described below, the Notes will not be issuable in definitive
form. Unless and until it is exchanged in whole or in part for the individual
notes represented thereby, a Global Note may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any nominee of DTC to a successor depositary or any
nominee of such successor.

 

So long as DTC or its nominee is the registered owner
of a Global Note, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Notes represented by such Global Note for all
purposes under this Supplemental Indenture. Except as described below, owners
of beneficial interest in Notes evidenced by a Global Note will not be entitled
to

 

4

 

have any of the individual Notes represented by such Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of any such Notes in definitive form and will not be considered the
owners or holders thereof under the Indenture or this Supplemental Indenture.

 

If DTC is at any time unwilling, unable or ineligible
to continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Notes in exchange for
the Global Note or Global Notes representing such Notes. In addition, the
Company may at any time and in its sole discretion, subject to certain
limitations set forth in the Indenture, determine not to have any of such Notes
represented by one or more Global Notes and, in such event, will issue
individual Notes in exchange for the Global Note or Global Notes representing
the Notes. Individual Notes so issued will be issued in denominations of $1,000
and integral multiples thereof.

 

(b)           Interest
and Interest Rate.  The Notes will
bear interest at a rate of 61⁄2% per annum, from December 6, 2002 (or, in the
case of Notes issued upon the reopening of this series of Notes, from the date
designated by the Company in connection with such reopening) or from the
immediately preceding Interest Payment Date to which interest has been paid or
duly provided for, payable semiannually on each January 15 and July 15,
commencing July 15, 2003 (each of which shall be an “Interest Payment Date”),
to the Persons in whose names the Notes are registered in the Security Register
at the close of business on the day falling 14 calendar days (whether or not a
Business Day) next preceding such Interest Payment Date (each, a “Regular
Record Date”).

 

(c)           Principal
Repayment; Currency.  The stated
maturity of the Notes is January 15, 2013, provided, however, the Notes may be
earlier redeemed at the option of the Company as provided in paragraph (d)
below. The principal of each Note payable on its maturity date shall be paid
against presentation and surrender thereof at the Corporate Trust Office of the
Trustee, located initially at Two Avenue de Lafayette, Boston, Massachusetts
02111, in such coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public or private debts. The
Company will not pay Additional Amounts (as defined in the Indenture) on the
Notes.

 

(d)           Redemption
at the Option of the Company; Acceleration.  The Notes will be subject to redemption at any time at the option
of the Company, in whole or in part, upon not less than 30 nor more than 60
days’ notice to each Holder of Notes to be redeemed at its address appearing in
the Security Register, at a price equal to the sum of (i) the principal amount
of the Notes being redeemed, plus accrued and unpaid interest to but excluding
the applicable Redemption Date, plus (ii) the Make-Whole Amount, if any. If the
notes are redeemed on or after July 15,
2012, the redemption price will not include the Make-Whole Amount. Upon
the acceleration of the Notes in accordance with Section 502 of the Indenture,
if such acceleration occurs prior to July
15, 2012, the principal amount of the Notes, plus accrued and unpaid
interest thereon and the Make-Whole Amount shall become due and payable
immediately.

 

(e)           Notices.  All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Company shall be directed to it at 400 Centre Street, Newton, Massachusetts
02458, Attention: President; notices to the Trustee shall be directed to it at
Two

 

5

 

Avenue de Lafayette, Boston, Massachusetts 02111, Attention: Corporate
Trust Department, Re: HRPT Properties Trust 61⁄2% Notes due 2013; or as to either
party, at such other address as shall be designated by such party in a written
notice to the other party.

 

(f)            Global
Note Legend.  Each Global Note shall
bear the following legend on the face thereof:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

(g)           Applicability
of Discharge, Defeasance and Covenant Defeasance Provisions.  The Discharge, Defeasance and Covenant
Defeasance provisions in Article Fourteen of the Indenture will apply to the
Notes.

 

ARTICLE 3

 

ADDITIONAL COVENANTS

 

Section 3.1             In addition to the covenants of the
Company set forth in Article Ten of the Indenture, for the benefit of the
holders of the Notes:

 

(a)           Limitations
on Incurrence of Debt.

 

(i)            The Company will not, and will not
permit any Subsidiary to, incur any Debt if, immediately after giving effect to
the incurrence of such additional Debt and the application of the proceeds
thereof, the aggregate principal amount of all outstanding Debt of the Company
and its Subsidiaries on a consolidated basis determined in accordance with GAAP
is greater than 60% of the sum (“Adjusted Total Assets”) of (without
duplication) (A) the Total Assets of the Company and its Subsidiaries as of the
end of the calendar quarter covered in the Company’s Annual Report on Form
10-K, or the Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Securities and Exchange Commission (or, if such filing is not
permitted under the Securities Exchange Act of 1934, as amended, with the
Trustee) prior to the incurrence of such additional Debt and (B) the purchase
price of any real estate assets or mortgages receivable acquired, and the
amount of any securities offering proceeds received (to the extent that such
proceeds were not used to acquire real estate assets or mortgages receivable or
used to reduce Debt), by the Company

 

6

 

or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Debt.

 

(ii)           In addition to the foregoing
limitations on the incurrence of Debt, the Company will not, and will not
permit any Subsidiary to, incur any Secured Debt if, immediately after giving
effect to the incurrence of such additional Secured Debt and the application of
the proceeds thereof, the aggregate principal amount of all outstanding Secured
Debt of the Company and its Subsidiaries on a consolidated basis is greater
than 40% of Adjusted Total Assets.

 

(iii)          In addition to the foregoing
limitations on the incurrence of Debt, the Company will not, and will not
permit any Subsidiary to, incur any Debt if the ratio of Consolidated Income
Available for Debt Service to the Annual Debt Service for the four consecutive
fiscal quarters most recently ended prior to the date on which such additional
Debt is to be incurred shall have been less than 1.5 to 1.0, on a pro forma
basis after giving effect thereto and to the application of the proceeds
therefrom, and calculated on the assumption that (A) such Debt and any
other Debt incurred by the Company and its Subsidiaries since the first day of
such four-quarter period and the application of the proceeds therefrom,
including to refinance other Debt, had occurred at the beginning of such
period; (B) the repayment or retirement of any other Debt by the Company
and its Subsidiaries since the first date of such four-quarter period had been
repaid or retired at the beginning of such period (except that, in making such
computation, the amount of Debt under any revolving credit facility shall be
computed based upon the average daily balance of such Debt during such period);
(C) in the case of Acquired Debt or Debt incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such period with appropriate
adjustments with respect to such acquisition being included in such pro forma
calculation; and (D) in the case of any acquisition or disposition by the
Company or its Subsidiaries of any asset or group of assets since the first day
of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related
repayment of Debt had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition or disposition being
included in such pro forma calculation. If the Debt giving rise to the need to
make the foregoing calculation or any other Debt incurred after the first day
of the relevant four-quarter period bears interest at a floating rate then, for
purposes of calculating the Annual Debt Service, the interest rate on such Debt
shall be computed on a pro forma basis as if the average interest rate which
would have been in effect during the entire such four-quarter period had been
the applicable rate for the entire such period.

 

(b)           Maintenance
of Total Unencumbered Assets.  The
Company and its Subsidiaries will maintain at all times Total Unencumbered
Assets of not less than 200% of the aggregate outstanding principal amount of
the Unsecured Debt of the Company and its Subsidiaries on a consolidated basis.

 

7

 

ARTICLE 4

 

ADDITIONAL EVENTS OF
DEFAULT

 

Section 4.1             For purposes of this Supplemental
Indenture and the Notes, in addition to the Events of Default set forth in
Section 501 of the Indenture, it shall also constitute an “Event of Default” if
a default under any bond, debenture, note or other evidence of indebtedness of
the Company (including a default with respect to any other series of
securities), or under any mortgage, indenture or other instrument of the
Company under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor) having an aggregate
principal amount outstanding of at least $20,000,000, whether such indebtedness
now exists or shall hereafter be incurred or created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of ten days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount of
the outstanding Notes, a written notice specifying such default and requiring
the Company to cause such indebtedness to be discharged or cause such
acceleration to be rescinded or annulled and stating that such notice is a
“Notice of Default” hereunder.

 

Section 4.2             Notwithstanding any provisions to
the contrary in the Indenture, upon any acceleration of the Notes under Section
502 of the Indenture, the amount immediately due and payable in respect of the
Notes shall equal the Outstanding principal amount thereof, plus accrued
interest, plus, if such acceleration occurs prior to July 15, 2012, the Make-Whole Amount.

 

ARTICLE 5

 

EFFECTIVENESS

 

This Supplemental Indenture shall be effective for all
purposes as of the date and time this Supplemental Indenture has been executed
and delivered by the Company and the Trustee in accordance with Article Nine of
the Indenture. As supplemented hereby, the Indenture is hereby confirmed as
being in full force and effect.

 

ARTICLE 6

 

MISCELLANEOUS

 

Section 6.1             In the event any provision of this
Supplemental Indenture shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof or any provision of the Indenture.

 

Section 6.2             To the extent that any terms of
this Supplemental Indenture or the Notes are inconsistent with the terms of the
Indenture, the terms of this Supplemental Indenture or the Notes shall govern
and supersede such inconsistent terms.

 

8

 

Section 6.3             This Supplemental Indenture shall
be governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

 

Section 6.4             This Supplemental Indenture may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

 

[Remainder of page
intentionally left blank.]

 

9

 

IN WITNESS WHEREOF, the Company and the Trustee have
caused this Supplemental Indenture to be executed as an instrument under seal
in their respective corporate names as of the date first above written.

 

	
   

  	
  HRPT PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C. Popeo

  	
   

  
	
   

  	
   

  	
  Name:  John C. Popeo

  
	
   

  	
   

  	
  Title:  Treasurer and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  STATE STREET BANK AND TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chi C. Ma

  	
   

  
	
   

  	
   

  	
  Name: Chi C. Ma

  
	
   

  	
   

  	
  Title: Vice President

  

 

10

EXHIBIT A

 

FORM OF NOTE

 

[Face Of Note]

 

61⁄2%  Note due 2013

 

	
  No.             

  	
   

  	
  $                    

  	
   

  

 

HRPT PROPERTIES TRUST

 

promises to pay to
             or
registered assigns, the principal sum of
                   
($                )
on January 15, 2013, subject to the terms set forth on the reverse of this Note
and the terms of the Indenture referred to therein.

 

Interest Payment Dates:  each January 15 and July 15, commencing July 15, 2003.

 

Record Dates: the day falling 14 calendar days prior
to any Interest Payment Date.

 

CUSIP No.: 40426W AN1

 

	
   

  	
  HRPT PROPERTIES
  TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

	
  Attest:

  	
   

  	
   

  
	
  [SEAL]

  
	
   

  
	
  CERTIFICATE OF AUTHENTICATION

  
	
   

  
	
  Dated: December      , 2002

  
	
   

  
	
  This is one of the Notes referred to in the
  within-mentioned Indenture:

  
	
   

  
	
  STATE STREET BANK AND TRUST COMPANY, as Trustee

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  
					

 

 

 

[THE FOLLOWING
CONSTITUTES THE REVERSE OF THE SECURITY]

 

HRPT
PROPERTIES TRUST

 

61⁄2% Note
due 2013

 

Capitalized terms used herein have the meanings
assigned to them in the Indenture (as defined below) unless otherwise
indicated.

 

1.             Interest.  HRPT Properties Trust, a Maryland real
estate investment trust (the “Company”), promises to pay interest on the principal
amount of this Note at the rate and in the manner specified below.

 

The Company shall pay in cash interest on the
principal amount of this Note at the rate per annum of 61⁄2%. The Company will
pay interest semi-annually in arrears on each January 15 and July 15,
commencing on July 15, 2003, or, if any such day is not a Business Day (as
defined in the Indenture), on the next succeeding Business Day (each an
“Interest Payment Date”), to Holders of record on the day falling 14 calendar
days immediately preceding such Interest Payment Date (whether or not a
Business Day).

 

Interest will be computed on the basis of a 360-day
year consisting of twelve 30-day months. Interest shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from December 6, 2002.

 

2.             Method
of Payment.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the record date next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date. The Company will pay
principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. The Company,
however, may pay principal, premium, if any, and interest by check payable in
such money. It may mail an interest check to a Holder’s registered address.

 

3.             Indenture.  The Company issued the Notes under an
Indenture, dated as of July 9, 1997, and a Supplemental Indenture No. 11
thereto, dated as of December 6, 2002 (collectively, the “Indenture”), between
the Company and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders of the Notes are referred to the
Indenture and such Act for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the Notes.
The Notes are unsecured general obligations of the Company limited to
$200,000,000 in aggregate principal amount, except as otherwise provided in the
Indenture.

 

4.             Optional
Redemption.  The Notes will be
subject to redemption at any time at the option of the Company, in whole or in
part, upon not less than 30 nor more than 60 days’ notice, at a redemption
price equal to the sum of (i) the principal amount of the Notes being redeemed,
plus accrued and unpaid interest to but excluding the applicable Redemption
Date and (ii) the Make-Whole Amount, if any. 
If the Notes are redeemed on or after July 15, 2012, the redemption price will not include the
Make-Whole Amount.

 

A-2

 

As used herein the term “Make-Whole Amount” means, in
connection with any optional redemption or accelerated payment of any notes
prior to July 15, 2012, the excess,
if any, of (i) the aggregate present value
as of the date of such redemption or accelerated payment of each dollar of
principal being redeemed or paid and the amount of interest (exclusive of
interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of such dollar if such redemption or accelerated
payment had been made on July 15, 2012, determined by discounting, on a
semiannual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had been made on July 15, 2012, over (ii) the
aggregate principal amount of the Notes being redeemed or paid.  In the case of any redemption or accelerated
payment of notes on or after July 15, 2012, the Make-Whole Amount means zero.  For
purposes of the Indenture and the Notes, references in the Indenture to the
payment of the principal (and premium, if any) and interest on the Notes shall
be deemed to include the payment of the Make-Whole Amount, if any, due upon
redemption with respect to the Notes. 
The Make-Whole Amount shall be calculated by the Company and set forth
in an Officer’s Certificate delivered to the Trustee, and the Trustee shall be
entitled to rely on said Officer’s Certificate.

 

As used herein the term “Reinvestment Rate” means a
rate per annum equal to the sum of 0.50% (fifty one-hundredths of one percent)
plus the yield on treasury securities at constant maturity under the heading
“Week Ending” published in the Statistical Release (as defined herein) under
the caption “Treasury Constant Maturities” for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity (which, in the
case of maturities corresponding to the principal and interest due on the notes
at their maturity, shall be deemed to be July
15, 2012), as of the payment date of the principal being redeemed or
paid. If no maturity exactly corresponds to such maturity, yields for the two
published maturities most closely corresponding to such maturity shall be
calculated pursuant to the immediately preceding sentence and the Reinvestment
Rate shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding in each of such relevant periods to the nearest month. For
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.

 

As used herein the term “Statistical Release” means
the statistical release designated “H.15(519)” or any successor publication
which is published weekly by the Federal Reserve System and which establishes
yields on actively traded United States government securities adjusted to
constant maturities or, if such statistical release is not published at the
time of any determination under the Supplemental Indenture, then any publicly
available source of similar market data which shall be designated by the
Company.

 

5.             Mandatory
Redemption.  The Company shall not
be required to make sinking fund or redemption payments with respect to the
Notes.

 

6.             Notice
of Redemption.  Notice of redemption
shall be mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at its registered
address.  Notes may be redeemed in part
but only in whole multiples of $1,000, unless

 

A-3

 

all of the Notes held by a Holder are to be redeemed. On and after the
redemption date, interest ceases to accrue on Notes or portions of them called
for redemption.

 

7.             Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000 in excess thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. The Security Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Security Registrar need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption. Also, it need not exchange or register the transfer of any Notes
for a period of 15 days before the mailing of a notice of redemption of Notes,
or during the period between a record date and the corresponding Interest
Payment Date.

 

8.             Defaults
and Remedies.  In case an Event of
Default (as defined in the Indenture) with respect to the Notes shall have
occurred and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the provisions provided in the Indenture.

 

9.             Actions
of Holders.  The Indenture contains
provisions permitting the holders of not less than a majority of the aggregate
principal amount of the outstanding Notes, subject to certain exceptions as
provided in the Indenture, on behalf of the holders of all such Notes at a
meeting duly called and held as provided in the Indenture, to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided in the Indenture to be made, given or taken by the
holders of the Notes, including without limitation, waiving (a) compliance
by the Company with certain provisions of the Indenture, and (b) certain
past defaults under the Indenture and their consequences. Any resolution passed
or decision taken at any meeting of the holders of the Notes in accordance with
the provisions of the Indenture shall be conclusive and binding upon such
holders and upon all future holders of this Note and other Notes issued upon
the registration of transfer hereof or in exchange heretofore or in lieu
hereof.

 

10.           Persons
Deemed Owners.  The Company, the
Trustee, and any agent of the Company or the Trustee may deem and treat the
Person in whose name this Note is registered on the Security Register as its
absolute owner for all purposes.

 

11.           Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

12.           Governing
Law.  THE INTERNAL LAW OF THE
COMMONWEALTH OF MASSACHUSETTS SHALL GOVERN AND BE USED TO CONSTRUE THE
INDENTURE AND THE NOTES.

 

13.           No
Personal Liability.  THE AMENDED AND
RESTATED DECLARATION OF TRUST OF THE COMPANY, DATED JULY 1, 1994, A COPY OF
WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”), IS DULY FILED
IN THE OFFICE OF THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF
MARYLAND, PROVIDES THAT THE NAME “HRPT PROPERTIES TRUST” REFERS TO THE TRUSTEES
UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT

 

A-4

 

INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY. ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture. Request may be made to:

 

HRPT Properties Trust

400 Centre Street

Newton, MA 02458

Telecopier No.: 
(617) 332-2261

Attention: President

 

or such other address as the Company may specify pursuant to the
Indenture.

 

A-5

 

ASSIGNMENT FORM

 

To assign this Note, fill
in the form below:

 

 

	
  [I] [We] assign and transfer this Note to

  	
   

  

 

	
   

  	
   [Print or
  type assignee’s name, address and zip code]

  
	
   

  	
   

  
	
   

  	
   [Insert
  assignee’s soc. sec. or tax I.D. no.] and irrevocably appoint

  

 

	
   

  	
   to transfer
  this Note on the books of the Company.

  

 

The agent may substitute another to act for him.

 

	
  Date:

  	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  [Sign
  exactly as your name appears on the face of this Note]

  
	
   

  	
   

  
	
  Signature
  Guarantee:

  
	
   

  	
   

  
	
  [The
  signature must be guaranteed by

  
	
  an officer of a participant in a
  recognized

  
	
  signature guarantee program.  Notarized

  
	
  or witnessed signatures are not
  acceptable.]

  
	
   

  
						

 

A-6

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