10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission file number 001-09585

ABIOMED, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	04-2743260
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

22 CHERRY HILL DRIVE

DANVERS, MASSACHUSETTS 01923

(Address of principal executive offices, including zip code)

(978) 646-1400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer	☒		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of January 31, 2018, 44,277,825 shares of the registrant’s common stock, $.01 par value, were outstanding.

ABIOMED, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION:
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of December 31, 2017 and March 31, 2017	3
	Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2017 and 2016	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2017 and 2016	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2017 and 2016	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II - OTHER INFORMATION:
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
SIGNATURES		34

NOTE REGARDING COMPANY REFERENCES

Throughout this report on Form 10-Q (the “Report”), “Abiomed, Inc.,” the “Company,” “we,” “us” and “our” refer to ABIOMED, Inc. and its consolidated subsidiaries.

NOTE REGARDING TRADEMARKS

ABIOMED, IMPELLA, IMPELLA 2.5, IMPELLA 5.0, IMPELLA LD, IMPELLA CP and IMPELLA RP are trademarks of ABIOMED, Inc., and are registered in the U.S. and certain foreign countries. AB5000 and cVAD REGISTRY are trademarks of ABIOMED, Inc. 

2

PART 1. FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share data)

	December 31, 2017			March 31, 2017
ASSETS
Current assets:
Cash and cash equivalents	$	50,502		$	39,040
Short-term marketable securities		250,751			190,908
Accounts receivable, net		64,862			54,055
Inventories		46,891			34,931
Prepaid expenses and other current assets		9,192			8,024
Total current assets		422,198			326,958
Long-term marketable securities		49,485			47,143
Property and equipment, net		107,977			87,777
Goodwill		34,814			31,045
In-process research and development		16,241			14,482
Long-term deferred tax assets, net		75,201			34,723
Other assets		13,686			8,286
Total assets	$	719,602		$	550,414
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,991		$	20,620
Accrued expenses		41,565			37,703
Deferred revenue		11,797			10,495
Current portion of capital lease obligation		—			799
Total current liabilities		75,353			69,617
Other long-term liabilities		466			3,251
Contingent consideration		10,423			9,153
Long-term deferred tax liabilities		878			783
Capital lease obligation, net of current portion		—			15,539
Total liabilities		87,120			98,343
Commitments and contingencies (Note 10)
Stockholders' equity:
Class B Preferred Stock, $.01 par value		—			—
Authorized - 1,000,000 shares; Issued and outstanding - none
Common stock, $.01 par value		443			437
Authorized - 100,000,000 shares; Issued - 45,995,445 shares at December 31, 2017 and 45,249,281 shares at March 31, 2017
Outstanding - 44,271,905 shares at December 31, 2017 and 43,673,286 shares at March 31, 2017
Additional paid in capital		605,697			565,962
Retained earnings (accumulated deficit)		103,610			(46,959	)
Treasury stock at cost - 1,723,540 shares at December 31, 2017 and 1,575,995 shares at March 31, 2017		(66,622	)		(46,763	)
Accumulated other comprehensive loss		(10,646	)		(20,606	)
Total stockholders' equity		632,482			452,071
Total liabilities and stockholders' equity	$	719,602		$	550,414

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share data)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2017			2016			2017			2016
Revenue:
Product revenue	$	153,989		$	114,624		$	419,202		$	320,541
Funded research and development		33			50			111			83
		154,022			114,674			419,313			320,624
Costs and expenses:
Cost of product revenue		24,994			18,987			68,483			51,366
Research and development		17,706			16,349			54,027			50,061
Selling, general and administrative		66,556			53,935			187,233			158,053
		109,256			89,271			309,743			259,480
Income from operations		44,766			25,403			109,570			61,144
Other income (expense):
Investment income, net		969			457			2,385			1,068
Other expense, net		(81	)		(34	)		(25	)		(225	)
		888			423			2,360			843
Income before income taxes		45,654			25,826			111,930			61,987
Income tax provision		32,208			10,394			36,607			24,770
Net income	$	13,446		$	15,432		$	75,323		$	37,217
Basic net income per share	$	0.30		$	0.36		$	1.71		$	0.86
Basic weighted average shares outstanding		44,247			43,431			44,095			43,125
Diluted net income per share	$	0.29		$	0.34		$	1.65		$	0.83
Diluted weighted average shares outstanding		45,869			44,770			45,731			44,597

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2017			2016			2017			2016
Net income	$	13,446		$	15,432		$	75,323		$	37,217
Other comprehensive gain (loss):
Foreign currency translation gains (losses)		1,557			(5,873	)		10,406			(6,760	)
Net unrealized losses on marketable securities		(401	)		(269	)		(446	)		(137	)
Other comprehensive gain (loss)		1,156			(6,142	)		9,960			(6,897	)
Comprehensive income	$	14,602		$	9,290		$	85,283		$	30,320

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

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ABIOMED, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the Nine Months Ended December 31,
	2017			2016
Operating activities:
Net income	$	75,323		$	37,217
Adjustments required to reconcile net income to net cash provided by    operating activities:
Depreciation expense		8,100			4,488
Bad debt expense		(8	)		(12	)
Stock-based compensation		29,170			24,521
Write-down of inventory and other assets		3,212			2,059
Excess tax benefit from stock-based awards		—			(4,595	)
Deferred tax provision		34,740			18,817
Change in fair value of contingent consideration		1,270			612
Changes in assets and liabilities:
Accounts receivable		(10,342	)		(7,555	)
Inventories		(11,974	)		(8,615	)
Prepaid expenses and other assets		(1,033	)		(3,923	)
Accounts payable		2,595			3,542
Accrued expenses and other liabilities		3,874			11,040
Deferred revenue		1,220			265
Net cash provided by operating activities		136,147			77,861
Investing activities:
Purchases of marketable securities		(209,834	)		(177,591	)
Proceeds from the sale and maturity of marketable securities		148,095			144,670
Purchase of other investment		(6,400	)		(149	)
Purchases of property and equipment		(44,168	)		(24,039	)
Net cash used for investing activities		(112,307	)		(57,109	)
Financing activities:
Proceeds from the exercise of stock options		7,626			8,265
Excess tax benefit from stock-based awards		—			4,595
Taxes paid related to net share settlement of vesting of stock awards		(19,860	)		(19,898	)
Proceeds from the issuance of stock under employee stock purchase plan		1,063			769
Principal payments on capital lease obligation		(517	)		(264	)
Net cash used for financing activities		(11,688	)		(6,533	)
Effect of exchange rate changes on cash		(690	)		(1,381	)
Net increase in cash and cash equivalents		11,462			12,838
Cash and cash equivalents at beginning of period		39,040			48,231
Cash and cash equivalents at end of period	$	50,502		$	61,069
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	845		$	735
Cash paid for interest on capital lease obligation		302			223
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment under capital lease obligation		—			16,784
Property and equipment in accounts payable and accrued expenses		3,836			3,717

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

6

ABIOMED, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(In thousands, except share data)

Note 1. Nature of Business

Abiomed, Inc. (the “Company” or “Abiomed”) is a provider of mechanical circulatory support devices and offers a continuum of care to heart failure patients. The Company develops, manufactures and markets proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by heart surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures.

Note 2. Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting and in accordance with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 that has been filed with the Securities and Exchange Commission (the “SEC”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments that are necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period may not be indicative of results for the full fiscal year or any other subsequent period.

There have been no changes in the Company’s significant accounting policies for the three and nine months ended December 31, 2017 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 that has been filed with the SEC.

New Accounting Pronouncements Adopted

Effective April 1, 2017, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) which simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, recognition of stock compensation award forfeitures, classification of awards as either equity or liabilities, the calculation of diluted shares outstanding and classification on the statement of cash flows.

7

The following table summarizes the most significant impacts of ASU 2016-09 for the three and nine months ended December 31, 2017:

Description of Change:	Impact of Change Upon Adoption on April 1, 2017 and for the Three and Nine Months Ended December 31, 2017:	Adoption Method:
The new standard eliminates the requirement that excess tax benefits be realized through a reduction in income taxes payable before a company can recognize them in the statement of operations.	As a result, on April 1, 2017, the Company recorded a cumulative-effect adjustment to increase retained earnings and deferred tax assets by $76.4 million for excess tax benefits not previously recognized.	Modified-retrospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are recorded through the statement of operations.	The income tax benefit for the three and nine months ended December 31, 2017, included excess tax benefits of $3.2 million and $24.5 million, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.	Prospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are classified as operating cash flows instead of financing cash flows.	Increase in cash flow from operating activities and decrease in cash flow from financing activities by approximately $24.5 million for the nine months ended December 31, 2017. The statement of cash flows for the prior period has not been adjusted.	Prospective (elected)
Calculation of diluted weighted average shares outstanding under the treasury method no longer assume that tax benefits related to stock-based awards are used to repurchase common stock.	The Company excluded the related tax benefits when applying the treasury stock method for computing diluted shares outstanding on a prospective basis as required by  ASU 2016-09.	Prospective (required)
An accounting policy election can be made to reduce stock-based compensation expense for forfeitures as they occur instead of estimating forfeitures that are expected to occur.	The Company made an accounting policy election to account for forfeitures as they occur with the change applied on a modified retrospective basis with a cumulative effect adjustment on April 1, 2017 to increase additional paid-in capital by $1.8 million, increase deferred tax assets by $0.7 million and decrease retained earnings by $1.1 million. The Company elected to make this accounting policy change to simplify the accounting for stock-based compensation and believes this method provides a more accurate reflection of periodic stock based compensation cost. Prior to the adoption of this accounting standard, the Company estimated at grant the likelihood that the award would ultimately vest, and revised the estimate, if necessary, in future periods if the actual forfeiture rate differed.	Modified-retrospective (elected)
Cash payments to tax authorities for shares withheld to meet employee tax withholding requirements on restricted stock units are classified as financing cash flow instead of operating cash flow.	No change since the Company has historically presented these amounts as a financing activity. Prior to ASU 2016-09, U.S. GAAP has not specified how these types of transactions should be classified in the statement of cash flows.	N/A

See table below for the changes in beginning stockholders' equity as a result of this implementation.

	Common Stock					Treasury Stock
	Number of shares			Par value		Number of shares			Amount				Additional Paid in Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
Balance, March 31, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		565,962	$		(46,959	)	$		(20,606	)	$		452,071
Cumulative effect of adoption of new accounting standard														1,835			75,246								77,081
Balance, April 1, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		567,797	$		28,287		$		(20,606	)	$		529,152

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Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customersto provide updated guidance on revenue recognition. This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under the current accounting guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.

The Company is assessing all of the potential impacts of the revenue recognition guidance. Although the Company has not yet completed its assessment of the new revenue recognition guidance, the Company believes that the new revenue recognition guidance generally supports the recognition of revenue at a point-in-time for product sales and over an extended period of time for preventative maintenance service agreements, which is consistent with its current revenue recognition model. The Company does anticipate that the new revenue standard will result in expanded financial statement disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is reviewing and updating its internal controls and processes over revenue recognition in order to prepare for the adoption of and ongoing accounting under the new standard. As the Company completes its evaluation of this new accounting standard, new information may arise that could change the Company’s current understanding of the impact to revenue and expense recognized and financial statement disclosures. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly, if required. ASU 2014-09 can be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company will apply the new guidance effective April 1, 2018 using the modified retrospective method to contracts that are not completed as of April 1, 2018. The Company does not expect the adoption of this standard, including the cumulative effect of any adjustment to the opening balance of retained earnings, to have a material impact to its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  This guidance changes accounting for financial assets and financial liabilities under the fair value option and includes additional presentation and disclosure requirements for financial instruments. ASU 2016-01 requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. ASU 2016-01 eliminates the available-for-sale classification for marketable securities in which changes in fair value are currently recorded as a component of other comprehensive income. ASU 2016-01 also impacts the recognition and measurement of equity investments, which are currently carried at cost, but will be measured at fair value in the Company’s consolidated statement of operations. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted with specific application guidance. ASU 2016-01 will become effective for the Company beginning in fiscal 2019. The Company is evaluating the impact to its consolidated financial statements but ASU 2016-01 could have a significant impact, including additional volatility in other income (expense) within its statement of operations in future periods if there are measurable changes in fair value of equity investments.

In February 2016, the FASB issued ASU 2016-02, Leases. The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lessee arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities.  ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company beginning in fiscal 2020.

9

Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2017 and 2016 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Basic Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Net income per share - basic	$	0.30	$	0.36	$	1.71	$	0.86

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Diluted Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Effect of dilutive securities		1,622		1,339		1,636		1,472
Weighted average shares used in computing diluted    net income per share		45,869		44,770		45,731		44,597
Net income per share - diluted	$	0.29	$	0.34	$	1.65	$	0.83

For the three and nine months ended December 31, 2017, approximately 2,600 and 4,800 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 128,000 restricted shares in each of the three and nine months ended December 31, 2017, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and nine months ended December 31, 2016, approximately 28,000 and 17,000 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 185,000restricted shares in each of the three and nine months ended December 31, 2016, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

Note 4. Marketable Securities and Fair Value Measurements

Marketable Securities

The Company’s marketable securities are classified as available-for-sale securities and, accordingly, are recorded at fair value. The difference between amortized cost and fair value is included in stockholders’ equity. At December 31, 2017 and March 31, 2017, the Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these investments.

The Company’s marketable securities at December 31, 2017 and March 31, 2017 are invested in the following:

10

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	21,068	$	—	$	(25	)	$	21,043
Short-term government-backed securities		152,586		—		(343	)		152,243
Short-term corporate debt securities		77,592		3		(130	)		77,465
Long-term government-backed securities		47,587		—		(96	)		47,491
Long-term corporate debt securities		1,997		—		(3	)		1,994
	$	300,830	$	3	$	(597	)	$	300,236

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	45,199	$	—	$	(13	)	$	45,186
Short-term government-backed securities		90,199		1		(87	)		90,113
Short-term corporate debt securities		55,465		—		(31	)		55,434
Long-term U.S. Treasury mutual fund securities		1,998		—		(3	)		1,995
Long-term government-backed securities		43,484		5		(18	)		43,471
Long-term corporate debt securities		1,853		—		(1	)		1,852
	$	238,198	$	6	$	(153	)	$	238,051

Fair Value Hierarchy

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Level 1 primarily consists of financial instruments whose values are based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flows, or similar techniques, and at least one significant model assumption or input is unobservable.

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The following table presents the Company’s financial instruments recorded at fair value in the condensed consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	21,043	$	—	$	21,043
Short-term government-backed securities		—		152,243		—		152,243
Short-term corporate debt securities		—		77,465		—		77,465
Long-term government-backed securities		—		47,491		—		47,491
Long-term corporate debt securities		—		1,994		—		1,994
Liabilities
Contingent consideration		—		—		10,423		10,423

	Level 1		Level 2		Level 3		Total
March 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	45,186	$	—	$	45,186
Short-term government-backed securities		—		90,113		—		90,113
Short-term corporate debt securities		—		55,434		—		55,434
Long-term U.S. Treasury mutual fund securities		—		1,995		—		1,995
Long-term government-backed securities		—		43,471		—		43,471
Long-term corporate debt securities		—		1,852		—		1,852
Liabilities
Contingent consideration		—		—		9,153		9,153

The Company has determined that the estimated fair value of its investments in U.S. Treasury mutual fund securities, government-backed securities, and corporate debt securities are reported as Level 2 financial assets as they are not exchange-traded instruments.

The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH (“ECP”) and AIS GmbH Aachen Innovative Solutions (“AIS”), in July 2014. The Company acquired ECP for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of certain clinical and regulatory and revenue-based milestones related to the development of the future Impella ECP^TM expandable catheter pump technology. These potential milestone payments may be made, at the Company’s option, by a combination of cash or Abiomed common stock. The Company uses a combination of an income approach, based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn out itself, the related projections, and the overall business. The revenue-based milestone is valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans.

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This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Fair Value at December 31, 2017 (in $000's)		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
Clinical and regulatory milestone	$	5,654	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
				Discount rate	2.8% to 3.3%
				Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 12% to 30% for various upside and downside scenarios
Revenue-based milestone		4,769	Monte Carlo simulation model	Projected fiscal year of milestone payments	2023 to 2035
				Discount rate		18%
				Expected volatility for forecasted revenues		50%
	$	10,423

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Level 3 liabilities, beginning balance	$	9,835	$	7,749	$	9,153	$	7,563
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		588		426		1,270		612
Level 3 liabilities, ending balance	$	10,423	$	8,175	$	10,423	$	8,175

The change in fair value of the contingent consideration was primarily due to the passage of time on the fair value measurement of milestones related to the ECP acquisition. Adjustments associated with the change in fair value of contingent consideration are included in research and development expenses in the Company’s condensed consolidated statements of operations. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value reflected in the Company’s statement of operations. There is no assurance that any of the conditions for the milestone payments will be met.

Other Investments

The Company periodically makes investments in private medical device companies that focus on heart failure, heart pump and other medical device technologies. The aggregate carrying amount of the Company’s other investments was $12.6 million and $7.2 million at December 31, 2017 and March 31, 2017, respectively, and is classified within other assets in the unaudited condensed consolidated balance sheets. During the nine months ended December 31, 2017, the Company made investments of $6.4 million in private medical device companies. These investments are accounted for using the cost method and are evaluated for impairment and measured at fair value only if there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of these investments.

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Note 5. Property and Equipment

The components of property and equipment are as follows:

	December 31, 2017			March 31, 2017
	(in $000's)
Land	$	7,550		$	4,046
Building and building improvements		61,086			10,900
Capital lease asset		—			16,784
Leasehold improvements		2,173			34,854
Machinery and equipment		38,336			27,989
Furniture and fixtures		7,503			3,899
Construction in progress		15,958			9,257
Total cost		132,606			107,729
Less accumulated depreciation		(24,629	)		(19,952	)
	$	107,977		$	87,777

In October 2017, the Company entered into a purchase and sale agreement to acquire the Company’s headquarters that it had been leasing in Danvers, Massachusetts. The total acquisition cost for the land and building was approximately $16.5 million, with $3.0 million being recorded to land and $13.0 million being recorded to building and building improvements. In addition, the Company reclassified $32.6 million in leasehold improvements to building and building improvements due to the termination of the lease agreement upon the property acquisition.

In December 2016, the Company entered into a purchase and sale agreement to acquire its existing European headquarters in Aachen, Germany, consisting of 33,000 square feet of space. The Company acquired the property in February 2017. The original acquisition cost for the land and building was approximately $12.6 million, with $4.0 million being recorded to land and $8.6 million being recorded to the building and building improvements.

Note 6. Goodwill and In-Process Research and Development

The carrying amount of goodwill at December 31, 2017 and March 31, 2017 was $34.8 million and $31.0 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005 and ECP and AIS in July 2014. The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2017	$	31,045
Foreign currency translation impact		3,769
Balance at December 31, 2017	$	34,814

The Company evaluates goodwill and in-process research and development (“IPR&D”) assets at least annually at October 31, as well as whenever events or changes in circumstances suggest that the carrying amount may not be recoverable.  The Company has no accumulated impairment losses on goodwill or IPR&D assets.

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The carrying amount of IPR&D assets at December 31, 2017 and March 31, 2017 was $16.2 million and $14.5 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014. The estimated fair value of IPR&D assets at the acquisition date was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flow estimates for the future Impella ECP^TM expandable catheter pump technology were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 21% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2017 are as follows:

	(in $000's)
Balance at March 31, 2017	$	14,482
Foreign currency translation impact		1,759
Balance at December 31, 2017	$	16,241

Note 7. Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2017		March 31, 2017
	(in $000's)
Employee compensation	$	26,077	$	23,290
Sales and income taxes		4,612		3,180
Professional, legal and accounting fees		3,294		2,019
Research and development		2,271		2,349
Marketing		2,254		1,827
Warranty		1,010		717
Accrued capital expenditures		—		2,300
Other		2,047		2,021
	$	41,565	$	37,703

Employee compensation consists primarily of accrued bonuses, accrued commissions and accrued employee benefits at December 31, 2017 and March 31, 2017.

Note 8. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Cost of product revenue	$	489	$	234	$	1,221	$	754
Research and development		1,673		900		4,217		4,793
Selling, general and administrative		9,070		5,340		23,732		18,974
	$	11,232	$	6,474	$	29,170	$	24,521

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Stock Options

The following table summarizes the stock option activity for the nine months ended December 31, 2017:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,646		$	32.09		5.46
Granted		152			140.41
Exercised		(371	)		20.54
Cancelled and expired		(55	)		100.57
Outstanding at end of period		1,372		$	44.49		5.42	$	196,132
Exercisable at end of period		1,048		$	24.03		4.42	$	171,235
Options vested and expected to vest at end of period		1,347		$	43.85		5.37	$	193,386

The aggregate intrinsic value of options exercised was $46.1 million for the nine months ended December 31, 2017. The total fair value of options that vested during the nine months ended December 31, 2017 was $4.8 million.

The remaining unrecognized stock-based compensation expense for unvested stock option awards at December 31, 2017 was approximately $10.6 million and the estimated weighted-average period over which this cost will be recognized is 2.4 years.

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted during the three and nine months ended December 31, 2017 and 2016 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2017			2016			2017			2016
Weighted average grant-date fair value	$	70.14		$	48.15		$	51.20		$	42.21
Valuation assumptions:
Risk-free interest rate		2.13	%		1.37	%		1.86	%		1.32	%
Expected option life (years)		4.08			4.17			4.07			4.14
Expected volatility		42.2	%		48.5	%		43.6	%		49.5	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2017:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		1,056		$	80.50
Granted		295		$	136.80
Vested		(363	)	$	53.16
Forfeited		(94	)	$	98.08
Restricted stock units at end of period		894		$	108.35

The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of December 31, 2017 was $38.5 million and the estimated weighted-average period over which this cost will be recognized is 2.0 years.

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Performance-Based Awards

In May 2017, performance-based awards of restricted stock units for the potential issuance of approximately 159,000 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of December 31, 2017, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.

Note 9. Income Taxes

On December 22, 2017, the Tax Cut and Jobs Act, or the Tax Reform Act, was signed into law. The Tax Reform Act included significant changes to existing law, including among other items, a reduction to the U.S. federal statutory corporate tax rate from 35% to 21% effective January 1, 2018. ASC 740, Income Taxes (Topic 740), or ASC 740, requires that the effects of changes in tax laws or rates be recognized in the period in which the law is enacted. Those effects, both current and deferred, are reported as part of the tax provision, regardless of income in which the underlying pretax income (expense) or asset (liability) was or will be reported.

The Company’s estimated fiscal 2018 blended U.S. federal statutory corporate income tax rate of 31.5% was applied in the computation of the income tax provision for the three and nine months ended December 31, 2017. The blended U.S. federal statutory corporate tax rate of 31.5% represents the weighted average rate between the pre-enactment U.S. federal statutory corporate tax rate of 35% prior to the January 1, 2018 effective date and the post-enactment U.S. federal statutory corporate tax rate of 21% thereafter.

The Company’s income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively, and $10.4 million and $24.8 million for the three and nine months ended December 31, 2016, respectively. The Company’s effective tax rate was 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively, and 40.2% and 40.0% for the three and nine months ended December 31, 2016, respectively. Consistent with guidance issued by the SEC, which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Reform Act, the Company provisionally recorded an income tax expense of $22.0 million during the three and nine months ended December 31, 2017, due to the re-measurement of its net deferred tax assets due to the lower U.S. federal statutory corporate tax rate. This provisional estimate reflects estimable current year impacts of the Tax Reform Act on the Company’s estimated annual effective tax rate and discrete items resulting directly from the enactment of the Tax Reform Act based on the information available, prepared, or analyzed (including computations) in reasonable detail. Any adjustments to this provisional estimate will be recorded as adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized, if necessary.

As discussed in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies,” the Company also recognized excess tax benefits associated with stock-based awards of $3.2 million and $24.5 million as an income tax benefit for three and nine months ended December 31, 2017, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.

The significant differences between the statutory income tax rate and effective income tax rate for the three and nine months ended December 31, 2017 and 2016 were as follows:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2017			2016				2017			2016
Statutory income tax rate		31.5		%	35.0		%		31.5		%	35.0		%
Increase resulting from:
Excess tax benefits from stock-based awards		(7.0	)		—				(21.9	)		—
Credits		(2.1	)		(1.2	)			(2.1	)		(1.2	)
State taxes, net		3.7			3.3				3.7			3.3
Permanent differences		1.7			2.7				1.7			2.7
Effect of the Tax Reform Act on net deferred tax assets		42.1			—				19.6			—
Other		0.7			0.4				0.2			0.2
Effective tax rate		70.6		%	40.2		%		32.7		%	40.0		%

The recently enacted Tax Reform Act allows for a 100% deduction for the repatriation of foreign subsidiary earnings with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. Since most of the Company’s cash

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and cash equivalents are held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of such funds to the U.S. would likely have a nominal tax impact, if any.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. Fiscal years 2012 through 2017 remain open to examination in Germany and Abiomed Europe GmbH, the Company’s main operating subsidiary in Germany, is currently being audited for fiscal years 2012 through 2015. In July 2017, the Company was notified by the Internal Revenue Service, or IRS, that it has selected the Company’s federal tax return for fiscal 2016 for examination. In September 2017, the Company was notified by German tax authorities that our ECP subsidiary in Germany will be audited for the year ended December 31, 2014 and the three months ended March 31, 2015. All tax years remain subject to examination by the IRS and state tax authorities, because the Company has net operating loss and tax credit carryforwards which may be utilized in future years to offset taxable income, those years may also be subject to review by relevant taxing authorities if the carryforwards are utilized.

Note 10. Commitments and Contingencies

Commitments

Leases

The Company’s corporate headquarters is located in Danvers, Massachusetts. This facility encompasses most of the Company’s U.S. operations, including research and development, manufacturing, sales and marketing and general and administrative departments. In October 2017, the Company entered into a purchase and sale agreement to purchase its corporate headquarters for approximately $16.5 million and terminated its existing lease arrangement (See Note 5).

In February 2017, the Company entered into a lease agreement for an additional 21,603 square feet of office space in Danvers, Massachusetts, which expires on July 31, 2022. In December 2017, the Company entered into an amendment to this lease to extend the lease term through August 31, 2025 and to add an additional 6,607 square feet of space in which rent would begin around June 1, 2018.  The amendment also allows the Company a right of first offer to purchase the property from January 1, 2018 through August 31, 2035, if the lessor decides to sell the building or receives an offer to purchase the building from a third-party buyer. The annual rent expense for the lease is estimated to be $0.4 million.

In September 2016, the Company entered into a lease agreement in Berlin, Germany which commenced in May 2017 and expires in May 2024. The annual rent expense for the lease is estimated to be $0.3 million.

In October 2016, the Company entered into a lease agreement for an office in Tokyo, Japan and expires in September 2021. The office houses administrative, regulatory, and training personnel in connection with the Company’s commercial launch in Japan. The annual rent expense for the lease is estimated to be $0.9 million.

Contingencies

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements.

In April 2014, the Company received an administrative subpoena from the Boston regional office of the United States Department of Health and Human Services, or HHS, Office of Inspector General requesting materials relating to the Company’s reimbursement of employee expenses and remuneration to healthcare providers from July 2012 through December 2012, in connection with a civil investigation under the False Claims Act (the “FCA Investigation”). Subsequently, the Company received Civil Investigative Demands from the U.S. Attorney’s Office for the District of Massachusetts that collectively sought additional information relating to this matter for the time period of January 1, 2011 through September 14, 2016. The Company continues to cooperate with the government in this investigation and is exploring ways to resolve this matter with the government. The Company is not able to predict what action, if any, might be taken in the future as a result of the investigation, or the potential impact on its financial position.

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Thoratec Corporation, or Thoratec, a subsidiary of Abbott Laboratories, has challenged a number of Company owned patents in Europe in connection with the launch of their HeartMate PHP medical device, or PHP, in Europe. These actions relate to Thoratec’s ability to manufacture and sell their PHP product in Europe. These actions do not relate to the Company’s ability to manufacture or sell its Impella line of devices.

In December 2014, Thoratec filed a nullity suit in the German Federal Patent Court against a German “pigtail” patent owned by the Company with a flexible extension feature, and auxiliary pigtail, basket and funnel features. The validity hearing was held in November 2016 and the Federal Patent Court found the patent invalid. The Company is appealing this decision.

In August 2015, Thoratec filed a nullity action in the German Federal Patent Court against two Company owned patents covering a “magnetic clutch” feature. These magnetic clutch patents were acquired by the Company in July 2014, in connection with its acquisition of ECP and AIS. The validity hearing for the magnetic clutch patents was held in June 2017. The Company’s patents were upheld in an amended form to focus on the structure and interaction of the magnets in the clutch. The Federal Patent Court found certain unamended claims to be invalid.  The Company is appealing the decision with respect to the unamended claims.

In September 2015, the Company filed counterclaims in the magnetic clutch action in Germany asserting that the PHP product infringes the two magnetic clutch patents, a European pigtail patent, and the German pigtail patent. The infringement trial has been stayed, pending resolution of the German nullity actions.  

In February 2017, Thoratec filed an opposition in the European Patent Office against a Company owned patent acquired in connection with the acquisition of ECP and AIS relating to a housing structure for an expandable pump. The Company filed an initial response to the opposition in July 2017. In December 2017, Thoratec filed an opposition in the European Patent Office against a Company owned patent acquired in connection with the acquisition of ECP and AIS relating to a pump having a shaft cap with an atraumatic ball. The Company’s due date for responding to the opposition is May 27, 2018.

In December 2015, the Company received a letter from Maquet Cardiovascular LLC, or Maquet, a subsidiary of the Getinge Group, asserting that the Company’s Impella devices infringe certain claims having guidewire, lumen and sensor features, which were in two Maquet patents and one pending patent application in the U.S. and elsewhere, and attached a draft litigation complaint and encouraged the Company to take a license from Maquet.  In January 2016, the Company responded to Maquet stating that it believed that the cited claims were invalid and that its Impella devices did not infringe the cited patents.  In May 2016, Maquet notified the Company that its pending U.S. patent application had been issued as a U.S. patent, repeated their earlier assertion and encouraged the Company to discuss taking a license from Maquet. The three patents expire September 2020, December 2020 and October 2021. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts, or D. Mass., against Maquet seeking a declaratory judgment that the Company’s Impella devices do not infringe Maquet’s cited patent rights.  

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In August 2016, Maquet sent a letter to the Company identifying four new U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. Of the four U.S. continuation applications, one issued as a patent on January 17, 2017, one issued as a patent on February 7, 2017, one issued as a patent on March 21, 2017, and one issued as a patent on October 17, 2017.  These four issued patents will expire in September 2020.

In September 2016, Maquet filed a response to the Company’s suit in D. Mass., including various counterclaims alleging that the Company’s Impella 2.5, Impella CP, Impella 5.0, and Impella RP heart pumps infringe certain claims of the three original issued U.S. patents. On June 15, 2017, Maquet filed a motion for leave to amend its infringement counterclaims to add the first three additional U.S. continuation patents mentioned above and to file various false advertising, unfair competition claims under state law and under the Lanham Act, and a trademark cancellation in the pending case.  Maquet’s amended complaint and counterclaim, like those it originally filed, seek injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. The amended complaint admits that Maquet’s currently commercially available products do not embody the claims of the asserted patents. On July 21, 2017, the Court granted the motion in part, allowing the three additional continuation patents to be added to the case, and denied the motion to add the false advertising claims, Lanham Act claims, and the trademark cancellation claims.  On October 26, 2017, Maquet filed an amended answer, adding a new counterclaim alleging infringement of an additional seventh patent. Maquet did not seek leave to amend the pleadings and did not first consult with the Company concerning this addition. On November 11, 2017, after Maquet refused to withdraw the patent, the Company filed a motion to strike the seventh patent of Maquet’s counterclaims on the grounds that Maquet did not seek leave to add the patent and had amended its pleadings after the deadline set by the Court. On November 15, 2017, Maquet informed the Court that it would agree to voluntarily withdraw the seventh patent. In response on November 22, 2017, Maquet filed a second lawsuit in D. Mass alleging that the Company’s Impella 2.5, Impella CP, and Impella 5.0 heart pumps infringe certain claims of the seventh patent.  In the complaint Maquet seeks injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. Discovery is ongoing and the Markman Hearing on claim interpretation has been rescheduled for March 13, 2018.

With regard to the first six Maquet patents mentioned above, in March and April 2017 the Company filed requests for inter partes review, or IPR, at the U.S. Patent & Trademark Office’s Patent Trial and Appeals Board, or PTAB, asserting that the claims are invalid in view of prior art blood pump technology. In September and October 2017, the PTAB denied institution on these IPR requests filed by the Company.  In September 2017, the Company filed additional IPRs and the institution decisions are expected in March 2018.  

The Company cannot estimate what the potential outcome of these claims will be at this time.  Discovery is ongoing and the hearing on claim interpretation is scheduled for March 2018.  

The Company is unable to estimate the potential liability with respect to the legal matters noted above. There are numerous factors that make it difficult to meaningfully estimate possible loss or range of loss at this stage of the legal proceedings, including that the FCA Investigation and patent disputes with Thoratec and Maquet remain either in relatively early stages, or there are significant factual and legal issues to be resolved and information obtained or rulings made during any lawsuits or investigations that could affect the methodology for calculation.

Note 11. Segment and Enterprise Wide Disclosures

The Company operates in one business segment—the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. International sales (sales outside the U.S. and primarily in Europe) accounted for 11% of total product revenue in each of the three and nine months ended December 31, 2017, respectively, and 9% of total product revenue in each of the three and nine months ended December 31, 2016, respectively. Most of the Company’s long-lived assets are located in the U.S. except for $31.7 million and $23.2 million at December 31, 2017 and March 31, 2017, respectively, which are located primarily in Germany.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Any statements other than one conveying solely historical facts is a forward-looking statement. These forward-looking statements may be accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “project,” “target,” “will” and other words and terms of similar meaning. These forward-looking statements address various matters including, among others, future actions related to ongoing investigations and litigation and expenditures related thereto; the development and commercialization of new and existing products and anticipated costs, including research and development, sales and marketing and training costs associated with product development and commercialization; the anticipated launch dates of technological improvements in existing products and studies in pipeline products; expected capital expenditures for the fiscal year ending March 31, 2018; commercial plans for our products into new markets such as Japan; expected enrollment in our prospective feasibility study; demand and expected shipments of our products; anticipated shifts in the revenue mix associated with our products; our ability to increase revenue from our Impella® line of products and the sufficiency of revenue to fund future operations; the impact of market factors such as changes in interest rates, currency exchange rates on our securities and the fair value of our financial instruments; awards of performance and market-based restricted stock units; and the impact of ASU 2016-09 on our consolidated financial statements and disclosures. Each forward-looking statement in this Report is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statement, including, among others: our inability to predict the outcome of investigations and litigation and associated expenses; possible delays in our research and development programs; our ability to obtain regulatory approvals and market our products, and uncertainties related to regulatory processes; greater government scrutiny and regulation of the medical device industry and our ability to respond to changing laws and regulations affecting our industry, including any reforms to the regulatory approval process administered by the U.S Food and Drug Administration, or FDA, and changing enforcement practices related thereto; the inability to manufacture products in commercial quantities at an acceptable cost; the acceptance by physicians and hospitals of our products; the impact of competitive products and pricing; uncertainties associated with future capital needs and the risks identified under Item 1A of Part I of our Annual Report on Form 10-K, for the year ended March 31, 2017, as well as the other information we file with the Securities and Exchange Commission. Readers are cautioned not to place considerable reliance on any forward-looking statements contained in this Report, which speak only as of the date of this Report. We undertake no obligation to update or revise these forward-looking statements whether as a result of new information, future events or otherwise, unless required by law. Our business is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties.

Overview

We are a leading provider of temporary mechanical circulatory support devices, and we offer a continuum of care to heart failure patients. We develop, manufacture and market proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow to the coronary arteries and end-organs and/or temporarily assisting the pumping function of the heart. Our products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists, the electrophysiology lab, the hybrid lab and in the heart surgery suite by heart surgeons. A physician may use our devices for patients who are in need of hemodynamic support prophylactically, urgently or emergently before, during or after angioplasty or heart surgery procedures. We believe that heart recovery is the optimal clinical outcome for a patient experiencing heart failure because it enhances the potential for the patient to go home with the patient’s own native heart, facilitating the restoration of quality of life. In addition, we believe, that for the care of such patients, heart recovery is often the most cost-effective solution for the healthcare system.

Our strategic focus and the driver of the majority of our revenue growth is the market penetration of our family of Impella® heart pumps. The Impella device portfolio, which includes the Impella 2.5® Impella CP®, Impella RP®, Impella LD® and Impella 5.0® devices, has supported numerous patients worldwide. We expect that all of our product and service revenue in the near future will be from our Impella devices. Revenues from our non-Impella devices, largely focused on the AB5000 device used in the heart surgery suite, have been decreasing over the past several years and we are no longer selling the AB5000 as we have strategically shifted our sales and marketing efforts towards our Impella devices and the cath lab.

In March 2015, we received a Pre-Market Approval, or PMA, from the FDA for use of the Impella 2.5 device during elective and urgent high-risk percutaneous coronary intervention, or PCI, procedures. In December 2016, the FDA expanded this PMA approval in the U.S. to include the Impella CP device. With these PMA indications, the Impella 2.5 and Impella CP devices provide the only minimally invasive treatment options indicated for use during high-risk PCI procedures in the U.S. In April 2016, the FDA approved a PMA supplement for our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock that occurs following a heart attack or open heart surgery. The intent of our Impella system therapy is to reduce

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ventricular work and to provide the circulatory support necessary to allow heart recovery and early assessment of residual myocardial function.

In September 2017, we received a PMA from the FDA for the Impella RP® heart pump. This latest approval follows the prior FDA Humanitarian Device Exemption (HDE) received in January 2015 and adds the Impella RP heart pump to our platform of PMA approved devices. The Impella RP heart pump is indicated for providing temporary right ventricular support for up to 14 days in patients with a body surface area ≥1.5 m², who develop acute right heart failure or decompensation following left ventricular assist device implantation, myocardial infarction, heart transplant, or open-heart surgery. With this approval, the Impella RP heart pump is the only percutaneous temporary ventricular support device that is FDA-approved as safe and effective for right heart failure as stated in the indication.

Our Impella 2.5, Impella 5.0, Impella LD, Impella CP and Impella RP devices also have CE Mark approval and Health Canada approval, which allows us to market these devices in the European Union and Canada.

In September 2016, we received Pharmaceuticals and Medical Devices Agency, or PMDA, approval from the Japanese Ministry of Health, Labour & Welfare, or MHLW, for our Impella 2.5 and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. In July 2017, we received approval from the MHLW for reimbursement for the Impella 2.5 and 5.0 heart pumps. Reimbursement in Japan for the Impella 2.5 and 5.0 is equivalent to our average Impella sales price in the U.S. and we commenced commercialization in Japan during the three months ended September 30, 2017. The first Japanese patient was treated with the Impella device in October 2017 and we are conducting a controlled Impella device launch at a limited number of hospitals. We do not expect to have any material revenue in Japan during fiscal 2018.

In May 2017, we announced the enrollment of the first patient in the FDA approved prospective multi-center feasibility study, STEMI Door to Unloading with Impella CP system in acute myocardial infarction. The trial focuses on the feasibility and safety of unloading the left ventricle using the Impella CP heart pump prior to primary PCI in patients presenting with ST segment elevation myocardial infarction, or STEMI, without cardiogenic shock with the hypothesis that this will potentially reduce infarct size. The study, which received FDA approval in October 2016, will enroll up to 50 patients at 10 sites. We expect to complete enrollment in fiscal 2019.

We expect to continue to make additional PMA supplement submissions for our Impella portfolio of devices for additional indications.

Our Existing Products

Impella 2.5®

The Impella 2.5 device is a percutaneous micro heart pump with an integrated motor and sensors. The device is designed primarily for use by interventional cardiologists to support patients in the cath lab who may require assistance to maintain circulation. The Impella 2.5 heart pump can be quickly inserted via the femoral artery to reach the left ventricle of the heart where it is directly deployed to draw blood out of the ventricle and deliver it to the circulatory system. This function is intended to reduce ventricular work and provide blood flow to vital organs. The Impella 2.5 heart pump is introduced with normal interventional cardiology procedures and can pump up to 2.5 liters of blood per minute.

The Impella 2.5 device received 510(k) clearance from the FDA in June 2008 for partial circulatory support for up to six hours. In March 2015, we received a PMA from the FDA for the use of the Impella 2.5 device during elective and urgent high-risk PCI procedures. With this PMA indication, the Impella 2.5 device became the first FDA approved hemodynamic support device for use during high-risk PCI procedures. Under this first PMA, the Impella 2.5 is a temporary (up to six hours) ventricular support device indicated for use during high-risk PCI performed in elective or urgent hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction, when a heart team, including a cardiac surgeon, that has determined high-risk PCI is the appropriate therapeutic option. Use of the Impella 2.5 device in these patients may prevent hemodynamic instability that may occur during planned temporary coronary occlusions and may reduce periprocedural and post-procedural adverse events. The product labeling allows for the clinical decision by physicians to leave the Impella 2.5 device in place beyond the intended duration of up to six hours should unforeseen circumstances arise.

In April 2016, the FDA approved a supplement to our March 2015 PMA approval for the use of our Impella 2.5, Impella CP, Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock. This PMA supplement covers a set of indications related to the use of the Impella devices in patients suffering cardiogenic shock following acute myocardial infarction or cardiac surgery and allows for a longer duration of support.

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Pursuant to the April 2016 PMA approval, the Impella 2.5, Impella CP, Impella 5.0 and Impella LD catheters, in conjunction with the Automated Impella Controller, or AIC, were approved as temporary ventricular support devices intended for short term use (≤ 4 days for the Impella 2.5 and Impella CP, and ≤ 6 days for the Impella 5.0 and LD) and indicated for the treatment of ongoing cardiogenic shock that occurs immediately (< 48 hours) following acute myocardial infarction or open heart surgery as a result of isolated left ventricular failure that is not responsive to optimal medical management and conventional treatment measures. The intent of the Impella system therapy is to reduce ventricular work and to provide the circulatory support necessary to allow heart recovery and early assessment of residual myocardial function.  Optimal medical management and convention treatment measures include volume loading and use of pressors and inotropes, with or without an intraortic balloon pump, or IABP.

The Impella 2.5 device has CE Mark approval in Europe for up to five days of use and is approved for use in up to 40 countries. The Impella 2.5 device also has Health Canada approval which allows us to market the device in Canada.

In September 2016, we received PMDA approval from the Japanese MHLW for our Impella 2.5 and Impella 5.0 heart pumps to provide treatment of drug-resistant acute heart failure in Japan. In July 2017, we received approval from the MHLW for reimbursement for the Impella 2.5 and 5.0 heart pumps. Reimbursement in Japan for the Impella 2.5 and 5.0 is equivalent to our average Impella sales price in the U.S. and we commenced commercialization in Japan during the three months ended September 30, 2017. The first Japanese patient was treated with the Impella device in October 2017 and we are conducting a controlled Impella device launch at a limited number of hospitals. We do not expect to have any significant revenue in Japan during fiscal 2018.

Impella CP®

In September 2012, we announced that the Impella CP device received 510(k) clearance from the FDA. The Impella CP device provides blood flow of approximately one liter more per minute than the Impella 2.5 device and is primarily used by either interventional cardiologists to support patients in the cath lab or by cardiac surgeons in the heart surgery suite.

In April 2016, the FDA approved the PMA supplement for certain of our devices, including our Impella CP device to provide treatment for ongoing cardiogenic shock.

In December 2016, we received PMA approval from the FDA for the use of the Impella CP device during elective and urgent high-risk PCI procedures, identical to the indication for use for the Impella 2.5 device.  This approval allows the Impella CP to be used as a temporary (≤ 6 hours) ventricular support system indicated for use during high risk PCI procedures performed in elective or urgent hemodynamically stable patients with severe coronary artery disease and depressed left ventricular ejection fraction, when a heart team, including a cardiac surgeon, has determined that high risk PCI is the appropriate therapeutic option. The product labeling allows for the clinical decision by physicians to leave the Impella CP device in place beyond the intended duration of up to six hours should unforeseen circumstances arise.

In May 2017, we announced the enrollment of the first patient in the FDA approved prospective multi-center feasibility study, STEMI Door to Unloading with Impella CP system in acute myocardial infarction. The trial focuses on the feasibility and safety of unloading the left ventricle using the Impella CP heart pump prior to primary PCI in patients presenting with ST segment elevation myocardial infarction, or STEMI, without cardiogenic shock with the hypothesis that this will potentially reduce infarct size. The study, which received FDA approval in October 2016, will enroll up to 50 patients at 10 sites. We expect to complete enrollment in fiscal 2019.

The primary endpoints of the feasibility study will focus on safety, including Adverse Cardiovascular and Cerebrovascular Events, or MACCE, at 30 days. All patients will undergo cardiac magnetic resonance imaging to assess infarct size as a percent of left ventricular mass at 30 days post-PCI. Patients will be randomized to Impella CP placement with immediate primary PCI, or to Impella CP placement with 30 minutes of unloading prior to primary PCI. The hypothesis of this novel approach to treating STEMI patients, based on extensive mechanistic research, is that unloading the left ventricle prior to PCI reduces myocardial work load, oxygen demand and also initiates a cardio-protective effect at the myocardial cell level, which may alleviate myocardial damage caused by reperfusion injury at the time of revascularization. This feasibility study will help refine the protocol and lay the groundwork for a future pivotal study with more sites and patients and will be designed for statistical significance.

We are currently developing optical sensor technology which is intended to provide enhanced monitoring capability, reduce setup time and improve ease of use for physicians.  The optical sensor technology is approved under CE Mark in Europe and we anticipate beginning to incorporate the technology into our Impella CP devices in fiscal 2019.

The Impella CP device has CE Mark approval in Europe for up to five days of use and is approved for use in up to 40 countries.

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Impella 5.0® and Impella LD®

The Impella 5.0 and Impella LD devices are percutaneous micro heart pumps with integrated motors and sensors for use primarily in the heart surgery suite. These devices are designed to support patients who require higher levels of circulatory support as compared to the Impella 2.5.

The Impella 5.0 device can be inserted into the left ventricle via femoral cut down or through the axillary artery. The Impella 5.0 device is passed into the ascending aorta, across the valve and into the left ventricle. The Impella LD device is similar to the Impella 5.0 device, but it is implanted directly into the ascending aorta through an aortic graft.  Both of these procedures are normally performed with the assistance of heart surgeons in the surgery suite. The Impella 5.0 and Impella LD devices can pump up to five liters of blood per minute, potentially providing full circulatory support.

The Impella 5.0 and Impella LD devices originally received 510(k) clearance in April 2009, for circulatory support for up to six hours.  In April 2016, the FDA approved the PMA supplement for certain of our devices, including the Impella 5.0 and Impella LD devices to provide treatment for ongoing cardiogenic shock following a heart attack or open heart surgery.

The Impella 5.0 and Impella LD devices have CE Mark approval in Europe for up to ten days’ duration and are approved for use in over 40 countries.

In July 2017, we received approval from the MHLW for reimbursement for the Impella 2.5 and 5.0 heart pumps. Reimbursement in Japan for the Impella 2.5 and 5.0 is equivalent to our average Impella sales price in the U.S. and we commenced commercialization in Japan during the three months ended September 30, 2017. The first Japanese patient was treated with the Impella device in October 2017 and we are conducting a controlled Impella launch at a limited number of hospitals. We do not expect to have any material revenue in Japan during fiscal 2018.

Impella RP®

The Impella RP is a percutaneous catheter-based axial flow pump that is designed to allow greater than four liters of blood flow per minute and is intended to provide the flow and pressure needed to compensate for right side heart failure. The Impella RP is the first percutaneous single access heart pump designed for right heart support to receive FDA approval. The Impella RP device is approved to provide support of the right heart during times of acute failure for certain patients who have received a left ventricle assist device or have suffered heart failure due to acute myocardial infarction, or AMI, a failed heart transplant, or following open heart surgery.

In November 2012, the Impella RP device received U.S. investigational device exemption, or IDE, approval from the FDA for use in RECOVER RIGHT, a pivotal clinical study in the U.S. This was a study of 30 patients who presented signs of right side heart failure, required hemodynamic support, and were capable of being treated in the catheterization lab or cardiac surgery suite. The study was completed in March 2014 and collected safety and effectiveness data on the percutaneous use of the Impella RP device and was submitted to the FDA in support of an HDE submission. An HDE is similar to a PMA application but is intended for patient populations of 8,000 or less per year in the U.S. and is subject to certain profit and use restrictions. In January 2015, we received HDE approval for the Impella RP device from the FDA.

In September 2017, we received a PMA from the FDA for the Impella RP heart pump. This latest approval follows the prior FDA HDE received in January 2015 and adds the Impella RP heart pump to our platform of PMA approved devices. The Impella RP heart pump is indicated for providing temporary right ventricular support for up to 14 days in patients with a body surface area ≥1.5 m², who develop acute right heart failure or decompensation following left ventricular assist device implantation, myocardial infarction, heart transplant, or open-heart surgery. With this approval, the Impella RP heart pump is the only percutaneous temporary ventricular support device that is FDA-approved as safe and effective for right heart failure as stated in the indication.

In April 2014, the Impella RP device received CE Mark approval which allows for commercial sales of the Impella RP device in the European Union and other countries that require a CE Mark approval for commercial sales.

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Our Product Pipeline

Impella 5.5™

The Impella 5.5^TM device is designed to be a percutaneous micro heart pump with integrated motors and sensors. The Impella 5.5^TM device is designed to be smaller, provide months of hemodynamic support and is expected to allow for greater than five liters of blood flow per minute. We anticipate conducting a first-in-man trial outside of the U.S. in calendar year 2018. The Impella 5.5^TM pump is still in development and has not been approved for commercial use or sale.

Impella ECP™

The Impella ECP^TM pump is designed for blood flow of greater than three liters per minute. It is intended to be delivered on a standard sized catheter and will include an expandable inflow in the left ventricle. We anticipate conducting a first-in-man trial outside of the U.S. in calendar year 2018. The Impella ECP^TM pump is still in development and has not been approved for commercial use or sale.

In July 2014, we acquired all of the issued shares of ECP Entwicklungsgesellschaft mbH, or ECP, a German limited liability company based in Berlin, Germany, for $13.0 million in cash, with additional potential payments up to a maximum of $15.0 million based on the achievement of certain technical, regulatory and commercial milestones. In connection with our acquisition of ECP, ECP acquired all of the issued shares of AIS GmbH Aachen Innovative Solutions, or AIS, a German limited liability company, for $2.8 million in cash which was provided by us. AIS, based in Aachen, Germany, holds certain intellectual property useful to ECP’s business, and, prior to being acquired by ECP, had licensed such intellectual property to ECP.

Impella BTR™

The Impella BTR^TM device is designed to be a percutaneous micro heart pump with integrated motors and sensors. The Impella BTR^TM device is designed to be smaller, provide up to one year of hemodynamic support and is expected to allow for greater than five liters of blood flow per minute.  The Impella BTR^TM device also includes a wearable driver designed for hospital discharge.  The Impella BTR^TM pump is still in development and has not been approved for commercial use or sale.  

Critical Accounting Policies and Estimates

There have been no significant changes in our critical accounting policies during the three and nine months ended December 31, 2017, as compared to the critical accounting policies disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017.

Recent Accounting Pronouncements

Information regarding recent accounting pronouncements is included in “Note 2. Basis of Preparation and Summary of Significant Accounting Policies” to our condensed consolidated financial statements and is incorporated herein by reference.

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Results of Operations

The following table sets forth certain condensed consolidated statements of operations data for the periods indicated as a percentage of total revenue:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
	2017			2016			2017			2016
Revenue:
Product revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses as a percentage of total revenue:
Cost of product revenue		16.2			16.6			16.3			16.0
Research and development		11.5			14.3			12.9			15.6
Selling, general and administrative		43.2			46.9			44.7			49.3
Total costs and expenses		70.9			77.8			73.9			80.9
Income from operations		29.1			22.2			26.1			19.1
Income tax provision and other		20.4			8.7			8.1			7.5
Net income as a percentage of total revenue		8.7	%		13.5	%		18.0	%		11.6	%

Three and nine months ended December 31, 2017 compared with the three and nine months ended December 31, 2016

Revenue

Our revenues are comprised of the following:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Impella product revenue	$	147,989	$	109,235	$	402,583	$	304,759
Service and other revenue		6,000		4,791		16,619		13,945
Other products		-		598		-		1,837
Total product revenue		153,989		114,624		419,202		320,541
Funded research and development		33		50		111		83
Total revenue	$	154,022	$	114,674	$	419,313	$	320,624

Impella product revenue encompasses Impella 2.5, Impella CP, Impella 5.0, Impella LD and Impella RP device sales. Service and other revenue represents revenue earned on service maintenance contracts and preventive maintenance calls. Other product revenue primarily includes sales of the AB5000 that we no longer actively market.

Total revenue for the three months ended December 31, 2017 increased $39.3 million, or 34%, to $154.0 million from $114.7 million for three months ended December 31, 2016. Total revenue for the nine months ended December 31, 2017 increased $98.7 million, or 31%, to $419.3 million from $320.6 million for nine months ended December 31, 2016. The increase in total revenue was primarily due to higher Impella product revenue from increased utilization in the U.S and Europe.

Impella product revenue for the three months ended December 31, 2017 increased by $38.8 million, or 36%, to $148.0 million from $109.2 million for three months ended December 31, 2016. Impella product revenue for the nine months ended December 31, 2017 increased by $97.8 million, or 32%, to $402.6 million from $304.8 million for the nine months ended December 31, 2016. Most of the increase in Impella product revenue was from increased device sales in the U.S., as we focus on increasing utilization of our disposable catheter products through continued investment in our field organization and physician training programs. Impella product revenue outside of the U.S. also increased primarily due to increased utilization in Germany. We expect product revenue from our Impella devices to continue to increase due to our recent PMAs in the U.S. for our Impella devices, including the PMA approval on the Impella RP device received in September 2017, continued utilization for high risk PCI procedures and ongoing cardiogenic shock, our continued controlled launch of Impella devices outside of the U.S. with a focus on Germany and Japan.

Service and other revenue for the three months ended December 31, 2017 increased by $1.2 million, or 25%, to $6.0 million from $4.8 million for three months ended December 31, 2016. Service and other revenue for the nine months ended December 31,

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2017 increased by $2.7 million, or 19%, to $16.6 million from $13.9 million for the nine months ended December 31, 2016. The increase in service revenue was primarily due to an increase in preventative maintenance service contracts. We have expanded the number of Impella AIC consoles at many of our existing higher volume customer sites and continue to sell additional consoles to new customer sites. We expect revenue growth for service revenue to be slower than our product revenue growth in the near future as most of these using sites in the U.S. have service contracts that normally have three year terms.

The decrease in other revenue was due to a decline in AB5000 disposable sales. We are no longer actively marketing the AB5000 revenue device and we do not expect to have any other product revenue in the near future. We have transitioned our sales focus in the surgical suite from the AB5000 to Impella 5.0, Impella LD and Impella RP devices.

Costs and Expenses

Cost of Product Revenue

Cost of product revenue for the three months ended December 31, 2017 increased by $6.0 million, or 32%, to $25.0 million from $19.0 million for the three months ended December 31, 2016. Gross margin was 84% for the three months ended December 31, 2017 and 83% for the three months ended December 31, 2016.

Cost of product revenue for the nine months ended December 31, 2017 increased by $17.1 million, or 33%, to $68.5 million from $51.4 million for the nine months ended December 31, 2016. Gross margin was 84% for each of the nine months ended December 31, 2017 and 2016, respectively.

The increase in cost of product revenue was related to higher demand for our Impella devices and higher production volume and costs to support growing demand for our Impella devices. The increase in gross margin for the three months ended December 31, 2017 was due to the shipment of more Impella pumps and higher manufacturing production during the quarter as compared to the prior year.

Research and Development Expenses

Research and development expenses for three months ended December 31, 2017 increased by $1.4 million, or 9%, to $17.7 million from $16.3 million for three months ended December 31, 2016. Research and development expenses for the nine months ended December 31, 2017 increased $3.9 million, or 8%, to $54.0 million from $50.1 million for the nine months ended December 31, 2016. The increase in research and development expenses was primarily due to product development initiatives on our existing products and new technologies in development such as Impella ECP^TM, Impella 5.5^TM and Impella BTR^TM as we expanded our engineering organization, increased clinical spending primarily related to our STEMI trial and continued our focus on quality initiatives for our existing Impella devices.

We expect research and development expenses to increase for the remainder of fiscal 2018 as we continue to increase clinical spending related to our cVAD Registry™, STEMI trial and incur additional costs as we continue to focus on engineering initiatives to improve our existing products and develop new technologies.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for three months ended December 31, 2017 increased by $12.7 million, or 24%, to $66.6 million from $53.9 million for three months ended December 31, 2016. Selling, general and administrative expenses for the nine months ended December 31, 2017 increased by $29.1 million, or 18%, to $187.2 million from $158.1 million for the nine months ended December 31, 2016. The increase in selling, general and administrative expenses was primarily due to the hiring of additional field sales and clinical personnel in the U.S. and Germany, increased spending on sales and marketing initiatives as we continue to educate physicians on the benefits of hemodynamic support after receiving PMAs in the U.S. for Impella 2.5, Impella CP, Impella 5.0, Impella LD and Impella RP devices, higher stock-based compensation expense, higher legal expenses related to the FCA Investigation, ongoing patent litigation and other legal matters discussed in “Note 10. Commitments and Contingencies—Litigation,” to our condensed consolidated financial statements and higher professional fees to support the growth of our business.  

We expect to continue to increase our expenditures on sales and marketing activities, with particular investments in field sales and clinical personnel with cath lab expertise to drive recovery awareness for acute heart failure patients. We also plan to increase our marketing, service and training investments as a result of recent PMA approvals in the U.S. for our Impella devices and as we continue our expansion in Japan and other new markets outside of the U.S. We also expect to continue to incur significant legal expenses for the foreseeable future related to the FCA Investigation and patent related matters. 

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Income Tax Provision

Our income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively, and $10.4 million and $24.8 million for the three and nine months ended December 31, 2016, respectively. Our effective tax rate was 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively, and 40.2% and 40.0% for the three and nine months ended December 31, 2016, respectively. The increase in the effective tax rate for the three and nine months ended December 31, 2017 was primarily due to the $22.0 million provisional income tax expense estimate from the re-measurement of our net deferred tax assets due to the Tax Reform Act, as discussed in “Note 9. Income Taxes.” As discussed in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies,” we also recognized excess tax benefits associated with stock-based awards of $3.2 million and $24.5 million as an income tax benefit for three and nine months ended December 31, 2017, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.

Net Income

For the three months ended December 31, 2017, net income was $13.4 million, or $0.30 per basic share and $0.29 per diluted share, compared to $15.4 million, or $0.36 per basic share and $0.34 per diluted share for three months ended December 31, 2016. For the nine months ended December 31, 2017, net income was $75.3 million, or $1.71 per basic share and $1.65 per diluted share, compared to $37.2 million, or $0.86 per basic share and $0.83 per diluted share for the nine months ended December 31, 2016. As discussed above, the enactment of the Tax Reform Act resulted in a decrease in net income of $22.0 million, or $0.50 per basic and $0.48 per diluted share for the three and nine months ended December 31, 2017.  As discussed above, the adoption of ASU 2016-09 resulted in an increase in net income of $0.07 per basic and diluted share for the three months ended December 31, 2017 and $0.56 per basic share and $0.54 per diluted share for the nine months ended December 31, 2017.

Our net income for fiscal 2018 was also driven by higher Impella product revenue due to greater utilization of our Impella devices in the U.S. and Germany.

Liquidity and Capital Resources

At December 31, 2017, our total cash, cash equivalents and marketable securities totaled $350.7 million, an increase of $73.6 million compared to $277.1 million at March 31, 2017. The increase in our cash, cash equivalents and marketable securities was due primarily to positive cash flows from operations in the nine months ended December 31, 2017.

Following is a summary of our cash flow activities:

	For the Nine Months Ended December 31,
	2017			2016
Net cash provided by operating activities	$	136,147		$	77,861
Net cash used for investing activities		(112,307	)		(57,109	)
Net cash used for financing activities		(11,688	)		(6,533	)
Effect of exchange rate changes on cash		(690	)		(1,381	)
Net increase in cash and cash equivalents	$	11,462		$	12,838

Cash Provided by Operating Activities

For the nine months ended December 31, 2017, cash provided by operating activities consisted of net income of $75.3 million, adjustments for non-cash items of $76.5 million and cash used in working capital of $15.7 million. The increase in net income was primarily due to higher revenue from increased utilization of our Impella devices. Adjustments for non-cash items consisted primarily of $29.2 million of stock-based compensation expense, a $34.7 million change in deferred tax provision due to the revaluation of our net deferred tax assets related to the Tax Reform Act, $8.1 million of depreciation expense on property and equipment and $3.2 million in inventory and other asset write-downs. The change in cash from working capital included a $10.3 million increase in accounts receivable associated with higher revenue, $12.0 million increase in inventory to support growing demand for our Impella devices, a $6.5 million increase in accounts payable and accrued expenses and a $1.2 increase in deferred revenue.

For the nine months ended December 31, 2016, cash provided by operating activities consisted of net income of $37.2 million, adjustments for non-cash items of $45.9 million and cash used in working capital of $5.2 million. The increase in net income was primarily due to higher revenue from increased utilization of our Impella devices. Adjustments for non-cash items consisted primarily

28

of $24.5 million of stock-based compensation expense, an $18.8 million change in deferred tax provision, $4.6 million in excess tax benefits on stock-based awards, $4.5 million of depreciation expense on property, plant and equipment and $2.1 million in inventory write-downs. The change in cash from working capital included a $7.6 million increase in accounts receivable associated with our higher revenue, an $8.6 million increase in inventory to support growing demand for our Impella devices, $14.6 million increase in accounts payable and accrued expenses and a $0.3 million increase in deferred revenue.

Cash Used for Investing Activities

For the nine months ended December 31, 2017, net cash used for investing activities primarily consisted of $61.7 million in purchases (net of maturities) of marketable securities and $44.2 million for the purchase of property and equipment primarily related to the purchase of our corporate headquarters building in Danvers, Massachusetts during the three months ended December 31, 2017 and the continued expansion of manufacturing capacity, office space and research development facilities in Danvers and Aachen, Germany.  We also have made $6.4 million of investments in private medical technology companies during fiscal 2018.

For the nine months ended December 31, 2016, net cash used for investing activities primarily consisted of $32.9 million in purchases (net of maturities) of marketable securities and $24.0 million for the purchase of property and equipment mostly related to expansion of manufacturing capacity and office space in Danvers, Massachusetts and Aachen, Germany.

Capital expenditures for fiscal 2018 are estimated to range from $50 million to $60 million. Most of the significant capital expenditures were for software development projects and expanding research facilities, manufacturing capacity and building improvements in our Danvers, Massachusetts, Aachen, Germany, Berlin, Germany and Tokyo, Japan locations.

Cash Provided by Financing Activities

For the nine months ended December 31, 2017, net cash used for financing activities included $19.9 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and $0.5 million in principal payments on capital lease obligation. The capital lease obligation previously recorded was removed as a result of the acquisition of our headquarters in October 2017. These amounts were offset by $7.6 million in proceeds from the exercise of stock options and $1.1 million in proceeds from the issuance of stock under the employee stock purchase plan.  

For the nine months ended December 31, 2016, net cash used for financing activities included $19.9 million in payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and $0.3 million in principal payments on capital lease obligation. These amounts were offset by $8.3 million in proceeds from the exercise of stock options, $4.6 million in excess tax benefits on stock-based awards and $0.8 million in proceeds from the issuance of stock under the employee stock purchase plan.

Operating Capital and Liquidity Requirements

We believe that our revenue from product sales together with existing resources will be sufficient to fund our operations for at least the next twelve months, exclusive of activities involving any future acquisitions of products or companies that complement or augment our existing line of products.

Our primary liquidity requirements are to fund the expansion of our commercial and operational infrastructure, increase our manufacturing capacity, incur additional capital expenditures as we expand our office space and manufacturing capacity in Danvers and Aachen, increase our inventory levels in order to meet growing customer demand for our Impella devices, fund new product development initiatives, continue our commercial launch in Japan and expand to potential new markets, increase clinical spending, legal expenses related to the FCA Investigation and ongoing patent litigation, payments in lieu of issuance of common stock for payroll withholding taxes upon vesting of certain equity awards and to provide for general working capital needs. To date, we have primarily funded our operations through product sales and the sale of equity securities.

Our liquidity is influenced by our ability to sell our products in a competitive industry and our customers’ ability to pay for our products. Factors that may affect liquidity include our ability to penetrate the market for our products, maintain or reduce the length of the selling cycle for our products, capital expenditures, investments in collaborative arrangements with other partners, and our ability to collect cash from customers after our products are sold. We also expect to continue to incur legal expenses for the foreseeable future related to the FCA Investigation, ongoing patent litigation and other legal matters. We continue to review our short-term and long-term cash needs on a regular basis. At December 31, 2017 we had no long-term debt outstanding.

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Marketable securities at December 31, 2017 and March 31, 2017 consisted of $300.2 million and $238.1 million held in investment funds that invest in U.S. Treasury, government-backed and corporate debt securities, respectively. We are not a party to any interest rate swaps, currency hedges or derivative contracts of any type and have no exposure to commercial paper or auction rate securities markets.

Cash and cash equivalents held by our foreign subsidiaries totaled $13.7 million and $8.2 million at December 31, 2017 and March 31, 2017, respectively. Our operating income outside the U.S. is deemed to be permanently reinvested in foreign jurisdictions. The recently enacted Tax Reform Act allows for a 100% deduction for the repatriation of foreign subsidiary earnings with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. Since most of our cash and cash equivalents are held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of such funds to the U.S. would likely have a nominal tax impact, if any.

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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Primary Market Risk Exposures

Our cash, cash equivalents and marketable securities are subject to interest rate risk and will fall in value if market interest rates increase. If market interest rates were to increase immediately and uniformly by 10% from levels at December 31, 2017, we believe the decline in fair market value of our investment portfolio would be immaterial.

Currency Exchange Rates

We have foreign currency exposure to exchange rate fluctuations and particularly with respect to the Euro, British pound sterling and Japanese yen. Therefore, our investment in our subsidiaries is sensitive to fluctuations in currency exchange rates. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive (loss) income component of stockholders’ equity. If rates of exchange for the Euro, British pound and Japanese yen were to have depreciated immediately and uniformly by 10% relative to the U.S. dollar from levels at December 31, 2017, the result would have been a reduction of stockholders’ equity of approximately $9.7 million.

Fair Value of Financial Instruments

At December 31, 2017, our financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these instruments. The estimated fair values of the financial instruments have been determined by us using available market information and appropriate valuation techniques. Considerable judgment is required, however, to interpret market data to develop the estimates of fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of December 31, 2017. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2017, these disclosure controls and procedures are effective to provide reasonable assurance that material information required to be disclosed by us, including our consolidated subsidiaries, in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Evaluation of Changes in Internal Control over Financial Reporting

During the third quarter of our fiscal year ending March 31, 2018, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are from time to time involved in various legal actions, the outcomes of which are not within our complete control and may not be known for prolonged periods of time. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. We record a liability in our condensed consolidated financial statements for these actions when a loss is known or considered probable and the amount can be reasonably estimated. We review these estimates each accounting period as additional information is known and adjust the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the condensed consolidated financial statements. Material legal proceedings are discussed in “Note 10. Commitments and Contingencies—Contingencies” to our condensed consolidated financial statements and are incorporated herein by reference.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. In addition to the other information set forth in this Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended March 31, 2017, which could materially affect our business, financial condition or future results. As of the date of this Report there has been no material change in any of the risk factors described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017, as supplemented by our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

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Item 6. Exhibits

Exhibit No.	Description	Filed with This Form 10-Q	Incorporated by Reference
			Form	Filing Date	Exhibit No.
2.1	Agreement on the Sale and Transfer of all shares in ECP Entwicklungsgellschaft mbH		8-K	July 7, 2014 (File No. 001-09585)	2.1
2.2	Agreement on the Sale and Transfer of all shares in AIS GmbH Aachen Innovation Solutions		8-K	July 7, 2014 (File No. 001-09585)	2.2
3.1	Restated Certificate of Incorporation.		S-3	September 29, 1997	3.1
3.2	Restated By-Laws, as amended.		10-K	May 27, 2004 (File No. 001-09585)	3.2
3.3	Certificate of Designations of Series A Junior Participating Preferred Stock.		S-3	September 29, 1997	3.3
3.4	Amendment to the Company’s Restated Certificate of Incorporation to increase the authorized shares of common stock from 25,000,000 to 100,000,000.		8-K	March 21, 2007 (File No. 001-09585)	3.4
10.1	Lease agreement for additional space in Danvers, Massachusetts dated February 2, 2017	X
10.2	Lease agreement amendment for additional space in Danvers, Massachusetts dated December 14, 2017	X
31.1	Principal Executive Officer Certification pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
31.2	Principal Financial Officer Certification pursuant to Securities Exchange Act Rule 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
32.1	Principal Executive Officer and Principal Financial Officer Certifications pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
101	The following financial information from the ABIOMED, Inc. Quarterly Report on Form 10-Q for the quarter ended December 31, 2017, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of December 31, 2017 and March 31, 2017; (ii) Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2017 and 2016; (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2017 and 2016; (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2017 and 2016; and (v) Notes to Condensed Consolidated Financial Statements.	X

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ABIOMED, INC. AND SUBSIDIARIES

PART II. OTHER INFORMATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	ABIOMED, Inc.
Date: February 6, 2018	/s/    IAN W. MCLEOD
	Ian W. McLeod
	Vice President and Corporate Controller
	(Interim Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

LEASE

BY AND BETWEEN

BROOKWOODCHERRYHILLI,LLC,aDelawarelimitedliabilitycompany,and

BROOKWOOD CHERRY HILL II, LLC, a Delaware limited liability company,

(astenantsincommon, “Landlord”)

and

ABIOMED, INC.,

a Delaware corporation

(“Tenant”)

TABLE  OF CONTENTS

		Page
1.	TERMS	1
2.	THEPREMISES	3
3.	TERM	3
4.	CONDITIONOFTHEPREMISES	4
5.	MONTHLYRENT	4
6.	TAXES	5
7.	OPERATINGEXPENSES	5
8.	RECONCILIATION;AUDITRIGHT	6
9.	INSURANCE	7
10.	WAIVEROFSUBROGATION	8
11.	SECURITYDEPOSIT	8
12.	USE	9
13.	MAINTENANCE;SERVICES	9
14.	SUBLEASE;  ASSIGNMENT	10
15.	INDEMNITY; NON-LIABILITYOFLANDLORD	11
16.	UTILITIES	12
17.	HOLDINGOVER	13
18.	NORENTDEDUCTIONORSETOFF	13
19.	CASUALTY	13
20.	SUBORDINATION;ESTOPPELLETTERS	14
21.	ALTERATIONS; RESTORATION	14
22.	DEFAULT;REMEDIES	15
23.	NOTICES	17
24.	EMINENTDOMAIN	18
25.	QUIETENJOYMENT	18
26.	RULESANDREGULATIONS	18

- i -

		Page
27.	ENVIRONMENTAL	18
28.	FINANCIALSTATEMENTS	20
29.	BROKERS	20
30.	MISCELLANEOUS	20
31.	PARKING	21
32.	SIGNAGE	22
33.	DELETED	22
34.	CERTAINRIGHTSRESERVEDTOLANDLORD	22
35.	LEASE COMMENCEMENT/ACCEPTANCE OFPREMISES	22
36.	WAIVEROFRIGHTTOJURYTRIAL	22
37.	RECORDING	23

- ii -

1.    TERMS. Each reference in this Lease to any of the following subjects shall beconstrued toincorporatethedatastatedforthatsubjectinthisSection 1.

Date of thisLease:	February 2, 2017
Name ofTenant:	ABIOMED, Inc., a Delaware corporation
Notice Address of Tenant:
(a)  Priortopossession:	22 CherryHillDrive Danvers, MA 01923 Attn: GeneralCounsel
(b)  Following possession:	At the Premises
with acopyto:	Ropes &GrayLLP Prudential Tower 800 BoylstonStreet Boston, MA 02199-3600 Attention: John M. Creedon, Esq.
Name ofLandlord:	Brookwood Cherry Hill I, LLC, a Delaware limited liability company, and Brookwood Cherry Hill II, LLC, a Delaware limited liability company, as tenants in common
Notice AddressofLandlord:	Brookwood Cherry Hill I, LLCand Brookwood Cherry Hill II, LLC 138 Conant Street Beverly, Massachusetts 01915 Attn: Kurt Zernich, Director of Asset Management
Landlord's RemittanceAddress:	Brookwood Cherry Hill I, LLC and Brookwood Cherry Hill II, LLC 138 Conant Street Beverly  MA 01915 Attention: Accounts Receivable
Building:	The building located at 24-42 CherryHillDrive, Danvers, Massachusetts01923.
Property:	The Building and the real property on which the Building is located and any other buildings and improvements located thereon.
Premises:	Approximately 12,258 rentable square feet of space at 28 Cherry  Hill Drive (the “28 Cherry Hill Premises”) and 9,345 rentable square feet of space at 24 Cherry Hill Drive (the “24 Cherry  Hill Premises”), for a total 21,603 rentable square feet of space in the Building, as shown by the floor plan attached hereto as Exhibit A.
Permitted Use:	General office and warehouse use, and no other use or purpose.

Term:	The period of time beginning on the Commencement Date and ending at 11:59 P.M. on the Expiration Date.
Commencement Date:	February 2, 2017; provided, however, the Term with respect to the 24 Cherry Hill Premises shall not commence until May 1, 2017 (the “24 Cherry Hill Commencement  Date”).
Expiration Date:	That certain date which is the last day of the sixty-sixth (66th) complete calendar month following the Commencement  Date, unless sooner terminated or extended in accordance with the provisions of this Lease.
Tenant's Percentage:	21.47%, being the ratio of rentable square footage of the Premises to the total  rentable square footage of the Building as determined by Landlord, provided, however, that until the 24 Cherry Hill Commencement Date shall have occurred,  Tenant's  Percentage shall  be12.18%. Landlord represents and warrants that the Building contains approximately 100,619 rentable square feet.
Security Deposit:	$39,727.53.
Exhibits:	ExhibitA     ThePremises
	ExhibitA-1  ParkingStripingPlan
	ExhibitB     AdditionalStipulations
	ExhibitCRulesandRegulations
	ExhibitD     WorkLetter
	ExhibitECommencement Letter
	ExhibitFInitialHVACWork
	ExhibitGTransformerWork
	ExhibitG1TransformerRemovalWork
	ExhibitG2Transfer RelocationWork
	All of the Exhibits listed above are incorporated into and made part of this Lease.
Rent:	Base Rent and all Additional Rent.
AdditionalRent:	All amounts required to be paid by Tenant to Landlord pursuant to this Lease other than Base Rent, including, without limitation, Operating Expenses and Taxes.
Base Rent:

2

Tenant shall pay Base Rent for the 28 Cherry Hill Premises in accordance with the following schedule:

Months of Term	Base Rent (per annum)	Base Rent (per month)	Base Rent (per rentable square foot, per annum)
*2/2/2017 - 1/31/2018	$128,709.00	$10,725.75	$10.50
2/1/2018 - 1/31/2019	$134,838.00	$11,236.50	$11.00
2/1/2019 - 1/31/2020	$140,967.00	$11,747.25	$11.50
2/ l/2020- 1/31/2021	$147,096.00	$12,258.00	$12 .00
2/1/2021 -   1/31/2022	$153,225.00	$12,768.75	$12.50
2/1/2022 - 7/31/2022	$159,354.00	$13,279.50	$13.00

Notwithstanding the foregoing, Base Rent with respect to the 28 Cherry Hill Premises only shall beabatedfortheperiodbeginningFebruary2,2017andendingonApril30,2017(the“28Cherry Hill Base Rent Abatement Period”). Tenant shall be credited $383.06 against Base Rent for the month of May 2017 to account for the Commencement Date occuring February 2, 2017. In no event shall the 28 Cherry Hill Base Rent Abatement Period be deemed to reduce or eliminate Tenant's obligation to pay Additional Rent or any other amounts due hereunder other than Base Rent for the 28Cherry Hill Premises.

Tenant shall pay Base Rent for the 24 Cherry Hill Premises in accordance with the following schedule:

Monthsof Term	Base Rent (per annum)	Base Rent (per month)	Base Rent (perrentable square foot, per annum)
5/1/2017 -1/31/2018	$98,122.50	$8,176.88	$10.50
2/1/2018 -1/31/2019	$102,795.00	$8,566.25	$11.00
2/l/ 2019 - 1/31/2020	$107,467.50	$8,955.63	$11.50
2/1/2020 - 1/31/2021	$112,140.00	$9,345.00	$12.00
2/1/2021 - 1/31/2022	$116,812.50	$9,734.38	$12.50
2/1/2022 - 7/31/2022	$121,485.00	$10,123.75	$13.00

Notwithstanding the foregoing, Base Rent with respect to the 24 Cherry Hill Premises only shall be abated for the month of May 2017 (the “24 Cherry Hill Base Rent Abatement Period”). In no event shall the 24 Cherry Hill Base Rent Abatement Period be deemed to reduce or eliminate Tenant's obligation to pay Additional Rent or any other amounts due hereunder other than Base Rent for the 24 Cherry Hill Premises.

2.    THEPREMISES.LandlordleasestoTenant,andTenantleasesfromLandlord,uponand subject to the terms and conditions of this Lease, the Premises. The Premises are leased with the right of Tenant to use for its customers, employees and visitors, in common with other parties entitledthereto,allcommonareaswithintheBuildingandPropertyandsuchotherfacilitieswithin theBuildingandPropertyasLandlordmayfromtimetotimedesignateandprovide.

3.    TERM. The Premises are leased for the Term. If for any reason Landlord is unable to deliver possession of, or access to, the 28 Cherry Hill Premises to Tenant on or prior to the Commencement Date, or the 24 Cherry Hill Premises to Tenant on or prior to the 24 Cherry Hill CommencementDate,thenLandlordshallnotbeliabletoTenantforanyresultantlossordamage and this Lease shall not be affected in any way except as herein provided. Tenant shall have the optiontoextendtheTermsubjecttothetermsandconditionsofExhibitBattachedhereto.

3

3.1    EARLY ACCESS. So long as Landlord shall have first received paymentofthefirst installment of Base Rent payable hereunder, evidence of the insurance coverage required pursuant to Section 9, and the Security Deposit required pursuant to Section 11, then Landlord shall provide Tenant early access (i) to the 28 Cherry Hill Premises as of the date of this Lease, and (ii) to the 24 Cherry Hill Premises on April 1, 2017. Such early access shall be to perform Tenant's Work as set forth in Exhibit D attached hereto. In connection with such access , Tenant agrees (a) to cease promptly upon notice from Landlord any Tenant's Work which is not set forth onExhibitD,isnotdirectlyrelatedtotheWorkdescribedthereinorisnototherwiseincompliance with the provisions of this Lease, and (b) to comply promptly with all reasonable procedures and regulationsprescribedbyLandlordfromtimetotimeforcoordinating theTenant'sWorkwithany other activity or work in the Building. Such access by Tenant shall be deemed to be subject to all of the applicable provisions of the Lease, except that there shall be no obligation on the part of Tenant solely because of such access to pay Base Rent, Taxes or Operating Expenses prior to the Commencement Date with respect to the 28 Cherry Hill Premises or prior to the 24 Cherry Hill Commencement Date with respect to the 24 Cherry Hill Premises. If Tenant fails to comply with the terms and conditions of this Lease applicable to such early access during the period of early access after one (1) business day prior notice from Landlord, Landlord shall have the right to immediately suspend Tenant's right to right to access the Premises early. Anything herein to the contrary notwithstanding, if early access to the 24 Cherry Hill Premises is not delivered to Tenant byApril15,2017,orpossessionofthe24CherryHillPremisesisnotdeliveredtoTenantbyMay 15, 2017, then for each day of delay thereafter, the 24 Cherry Hill Base Rent Abatement Period shall be extended by oneday.

4.    CONDITIONOFTHEPREMISES.ThePremisesareleased inan“asis”and“where is” condition without any warranty of fitness for use or occupation express or implied, it being agreedthatTenanthashadanopportunitytoexaminetheconditionofthePremises, thatLandlord has made no representations or warranties of any kind with respect to such condition, and that Landlord has no obligation to do or approve any work or make or approve any improvements to or with respect to the Premises to prepare the same for Tenant's occupancy except (A) Landlord shall perform the Initial HVAC Work described by Exhibit F for the 28 Cherry Hill Drive Premises, (B) Landlord shall perform the Transformer Work described by Exhibits G, G1 and G2, and (C) as may otherwise be expressly provided herein. Tenant acknowledges and agrees that the TransformerRelocationWorkdescribedbyExhibitG2shallbeperformedbyLandlordatTenant's solecostandexpenseandthatTenantshallreimburseLandlordforthecostthereofwithinten(10) business days of Landlord's invoicetherefor.

Notwithstanding the foregoing, Landlord represents and warrants that all structural elements of the Building, the windows, doors , all light fixtures, and all mechanical, life-safety, electricalandplumbingsystems(includingHVAC)servingthe28CherryHillPremiseswill bein good working order on the Commencement Date and that all structural elements of the Building, and the windows, doors, all light fixtures, and all mechanical, life-safety, electrical and plumbing systems(includingHVAC)servingthe24CherryHillPremiseswillbeingoodworkingorderon the 24 Cherry Hill Commencement Date. Tenant may, at its sole cost and expense, inspect the mechanical, electrical and plumbing (including HVAC) systems serving the 28 Cherry Hill Premises and 24 Cherry Hill Premises at any time up until the date that is within thirty (30) days after the respective Commencement Date. Landlord shall repair any defects in such systems, provided Landlord receives written notice of such defects within ten (10) business days after Tenant'sinspection ofsuchsystems,atLandlord'ssolecostandexpenseandwithLandlordusing commercially reasonable efforts in making such repairs to not interrupt Tenant's business in the Premises by more than a de minimisextent.

TenantmaymakeimprovementstothePremisesasdescribedintheWorkLetterattached as ExhibitD.

5.    MONTHLYRENT.CommencingontheCommencementDate,BaseRentshallbepaid monthly in advance on or before the first day of each calendar month in accordance with the schedulesetforthinSection1.Exceptintheeventofacasualtyorcondemnationresultinginthe loss of rentable square footage, the Base Rent shall not be adjusted or modified if the actual rentablesquarefootageofthePremisesvariesfromtherentablesquarefootagesetforthinSection 1. If the Commencement Date shall be on any day other than the first day of a calendar month, Base Rent for the partial month shall be prorated based on the number of days in that month. Unless otherwise provided herein, commencing on the Commencement Date, Additional Rent shall be paid monthly in advance on or before the first day of each calendar month. If the CommencementDateshallbeonanydayotherthanthefirstdayofacalendarmonth, Additional Rentforthepartialmonthshall

4

beproratedbasedonthenumberofdaysinthatmonth.Rentshall be paid to Landlord, without notice or demand, and without deduction or offset, in lawful money of the United States of America, at Landlord's Remittance Address as set forth in Section 1 or to suchotheraddressasLandlordmayfromtimetotimedesignateinwriting.Tenantacknowledges that the late payment of Rent or other sums due hereunder shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult to ascertain.Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed covering the Property.Accordingly,ifanyinstallmentofRentoranyothersumsduefromTenantshallnotbe received by Landlord when due, Tenant shall pay to Landlord a late charge equal to five percent (5%) of such overdue amount. In addition, any amount due to Landlord, if not paid when due, shall bear interest from the date due until paid at the lesser of: (i) the Prime Rate (as hereinafter defined)plusfivepercent(5%)perannum,or(ii)thehighestratepermittedbylaw(the“Default Rate”).Theterm“PrimeRate”shallmeanthePrimeRateaspublishedinTheWallStreetJournal fromtimetotime.Thepartiesagreethatsuchlatechargesrepresentafairandreasonableestimate ofthecostsLandlordshallincurbyreasonoflatepaymentbyTenant.Theacceptanceofsuchlate charges by Landlord shall in no event constitute a waiver of Tenant's default with respect to the overdueamountorpreventLandlordfromexercisinganyoftheotherrightsandremediesgranted hereunder. Notwithstanding anything to the contrary in this Lease, Tenant shall pay the first full monthlyinstallmentofRentduehereunder(i.e.RentforthefirstcompletemonthoftheTerm,or, ifapplicable,forthefirstcompletemonthfollowinganyinitialabatementperiod)simultaneously withTenant'sexecutionanddeliveryofthisLease.

6.    TAXES.(a)Tenantshallpaymonthly,asAdditionalRent,one-twelfth(1/12)ofTenant's PercentageofannualTaxesbasedonestimatesprovidedbyLandlordfromtimetotimeandsubject to reconciliation as provided in Section 8 below. “Taxes” means all taxes, assessments and fees levied upon the Property by any governmental entity based upon the ownership, leasing, renting oroperationoftheProperty.Taxesshallnotincludeanyfederal,stateorlocalnetincome,capital stock, succession, transfer, replacement, gift, estate or inheritance taxes; provided, however, if at any time during the Term, a tax or excise on income is levied or assessed by any governmental entityinlieuoforasasubstitutefor,inwholeorinpart,realestatetaxesorotheradvaloremtaxes, such tax shall constitute and be included in Taxes. In addition to the foregoing, Tenant shall pay Landlord,asAdditionalRent,foranyuse,rentorsalestax,servicetax,valueaddedtax,franchise tax or any other tax on Rent however designated as well as for any taxes which are reasonably attributable to the cost or value of Tenant's equipment, furniture, fixtures and other personal propertylocatedinthePremisesorthecostorvalueofanyleaseholdimprovementsmadeinorto the Premises by or for Tenant. All expenses, including reasonable attorneys fees and disbursements,experts'andotherwitnesses'fees,incurredincontestingthevalidityoramountof any Taxes or in obtaining a refund of Taxes shall, solely to the extent of the amount of any reduction in Taxes achieved by Landlord as a result of such contest, be considered as part of the Taxesfortheyearinwhichtheexpensesareincurred.

7.    OPERATINGEXPENSES.Tenantshallpaymonthly,asAdditionalRent,one-twelfth (1/12) of Tenant's Percentage of annual Operating Expenses based on estimates provided by Landlord from time to time and subject to reconciliation as provided in Section 8 below. “Operating Expenses” means and includes all expenses, costs, fees and disbursements paid or incurredbyoronbehalfofLandlordformanaging,operating,maintaining,improving,servicing or repairing the Building or Property and all associated plumbing, heating, ventilation, air conditioning, lighting, electrical, mechanical and other systems, including, without limitation, costs of: performing the Landlord's obligations described in Section 13; janitorial services, the repair, maintenance, repaving and re-striping of any parking and dock areas; providing any services or amenities for the benefit of all tenants of the Building such as conference rooms, parkinggarage,cafeteria,orgymnasium;exteriormaintenance,repairandrepainting;landscaping;snow removal; utilities; management fees; supplies and sundries; sales or ustaxes on supplies or services;chargesorassessmentsunderanyeasement,license,declaration,restrictivecovenantor association;legalandaccountingexpenses;InsurancePremiums;andcompensationandinsurance plans, tax qualified benefit plans, worker's compensation insurance premiums and payroll taxes paid to, for or with respect to all persons engaged in the operation, administration, maintenance and repair of the Property. Landlord may equitably allocate any item of Operating Expenses that benefits multiple buildings among such benefited buildings based on comparable lot size or rentablesquarefootageofsuchbuildings.Ifthereislessthanninetyfivepercent(95%)occupancy during any period, Landlord may adjust those Operating Expenses that are affected by variations inoccupancylevelstotheamountofOperatingExpensesthatwouldhavebeenincurredhadthere beenninetyfivepercent(95%)occupancy.

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Notwithstanding the foregoing, Operating Expenses shall not include costs of alterations to the premises of other tenants of the Property, depreciation charges, interest and principal payments on mortgages, ground rental payments and real estate brokerage and leasing commissions; costs incurred for Landlord's general overhead and any other expenses not directly attributable to the operation and management of the Building or the Property; costs of selling or financing any of Landlord's interest in the Property; costs incurred by Landlord for the repair of damagetothePropertytotheextentthatLandlordisreimbursedbyinsuranceproceeds;thecosts of services and utilities separately chargeable to individual tenants of the Building; wages, bonuses, and other compensation of employees above the grade of property manager; the cost of installing, operating and maintaining any specialty service, such as cafeteria, gym, child or day carefacilities;thecostofanyworkorservicesperformedforanyfacilityotherthan theBuilding; and capital expenditures other than those which (i) actually reduce Operating Expenses (but only totheextentofLandlord'sreasonableprojectionofsuchreduction),or(ii)arerequiredunderany governmentallaws,regulations,orordinancesenactedafterthedateofthisLease.

8.    RECONCILIATION;AUDITRIGHT.AnyfailurebyLandlordtodeliveranyestimate or statement of Additional Rent required under this Lease shall not operate as a waiver of Landlord's right to collect all or any portion of Additional Rent due hereunder. On an annual basis, Landlord shall provide Tenant with a statement of all actual Operating Expenses (each, an “Operating Statement”) and all actual Taxes (each, a “Tax Statement”) for the preceding year. Landlord shall endeavor to provide such statements to Tenant within one hundred twenty (120) days following the end of each year (and shall in all events provide such statements to Tenant withinonehundredfifty(150)daysfollowingtheendofeachyear).IfTenanthasmadeestimated payments of Operating Expenses or Taxes in excess of the actual amount due as shown on the applicable Operating Statement or Tax Statement, Landlord shall credit Tenant with any overpaymentagainstthenextRentotherwisedue,provided,however,ifsuchoverpaymentoccurs within the final year of the Term, then Landlord shall reimburse Tenant in the amount of such overpayment in cash as part of Landlord's reconciliation procedure for the final year of the Term at or after the end of the Term (and not later than fifteen (15) business days after such reconciliation procedure has been completed), and such obligation shall survive the expiration or earlier termination of this Lease. If the actual amount due exceeds the estimated payments made by Tenant during the preceding year, Tenant shall pay the difference to Landlord within fifteen (15) business days of being invoiced therefor and such obligation shall survive the expiration or earlier termination of this Lease.

Tenant shall have the right during the Term, by providing written notice to Landlord (the “Review Notice”) within ninety (90) days after receiving Landlord's statement of actual Operating Expenses for any year, to review Landlord's records relating to Operating Expenses for such year as well as for the immediately preceding year (provided, however, Tenant shall not be permitted  to review any year more than once). Within a reasonable period of time after receipt of a timely Review Notice, Landlord shall make such records available for Tenant's review at either Landlord's home office or at the office of the property manager for the Building.  If Tenant fails  to give Landlord written notice stating in reasonable detail any objection to Landlord's statement ofactualOperatingExpenseswithinsixty(60)daysaftersuchrecordsaremadeavailabletoTenant for review then Tenant shall be deemed to have approved Landlord's statement of Operating Expenses for such year and Tenant shall have no further right to object or contest such statement. UponLandlord'sreceiptofatimelyobjectionnoticefromTenant,LandlordandTenantshallwork together in good faith to resolve the discrepancy between Landlord' s statement and Tenant's review. If Landlord and Tenant determine that Operating Expenses for the year in question areless than reported in Landlord's statement, Landlord shall provide Tenant with a credit against future Rent in the amount of any overpayment   byTenant. Likewise, if Landlord andTenant determine that Operating Expenses for the year in question are greater than reported in Landlord's statement, Tenant shall forthwith pay to Landlord the amount of underpayment by Tenant. Any information obtained by Tenant pursuant to the provisions of this section shall be treated as confidential  and   Landlord   may   require   that   Tenant   executea commercially reasonable confidentiality agreement as a condition of Tenant's review. If Tenant retains an agent to review Landlord's books and records for any year, such agent must (i) be a CPA firm (ii) not be compensated on a contingency basis, and (iii) execute a commercially reasonable confidentiality agreement with respect to such review. Tenant shall be solely responsible for all costs incurred by Tenant in connection with such review, unless such review discloses an overcharge in excess of threepercent(3%),inwhichcaseLandlordshallpayallcostsofsuchreviewnottoexceed$7,500. Notwithstanding anything herein to the contrary, Tenant shall not be permitted to review

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Landlord's records or to dispute any statement of Operating Expenses if Tenant is in default hereunder beyond all applicable notice and cure periods or if Tenant has not first paid to Landlord theamountdueasshownonLandlord'sstatementofactual OperatingExpenses.

If, after the completion of Tenant's review in compliance with the preceding paragraph, Landlord and Tenant fail to resolve any discrepancy between Landlord's statement and Tenant's review, then either party may submit such dispute to arbitration conducted in Boston, Massachusetts administered by the American Arbitration Association (the “AAA”) under its Commercial Arbitration Rules. Prior written notice of application by either party for arbitration shall be given to the other at least ten (10) days before submission of the application to the said AAA' s office, in the City of Boston.The arbitrator shall hear the parties and their evidence. The decisionofthearbitratorshallbebindingandconclusive,andjudgmentupontheawardordecision of the arbitrator  may  be entered  in the applicable  Superior  Court  of  the Commonwealth ofMassachusetts. Each party shall bear their respective costs incurred in connection with any such arbitration.

9.    INSURANCE.

(A)    Tenant shall maintain the following insurance in force from the date upon which TenantfirstentersthePremisesandthroughouttheTermandthereafterforsolongasTenantisin occupancy of any part of thePremises:

(i)    Commercial General Liability insurance with limits of at least $ 1,000,000 per occurrence, $2,000,000 general aggregate, and, if the Tenant manufacturers or produces a product in the Premises, $2,000,000 products completed operations aggregate or such larger amounts as Landlord may reasonably require from time to time, covering bodily injury and propertydamagearisingoutoftheuseofthePremises,aswellasproducts/completedoperations, blanketcontractualliability,personalinjuryandadvertisingliability;

(ii)    Worker's Compensation insurance as required by the state in which the PremisesislocatedcoveringoccupationalinjuriesordiseasetoallemployeesofTenantandtoany contractors,subcontractorsorotheragentsused byTenantforworkorotheractivitiesonorabout the Premises. Such policy shall include Employer's Liability limits of at least $500,000 each accident,$500,000eachemployee,and$500,000disease;

(iii)    Business Automobile Liability insurance for all owned (Symbol 1), non- owned(Symbol9)andhired,rentedand/orborrowed(Symbol8)vehicles used bytheTenant,its employees or agents. Such policy shall include a combined  single limit of liability of at least $1,000,000 per claim for bodily injury and property damage and shall provide that employees are insureds;

(iv)    Excess or Umbrella Liability insurance with a limit of at least $5,000,000 providing additional limits of insurance over the primary per occurrence and aggregate limits of theCommercialGeneralLiability(includingbodilyinjury,propertydamage,products/completed operations,personal/advertisinginjuryandblanketcontractualliability),Employer'sLiability,and BusinessAutoLiabilityinsurancerequiredin(i),(ii),and(iii)above;and

(v)    Property insurance covering “all risk” of physical damage to Tenant's personalpropertyandanypropertyinthecare,custody,andcontroloftheTenant.Inadditionthis policyshallcoveranydirectorindirectphysicaldamagetoallalterations,additions,improvements (including carpeting, floor coverings, paneling, decorations, fixtures and any improvements or betterments to the Premises made by Tenant or by Landlord at Tenant's request or for Tenant's benefit) situated in or about the Premises. Such coverage shall be for the full replacement value of the coveredproperty.

(B)    Tenant's Commercial General Liability, Property, and Excess Liability/Umbrella LiabilitypoliciesshallnameLandlord,Landlord'smanagingagent,andLandlord'smortgageeas Additional Insureds and shall be primary insurance as to any insurance carried by the parties designatedasAdditionalInsureds.AllpoliciespurchasedandmaintainedbyTenanttosatisfythe requirementsinthisLeasemustbepurchasedfromaninsurancecompanywithaminimumrating of “A- X” or its equivalent from one of the major rating agencies (AM Best, Moody' s, Standard &Poor's,Fitch)thatisadmittedoreligibletodobusinessinthestatewherethePremisesislocated.

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(C)    Tenant shall provide Landlord with a certificate of insurance for each policy simultaneously with the delivery of an executed counterpart of this Lease and at least thirty (30)dayspriortoeachrenewalofsuchinsurance.SuchcertificatesofinsuranceshallbeonanACORD Form 27 or ISO Form 2026 or their equivalent, shall certify that such policy has been or shall be issued and that it provides the coverage and limits required above, and shall provide that the insurance shall not be canceled or materially changed unless thirty (30) days prior written notice (or ten (10) days in the event of cancellation for non-payment) shall have been given to Tenant. Tenant shall provide Landlord a copy of any such notice within five (5) business days following Tenant' s receipt thereof. In addition to providing the certificates of insurance required herein, TenantshallalsopromptlyfurnishanyadditionalinformationasLandlordmayreasonablyrequest from time to time pertaining to Tenant's insurance coverage. Tenant shall notify Landlord in writing (i) at least thirty (30) days in advance if Tenant intends to cancel or non-renew such insuranceforanyreason,or(ii)withinthree(3)businessdaysofreceiptifTenantreceivesanotice that its insurance company intends to cancel or non-renew such insurance for any reason or that the required coverage or limits are to be materially changed from the initial requirements in this Lease. In the event that Tenant fails to obtain or maintain the insurance required above or fails to provide the certificates of insurance required, Landlord may, at its option, obtain such insurance on behalf of Tenant. Tenant shall pay, as Additional Rent upon demand, the reasonable cost of such insurance. Landlord' s failure to obtain such coverage on behalf of Tenant shall not limit Tenant's liability in the event of an uncoveredloss.

(D)    Landlord shall carry or cause to be carried such insurance in amounts and with deductibles as a reasonably prudent landlord would purchase and maintain with respect to the Property. Tenant shall pay Tenant's Percentage of Landlord' s insurance premiums (“Insurance Premiums”) during the Term of the Lease as a part of Operating Expenses. Tenant shall not knowingly do or permit to be done anything which shall contravene, invalidate, or increase the costoftheLandlord'sinsuranceandshallcomplywithallrules,orders,regulations,requirements andrecommendationsofLandlordoritsinsurancecompaniesrelatingto oraffectingthecondition, use,oroccupancyofthePremises.IfTenantdoesknowinglyconductanyactivitywithinorabout thePremisesthatresultsinanincreasetothecostofLandlord'sinsuranceTenantshallreimburse Landlordfortheentireamountofsuchadditionalpremiumsorsurchargesondemand.

10.    WAIVER OF SUBROGATION. Notwithstanding any other language of this Lease to thecontrary,LandlordandTenanteachwaivetheirrespectiverightstorecoverfromtheotherfor any and all loss of or damage to their respective property if such loss or damage is covered, or required by this Lease to be covered, by insurance. Both Landlord and Tenant shall obtain an endorsement acknowledging such waiver from its insurance company(s) evidencing compliance with thissection.

11.    SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit with Landlord the amount of the Security Deposit specified in Section 1 of this Lease. Provided that Tenant has paid all amounts due and has otherwise performed all obligations hereunder, the Security Deposit shall be returned to Tenant without interest within thirty (30) days after the expiration of the Term. If Tenant defaults under any provision of this Lease, Landlord may, but shall not be obligated to, apply all or any part of the Security Deposit to cure the default. In the event Landlord elects to apply the Security Deposit as provided for above, Tenant shall, within five (5) days after Landlord' s demand, restore the Security Deposit to the original amount. Upon any sale or other conveyance of the Building, Landlord shall transfer the Security Deposit (or any amountoftheSecurityDepositremaining)toasuccessorowner, andTenantagreestolooksolelyto the successor owner for repayment of the same. The Security Deposit shall not operate as a limitation on any recovery to which Landlord may be entitled.

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12.    USE. The Premises shall be used for the Permitted Use and for no other purposes whatsoever.TenantshallnotdoorknowinglypermittobedoneinoraboutthePremises,Building or Property anything which is prohibited by any ordinance, order, rule, regulation, certificate of occupancy, or other governmental requirement, now in force or which may hereafter be enacted, including, without limitation, the Americans with Disabilities Act of 1990, as amended (collectively, “Applicable Law”). Tenant shall comply with all Applicable Law in its use of the Premises and common areas of the Property. Tenant shall use commercially reasonable efforts to cause all contractors, agents, employees, invitees and visitors of Tenant to use the Premises and anycommonareaofthePropertyinsuchamannerastopreventwaste,nuisanceandanydisruption of other occupants. Landlord represents and warrants to Tenant that the maximum live floor load per square foot of the Premises is 125 pounds per square foot. Tenant shall not place a load upon any floor in the Premises exceeding such floor load. The judgment of any court of competent jurisdiction or the admission by Tenant in any action or proceeding against Tenant, whether Landlord is a party thereto or not, that Tenant has violated any Applicable Law in the use or occupancy of the Premises, Building or Property shall be conclusive of that fact as between Landlord andTenant.

13.    MAINTENANCE; SERVICES. Tenant will, throughout the Term and at its sole cost, keep and maintain the Premises and all fixtures and equipment located therein clean, safe and in good working order, repair and condition, and make all necessary repairs thereto,  including, withoutlimitation,replacingallbrokenglasswithglassofthesamesizeandqualityasthatbroken, replacing all burnt out light bulbs and ballasts, removing all garbage, and repairing all systems or portions of systems exclusively serving the Premises including, without limitation, electrical, mechanical, fire and life safety, plumbing and heating, ventilating and air conditioning systems. For the purposes of maintaining the heating, ventilating, and air conditioning system serving the Premises (but only if such system serves only the Premises and no other space in the Building), Tenant shall, at Tenant's expense, procure and maintain from a contractor approved by Landlord a service and maintenance contract (“Service Contract”) subject to Landlord's review and approval, not to be unreasonably withheld, conditioned or delayed. Tenant shall provide such Service Contract to Landlord within thirty (30) days following the Commencement Date and withinten(10)daysofLandlord'srequestTenantshallprovideLandlordwithcopiesofallservice and maintenance records pertaining to the service and maintenance of the heating, ventilating and air conditioning system. In the event Tenant fails to maintain such contract, Landlord shall have the right, but not the obligation, to procure and maintain the heating, ventilating and air conditioning system maintenance contract and if Landlord so elects, Tenant shall reimburse Landlord for the cost thereof as Additional Rent upon demand. All repairs required of Tenant in connectionherewithshallbeofaqualityandclassatleastequaltotheminimumbuildingstandards establishedbyLandlordandshallbedoneinagoodandworkmanlikemannerincompliancewith all Applicable Law and the terms and conditions of this Lease. If Tenant fails to maintain the Premises in compliance with the terms hereof Landlord shall have the right to do such acts and expendsuchfundsattheexpenseofTenantasarereasonablyrequiredandTenantshallreimburse Landlord  for the cost  thereof  as Additional  Rent upondemand. Should  Tenantrequireany additional service not provided by Landlord pursuant to this Lease, including any services furnished outside the Building' s normal business hours, Landlord may, but shall not beobligated to, furnish such additional service and Tenant agrees to pay Landlord's then standard charges therefor, which may include a reasonable administrative fee, any taxes imposed thereon, and, where appropriate, a reasonable allowance for depreciation of any systems being used to provide such service, as Additional Rent within thirty (30) days of being invoiced therefor.

Landlord shall maintain and repair (and replace, as necessary) in good working order, condition and repair, and, subject to Section 21(A), cause the same to be kept in compliance with Applicable Law, the roof, foundation, exterior walls, parking lots, walkways and any common areasoftheBuilding,andallBuildingsystemsorportionsofsystemslocatedoutsidethePremises not exclusively serving the Premises, the cost of which shall be included as a part of Operating Expenses, provided that Landlord shall have no obligation to make any repairs unless Landlord has first received written notice of the need for such repairs from Tenant. Notwithstanding the foregoing, any damage occasioned by the negligence or willful act of Tenant or any person claiming under Tenant, or contractors, agents, employees, invitees or visitors of Tenant or any suchperson,shallberepairedbyandatthesoleexpenseofTenant,exceptthatLandlordshallhave the right, at its sole option, to make such repairs and to charge Tenant for all costs and expenses incurred in connection therewith and Tenant shall pay the cost therefor as Additional Rent within thirty (30) days after being invoiced thereof together with reasonable supporting documentation therefor.

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Notwithstanding the foregoing, if any existing rooftop heating, ventilation and air conditioningunit(“RTU”)servingthePremisesfailsandrequiresreplacementduringthefirsttwo(2)yearsoftheinitialTerm,asdeterminedbyalicensedandqualifiedHVACcontractorselected byTenantandapproved byLandlordinitscommerciallyreasonablejudgment,thenLandlordshall be responsible for the removal and replacement of such RTU with a reasonably comparable unit andLandlordshallpaydirectlytothecontractorundertakingtheremovalandreplacementproject the full cost of such removal and replacement project; provided, however, that Landlord shall not be responsible for any costs which are due to damages to such RTU caused by Tenant or any of Tenant'semployees,contractors,agents,subtenants,invitees,orsimilarparties. Infurtheranceof the foregoing, and as a condition to any Landlord obligation pursuant to this paragraph (i) Tenant shallprovidepriorwrittennoticetoLandlordofthefailureorrequiredreplacementoftheRTU in question, along with a detailed recommendation from a licensed and qualified HVAC contractor that the replacement is required, which recommendation Landlord shall have the option to verify andconfirmwithitspreferredHVACcontractor,(ii)Landlordshalldetermine(initscommercially reasonable judgment) the brand, make, and model of the proposed replacement HVAC unit) and final budget for the removal and replacement project prior to the actual incurrence of any costs relatedthereto,subjecttoTenant'sapproval(whichapprovalshallnot beunreasonablywithheld),(iii)TenantshallprovideLandlordwithallnecessaryaccesstothePremises,andshallreasonably cooperate with Landlord in all respects, to undertake and complete the removal and replacement project.

14.    SUBLEASE; ASSIGNMENT.

(A)    Tenant shall not mortgage, pledge, hypothecate or otherwise encumber itsinterest inthisLease.TenantshallnotallowthePremisestobeoccupied,inwholeor inpart,byanyother party and shall neither sublet the Premises, in whole or in part, nor assign this Lease, nor amend any sublease or assignment to which Landlord has consented, without in each case obtaining the prior written consent of Landlord. Any sublease or assignment, or amendment to any subleaseor assignment, made without Landlord's prior written consent (if such consent is required hereunder) shall, at Landlord's option, be null, void and of no effect, and shall, at Landlord's option, constitute an Event of Default. The provisions of this section 14(A) shall apply to a transfer, by one or more transfers, of all, or substantially all, of the business or assets of Tenant, of a majority of the stock, partnership or membership interests, or other evidences of ownership, of Tenant, and of any shares, voting rights or ownership interests of Tenant which results in a change in the identity of the entity or entities which exercise, or may exercise, effective control of Tenant as if such transfers were an assignment of this Lease.  Tenant must request Landlord's consent to any assignment or sublease at least sixty (60) days prior to the proposed effective date of the assignment or sublease. At the time of its request, Tenant shall provide Landlord in writing: (a) the name and address of the proposed assignee or subtenant, (b) a complete copy of the proposed assignment or sublease or a term sheet setting forth the material economic terms of the proposed assignment or sublease, (c) reasonably satisfactory information about the nature, business, and business history of the proposed assignee or subtenant and its proposed use of the Premises, and (d) banking, financial or other credit information about the proposed assignee or subtenant reasonably sufficient to enable Landlord to determine  its financial  condition and operatingperformance. Landlordshallnot unreasonably withhold, condition or delay its consent to Tenant's written request to sublease the Premises or assign this Lease which is made in compliance with the terms and conditions of this section. Without  limiting  the other instances  in  which  it  may  be reasonablefor Landlordto withhold its consent to an assignment or sublease, Landlord's refusal to consent to any proposed assignment or sublease shall not be unreasonable if: (a) the financial condition or operating performance of the proposed subtenant or assignee, determined in Landlord's reasonable discretion,islessthanthegreaterofthefinancialconditionoroperatingperformanceoftheTenant on (i) the date of execution of this Lease or (ii) the date of Tenant's request for Landlord's consent to the proposed assignment or sublease, (b) Tenant is in default under any of the terms, covenants or conditions of this Lease beyond all applicable notice and cure periods, (c) Landlord reasonably determines that the proposed use of the Premises may result in: (i) increased wear and tear on the Premises, Building or Property or (ii) any materially adverse effect on other tenants in the Building oradjacentbuildingsownedbyLandlord,(d)theproposedsubtenantorassigneeisagovernmental agency, (e) Landlord has space available elsewhere in the Building which can accommodate the needs of the proposed subtenant or assignee or the proposed subtenant or assignee is a prospect to whom Landlord has made a proposal for the lease of space within the market area within the prior six (6) months, (f) the proposed assignee or subtenant is a tenant in any building owned by Landlord or any affiliate of Landlord including, without limitation, the Building, (g) the proposed subtenant or assignee would or its proposed use of the Premises would cause Landlord to be in violation of any covenant or restriction contained in another lease or other agreement, (h) Landlord's lender, if any, does not consent to the proposed sublease or assignment where such consentisrequiredundertheapplicableloandocuments.

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(B)    Notwithstanding the foregoing, Landlord's consent shall not be withheld, and Landlord shall have no right to recapture the Premises or share in Profits (defined below), when Tenant is transferring its interest in the Premises pursuant to transactions with an entity into or with which Tenant is merged or consolidated or to which all or substantially all of Tenant's business or assets are transferred or to any entity which controls or is controlled by Tenant or is under common control with Tenant (provided that such entity maintains such relationship to Tenant for a period of at least two (2) years after the date of such transfer, it being agreed thatthesubsequentsaleortransferofstockwithinsuchtwo(2)yearperiodresultinginachangeinvoting control, or any other transaction(s) within such two (2) year period having the overall effect that such entity ceases to control, be controlled by, or be under common control with Tenant, shallbe treatedasanassignmentofthisLeasegovernedbytheprecedingparagraphsofthisSection)(such transfer being a “Permitted Transfer”), provided that in any of such events (a) Tenant is not then in default under this Lease beyond applicable notice and cure periods, and (b) the successor to Tenant, in Landlord's reasonable opinion, possesses adequate financial capability to perform the Tenantobligationsasandwhendueorrequired.

(C)    No subletting or assignment shall release Tenant from Tenant's obligations under this Lease or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. Any subtenant shall, at Landlord's election, attorn to Landlord following any early termination of this Lease and any assignee shall be jointly and severally liable for the full performance of all of Tenant' s obligations hereunder. Landlord may require, as a condition to granting Landlord's consent with respect to the provisions of this section, that the proposed subtenant or assignee enter into a written agreement with Landlord confirming the obligations of such subtenant or assignee under this Lease. Tenant shall pay, as AdditionalRentwithinthirty(30)daysafterbeinginvoicedtherefor,allreasonablelegalfees(not toexceed$2,500)incurredbyLandlordinconnectionwitheachproposed assignmentorsublease whether or not Landlord's consent is obtained. If Tenant receives rent or other payments under anyassignmentorsubleaseinexcessofthepaymentsmadebyTenanttoLandlordunderthisLease (as such amounts are adjusted on a per square foot basis if less than all of the Premises is transferred), then Tenant shall pay Landlord one-half of such excess after deduction on an amortized basis of the cost of reasonable marketing expenses, brokerage fees and tenant improvements (such net amount “Profits”) paid for or incurred in connection with such sublease or assignment. Landlord's consent to one assignment or sublease shall not be deemed a waiver of the requirement of Landlord ' s consent to any subsequent assignment or sublease. In the event Tenant seeks to assign its interest in this Lease, and Landlord does not consent to such proposed assignment,LandlordmayelecttoterminatethisLeaseinitsentirety,andthelastdayoftheTerm of this Lease shall be the thirtieth (30th) day after Landlord notifies Tenant of Landlord's election to terminate this Lease. In the event Tenant seeks to sublet all or any portion of the Premises and Landlord does not consent to such proposed sublease, Landlord may elect to terminate this Lease with respect to the portion of the Premises that would be subject to such sublease and the last day of the Term of this Lease for such space shall be the thirtieth (30th) day after Landlord notifies Tenant of Landlord' s election to terminate this Lease and, if less than the entire Premises is affected, Landlord shall have the right to perform any alterations to make such space a self contained rentalunit.

15.    INDEMNITY;NON-LIABILITYOFLANDLORD.Excepttotheextentprohibitedby law,asamaterialpartoftheconsiderationforLandlord'sexecutionofthisLease,Tenantshallnot hold Landlord or its employees or Landlord's agents or contractors or their employees liable for, and Tenant covenants and agrees that it shall indemnify and defend Landlord for and againstany and all penalties, damages, fines, causes of action, liabilities, judgments, expenses (including, without limitation, reasonable attorneys' fees) or charges incurred in connection with or arising from: (i) the use or occupancy of the Premises by Tenant or any person claiming under  Tenant; (ii) any acts, omissions or negligence of Tenant or any person claiming under Tenant, or contractors,agents,employees, inviteesorvisitorsofTenantoranysuchperson;(iii)anybreach, violation or nonperformance by Tenant or any person claiming under Tenant or the employees, agents , contractors , invitees or visitors of Tenant or any such person of any term, covenant or provision of this Lease or any Applicable Law; (iv) any injury or damage to the person, property or business of Tenant, its employees, agents, contractors, invitees, visitors or any other person entering upon the Property under the express or implied invitation of Tenant; or (v) any matter occurring in the Premises during the Term that is not caused by the negligence or willful misconduct of Landlord or the employees, agents, contractors, invitees or visitors of Landlord.

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Landlord shall indemnify, defend and hold harmless Tenant from and against any and all claims, demands, causes of action, judgments, costs and expenses, and all losses and damages caused to Tenant from any occurrence within the common areas of the Building or Property without any negligence on the part of Tenant and arising from Landlord' s negligence or willful misconduct in failing to maintain the common areas of the Building and Property in accordance with the provisions ofthis Lease. Upon notice from Tenant, Landlord shall defend any suchclaim, demand, cause of action or suit at Landlord' s expense by counsel selected by Landlord and reasonably satisfactory to Tenant, provided, however, that any counsel selected by Landlord' s insurancecarriershallbedeemedacceptabletoTenant.

Landlord, to the fullest extent not prohibited by law, shall not be liable for any damage occasioned by failure to keep the Premises, Building or Property in repair, nor for any damage done or occasioned by or from plumbing, gas, electricity, water, sprinkler, or other pipes or sewerage or the bursting, leaking or running of any pipes, tank or plumbing fixtures, in, above, upon or about the Premises or the Building nor from any damage occasioned by water, snow or ice beinguponorcomingthroughtheroof,skylights,trapdoororotherwise,norforanydamages arising from acts, or neglect of co-tenants or other occupants of the Building or of any owners or occupants of adjacent or contiguous property, nor for any loss of or injury to property or business occurring, through, in connection with or incidental to the failure to furnish any such services or theinterruptionofanyservicestothePremises.Further,Landlordshallnotbeliableorresponsible to Tenant for any loss or damage to any property or person occasioned by theft or any other criminalact,fire,actofGod,publicenemy,injunction,riot,strike,insurrection,war,courtorder, lawofrequisitionororderofanygovernmentalauthority.

Neither Landlord nor Tenant shall be liable in any event for incidental or consequential damages to the other party by reason of any default by such party hereunder, whether or not the other party is notified that such damages may occur. The term “Landlord” , as used in this Lease, so far as covenants or obligations to be performed by Landlord are concerned, means only the ownerorowners atthetimeinquestionoftheLandlord'sinterestintheBuilding,andintheevent of any transfer or transfers ohitle to the Landlord's interest in the Building, the Landlord herein named (and in case of any subsequent transfers or conveyances, the then grantor) shall be automatically freed and relieved from and after the date of such transfer or conveyance of all liability as respects the performance of any covenants or obligations on the part of the Landlord contained in this Lease thereafter to be performed. Tenant's sole recourse against Landlord, and any successor to the interest of Landlord in the Premises, is to the interest of Landlord, and any successor, in the Premises and the Building of which the Premises are a part. In no event whatsoevershallLandlordoranybeneficiaryofanytrustofwhichLandlordisatrusteeoranyof Landlord's officers, directors, partners, managers, members, shareholders, agents, attorneys and employeeseverbepersonallyliablehereunder.

16.    UTILITIES. Tenant shall contract directly with public utility providers for gas and electricity which are separately metered to the Premises and shall pay such utility providers directlyandpromptlywhendue.Landlordrepresentsandwarrantsthatallmetersforsuchgasand electric utilities are currently in the Premises and are operational. If any utility is not separately metered to the Premises, including water and sewer, the cost of such utility consumed on the Premises, as reasonably determined by Landlord, shall be paid by Tenant as Additional Rent as partofOperatingExpenses.Tenant'sobligationtopayforutilitiesprovidedtothePremisesduring the Term shall survive the expiration or earlier termination of the Lease. Tenant shall not utilize an alternative provider for a utility service other than the public utility provider servicing the Property unlessTenantshallfirstobtainthewrittenconsentofLandlord.Landlordshallinnoway beliableorresponsibleforanyloss,damage,orexpensethatTenantmaysustainorincurbyreason of any change, failure, interruption, or defect in the supply or character of the electric energy furnished to the Premises or Building. To ensure the proper functioning and protection of all utilities, Tenant agrees to abide by all reasonable regulations and requirements which Landlord may prescribe and to allow Landlord and its utility providers access to all electric lines, feeders, risers,wiring,andanyothermachinerywithinthePremises(providedthatreasonablepriorwritten notice thereof shall be given to Tenant, and in connection therewith, Landlord shall take reasonablestepstominimize interferencewithTenant'sbusinessinthePremises).

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17.    HOLDING OVER. If Tenant or any party claiming by or under Tenant remains in occupancy of the Premises or any part thereof beyond the expiration or earlier termination of this Lease, such holding over shall be without right and a tenancy at sufferance, and Tenant shall be liable to Landlord for any loss or damage incurred by Landlord as a result thereof, including consequential damages; provided, however, Landlord shall not be entitled to consequential damages on account of Tenant's holding over that are attributable to any period prior to the date that isfortyfive(45)daysafterLandlordhasprovidednoticetoTenantthatLandlordhasentered intogoodfaithnegotiationswithaprospectivereplacementtenantforanyportionofthePremises. Inaddition,foreachmonthoranypartthereofthatsuchholdingovercontinues,Tenantshallpay toLandlord amonthlyfeefortheuseandoccupancyofthePremisesequalto(a)forthefirstthirty days of such holdover, one hundred fifty percent (150%) of the Rent payable for the month immediatelyprecedingsuchholdover,and(b)thereafter,twohundredpercent(200%)oftheRent payable for the month immediately preceding such hold over, and there shall be no adjustment or abatement for any partial month. The provisions of this section shall not be deemed to limit or exclude any of Landlord's rights of re-entry or any other right granted to Landlord hereunder, at law or inequity.

18.    NORENTDEDUCTIONORSETOFF.Tenant'scovenanttopayRentisandshallbe independent of each and every other covenant of this Lease. Tenant agrees that any claim by TenantagainstLandlordshallnotbedeductedfromRentnorsetoffagainstanyclaimforRentin anyaction.NopaymentbyTenantorreceiptbyLandlordofalesseramountthantheRentherein stipulatedshallbedeemedtobeotherthanonaccountoftheearlieststipulatedRent,norshallany endorsementorstatementonanycheckoranyletteraccompanyinganycheckorpaymentasRent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any remedy provided inthisLeaseoratlaw.Inconnectionwiththeforegoing,Landlordshallhavetheabsoluterightin itssolediscretiontoapplyanypaymentreceivedfromTenanttoanyaccountorotherpaymentof Tenantthennotcurrentanddueordelinquent.

Notwithstanding the foregoing, if, for more than three (3) consecutive business days following written notice from Tenant to Landlord, Landlord shall fail to restore of any utility or other service required to be provided by Landlord under this Lease following the interruption, curtailment or suspension of such utility or other service as a result of Landlord's negligence or willful misconduct, and as a result of such failure (i) Tenant shall not be reasonably able to use and occupy, or to have access to, the entire Premises or a material portion of the Premises, as the case may be, for the normal conduct of Tenant's business operations, and (ii) Tenant does not use or occupy the same during said period, then the obligation of Tenant to pay Rent hereunder shall be abated in proportion to the portion of the Premises that Tenant is unable to use as a result of such failure from the date of Tenant's notice until the date on which Landlord has restored any such utility or other service.

19.    CASUALTY. If the Premises or any part thereof are damaged by fire or other casualty, Tenant shall give prompt notice thereof to Landlord. If the Premises or the Building are totally or partiallydamagedordestroyedbyfireorothercasualty,therebyrenderingthePremisestotallyor partiallyinaccessibleorunusable,LandlordshalldiligentlyrestoreandrepairthePremisesandthe Buildingtosubstantiallythesameconditiontheywereinpriortosuchdamage.Providedthatsuch damagewasnotcausedbytheactoromissionofTenantoranyofitsemployees,agents,licensees, invitees or subtenants, until the repair and restoration of the Premises is completed Base Rent and Additional Rent shall be abated for that part of the Premises that Tenant is unable to use without substantial interference and is not occupied while repairs are being made, based on the ratio that the amount of unusable rentable area bears to the total rentable area of the Premises. Landlord shall bear the costs and expenses of repairing and restoring the Premises and the Building, provided, however, that Landlord shall not be obligated to spend more than the net proceeds of insurance made available for such repair and restoration nor shall Landlord be obligated to repair orrestore,ortopayfortherepairorrestorationof,anyfurnishings,equipmentorpersonalproperty belonging to Tenant or any alterations, additions, or improvements (including carpeting, floor coverings, paneling, decorations, fixtures) made to the Premises or Building by Tenant or by Landlord at Tenant's request or for Tenant's benefit. It shall be Tenant's sole responsibility to repair and restore all suchitems.

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Notwithstanding the foregoing, (a) if there is a destruction of the Building that exceeds twenty-fivepercent(25%)ofthereplacementvalueoftheBuildingfromanyrisk, whether ornot thePremisesaredamagedordestroyed,or(b)ifLandlordreasonablybelievesthattherepairsand restoration cannot be completed despite reasonable efforts within ninety (90) days after the occurrenceofsuchdamage,or(c)ifLandlordreasonablybelievesthatthereshallbelessthantwo(2) years remaining in the Term (exclusive of any extension options) upon the substantial completion of such repairs and restoration, or (d) if any mortgagee or lender fails or refuses to make sufficient insurance proceeds available for repairs and restoration, or (e) if zoning or other Applicable Law does not permit such repairs and restoration, Landlord shall have the right, at its sole option, to terminate this Lease by giving written notice of termination to Tenant within one hundred eighty (180) days after the occurrence of such damage. If this Lease is terminated pursuant to the preceding sentence, all Rent payable hereunder shall be apportioned and paid to the date of termination.

All time periods provided in this Section for Landlord' s performance shall be subject to extension  on  account  of delays  in  effectuating  a  satisfactory  settlement  with  any insurancecompany involved and Force Majeure events. In the event of any damage or destruction to the Building or Premises, it shall be Tenant's responsibility to secure the Premises and, upon notice from Landlord, to remove forthwith, at its sole cost and expense, property belonging to Tenantor itslicenseesfromsuchportionofthePremisesasLandlordshallreasonablyrequest.

20.    SUBORDINATION; ESTOPPEL LETTERS. This Lease is expressly subordinateto any current or future mortgage or mortgages placed on the Property and to all other documents executed in connection with any such mortgage.  Tenant agrees not to pay rent more than  thirty (30)daysinadvanceand toattorntoanypartyacquiringrightfulpossessionofthePremisesbyor through any such mortgage. Tenant agrees that from time to time it shall deliver to Landlord or Landlord's mortgagee or designee within ten (10) business days of the date of Landlord's or Landlord's mortgagees or such other designee's request, a statement, in writing, certifying (i) that this Lease is unmodified and in full force and effect, if this is so, or if there have been modifications, that the Lease, as modified, is in full force and effect; (ii) the dates to which Rent and other charges have been paid; (iii) that Landlord is not in default under any provisions of this Leaseor,if indefault,thenaturethereofindetail;(iv)thesubordinationofthisLeasetoanycurrent or future mortgage or mortgages placed on the Property by Landlord and Tenant's agreement to attorntoanypartyacquiringrightfulpossessionofthePremisesbyorthroughanysuchmortgage; and (v) such other true statements as Landlord or Landlord's mortgagee or designee may reasonablyrequire.

LandlordintendstorefinancetheBuildinginthefirstquarterof2017.Landlordshallcause the mortgagee of such refinancing to enter into its usual subordination, non-disturbance and attomment agreement (“SNDA”) with Tenant, subject to Tenant's negotiation of commercially reasonable modifications to any such SNDA. Landlord shall thereafter use commercially reasonable to cause any future mortgagee of the Property to enter into such mortgagee's usual SNDA with Tenant, subject to Tenant's negotiation of commercially reasonable modifications to any suchSNDA.

LandlordrepresentsandwarrantsthatnoleasesuperiortothisLease(e.g.,a groundlease) exists with respect to theProperty.

21.    ALTERATIONS;  RESTORATION.

(A)    Tenant shall not make or permit to be made any alterations, additions, or improvementsinortothePremises(“Alterations”)withoutfirstobtainingthepriorwrittenconsent ofLandlordwhichconsentshallnotbeunreasonablywithheld,conditionedordelayedwithrespect to non-structural Alterations that do not cost more than Fifty Thousand Dollars ($50,000) in any one calendar year, are not visible from outside of the Premises and do not affect the operating or life safety systems of the Building, but which consent may otherwise be withheld in Landlord' s sole discretion. Notwithstanding the foregoing, Landlord's consent shall not be required for cosmeticAlterations,suchaspainting,hangingpictures,andinstallingcarpetingsolongasTenant provides Landlord not less than five (5) business days prior written notice of any such Alteration for which Tenant has engaged a third party contractor. All Alterations (i) must comply with all ApplicableLaws,(ii)mustbecompatiblewiththeBuildinganditsmechanical,electrical,heating, ventilating, air-conditioning and life safety systems; (iii) must not interfere with the use and occupancyofanyotherportionoftheBuildingbyanyothertenantortheirinvitees;and(iv)must notaffecttheintegrityofthestructuralportionsoftheBuilding.In

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addition,Landlordmayimpose as a condition to such consent such additional requirements as Landlord in its commercially reasonable discretion deems necessary or desirable, including, without limitation: (a) Tenant's submission to Landlord, for Landlord's prior written approval (not to be unreasonably withheld, conditioned or delayed), of all plans and specifications relating to the Alterations; (b) Landlord's prior written approval (not to be unreasonably withheld, conditioned or delayed) of the time or times when the Alterations are to be performed; (c) Landlord's prior written approval (not to be unreasonably withheld, conditioned or delayed) of the contractors and subcontractors performing work in connection with the Alterations (provided, however, that Tenant shall be entitled to use its own architect and general contractor for the performance of Tenant's Work as set forth in Exhibit D attached hereto); (d) Tenant's receipt of all necessary permits and approvals from all governmental authorities having jurisdiction over the Premises prior to the construction of the Alterations;(e)Tenant'sdeliverytoLandlordofsuchbondsandinsuranceasLandlordreasonably requires; (f) Tenant's payment to Landlord of a commercially reasonable fee for Landlord's supervision of any Alterations not to exceed 2% of the cost of the Alterations in question; (g) Tenant's and Tenant's contractor's compliance with such construction rules and regulations and building standards as Landlord promulgates from time to time; and (i) Tenant' s delivery to Landlord of “as built”drawings of the Alterations in such form or medium as Landlord may reasonablyrequire.All direct  and  indirect costs relating to  any  modifications, alterationsorimprovements of Building, whether outside or inside of the Premises, required by any governmental agency or by law as a condition or as the result of any Alteration requested or effected by Tenant shall be borne by Tenant. Tenant shall not permit any mechanic's lien or other liens to be placed upon the Premises or the Building as a result of any materials, services or labor ordered by or provided to Tenant or any of Tenant's agents, officers, or employees. Without waiving any other rights or remedies under this Lease, Landlord may bond or insure or otherwise discharge any such lien and Tenant shall reimburse Landlord for any amount paid by Landlord in connectiontherewithasAdditionalRentwithinten(10)daysafterbeinginvoicetherefor.

(B)    Upon the expiration or earlier termination of the Lease, Tenant shall surrenderthe Premisesingoodworkingorderandcondition.TenantshallremoveanyandallAlterations,trade fixtures, equipment, data/telecommunications cabling and wiring installed by or on behalf of Tenant and furniture from the Premises and Tenant shall fully repair any damage, including any structuraldamage,occasionedbytheremovalofthesame.Notwithstandingtheforegoing,Tenant shall only be required to remove such Alterations, including those performed pursuant to Exhibit D, if Landlord shall at the time of giving consent to the making of such Alteration notify Tenant thatremovalofsameandrestoration ofthePremisesshallberequiredattheendofthetermofthe Lease. If Landlord notifies Tenant that Tenant not remove any or all such Alteration(s), such Alteration shall become a part of the realty and shall belong to Landlord without compensation, andtitletheretoshallpasstoLandlordunderthisLeaseasbyabillofsale.AtLandlord'selection, all Alterations, trade fixtures, equipment, wire and cable, furniture, fixtures, other personal property not removed shall conclusively be deemed to have been abandoned by Tenant and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or to any other person and without obligation to account for them. Tenant shall pay Landlord all reasonable expenses incurred in connection with Landlord's disposition of such property, including without limitation the cost of repairing any damage to the Building or the Premisescausedbyremovalofsuchproperty,andshallholdLandlordharmlessfromloss,liability, orexpensearisingfromtheclaimsofthirdpartiessuchasTenant'slenderswhoseloansaresecured by such property. Tenant's obligations under this section shall survive the end of thisLease.

22.    DEFAULT;REMEDIES.

(A)    In addition to any other acts or omissions designated in this Lease as Events of Default, each of the following shall constitute an Event of Default by Tenant hereunder: (i) the failure to make any payment of Rent or any installment thereof or to pay any other sum required to be paid by Tenant under this Lease within five (5) business days after Landlord shall have provided written notice to Tenant that the same is due, but such notice shall not be given more than twice in any twelve (12) month period such that any subsequent failure to make any such payment when due in said twelve month period shall constitute an Event of Default hereunder without the need for notice or grace period; (ii) the use or occupancy of the Premises for any purpose other than the Permitted Use without Landlord's prior written consent or the conduct of any activity in the Premises which constitutes a violation of law; (iii) if the interest of Tenant or anypartthereofunderthisLeaseshallbeleviedonunderexecutionorotherlegalprocessandsaid interestshallnothavebeenclearedbysaidlevyorexecutionwithinfifteen(15)daysfromthedate thereof;(iv)ifanyvoluntaryor involuntary petitioninbankruptcyor forcorporatereorganization oranysimilarreliefshallbefiledbyoragainstTenantorany

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guarantoroftheLeaseorifareceiver shall be appointed for Tenant or any guarantor or any of the property of Tenant or guarantor and suchinvoluntarypetitionorappointmentofa receiverisnotdismissedorstayedwithinsixty(60) days of such filing or appointment; (v) if Tenant or any guarantor of the Lease shall make an assignment for the benefit of creditors or if Tenant shall admit in writing its inability to meet Tenant's debts as they mature; (vi) if any insurance required to be maintained by Tenant pursuant to this Lease shall be cancelled or terminated or shall expire or shall be reduced or materially changed, except, in each case, as permitted in this Lease, or mutually agreed to in writing by the parties; (vii) if Tenant shall fail to discharge or bond over any lien placed upon the Premises in violationofthisLeasewithinthirty(30)daysafterreceivingwrittennoticeoftheexistenceofsuch lien;(viii)ifTenantshallabandonorvacatethePremisesduringtheTerm;(ix)ifTenantshallfail toexecuteanddeliveranestoppelcertificateorsubordinationagreementasrequiredhereunder;or(x) the failure to observe or perform any of the other covenants or conditions in this Leasewhich Tenant isrequiredtoobserveandperformandwhichTenanthasnotcorrectedwithintwenty(20) daysafterwrittennoticethereoftoTenant;providedhowever,thatifsuchfailureisnotsusceptible tobeingcuredwithinsuchperiodoftime,Tenantshallbeentitled tosuch additionaltimeasmay be reasonably necessary so long as Tenant is diligently curing such failure and completes such cure within one hundred twenty (120) days thereafter; further provided, however, if such failure creates a condition that, in Landlord's reasonable judgement, is dangerous or hazardous then Tenant shall be required to commence such cure within three (3) business days following written notice and, subject to extension for Force Majeure (as defined in Section 30(G)) complete such cure within ten (10) businessdays.

(B)    UpontheoccurrenceofanEventofDefaultbyTenant,Landlordmay,atitsoption, with or without notice or demand of any kind to Tenant or any other person, exercise any one or moreofthefollowingdescribedremedies,inadditiontoallotherrightsandremediesprovidedat law,inequityorelsewhereherein,andsuchrightsandremediesshallbecumulativeandnoneshall exclude any other right allowed bylaw:

(i)    Landlord may terminate this Lease, repossess and re-let the Premises, in which case Landlord shall be entitled to recover as damages (in addition to any other sums or damages for which Tenant may be liable to Landlord) a lump sum equal to the amount by which thepresentvalueoftheexcessRentremainingtobepaidbyTenantforthebalanceoftheTermof the Lease exceeds the fair market rental value of the Premises, after deduction of all anticipated expenses of reletting. For the purpose of determining present value, Landlord and Tenant agree thattheinterestrateshallbetherateapplicabletothethen-currentyieldonobligationsoftheU.S. Treasury having a maturity date on or about the Expiration Date. Should the fair market rental value of the Premises for the balance of the Term (after deduction of all anticipated expenses of reletting)exceed thevalueoftheRenttobepaidbyTenant forthebalanceoftheTerm,Landlord shallhavenoobligationtopaytoorotherwisecreditTenant foranysuchexcessamount;

(ii)    Landlord may, without terminating the Lease, terminate Tenant's right of possession, repossess the Premises including, without limitation, removing all or any part of Tenant's personal property in the Premises and to place such personal property in storage or a public warehouse at the expense and risk of Tenant, and relet the same for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord in its commercially reasonablejudgment.Forthepurposeofsuchreletting,Landlordisauthorizedtodecorate,repair, remodel or alter the Premises. Tenant shall pay to Landlord as damages a sum equal to all Rent underthisLeaseforthebalanceoftheTermunlessanduntilthePremisesarerelet.IfthePremises are relet, Tenant shall be responsible for payment upon demand to Landlord of any deficiency between the Rent as relet and the Rent for the balance of this Lease, and all actual costs and expenses of reletting. Tenant shall not be entitled to any rents received by Landlord in excess of the rent provided for in this Lease. No re-entry or taking possession of the Lease Premises by Landlord shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any reletting without  termination,  Landlord  may  atanytime thereafterelecttoterminatethisLeaseforanybreach,andinadditiontotheotherremedies itmay have, recover as damages (in addition to any other sums or damages for which Tenant may be liabletoLandlord)alumpsumequaltotheamountbywhichthepresentvalueoftheexcessRent remaining to be paid by Tenant for the balance of the Term of the Lease exceeds the fair market rental value of the Premises, after deduction of all anticipated expenses of reletting. In the event Landlord repossesses the Premises as provided above, Landlord may remove all persons and property from the Premises and store any such property at the cost of Tenant, without liability for damage;and

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(iii)    Landlord may, but shall not be obligated to, and without waivmg or releasing Tenant from any obligations of Tenant hereunder, make any payment or perform such otheractonTenant'sparttobemadeorperformedasprovidedinthisLease.Allsumssopaidby Landlord and all necessary incidental costs shall be payable to Landlord as Additional Rent on demand and Tenant covenants to pay suchsums.

(C)    If Tenant (i) fails to pay Rent timely and such failure continues for five (5) days afterwrittennoticethereof(thepaymentofRentinmonthlyinstallmentsbeingforthesolebenefit and convenience of Tenant), (ii) fails to maintain the Security Deposit as required hereunder, and such failure continues for five (5) business days after written notice thereof, (iii) uses or permits or suffers the use of the Premises for any purpose other than the Permitted Use and such  failure continues for five (5) business days after written notice thereof, or (iv) assigns or subleases the Premises in violation of the provisions of Section 14 hereof (Assignment/Subletting), then, because both parties agree that each of the foregoing defaults is a substantial and material breach of the Tenant's obligations hereunder, at the option of Landlord the entire balance of Rent due underthisLeaseshall becomedueandpayableimmediatelyasliquidateddamages.Landlord and TenantspecificallyacknowledgeandagreethatacceleratingtheRentasliquidateddamagesisfair and reasonable because, among other reasons, each of the foregoing defaults is significant and material and the parties cannot foresee when in the Term any such default may occur , what the commercial rental market for the Premises may be at the time of such default, what the cost of finding a substitute tenant may be at such time, or how long the Premises may remain vacant following any suchdefault.

(D)    TenantagreesthatLandlordmayfilesuittorecoveranysumsfallingdueunderthe terms of this section from time to time and that no suit or recovery of any portion due Landlord hereunder shall be any defense to any subsequent action brought for any amount not theretofore reducedtojudgmentinfavorofLandlord.

(E)    Tenant shall promptly pay upon notice, as Additional Rent, all reasonable costs, chargesandexpensesincurredbyLandlord(including,withoutlimitation,reasonablefeesandout­ of-pocketexpensesof legalcounsel,collectionagents,andotherthirdpartiesretainedbyLandlord) together with interest thereon at the Default Rate, in collecting any amount due from Tenant, enforcing any obligation of Tenant hereunder, or preserving any rights or remedies of Landlord; and Tenant shall pay all reasonable attorneys ' fees and expenses arising out of any litigation, negotiation or transaction in which Tenant causes Landlord, without Landlord's fault, to become involved orconcerned.

(F)    NowaiverofanyprovisionofthisLeaseshallbeimpliedbyanyfailureofLandlord to enforce any remedy on account of the violation of such provision, even if such violation be continued or repeated subsequently, and no express waiver by Landlord shall be valid unless in writing and shall not affect any provision other than the one specified in such written waiver and that provision only for the time and in the manner specifically stated in the waiver. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the lengthoftheTermorTenant'srightofpossessionhereunderor afterthegivingofanynoticeshall reinstate,continueorextendtheTermoraffectanynoticegivenTenantpriortothereceiptofsuch monies,itbeingagreedthataftertheserviceofnoticeorthecommencementofasuitorafterfinal judgmentforpossessionofthePremises,Landlordmay receiveandcollectanyRentdue,andthe paymentofRentshall notwaiveoraffectsaidnotice,suitorjudgment.

23.    NOTICES. All notices permitted or required hereunder shall be in writing and (i) deliveredpersonally,(ii)sentbyU.S.certifiedmail,postageprepaid,withreturnreceiptrequested, or(iii)sentovernightbynationallyrecognizedovernightcourierandsenttotherespectiveparties at the Notice Addresses provided in Section 1 of this Lease. If sent by U.S. certified mail, such noticeshallbeconsideredreceivedbytheaddresseeonthesecond(2nd)businessdayafterposting. Ifsentbynationallyrecognizedovernightcourier,suchnoticeshall beconsideredreceivedbythe addressee on the first (1st) business day after deposit with the courier. Notices may be given by an agent on behalf of Landlord or Tenant. Any notice from Landlord to Tenant shall also be deemedtohavebeengivenifdelivered tothePremises,addressedtoTenant.

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24.    EMINENT DOMAIN. If during the Term (a) the whole of the Premises or theBuilding shall be taken by any governmental or other authority having powers of eminent domain or conveyedtosuchentityunderthreatoftheexerciseofsuchpoweror(b)anypartofthePremises ortheBuildingshallbesotakenorconveyed andasaresult,theremainderofthePremisesorthe Buildinghasbeenrendered impractical,inLandlord'scommerciallyreasonablejudgment,forthe operation of Landlord's rental activities on the Property, this Lease shall terminate on the date of the taking or conveyance, and rent shall be apportioned to the date thereof. Tenant shall have no right to any apportionment of or any share in any condemnation award or judgment for damages made for the taking or conveyance of any part of the Premises or the Building but may prosecute a separate claim for the value of all Alterations, and tenant improvements provided such claim does not reduce any award toLandlord.

25.    QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authoritytoenterintothisLeaseandthatTenant,whilepayingtherentalandperformingitsother covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the termsandprovisionsofthisLease.Landlordshallnotbeliableforanyinterferenceordisturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance. Nevertheless, Landlord agrees to use reasonableeffortstoenforcethetermsandconditionsandrulesandregulationsofanythirdparty's lease at the Building in order to minimize any interference or disturbance caused by such third party to Tenant' s use and enjoyment of thePremises.

26.    RULES AND REGULATIONS. Tenant agrees to comply with (and cause its agents, contractors, employees and invitees to comply with) the rules and regulations attached hereto as Exhibit B and with such reasonable modifications thereof and additions thereto as Landlord may from time to time make. Landlord agrees to enforce the rules and regulations uniformly against all tenants of the Property. Landlord shall not be liable, however, for any violation of said rules andregulationsbyothertenantsoroccupantsoftheBuildingorProperty.

27.    ENVIRONMENTAL.(A)“Environment”shallmeanallindoorandoutdoorair,surface water, groundwater, surface or subsurface land , including, without limitation, all fish, wildlife, biotaandallothernaturalresources.“EnvironmentalLaws”shallmeanallfederal,stateandlocal laws(including,withoutlimitation,caseandcommonlaw),statutes,regulations,rules,ordinances, binding guidance, permits, licenses, grants, orders, decrees and judgments relating to the Environment,humanhealthandsafety(asitrelatestoexposuretoHazardousSubstances,defined below), preservation or reclamation of natural resources, or to the management, handling, use, generation, treatment, storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, Release or threatened Release of or exposure to Hazardous Substances, whether now existing or subsequently amended or enacted, including, without limitation: the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq. (“CERCLA”); the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.;theCleanAirAct,42U.S.C.Section7401etseq.;theToxicSubstancesControlAct,15 Section 2601 et seq.; the Occupational Safety and Health Act (to the extent it relates to exposure to Hazardous Substances), 29 U.S.C. Section 651 et seq.; the Emergency Planning and CommunityRight-to-KnowActof1986,42U.S.C.Section1100Ietseq.;theSafeDrinkingWater Act,  42 U.S.C. Section  300(f) et  seq.;  the Hazardous  Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C. Section 136 etseq.;theResourceConservation andRecoveryActof1976(“RCRA”),42U.S.C.Section6901 etseq.;andtheOilPollutionActof1990,33U.S.C.Section2701etseq.“HazardousSubstances” shall mean all explosive materials, radioactive materials, hazardous or toxic materials, wastes, chemicals or substances, petroleum, petroleum by-products and petroleum products (including, without limitation, crude oil or any fraction thereof), asbestos and asbestos-containing materials, radon, lead, polychlorinated biphenyls, and all materials, wastes, chemicals and substances that are regulated as hazardous by any Environmental Law, including, without limitation, hazardous materials listed in 49 C.F.R. Section 172.101 and materials defined as hazardous substances pursuant to Section 101(14) of CERCLA. “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing of HazardousSubstancesintotheEnvironment.

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(B)    Upon Landlord’s information and belief, as of the Commencement Date, the PremisesareincompliancewithallEnvironmentalLawsandLandlordhasnotreceivedanynotice from a governmental authority to the contrary. Tenant shall not suffer or permit to occur any violation of Environmental Laws by Tenant, its employees or contractors with respect to the Premises or Property. Tenant shall not Release any Hazardous Substance at, in, under, from, or on the Premises or Property. Other than in compliance with all Environmental Laws and only to theextentreasonableandcustomaryintheordinarycourseofTenant’sbusinessandthePermitted Use, Tenant shall not manufacture, generate, treat or process any Hazardous Substances, on the Premises or Property. Tenant shall not utilize, store or handle any Hazardous Substances, on the Premises or Property except those which are reasonably necessary and customary in the ordinary course of Tenant’s business and the Permitted Use, and provided that in doing so Tenant complies with all Environmental Laws. Tenant shall not install any underground storage tanks for any Hazardous Substances. Tenant shall indemnify, defend (with counsel reasonably acceptable to Landlord and at Tenant’s sole cost) and hold harmless Landlord and its partners, managers, members, officers, directors, employees, agents, successors, grantees, assigns and mortgagees from any and all claims, demands, liabilities, damages, expenses, fees, costs, fines, penalties, suits, proceedings, actions, causes of action and losses of any and every kind and nature, including, without limitation, diminution in value of the Property, damages for the loss or restriction on use oftherentableorusablespaceorofanyamenity,naturalresourcedamages,damagesarisingfrom any adverse impact on leasing space on the Premises or Property, and reasonable sums paid in settlement of claims and for attorney’s fees, consultant’s fees and expert’s fees that may arise duringoraftertheTermoranyextensionoftheTerminconnectionwithanybreachbyTenantof the covenants contained in this section, the presence, Release or threatened Release of Hazardous SubstancescausedbyTenant,itsemployeesorcontractorsat,in,under,from,tooronthePremises or Property, or any violation or alleged violation caused by Tenant, its employees or contractors of any Environmental Laws. For purposes of this section, the term “costs”includes, without limitation, costs, expenses and consultant’s fees, expert’s fees and reasonable attorney’s  fees incurred in connection with any investigation of site conditions or any cleanup, remedial, removal, restoration, monitoring or maintenance work. This covenant of indemnity shall survive the termination of thisLease.

(C)    TenantshallimmediatelynotifyLandlordofanyReleaseorthreatenedReleaseat, in, under, from, to or on the Premises or Property caused by Tenant or of which Tenant has knowledge.   Tenant shall immediately  notify Landlord and provide copies  upon receipt of  all written complaints, claims, citations, demands, inquiries, reports, notices or requests for information relating to the condition of the Premises or compliance with Environmental Laws. TenantshallimmediatelysupplyLandlordwithcopiesofallnotices,reports,correspondence,and submissionsexchanged betweenTenantandtheUnitedStatesEnvironmentalProtectionAgency, the United States Occupational Safety and Health Administration, and any other local, state, or federal authority which requires submission of any information pursuant to EnvironmentalLaws. TenantshallimmediatelynotifyLandlord ofanyactionsbroughtagainstTenantofwhich Tenant has knowledge and which pertains to Environmental Laws and Tenant’s activity at the Premises or Property and provide Landlord, from time to time upon Landlord’s request, with periodic updates as to the status of the same. Tenant shall keep the Premises free of any lien imposed pursuanttoanyEnvironmentalLawandshallimmediatelynotifyLandlordofanysuchlien.

(D)    Landlord and Landlord’s agents, servants, and employees including, without limitation,legalcounselandenvironmentalconsultantsandengineersretainedbyLandlord,may (butwithout theobligationordutysotodo),uponreasonablenotice(exceptincaseofemergency when no notice shall be required) and from time to time, inspect the Premises and any documentation which Tenant is required by law to maintain with respect to any Hazardous Substance (including, without limitation, “ Material Safety Data Sheets”) to determine whether Tenant is complying with Tenant’s obligations set forth in this section, and to perform environmentalinspectionsandsamplings.IfTenantisnotincompliancewithTenant’sobligations set forth in this section or is otherwise in violation of any Environmental Laws then such shall constitute an Event of Default under the Lease and Landlord may (but without the obligation or duty to do so), in addition to Landlord’ s other remedies available under this Lease, at law or in equity,enteruponthePremisesimmediatelyandtakesuchactionasLandlordinitssolejudgment deemsappropriateandLandlordshallnotbeliableforanyinterferencecausedbyLandlord’sentry and remediation efforts. The costs of any remediation performed by Landlord pursuant to this section (including, without limitation, transportation and storage costs) shall be paid by Tenant as Additional Rent ondemand.

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28.    FINANCIAL STATEMENTS. From time to time, but not more often than once each year, Tenant shall furnish Landlord within ten (10) business days of such request copies of financial statements showing Tenant's current financial condition and the results of the previous year'soperationswhichshallbecertifiedastrueandcorrect bythechieffinancialofficer,orother responsible officer, of Tenant. This Section 28 shall not apply to the Tenant originally named in thisLeasesolongasitremainsapubliclytradedcompanywithcurrentfinancialstatementsreadily accessible by Landlordonline.

29.    BROKERS.LandlordutilizedtheservicesofColliersInternational(the“ListingBroker”) and Tenant utilized the services of Jones Lang LaSalle (the “Non-Listing Broker”) in connection with this Lease. Landlord and Tenant each represent to the other that they did not involve any otherbrokersinprocuringthisLease.LandlordshallpayacommissiontotheNon-ListingBroker and the Listing Broker as is agreed to by the parties per a separate agreement. Tenant agrees to forever indemnify, defend and hold Landlord harmless from and against any commissions, liability,loss,cost,damageorexpense(includingreasonableattorneys' fees)thatmaybeasserted against or incurred by Landlord by any broker other than the Listing Broker and Non-Listing Broker as a result of any misrepresentation by Tenant hereunder. Landlord agrees to forever indemnify, defend and hold Tenant harmless from and against any commissions, liability,  loss, cost, damage or expense (including reasonable attorneys' fees) that may be asserted against or incurred by Tenant by any broker as a result of any misrepresentation by Landlord hereunder.

30.    MISCELLANEOUS.

(A)    Timeisof theessenceofthisLeaseandeachofitsprovisions.

(B)    This Lease and all covenants and agreements herein contained shall be binding upon,apply,andinuretotherespective heirs,executors ,successors,administratorsandassignsof all parties to this Lease; provided, however, that this Lease shall not inure to the benefit of any assignee, heir, administrator, devisee, legal representative, successor, transferee or successor of TenantexceptuponthepriorwrittenconsentofLandlord.

(C)    This Lease contains the entire agreement of the parties, all other and prior representations,negotiationsandagreementshavingbeenmergedhereinandextinguishedhereby. Nomodification,waiveroramendmentofthisLeaseorofanyofitsconditionsor provisionsshall bebindinguponeitherpartyheretounlessinwritingsignedbybothparties.

(D)    ThecaptionsofsectionsandsubsectionsofthisLeaseareforconvenienceonlyand shall notbedeemedtolimit,construe,affectoralterthemeaningofsuchsectionsorsubsections.

(E)    Interpretation of this Lease shall be governed by the laws of the state or commonwealth in which the Premises is located, without regard to conflict of laws. Tenant irrevocably submits to the nonexclusive jurisdiction of the courts of said state or commonwealth and agrees that all suits, actions, claims or proceedings may be heard and determined in such courts. Tenant waives any objection which it may have at any time to the laying of venue of any suit, action, claim or proceeding arising out of or relating to this Lease. The foregoing shall not bedeemed toprecludeLandlordfrombringinganysuit,action,claimorproceedinginconnection withthisLeaseinanyotherjurisdiction.

(F)    ThisLeaseisandshallbedeemedandconstruedtobethejointandcollectivework productofLandlordandTenantand,assuch,thisLeaseshallnotbeconstruedagainsteitherparty, as the otherwise purported drafter of same, by any court of competent jurisdiction in order to resolve any inconsistency, ambiguity , vagueness or conflict, if any, in the terms or provisions containedherein.

(G)    In the event that either party thereto shall be delayed or hindered in or prevented fromtheperformanceofanyactrequiredhereunder byreasonofstrikes,lock-outs,labortroubles, inability to procure labor, inability to procure materials or equipment or reasonable substitutes therefore, failure of power, fire or other casualty, restrictive government laws or regulations, judicialorders,enemyorhostilegovernmentactions,riots,insurrection orothercivilcommotions, war or other reason of a like nature not at the fault of the party delayed in performing any act as required under the terms of this Lease (“Force Majeure”), then performance of such act shall be excusedfortheperiodofdelayandtheperiodfortheperformanceofanysuchactshallbeextended for a period equivalent to the period of such delay. Force Majeure shall not operate to excuse Tenant from the prompt payment of Rent or any other payments required under the terms of this Lease.

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(H)    Tenant shall reimburse Landlord as Additional Rent within thirty (30) days after being invoiced therefor, together with copies of reasonable supporting documentation for all reasonable out-of-pocket expenses, including without limitation reasonable legal, engineering or other professional services or expenses incurred by Landlord in connection with any requests by Tenantforconsentsorapprovalshereunder.

(I)    Afinaldeterminationbyacourtofcompetentjurisdictionthatanyprovisionofthis Leaseisinvalidshallnotaffectthevalidityofanyotherprovision,andanyprovisionsodetermined to be invalid shall, to the extent possible, be construed to accomplish its intended effect.

(J)    If more than one person or entity shall ever be Tenant, the liability of each such personandentityshallbejointandseveral.

(K)    If Tenant is a corporation, a limited liability company, an association or a partnership, it shall, concurrently with the signing of this Lease, at Landlord's option, furnish to Landlordcertifiedcopiesoftheresolutionsofitsboardofdirectors(oroftheexecutivecommittee ofitsboardofdirectors)orconsentofitsmembersorpartnersauthorizingTenanttoenterintothis Lease.Moreover,eachindividualexecutingthisLeaseonbehalfofTenantrepresentsandwarrants that he or she is duly authorized to execute and deliver this Lease and that Tenant is a duly organized corporation, limited liability company, association or partnership under the laws of the state of its incorporation or formation, is qualified to do business in the jurisdiction in which the Buildingislocated,isingoodstandingunderthelawsofthestateofitsincorporationorformation and the laws of the jurisdiction in which the Building is located, has the power and authority to enter into this Lease, and that all corporate or partnership action requisite to authorize Tenant to enter into this Lease has been dulytaken.

(L)    The submission of this Lease to Tenant is not an offer to lease the Premises, or an agreement byLandlordtoreservethePremisesforTenant.LandlordshallnotbeboundtoTenant untilTenanthasdulyexecutedanddeliveredanoriginalLeasetoLandlordandLandlordhasduly executedanddeliveredanoriginalLeasetoTenant.NotwithstandingtheCommencementDateor 24CherryHillCommencementDatecontemplatedinSection1hereof,thisLeaseshalltakeeffect andbebindinguponthepartiesheretoasofitsexecutionanddelivery.

(M)    ThisLeasemaybeexecutedinanynumberofcounterparts,andbydifferentparties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any signature to thisLease transmitted via facsimile (or other electronic means) shall be deemed an original signature and be binding upon the partieshereto.

(N)    Tenant representsandwarrantstoLandlordthatneitherTenantnoranyofTenant's members, shareholders or other equity owners, is a person or entity with whom U.S. persons or entitiesarerestrictedfromdoingbusinessunderregulationsoftheOfficeofForeignAssetControl (“OFAC”) of the Department of the Treasury (including those named on OFAC's Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with PersonsWhoCommit,ThreatentoCommit,orSupportTerrorism),orothergovernmentalaction. Landlordrepresentsand warrantstoTenantthatneitherLandlordnoranyofLandlord'smembers, shareholders or other equity owners, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC' s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001 , Executive Order Blocking Property and Prohibiting Transactions with PersonsWhoCommit,ThreatentoCommit,orSupportTerrorism),orothergovernmentalaction.

31.    PARKING. Tenant shall be entitled to the non-exclusive use, on a first come-first serve basis,ofnomorethan2.6parkingspacesper1,000rentablesquarefeetofthePremisesinparking areas designated by Landlord. Landlord shall not be obligated to enforce parking limits. Tenant shallnotuseanyparkingspacedesignatedbyLandlordasvisitorparkingorasexclusivetoother parties.IfTenantusesparkinginexcessofthatprovidedforherein,andifsuchexcess useoccurs onaregularbasis,andifTenantfails,aftermorethanone(1)writtennoticefromLandlordofany one violation, to reduce its excess use of the parking areas, then such excess use shall constitute an Event of Default under this Lease without further notice or opportunity to cure such Event of Default.Subjecttotheapproval oftheTownofDanvers,ifsuchapprovalisrequired,priortothe CommencementDateLandlordshallre-stripetheloadingareaadjacenttotheBuildingtoprovide additional parking spaces to be used on a non-exclusive, first come-first serve basis as shown on the plan attached hereto as ExhibitA-1.

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32.    SIGNAGE. Landlord, at Landlord' s expense, shall provide Tenant building standard monument signage. In addition, Tenant, at Tenant's expense, shall be entitled to install one (1) identificationsigninfrontandbackofthePremises,thedesign,dimensionandlocationofwhich shall be subject to Landlord's prior approval, not to be unreasonably withheld, conditioned or delayed. Such signage shall be subject to all Applicable Law and Tenant shall be solely responsible for obtaining all necessary permits for such signage. Tenant shall maintain such signage in good condition and repair during the Term. Upon termination of this Lease, Tenant shallremovesuchsignageandrepairanydamagecausedthereby.

33.    DELETED.

34.    CERTAINRIGHTSRESERVEDTOLANDLORD.Landlordreservesthefollowing rights,eachofwhichLandlord mayexercisewithoutnoticeorliabilitytoTenant,andtheexercise of any such rights in accordance with the provisions hereof shall not be deemed to constitute an evictionordisturbanceofTenant'suseorpossessionofthePremisesandshallnotgiverisetoany claimforset-offorabatementof Rentoranyotherclaim:(a)toenterthePremiseswithreasonable advance prior notice, except in the case of emergency when no notice shall be required, for the purposes of examining the same or to make repairs or alterations or to provide any service; (b) to change the arrangement and/or locations of entrances, or passageways, doors and doorways, and corridors,windows,elevators,stairs,parkingareasandanyothercommonareas,(c)tochangethe name or street address of the Building or the suite number of the Premises (provided that in such eventduesolelytoLandlord'selectionandsuchchangeisnotmadebyanyothergovernmentalor applicableauthority,LandlordshallreimburseTenantforallcostsofchangesinsignage,company letterhead,and reasonablerelatedcosts);(d)toinstall,affixandmaintainanyandallsignsonthe exterior or interior of the Building; (e) to make repairs, decorations, alterations, additions or improvements,whetherstructuralorotherwise,in,aboutandtotheBuildingorcommonareasand forsuchpurposestemporarilyclosedoors,corridorsandotherareasofthe Buildingandinterrupt ortemporarilysuspendservicesoruseofcommonareas;(f)toretainatalltimes,andtousein appropriate instances, keys to all doors within and into the Premises (except that Tenant may designate proprietary areas within the Premises to which Landlord will not be permitted entrance unless accompanied by a representative of Tenant, unless in the case of emergency when no such accompanimentshall berequired);(g)togranttoanypersonortoreserveuntoitselftheexclusive right to conduct any business or render any service in the Building; (h) to show the Premises at reasonable times during the last six (6) months of the term of this Lease, and, if vacated or abandoned,topreparethePremisesforreoccupancy;(i)toinstall,useand maintaininandthrough the Premises pipes, conduits, wires and ducts serving the Building; (j) to reasonably approve the weight,sizeandlocationofsafesorotherheavyequipmentorotherarticleswhichmaybelocated in the Premises and to determine the time and manner in which such articles may be moved in, about or out of the Building or Premises; and (k) to take any other reasonable action which Landlord deems necessary in connection with the operation, maintenance, marketing or preservation of the Premises or Building. The temporary reduction or elimination of Tenant' s light, air or view for a period of ten business days or less shall not affect Tenant ' s liability under this Lease, nor shall it create any liability of Landlord to Tenant. In all actions taken by Landlord under this Section 34, Landlord shall use commercially reasonable efforts not to materially and adverselyaffectTenant'suseandoccupancyof,andaccessto,thePremises.

35.    LEASE COMMENCEMENT/ACCEPTANCE OF PREMISES. At  Landlord's request, Landlord and Tenant shall enter into a commencement letter agreement (the  “Commencement Letter”) in form substantially similar to  that  attached  hereto  as  Exhibit  E. Tenant's failure to execute  and  return  the Commencement  Letter,  or to provide  written  objection to the statements contained in the Commencement Letter, within fifteen (15) days shall  be deemed  an approval  by Tenant  of the statements contained therein.

36.    WAIVER OF RIGHT TO JURY TRIAL. LANDLORD AND TENANT WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM, ACTION, PROCEEDING OR COUNTERCLAIM BY EITHER PARTY AGAINST THE OTHER ON ANY MATTERS ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, AND/OR TENANT'S USE OR OCCUPANCYOFTHEPREMISESORBUILDING(INCLUDING ANYCLAIMOFINJURY OR DAMAGE OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY CURRENT OR FUTURELAWS, STATUTES,REGULATIONS,CODESORORDINANCES).

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37.    RECORDING. Tenant shall not record this Lease without the prior written consent of Landlord. Upon Tenant' s request, Landlord and Tenant shall execute and acknowledge a short form memorandum of this Lease for recording purposes provided Tenant also provides a recordabledischargeorterminationofsuchmemorandumofleasetobefileduponthetermination or expiration of thisLease.

[Signatures on following page]

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IN WITNESS WHEREOF, the parties hereto have executed this Lease.

LANDLORD:		TENANT:
BROOKWOOD CHERRY HILL I,LLC,		ABIOMED, Inc.
a Delaware limited liability company		a Delaware corporation
By:	Brookwood Real Estate Partners, LLC,	By:	/s/ Michael Tomsicek
	its sole member	Name:	MICHAEL TOMSICEK
		Its:	VP – CFO ABIOMED
By:	Brookwood Real Estate Co., LLC,
	its managing member
By:	/s/ Kurt M. Zernich
	Kurt M. Zernich
	Authorized Signor
LANDLORD:
BROOKWOOD CHERRY HILL II, LLC,
a Delaware limited liability company
By:	Brookwood Real Estate Partners II , LLC,
	its sole member
By:	Brookwood Real Estate Co. II , LLC,
	its managing member
By:	/s/ Kurt M. Zernich
	Kurt M. Zernich
	Authorized Signor

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EXHIBIT A

THEPREMISES

28 Cherry Hill Premises

Exhibit A

24 Cherry Hill Premises

Exhibit A

EXHIBIT A-1

Exhibit A - 1

EXHIBIT B

ADDITIONAL STIPULATIONS

This extension option is a part of the Lease dated February 2, 2017 by and between BROOKWOODCHERRYHILLI,LLCandBROOKWOODCHERRYHILLII,LLC(astenants in common, “Landlord”) and ABIOMED, Inc. (“Tenant”) for the Premises located at 24-42 Cherry Hill Drive, Danvers, Massachusetts.

EXTENSIONOPTION.Solongasthereexistsnodefaultbeyondanyapplicablenoticeandcure periods, either at the time of exercise or on the first day of the Extension Term (as hereinafter defined)andTenanthasnotassignedthisLeasenorsubletthePremisesin wholeorinpart,Tenant shallhavetheoptiontoextendtheTermforone(1)additionalfive(5)yearperiod(the“Extension Term”) upon written notice to Landlord given not less than twelve (12) months and not more than fifteen (15) months prior to the expiration of the Term. If Tenant fails to exercise its option to extend the Term strictly within the time period set forth in this section, then Tenant's option to extend the Term shall automatically lapse and be of no further force or effect. In the event that Tenant exercises the option granted hereunder, the Extension Term shall be upon the same terms andconditionsasareineffectunderthisLeaseimmediatelyprecedingthecommencementofsuch Extension Term except that the Base Rent due from the Tenant shall be increased to Landlord's determination of Base Rent as provided herein, and Tenant shall have no further right or option to extend the Term or to any abatements, improvement allowance or other inducements. If Tenant timelyexercisesitsoptiontoextendtheTerm,thennolaterthanthirty(30)daysfollowingreceipt ofTenant'snotice,LandlordshallnotifyTenantinwritingofLandlord'sdeterminationoftheBase RentfortheExtensionTerm(“Landlord'sRentalNotice”).IfTenantdoesnotobjecttoLandlord's determinationoftheBaseRentbywrittennoticetoLandlordwithintwenty(20)daysafterthedate of Landlord's Rental Notice, then Tenant shall be deemed to have accepted the Base Rent set forth in Landlord's RentalNotice.

If Tenant timely objects to Landlord's Rental Notice, and the parties cannot agree on Base Rent for the Extension Term within thirty (30) days after Landlord receives Tenant's notice of objection, then the Term shall automatically be extended and Base Rent for the Extension Term shallbesubmitted toarbitrationasfollows:BaseRentshallbedeterminedbyimpartialarbitrators (who shall be qualified real estate appraisers or brokers with at least ten (10) years of experience dealing with like types of properties in the market area), one to be chosen by the Landlord, one to be chosen by Tenant, and a third to be selected, if necessary, as below provided, and shall reflect the greater of (i) the rate that would be agreed upon between a landlord and a tenant on or about thedateonwhichtheExtensionTermistobeginforacomparable termandforspacecomparable tothePremisesintheBuildingandbuildingscomparabletotheBuildinginthemarketarea,taking into account any material economic differences between the terms of this Lease and any comparison lease, such as the manner, if any, in which the landlord under any such lease is reimbursed for operating expenses and taxes and (ii) the Base Rent payable during the last month of the current Term. The unanimous written decision of the two first chosen (without selection and participation of a third arbitrator), or otherwise the written decision of a majority of three arbitrators chosen and selected as aforesaid, shall be conclusive and binding upon Landlord and Tenant. Landlord and Tenant shall each notify the other of its chosen arbitrator within ten (10) days  following  the call for arbitration  and,  unless  such  two arbitrators  shall  have  reacheda unanimous decision within thirty (30) days after their designation, they shall select an impartial third arbitrator to determine the market value as herein defined. Such third arbitrator and the first twochosenshallrendertheirdecisionwithinthirty(30)daysfollowingthedateofappointmentof thethirdarbitratorandshallnotifyLandlordandTenantthereof,whichdecisionshallbefinaland binding on the parties. Landlord and Tenant shall each pay the expenses of its own arbitrator and shall share the payment of expenses of the third arbitrator equally, regardless of the outcome of arbitration. If the dispute between the parties as to the Base Rent for the Extension Term has not been resolved before the commencement of the Extension Term, Tenant shall pay Base Rent for the Extension Term based upon the Base Rent designated by Landlord in the Landlord's Rental Notice until either (i) agreement of the parties as to the fair market rent, or (ii) decision of the arbitrators,asthecasemaybe,atwhichtimeTenantshallpromptlypayanyunderpaymentofBase Rent to Landlord, or Landlord shall credit the overpayment of Base Rent against the next installmentofrentalorotherchargesduetoLandlord.

Exhibit B

EXHIBIT C

RULES AND REGULATIONS

1.    The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no sweepings, rubbish, rags or other substances (including, without limitation, coffee grounds) shall be thrown therein. All damages resulting from misuse of the fixtures shall be borne by Tenant if Tenant or its servants, employees, agents, visitors or licensees shall have caused the same.

2.    No cooking (except for hot-plate and microwave cooking by Tenants' employees for their own consumption, the location and equipment of which is first approved by Landlord), sleeping or lodging shall be permitted by any tenant on the Premises. No tenant shall cause or permitanyunusualorobjectionableodorstobeproduceduponorpermeatefromthePremises.

3.    Except as otherwise provided in the Lease, no inflammable, combustible, or explosive fluid, material, chemical or substance shall be brought or kept upon, in or about the Premises.Fireprotectiondevices,inandabouttheBuilding,shallnotbeobstructedorencumbered in anyway.

4.    Canvassing, soliciting and peddling at the Property is prohibited and each tenant shall cooperate to prevent thesame.

5.    There shall not be used in any space, or in the public halls of the Building, either by any tenant or by its agents, contractors, jobbers or others, in the delivery or receipt of merchandise,freight,orothermatters,anyhandtrucksorothermeansofconveyanceexceptthose equippedwithrubbertires,rubbersideguards,andsuchothersafeguardsasLandlordmayrequire, and Tenant shall be responsible to Landlord for any loss or damage resulting from any deliveries toTenantintheBuilding.Deliveriesofmail,freightorbulkypackagesshallbemadethroughthe freightentranceorthroughdoorsspecifiedbyLandlordforsuchpurpose.

6.    Mats, trash or other objects shall not be placed in the public corridors. The sidewalks, entries, passages, elevators, public corridors and staircases and other parts of the Building which are not occupied by Tenant shall not be obstructed or used for any other purpose than ingress oregress.

7.    Tenantshall notinstallorpermittheinstallationofanyawnings,shades, draperies and/or other similar window coverings, treatments or like items visible from the exterior of the PremisesotherthanthoseapprovedbytheLandlordinwriting.

8.    No vehicles or materials shall be permitted to block any sidewalks, driveways, loading docks or any other common area nor shall any vehicle be parked in the parking lot for longer than is necessary for the customary business purposes of Tenant. Landlord shall have the right,butnottheobligation,toremoveanyvehiclesanddisposeofanymaterials,debris,orother items in violation of this section and such removal or disposal shall be at the sole risk of Tenant andTenantshallpaythecosttherefortoLandlordasAdditionalRentupondemand.

9.    Tenant shall not allow any signs, cards or placards to be posted, or placed within thePremisessuchthattheyarevisibleoutsideofthePremisesexceptasspecificallyprovidedfor in thisLease.

10.    Tenant shall not construct, maintain, use or operate within said Premises or elsewhere in the Building or on the outside of the Building, any equipment or machinery which producesmusic,soundornoisewhichisaudiblebeyondthePremises.

11.    Bicycles, motor scooters or any other type of vehicle shall not be brought into the lobbyorelevatorsoftheBuildingorintothePremisesexceptforthosevehicleswhichareusedby aphysicallydisabledpersoninthePremises.

Exhibit C

12.    Allblindsforexterior windowsshallbebuildingstandardandshallbemaintained byTenant.

13.    NoadditionallocksshallbeplacedupondoorstoorwithinthePremisesexceptas shall be necessary adequately to safeguard United States Government security classified documentsstoredwiththePremises.Thedoorsleadingtothecorridorsormainhallshallbekept closed during business hours, except as the same may be used for ingress or egress. If Landlord providesaproximitycardorkeyfortheentrydoors,Landlordmaymakeareasonablechargefor such proximity cards or keys, and replacements. Tenant, upon termination of it tenancy, shall deliver to the Landlord all keys of offices, rooms and toilet rooms which have been furnished TenantorwhichtheTenantshallhave hadmade,andintheeventoflossofanykeyssofurnished shall pay Landlord therefore.

14.    Provided reasonable advance written notice is given to Tenant (except in an emergency, when notice may be given after the fact), Landlord reserves the right to temporarily shut down the air conditioning, electrical systems, heating, plumbing and/or elevators when necessary by reason of accident or emergency, or for repair, alterations, replacements or improvement,subjecttotheprovisionsoftheLease.

15.    No carpet, rug or other article shall be hung or shaken out of any window of the Building and Tenant shall not sweep or throw or permit to be swept or thrown from the Premises any dirt or other substances into any of the corridors or halls, elevator, or out of the doors or windowsorstairwaysoftheBuilding.Tenantshallnotuse,keeporpermittobeusedorkeptany foul or noxious gas or substance in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building by reasonofnoise,odorsand/orvibrations, orinterfereinanywaywithothertenantsorthosehaving business therein, nor shall any animals or birds be kept in or about the Building. Smoking or carryinglightedcigarsorcigarettesintheelevatorsoftheBuildingisprohibited.

16.    Landlord reserves the right to restrict access to the Building on weekdays outside of normal hours for the Building and at all hours on weekends and legal holidays; provided, however,thatreasonableaccessforTenant'semployeesandcustomersshallbeaccorded.Tenant shallberesponsibleforallpersonsforwhomitrequestsaccessandshallbeliabletoLandlordfor all acts of suchpersons.

17.    Tenantagreestokeepallwindowsclosedatalltimesandtoabidebyallrulesand regulations issued by Landlord with respect to the Building's air conditioning and ventilation systems.

18.    Tenantshallnotconductorgivenoticeofanyauction,liquidation,orgoingout of businesssaleinthePremises.

19.    Intheeventitbecomes necessaryfortheLandlordtogainaccesstotheunderfloor electric and telephone distribution system for purposes of adding or removing wiring, then upon requestbyLandlord,Tenantagreestotemporarilyremovethecarpetovertheaccesscoverstothe underfloorductsforsuchperiodoftimeuntilworktobeperformedhasbeencompleted.Thecost of such work shall be borne by Landlord except to the extent such work was requested by or is intendedtobenefitTenantor thePremises,inwhichcasethecostshallbebornebyTenant.

Exhibit C

EXHIBIT D

WORKLETTER

1.    Preparation of Plans. Tenant shall perform all work (“Tenant's Work”) necessary to prepare the Premises for Tenant's occupancy in accordance with plans and specifications prepared by a licensed architect and reasonably approved by Landlord. Tenant shall submit to Landlord a detailed floor plan layout together with working drawings (collectively, the “Plans”) for all Tenant's Work and all Tenant's Work and the Plans therefor shall be subject to Landlord's prior written approval, not to be unreasonably withheld, conditioned or delayed. All of Tenant's WorkshallbedeemedAlterationsundertheLease.

Landlord will not unreasonably withhold, condition or delay its consent to a supported structure over the wetland portion of Property between the 28 Cherry Hill Premises and the 24 Cherry Hill Premises.

2.    Tenant's  Performance of Tenant's  Work.   Once the Plans have been approved by Landlord, Tenant shall promptly, and with all due diligence, perform Tenant's Work as set forth on the Plans, and, in connection therewith, the Tenant shall obtain all necessary governmental permits and approvals for Tenant's Work. Tenant shall have Tenant's Work performed by contractors approved by Landlord, which contractors shall maintain such insurance as the Landlord may reasonably require. Landlord approves Cianbro and Stantec as contractors for the Tenant's Work. Landlord shall have the right to prescribe such reasonable rules and regulations relative to the performance of Tenant's Work and any other work which the Tenant may perform under this Lease and Tenant shall abide  by  all  such  rules  and  regulations  and shall use commercially reasonable efforts to cause all of its contractors to so abide. All of Tenant's Work shall be done strictly in accordance  with the Plans and in a good and  workmanlike manner and in compliance with all Applicable Law, court decisions, and orders and requirementsofallpublicauthoritiesandallinsurancerequirementssetforthintheLease.Except as may be otherwise shown on the Plans, Tenant  shall  performLandlord's Work  using building standard materials, quantities and procedures then in use by Landlord. It shall be Tenant's obligation to obtain a certificate of occupancy or other like governmental approval for the use and occupancy of the Premises to the extent required by Applicable Law and upon substantial completion of Tenant's Work and Tenant shall submit to Landlord a copy of the same together with waivers of lien from all of Tenant's contractors in form adequate for recording purposes. Tenant shall also prepare and submit to Landlord promptly after Tenant's Work is substantially complete a set of as-built plans in both print and electronic  forms   showing the work performed  by Tenant to the Premises  including, without limitation, any wiring or cabling installed by Tenant or Tenant's contractor for Tenant's computer, telephone  and other communicationsystems.

3.    Tenant Allowance. Subject to the terms and conditions hereof, Landlord agrees to provide to Tenant an allowance equal to $432,060.00 (the “Tenant Allowance”). The Tenant Allowance shall be used and applied by Tenant solely on account of the cost of Tenant's Work. ProvidedthattheTenant (i)hasopenedforbusinessinthePremises, (ii)hascompletedallofsuch Tenant'sWorkinaccordancewiththetermsofthis WorkLetter, haspaidforallofsuchTenant's WorkinfullandhasdeliveredtoLandlordlienwaiversfromall personswhomighthavealienas a result of such work in recordable form, (iii) has delivered to Landlord its certificatespecifying the total cost of such Tenant's Work and all contractors, subcontractors and suppliers involved withTenant's Work,togetherwithevidenceofsuchcostintheformofpaidinvoices,receiptsand the like, (iv) has made written request for such payment on or before February 2, 2019, (v) is not otherwise in default under this Lease beyond the expiration of all applicable notice and cure periods,and(vi)therearenoliensagainstTenant'sinterestintheLeaseoragainst theBuildingor arising out of Tenant's Work or any litigation in which Tenant is a party relating to the Premises, then within thirty (30) days after the satisfaction of the foregoing conditions, the Landlord shall pay to the Tenant the lesser of the amount of such costs so certified or the amount of the Tenant Allowance.Notwithstandingtheforegoing,TenantmayelecttorequestinstallmentsoftheTenant Allowance be paid upon completion of phases of the Tenant's Work. Each installment paid by Landlord will be in the amount of Landlord's pro-rata share based on the ratio of the Tenant AllowancetothetotalcostofTenant'sWork(asevidencedbyreasonablydetaileddocumentation deliveredtoLandlordwiththerequisitionfirstsubmittedbyTenant),lessaretainageequaltothe greater of the retainage set forth in the construction contract or ten percent (10%) of amount due under the construction contract, but in no event shall Landlord be required to pay more than the Tenant Allowance. Any final retainage amounts shall be paid by Landlord following substantial completionofTenant'sWorkandsatisfactionoftheforegoingrequirementswithrespecttoafinal installment.

Exhibit D

For the purposes hereof, the cost to be so reimbursed by Landlord shall include the hard costs of Tenant's Work and up to $64,809.00 of the Tenant Allowance may be used for Tenant's actual out-of-pocket engineering, architectural and permitting costs, cabling and wiring, but not thecostofanyofTenant'spersonalproperty,tradefixtures,ortradeequipment.Landlordshall be under no obligation to apply any portion of the Tenant Allowance for any purposes other than as provided herein, nor shall Landlord be deemed to have assumed any obligations, in whole or in part, of Tenant to any contractors, subcontractors, suppliers, workers or materialmen. Further, in noeventshallLandlordberequiredtopayanyportionoftheTenantAllowanceonaccountofany supervisory fees, overhead, management fees or other payments to Tenant, or any partner or affiliate of Tenant. Any portion of the Allowance which not requested or applied in compliance with the terms and conditions hereof on or before the second (2^nd) anniversary of the 24 Cherry HillDriveCommencementDateshallberetained byLandlordandforfeitedbyTenant.Landlord shall be entitled to deduct from the Tenant Allowance an amount equal to the sum of: (i) one percent(1%)ofthetotalcostofTenant'sWorkforLandlord'sout-of-pocketcostsforsupervision of Tenant's Work by Landlord's property management company, plus (ii) actual and reasonable third party expenses incurred by Landlord to review Tenant's Plans and Tenant'sWork.

4.    Hold Harmless. Tenant shall indemnify and hold Landlord harmless from and against any and all liability and claims of any kind for loss or damage to any person or property arising out of or occurring during construction of Tenant's Work. In addition, Landlord shall not be liable for injury or damage which may be sustained by the person or property of Tenant, its employees, agents, invitees or contractors, or any other person in or about the Premises, arising out of or during performance of Tenant'sWork.

Exhibit D

EXHIBIT E

COMMENCEMENT LETTER

RE: Leasedated , between Brookwood Cherry Hill I, LLC andBrookwood Cherry Hill II, LLC (as tenants in common, “Landlord”) and ABIOMED, Inc. (“Tenant”) concerning the premises located at 24-42 Cherry Hill Drive, Danvers,Massachusetts.

In accordance with the above-referenced Lease, we request that you and/or the proper authority, please confirm the following statements:

1.     The Commencement  Date is deemed tobeand theExpiration Dateis, subjecttoextensionasprovidedinthisLease.

2.    Tenant acknowledges and agrees that as of the date of this letter (i) all improvements required by the Lease to be performed by Landlord to the Premises have been completed;and(ii)TenanthasacceptedthePremisesinitscurrentcondition.

Please confirm your agreement with the above terms of this letter by signing below and returningacopytoLandlord.FailuretoexecutethisletteranddeliverthesametoLandlordshall beconclusiveevidenceagainstTenantthattheabovestatementsareaccurateandtrue.

Sincerely,

By:

Name:

Its:

AGREED TO& ACCEPTED BY:

ABIOMED, INC.

a Delaware corporation

By:

Name:

Its:

Exhibit E

EXHIBIT F

INITIAL HVAC WORK

28 Cherry Hill Drive HVAC Units

Landlord will address the following deficiencies:

1. Serial: 3206G50272

a. Heatexchanger, safetyswitches,ignitionmodule,draftmotorandcap.

2. Serial:1606G20265

a. Heat exchanger, safety switches, ignition module, draft motor and cap, economizer motor and control, heavy vibration on economizer fan, loose mount on spider bracket.

3. Serial: 1094G1622

a. Condenser fan motor and capacitor

4. Serial: 1506G30127

a. Condenser fan motor, cap, blade and gas valve, economizer motor and controls.

5. Serial: 2806G0334

a. Draft motor assembly and cap, economizer motor and controls.

Exhibit F

EXHIBIT G

TRANSFORMERWORK

Exhibit G

EXHIBIT G1

TRANSFORMER REMOVAL WORK

(Landlord's Cost)

Exhibit G1

EXHIBIT G2

TRANSFORMER RELOCATION WORK

(Tenant’s Cost)

64623234v.6 Exhibit G2

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE (this "First Amendment"), dated as of December 14, 2017 (the "Effective Date"), is made and entered into by and between CHERRY HILL DRIVE OWNER, LLC, a Delaware limited liability company ("Landlord") and ABIOMED, INC., a Delaware corporation ("Tenant").

R E C I T A L S

ALandlordandTenantarepartiestothatcertainLeasedatedasofFebruary 2,2017 "Lease") for that portion of the office building located at 24-42 Cherry Hill Drive, Danvers, Massachusetts (the "Building") consisting of 21,603 rentable square feet as more particularly describedintheLease(the"ExistingPremises").

BThe Term of the Lease is scheduled to expire on August 31, 2022 (the "Expiration Date") and Landlord and Tenant wish to extend the Lease Term for an additional periodofthirty-six(36)fullcalendarmonths beyondtheExpirationDatetoexpireonAugust31, 2025(the"NewExpirationDate").

CTenant wishes to expand the Existing Premises to include the addition of the space consisting of approximately 6,607 rentable square feet in the Building commonly known asSuite26andidentifiedontheplanattachedheretoasExhibitA (the"ExpansionPremises").

DLandlord and Tenant wish to make certain amendments and modifications to the terms and provisions of the Lease consistent with the foregoing as hereinafter set forth. The Lease, as modified by this First Amendment, is hereinafter referred to as the "Lease." Capitalized terms not otherwise defined herein shall have the meanings given to such terms in theLease.

AGREEMENT:

NOW, THEREFORE, in consideration of the premises, the sum of Ten Dollars and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and confessed, Landlord and Tenant hereby agree as follows:

1. TermoftheLease;ExtensionOption.

(a)The Term of the Lease is hereby extended for an additional period of thirty-six (36) full calendar months beyond the Expiration Date to expire on the New Expiration Date (the "Extended Term"). Therefore, notwithstanding anything to the contrary contained in the Lease, the Term of Lease shall include the Extended Term and shall expire and terminate on the New Expiration Date (August 31, 2025) and all references in the Lease to the "Expiration Date"orthe"expirationoftheTerm"orsimilarlanguageshallbedeemedtorefertotheNew Expiration Date, subject to the Extension Options set forth in Exhibit B of the Lease.

(b)The Extension Option set forth in Exhibit B of the Lease shall remain in full force and effect throughout the Extended Term and apply to the entire Premises (as  expanded by this First Amendment), including any Offer Right Space (as defined in Exhibit B of this First Amendment) that may be added to the Premises, provided however, that:

a. The second paragraph of Exhibit B of the Lease shall be modified in its entirety to read as follows: “EXTENSION OPTIONS So long as there exists no default beyond any applicable notice and cure periods, either at the time of exercise or on the first day of the Extension Term (as hereinafter defined) and Tenant has not assigned this Lease nor sublet the Premises in whole or in part, Tenant shall have the option to extend the Term for up to two (2) consecutive periods of five (5) years each (each, an “Extension Term”) upon written notice to Landlord given not less than twelve (12)

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months and not more than fifteen ( 15) months prior to the expiration of the Term or first Extension Term, as applicable.  If Tenant fails to exercise its first option to extend the Term strictly within the time period set forth in this section, then Tenant's first and second option to extend the Term shall both automatically lapse and be of no further force or effect. If Tenant exercises its first option to extend the Term but fails to exercise its second option to extend the Term strictly within the time period set forth in this section, then Tenant's  second option to extend the Term shall automatically lapse and be of no further force or effect. In the event that Tenant exercises the option(s) granted hereunder, the applicable Extension Term shall be upon the same terms and conditions as are in effect under this Lease immediately preceding the commencement of such Extension Term except that the Base Rent due from the Tenant shall be increased to Landlord's determination of Base Rent as provided herein, and, other than the second extension option provided herein, Tenant shall have no further right or option to extend the Term or to any abatements, improvement allowance or other  inducements. If Tenant timely exercises its option(s) to extend the Term, then no later than thirty (30) days following receipt of Tenant's notice, Landlord shall notify Tenant in writing of Landlord's determination of the Base Rent for such Extension Term ("Landlord's Rental Notice"). If Tenant does not object to Landlord's determination of the Base Rent by written notice to Landlord within twenty (20) days after the date of Landlord's Rental Notice, then Tenant shall be deemed to have accepted the Base Rent set forth in Landlord's Rental Notice”

b. All references in the third and fourth paragraphs of Exhibit B of the Lease to “the Extension Term” shall be modified to read “the applicable Extension Term”.

2.Premises; Tenant’s Percentage.  Effective as of the later of (a) June 1, 2018,and (b) the date the Landlord delivers the Expansion Premises to Tenant in broom clean condition, free of all other tenants, occupants and their possessions (the “First Amendment Commencement Date”): (i) the definition of Premises as set forth in the Lease shall be  amended by adding the Expansion Premises thereto,  (ii) the term “Premises” shall be deemed  the Existing Premises and the Expansion Premises, (iii) the Premises shall be deemed to consist of 28,210 rentable square feet, consisting of the Existing Premises (21,603 rentable square feet) and the Expansion Premises (6,607 rentable square feet), and (iv) Tenant’s Percentage shall be deemed to be28.04%.

3.Base Rent. Effective as of the First Amendment Commencement Date, the Base Rent Tables appearing in Section 1 of the Lease shall be deleted in their entireties and shall have no further force or effect, and Tenant shall pay Base Rent for the entire Premises (the Existing Premises and the Expansion Premises) in accordance with the terms and conditions of the Lease in the following amounts applicable to the followingperiods:

Period	Base Rent (per annum)	Base Rent (per month)	Base Rent (per rentable square foot, per annum)
First Amendment Commencement Date – January 31, 2019	$362,780.60	$30,231.72*	$12.86
February 1, 2019 – January 31, 2020	$377,449.80	$31,454.15	$13.38
February 1, 2020 – January 31, 2021	$392,119.00	$32,676.58	$13.90
February 1, 2021 – January 31, 2022	$406,788.20	$33,899.02	$14.42
February 1, 2022 – August 31, 2022	$421,739.50	$35,144.96	$14.95
September 1, 2022 – August 31, 2023	$436,690.80	$36,390.90	$15.48
September 1, 2023 – August 31, 2024	$451,924.20	$37,660.35	$16.02
September 1, 2024 – August 31, 2025	$467,157.60	$38,929.80	$16.56

{W6393204.9} 2

*In the event the First Amendment Commencement Date occurs on a day other than the first day of a calendar month, the monthly Base Rent payment for such month shall be pro-rated based on the number of days occurring in such month from and after the First Amendment Commencement Date in relation to the total number of days in such month.

4.Condition of the Expansion Premises; ImprovementAllowance.

(a)Condition of the Expansion Premises. Tenant hereby acknowledges and agrees that it hereby accepts the Expansion Premises in such “AS IS, WHERE IS” condition as exists on the date hereof. Further, Tenant specifically acknowledges and agrees that no provision of the Lease concerning (i) improvements, alterations and/or additions to be performed or provided by Landlord or at Landlord’s expense, (ii) tenant improvement allowances, (iii) reimbursement allowance, or (iv) free rent or other rent concession shall have any application whatsoever to the Expansion Premises or this First Amendment, except as specifically set forth  in this First Amendment. Notwithstanding the foregoing, the Expansion Premises shall be delivered to Tenant with all Building systems serving the Expansion Premises in good working order, provided however, Tenant hereby acknowledges and agrees that the Expansion Premises are not served by any uninterrupted power supply systems or generators and Landlord shall have no obligation with respect tosame.

(b)Improvement Allowance. In the event, after the First Amendment Commencement Date, Tenant makes any alterations, additions or improvements to the Existing Premises or the Expansion Premises (which alterations and improvements shall be subject to the terms  and  conditions  of  Section  21  of  the  Lease),  Landlord  shall  reimburse  Tenant  up to $108,015.00 (the “Improvement Allowance”) for the costs incurred by Tenant in connection with such alterations, additions or improvements, including all so-called hard and soft costs, cabling, telecommunications/data wiring, moving costs and the like. Such reimbursement shall occur within thirty (30) days after Landlord has received (i) a written certificate from Tenant specifying the work performed, (ii) written documentation reasonably satisfactory to Landlord that such work was completed and paid for by Tenant (it being agreed that copies of paid  invoices shall be sufficient evidence of such payment), and (iii) duly executed unconditional lien waivers from all general contractors, subcontractors and materialmen performing work on the Existing Premises or the Expansion Premises. Any portion of the Improvement  Allowance which has not been requested or applied in compliance with the terms and conditions of this Section 4(b) by December 1, 2020 shall be retained by Landlord and forfeited byTenant.

5.Right of First Offer. From and after the Effective Date, Tenant shall have the right to be offered the opportunity to lease additional space in the Building pursuant to the terms and conditions of the Right of First Offer attached hereto as ExhibitB.

6.Right of First Offer to Purchase the Property; Right to Purchase the Property.

(a)Right of First Offer to Purchase theProperty.

(1)Tenant shall have a right of first offer to purchase the Property throughout the Term of the Lease, as it may be extended, in strict accordance with this Section 6(a). If, after the Effective Date and provided the Lease is in full force and effect, there exists no Event of Default by Tenant, Landlord determines to offer the Property for sale, in Landlord’s sole and absolute discretion, without any obligation to do so, Landlord shall, in accordance with this Section 6(a), offer to sell the Property to Tenant by sending to Tenant a written notice (the “Proposed Sale Notice”) which shall (i) state Seller’s intent to offer the Property for sale, (ii) state the Sale Price, as hereinafter defined in Section 6(c) in effect at such time, and basis for the determination of such Sale Price and (iii) include a Purchase and Sale Agreement in the form attached hereto as Exhibit C with the Sale Price and other applicable terms inserted (the “Purchase and Sale Agreement”), prior to offering to sell the Property to any other party except as provided in the following sentence. The provisions of this Section 6(a) shall not apply to the following: (a) any sale or transfer of the Property to any entity which controls, is controlled by,  or under common control with Landlord or with R.J. Kelly Co., Inc. or their respective affiliates (“Landlord Affiliates”); (b) the grant of a mortgage of the Property to any mortgagee; or (c) a foreclosure of any mortgage encumbering, or the execution and delivery by Landlord of a deed  in lieu or contemplation of foreclosure in regard to, Landlord’s interest in the Property.

{W6393204.9} 3

(2)Tenant shall have ten (10) days after receipt of the Proposed Sale Notice to (i) give Landlord written notice (“Tenant’s Acceptance Notice”) accepting the terms set forth in the Proposed Sale Notice (which terms must conform to the computation of the Sale Price as set forth in Section 6(c)), (ii) deliver the Purchase and Sale Agreement executed by Tenant, and (iii) deliver a deposit in the amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Deposit”) to the escrow agent designated in the Purchase and Sale Agreement, which Deposit shall be refundable to Tenant solely upon the terms and conditions set forth in the Purchase and Sale Agreement. If Tenant has not delivered the Tenant’s Acceptance Notice, the executed Purchase and Sale Agreement and the Deposit as provided in the immediately preceding sentence within such ten (10) day period, then such failures shall be treated as if Tenant did not give a timely Tenant’s Acceptance Notice, and Landlord shall be free to sell the Property unencumbered by the provisions of this Section 6 upon terms and conditions acceptable to Landlord in its sole and absolute discretion, and Tenant shall have no further right to purchase the Property under this Lease, except as provided in Section 6(a)(3) below to the extent applicable. For purposes of clarification, in the event Landlord is entitled to offer to sell the Property to any third party, Landlord shall not be limited to any particular sale price and Landlord may accept any price or other terms and conditions in Landlord’s sole and absolute discretion.

(3)Notwithstanding anything to the contrary herein contained, for so long as Cherry Hill Drive Owner, LLC, or any Landlord Affiliates, is the Landlord hereunder, Tenant shall again have the right of first offer to purchase the Property and Landlord shall provide Tenant with an additional Proposed Sale Notice and shall otherwise comply with the procedures set forth in this Section 6(a) if (a) Landlord does not accept an offer to sell the Property on or before the date six (6) months days after Tenant receives the Proposed Sale Notice, or (b) Landlord does not close the sale of the Property within nine (9) months after Tenant receives the Proposed Sale Notice (a “Re-Offer Event”). Upon the occurrence of a Re- Offer Event, Landlord shall re-offer the Property to Tenant in accordance with the procedures set forth in this Section 6(a).

(b)Right to Purchase the Property.

(1)At any time throughout the Term of this Lease, as it may be extended, Tenant shall have the right to purchase the Property for the Sale Price, in strict accordance with this Section 6(b). If, after the Effective Date and provided the Lease is in full force and effect, and there exists no Event of Default by Tenant, Tenant shall have the right to purchase the Property by providing Landlord with a written notice stating Tenant’s intention to Purchase the Property pursuant to this Section 6(b) and requesting a determination of Sale Price from Landlord (“Tenant’s Purchase Notice”). Within five (5) days  following  Landlord’s receipt of Tenant’s Purchase Notice, Landlord shall provide Tenant a written response (the “Landlord’s Purchase Notice Response”) which shall (i) state the Sale Price in effect at such time, and basis for the determination of such Sale Price, which must comply with the provisions for such determination set forth in Section 6(c) below, and (ii) include the Purchase and Sale Agreement (as defined in Section 6(a) above) with the Sale Price and other applicable terms inserted.

(2)Tenant shall have ten (10) days after receipt of Landlord’s Purchase Notice Response to (i) deliver the Purchase and Sale Agreement executed by Tenant, and (ii) deliver a deposit in the amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Deposit”) to the escrow agent designated in the Purchase and Sale Agreement. If Tenant has not delivered the executed Purchase and Sale Agreement and the Deposit as provided in the immediately preceding sentence within such ten (10) day period, then such failures shall be treated as if Tenant has rescinded the Tenant’s Purchase Notice, and this Section 6(b) shall be null and void and terminated in all respects, and Landlord shall have no further obligation to sell the Property to Tenant pursuant to this Section 6(b).

{W6393204.9} 4

(3)Notwithstanding the foregoing, Tenant hereby acknowledges and agrees that, so long as Landlord has fully and timely complied with all of the terms, covenants and conditions of Sections 6(a) above, if Landlord has entered into a written agreement with a third party to purchase and sell the Property (a “Third Party Purchase and Sale Agreement”), Tenant shall not have the right to purchase the Property pursuant to this Section 6(b) (and any exercise thereof shall be null and void in all respects) so long as such Third Party Purchase and Sale Agreement remains in effect and a Re-Offer Event has not occurred. If such Third Party Purchase and Sale Agreement is terminated for any reason or a Re-Offer Event (as described in Section 6(a) above) occurs, Tenant’s right to purchase the Property pursuant to this Section 6(b) shall be restored and have full force and effect. Landlord hereby agrees to give written notice to Tenant if Landlord enters into a Third Party Purchase and Sale Agreement and, upon request, shall keep Tenant reasonably informed of the status of such Third Party Purchase and Sale Agreement.

(c)Sale Price.  For purposes of this Section 6, the “Sale Price” shall mean  the sum of (1) the Base Price in effect on the date the Proposed Sale Notice or the Tenant’s Purchase Notice, as applicable, is given, (2) the Total Unamortized Tenant Improvements in effect at such time, (3) the Total Unamortized Leasing Commissions in effect at such time, and (z) the Total Unamortized Capital Investments in effect at such time. Within thirty (30) days following written request by Tenant, Landlord agrees to provide Tenant a schedule (certified as true and accurate by Landlord) setting forth in reasonable detail the Total Unamortized Tenant Improvements, the Total Unamortized Leasing Commissions, and the Total Unamortized Capital Investments in effect at the time of such request, provided however, Landlord shall not be obligated to respond to more than two (2) such requests in any twelve (12) month period.

(i) The “Base Price” (the “Base Price”) in effect for a particular period in the Lease Term (and any extensions thereof, as the case may be) shall mean the amount set forth in the table below applicable to such period:

Period	PSF Price	Base Price
January 1, 2018 – December 31, 2018	$150.00	$15,092,850.00
January 1, 2019 – December 31, 2019	$154.50	$15,545,635.50
January 1, 2020 – December 31, 2020	$159.14	$16,012,507.66
January 1, 2021 – December 31, 2021	$163.91	$16,492,460.29
January 1, 2022 – December 31, 2022	$168.83	$16,987,505.77
January 1, 2023 – December 31, 2023	$173.89	$17,496,637.91
January 1, 2024 – December 31, 2024	$179.11	$18,021,869.09
January 1, 2025 – December 31, 2025	$184.48	$18,562,193.12
January 1, 2026 – December 31, 2026	$190.01	$19,118,616.19
January 1, 2027 – December 31, 2027	$195.71	$19,692,144.49
January 1, 2028 – December 31, 2028	$201.58	$20,282,778.02
January 1, 2029 – December 31, 2029	$207.63	$20,891,522.97
January 1, 2030 – December 31,2030	$213.86	$21,518,379.34
January 1, 2031 – December 31, 2031	$220.28	$22,164,353.32
January 1, 2032 – December 31, 2032	$226.88	$22,828,438.72
January 1, 2033 – December 31, 2033	$233.69	$23,513,654.11
January 1, 2034 – December 31, 2034	$240.70	$24,218,993.30
January 1, 2035 – August 31, 2035	$247.92	$24,945,462.48

{W6393204.9} 5

(ii) The “Total Unamortized Tenant Improvements” (the “Total Unamortized Tenant Improvements”) means the sum of all Unamortized Tenant Improvements (as calculated below) for each lease in connection with additions, improvements or alterations made to tenant spaces in the Building from and after the Effective Date (the “Tenant Improvement Costs”). The calculation of the Unamortized Tenant Improvements for each lease (the “UnamortizedTenant Improvements”) shall be madeby(a) taking the total of all Tenant Improvement Costs for such lease, (b) fully amortizing such amount on a so-called straight line basis, using an annual rate of interest of nine percent (9%), over the applicable term of such lease to establish a monthly payment therefor, and (c) calculating the remaining principal balance of such Tenant Improvement Costs as of the applicable date. Such remaining principal balance shall be the Unamortized Tenant Improvements for suchlease.

(iii) The “Total Unamortized Leasing Commissions” (the “Total Unamortized Leasing Commissions”) means the sum of all Unamortized Leasing Commissions (as calculated below) for each lease in connection with brokerage commissions paid by Landlord for leases of space in the Building from and after the Effective Date (the “Leasing Commissions”). The calculation of the Unamortized Leasing Commissions for each lease (the “Unamortized Leasing Commissions”) shall be made by (a) taking the total of all Leasing Commissions for such lease, (b) fully amortizing such amount on a so-called straight line basis, using an annual rate of interest of nine percent (9%), over the applicable term of such lease to establish a monthly payment therefor, and (c) calculating the remaining principal balance of such Leasing Commissions as of the applicable date. Such remaining principal balance shall be the Unamortized Leasing Commission for suchlease.

(iv) The “Total Unamortized Capital Investments” (the “Total Unamortized Capital Investments”) means the sum of all Unamortized Capital Investments (as calculated below) in connection with capital improvements and/or investments made to the Building from an after the Effective Date (the “Capital Costs”). The calculation of the Unamortized Capital Investment (the “Unamortized Capital Investment”) for each Capital Cost shall be made by (a) taking the particular Capital Cost, (b) fully amortizing such Capital Cost on a so-called straight line basis, using an annual rate of interest of nine percent (9%), over the useful life of such item (as determined by generally accepted accounting principles) to establish a monthly payment therefor, and (c) calculating the remaining principal balance of such Capital Costs as of the applicable date. Such remaining principal balance shall be the Unamortized Capital Investment for such particular CapitalCost.

(d)Landlord and Tenant hereby acknowledge and agrees that if Tenant delivers the Purchase and Sale Agreement pursuant to Sections 6(a) and 6(b) above and then defaults in the performance of its obligations under such Purchase and Sale Agreement beyond the expiration of all applicable notice and cure periods, or otherwise terminates such Purchase and Sale Agreement (other than a termination by reason of a default of Landlord thereunder), this Section 6 shall be deemed to be null and void and terminated in all respects and Landlord shall have no further obligation to offer or sell the Property to Tenant.

(e)Landlord and Tenant hereby acknowledge and agree that, so long as Landlord has fully and timely complied with all of the terms, covenants and conditions of Sections 6(a) and (b) above, upon the sale or transfer of the Property to any third party, including without limitation, the sale or transfer to a mortgagee or a buyer pursuant to a foreclosure of any mortgage encumbering the Property, or the execution and delivery by Landlord of a deed in lieu or contemplation of foreclosure in regard to, Landlord’s interest in the Property, this Section 6 shall be deemed to be terminated in its entirety and shall have no further force and effect and any subsequent owner of the Property shall own the Property unencumbered by the terms and conditions of this Section 6. Notwithstanding the foregoing, this Section 6(e) shall not apply to sales or transfers to Landlord Affiliates.

{W6393204.9} 6

(f)If Landlord shall record an affidavit in the Essex South Registry of Deeds stating that: (A)(i) Landlord has sent the Proposed Sale Notice to Tenant in accordance with the requirements of Section 6(a) above, and (ii) Landlord has not received Tenant’s Acceptance Notice within the time period specified herein (or that Tenant has given Tenant’s Acceptance Notice but defaulted in the performance of its obligations under Section 6(a), defaulted in the performance of its obligations under the Purchase and Sale Agreement or otherwise terminated the Purchase and Sale Agreement), or (B)(i) Landlord has sent the Landlord’s Determination of Sale Price to Tenant in accordance with the requirements of Section 6(b) above, and (ii)  Landlord has not received the executed Purchase and Sale Agreement from Tenant within the time period specified herein (or that Tenant has given the executed Purchase and Sale Agreement but defaulted in the performance of its obligations under Section 6(b), defaulted in the performance of its obligations under the Purchase and Sale Agreement or otherwise terminated the Purchase and Sale Agreement), then, with respect solely to any third party relying on such affidavit, such affidavit shall be conclusive as to (1) compliance of Landlord with the requirements of this Section 6, and (2) termination of Tenant’s rights under this Section 6, and such third  party shall be entitled to rely on same.

(g)The rights under this Section 6 are personal to Abiomed, Inc. (the Tenant named herein) and any assignee of Tenant’s interest under the Lease pursuant to a Permitted Transfer, and may not be exercised by another person or entity.

(h)Time is of the essence with respect to all terms and conditions of this Section 6, including without limitation, the exercise of any rights and the performance of obligationshereunder.

7.Condition Precedent to Expansion; Delay in First Amendment Commencement Date. Landlord shall use commercially reasonable efforts to cause the First Amendment Commencement Date to occur by June 1, 2018 (the “Target Commencement Date”). However, Tenant hereby acknowledges and agrees that to accommodate  Tenant’s desired expansion of the Premises contemplated by this First Amendment, it will be necessary  for Landlord to move the tenant presently occupying the Expansion Premises, North of Boston Library Exchange, Inc. (“NOBLE”), to alternate space in the Building presently occupied by another tenant (the “NOBLE Relocation Premises”), Bioceutica, LLC (“Bioceutica”), and to move NOBLE into the NOBLE Relocation Premises it will be necessary for Bioceutica to agree to terminate its lease of the NOBLE Relocation Premises. Tenant hereby acknowledges and agrees that, despite Landlord’s commercially reasonable efforts, Landlord cannot assure the Tenant nor guaranty that the First Amendment Commencement Date will occur by the Target Commencement Date. Accordingly, notwithstanding any terms or conditions of  thisFirst Amendment to the contrary, in the event Landlord is unable to deliver the Expansion Premises to Tenant by the Target Commencement Date for any reason whatsoever, the Lease (including this First Amendment) remains in full force and effect and Landlord shall not be liable to Tenant for any resulting loss or damage. For purposed of this Section 7, the First Amendment Commencement Date shall be referred to as the “Rent Commencement Date”. Anything in this Lease to the contrary notwithstanding, if the First Amendment Commencement Date has not occurred by August 1, 2017, then for each day of delay thereafter, the Rent Commencement Date shall be extended by one-half of one day as to the Expansion Premises only, and if the First Amendment Commencement Date has not occurred by September 1, 2017, then for each day of delay thereafter, the Rent Commencement Date shall be extended by one day as to the Expansion Premises only. For purposes of clarity, the parties agree that the annual Base Rent for the Expansion Premises to be used in calculating such abatement is One Hundred Twenty Five Thousand Two Hundred Two and 65/100 Dollars ($125,202.65).

8.Condition Precedent. Notwithstanding any term or condition of this First Amendment to the contrary, Tenant hereby acknowledges and agrees that the effectiveness of this First Amendment is conditioned upon Landlord (a) entering into a written agreement with NOBLE , the tenant presently occupying the Expansion Premises, wherein NOBLE agrees to relocate from the Expansion Premises to the NOBLE Relocation Premises (the “NOBLE Relocation Agreement”), and (b) entering into a written agreement with Bioceutica, wherein Bioceutica agrees to terminate its lease early (the “Bioceutica Early Termination  Agreement”). If, for any reason the Landlord does not enter into the NOBLE Relocation Agreement or the Bioceutica Early Termination Agreement, Landlord may rescind its execution of this First Amendment by written notice thereof to Tenant, whereupon the Lease shall remain  in full force and effect as if this First Amendment was never executed. Landlord agrees to use commercially reasonable efforts to enter into the NOBLE Relocation Agreement and the Bioceutica Early Termination Agreement prior to February 28,2018.

{W6393204.9} 7

9.Notices. From and after the Effective Date, all notices to Landlord and remittances of payments shall be sent asfollows:

Notice Address of Landlord:

Cherry Hill Drive Owner LLC

c/o RJ Kelly Company

55 Cambridge Street

Burlington, MA 01803

Landlord’s Remittance Address:

Mailing Instructions:

Cherry Hill Drive Owner LLC

c/o RJ Kelly Company

55 Cambridge Street

Burlington, MA 01803 Attn:  Accounts Receivable

Wire/ACH Instructions:

Cambridge Savings Bank 1374 Massachusetts Ave.

Cambridge, MA 02138

ABA #2113-7112-0

Account Title: Cherry Hill Drive Owner LLC

Account Address: 55 Cambridge Street, Burlington, MA 01803 Account Number: 10835075

10.Broker. Landlord and Tenant each represents and warrants to the other that, except for Jones Lang LaSalle (the “Broker”), it has had no dealing with any other broker or agent in connection with the negotiation or execution of this First Amendment, and  Tenant agrees to indemnify and hold Landlord harmless from and against any claims by any broker, agent or other person claiming a commission or other form of compensation by virtue of having dealt with Tenant with regards to this leasing transaction, except for the Broker.  Any  commission owed to the Broker shall be paid by Landlord pursuant to separateagreement.

11.Counterparts; PDF Signatures. This First Amendment may be executed intwo (2) or more counterparts, each of which shall be an original but such counterparts together shall constitute one and the same instrument notwithstanding that both Landlord and Tenant are not signatories to the same counterpart.  PDF signatures shall be binding as originals.

12.Ratification. Except as amended by this First Amendment, all other terms, conditions, covenants and provisions as appear in the Lease are hereby ratified and confirmed and shall remainunchanged.

13.Successors and Assigns. This First Amendment shall be binding upon and inure to the benefit of the parties hereto and their heirs, successors and permittedassigns.

14.SNDA. Concurrently with execution of this First Amendment by Landlord, Landlord shall, at Landlord’s sole cost and expense, have the existing mortgagee of the Property enter into a subordination, attornment and non-disturbance agreement (“SNDA”) with Tenant, on such mortgagee’s customary form thereof subject to Tenant’s commercially reasonable modifications to such form, provided however, Landlord and Tenant hereby acknowledge and agree that the form of SNDA dated July 25, 2017 by and among Landlord, Tenant and Cambridge Savings Bank shall be deemed to be an acceptable form of SNDA. Section 20 of the Lease shall remain in full force and effect with respect to any future mortgages which may encumber theProperty.

{W6393204.9} 8

15.Tenant Estoppel Certificate. Landlord and Tenant hereby acknowledge and agree that notwithstanding Section 2 of that certain Tenant Estoppel Certificate dated as of July 12, 2017 executed by Tenant and provided to Brookwood Cherry Hill I, LLC, Brookwood  Cherry Hill Owner II, LLC, Landlord, and Cambridge Savings Bank, the Expiration Date of the Lease, prior to this First Amendment having force and effect, is August 31,2022.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

{W6393204.9} 9

INWITNESSWHEREOF,thepartieshavecausedthisFirstAmendmenttobeduly executedundersealasofthedatefirstwrittenabove.

LANDLORD:
CHERRY HILL DRIVE OWNER LLC,
a Delaware limited liability company
By	/s/ Brandon D Kelly
Name	Brandon D Kelly
Title	Authorized Signatory

TENANT:

ABIOMED,INC.,aDelaware corporation

By:

Name

Title:

{W6393204.9} 10

IN WITNESS WHEREOF, the parties have caused this First Amendment to be duly executed  under seal as of the date first written  above.

LANDLORD:
CHERRY HILL DRIVE OWNER LLC,
a Delaware limited liability company
By
Name	Brandon D Kelly
Title	Authorized Signatory

TENANT:

ABIOMED,INC.,aDelawarecorporation

{W6393204.9} 11

EXHIBIT A

PLAN OF EXPANSION PREMISES

(Attached)

{W6393204.9}

Plan may not be to scale or depict the exact configuration

of walls within the space.

EXHIBIT B

RIGHT OF FIRST OFFER

So long as no Event of Default then exists under the Lease, Tenant will have the right during the Term (“Offer Right”) to be offered by Landlord the opportunity to lease that certain space in the Building consisting of (a) 11,269 rentable square feet (the “Right of First Offer Space”) identified and shown on the plan attached hereto as Schedule B-1, (b) 24,070 rentable square feet (the “Subordinate Right of First Offer Space”) identified and shown on the plan attached hereto as Schedule B-1, and (c) any other space in the Building (“Other Right of First Offer Space”) which becomes vacant or is available to lease (the Right of First Offer Space, the Subordinate Right of First Offer Space, and the Other Right of First Offer Space, collectively,  the “Offer Right Space”). The Offer Right is subject to the terms and conditions set forth in this Exhibit B, provided however, Tenant hereby acknowledges and agrees that the Offer Right (a) solely with respect to the Subordinate Right of First Offer Space is subject and subordinate to Landlord’s right to first offer and lease such space to another tenant occupying, as of the Effective Date, no less than 35,000 rentable square feet space within a building owned by LandlordwithinthebusinessparkinwhichtheBuildingislocated(the“OtherTenant”), (b) and solely with respect to the Other Right of First Offer Space is subject and subordinate to any presently existing rights of existing tenants of the Building (individually, an “Existing Tenant” and, collectively, “Existing Tenants”). If at any time after the Effective Date Landlord receives a request for proposal to lease all or any portion of the Offer Right Space from a third party or wishes to offer the Offer Right Space to a third party, Landlord shall notify Tenant that such Offer Right Space is available for lease (the “Available Space”), such notice shall include the material terms and condition under which Landlord would be willing to lease such space to Tenant (including, without limitation, the rent per square foot), in Landlord’s sole and absolute discretion. Tenant must notify Landlord in writing within ten (10) business days of receiving Landlord’s notice whether Tenant desires to lease all (and not a portion) of the Available Space from Landlord. If Tenant notifies Landlord that Tenant does not desire to lease all (and not a portion) of the Available Space, or if Tenant does not respond in writing to Landlord’s notice within such ten (10) Business Day period, then Landlord may proceed with negotiating a lease with such third party from whom a request for proposal was received or any other party to whom Landlord wishes to extend an offer to lease such space and freely lease the Available Space without restriction and no further obligation to offer such Available Space to Tenant. If Tenant notifies Landlord in writing within such ten (10) Business Day period that Tenant desires to lease all of the Available Space (and not a portion), and Landlord accepts Tenant’s offer, the parties will thereafter negotiate Tenant’s lease of the Available Space from Landlord based upon the material terms and conditions set forth in Landlord’s notice, provided however, in the event any portion of the Available Space consists of the Subordinate Right of First Offer Space or the  Other Right of First Offer Space and if the Other Tenant (with respect to the Subordinate Right  of First Offer Space) or any Existing Tenant (with respect to the Other Right of First Offer Space) elects to lease such space, Landlord shall not be obligated to lease such space to Tenant and Tenant’s election to lease such space shall be null and void and have no force or effect. LandlordagreesthatitwillusecommerciallyreasonableeffortstokeepTenantreasonably informed of the status of leasing the Subordinate Right of First Offer Space to the Other Tenant and the Other Right of First Offer Space to any Existing Tenant. Tenant acknowledges and  agrees that Landlord may contemporaneously provide Tenant, the Other Tenant (solely with respect to the Subordinate Right of First Offer Space) and any Existing Tenants (solely with respect to the Other Right of First Offer Space) with a notice of Available Space (as described above) and, regardless of whether Tenant notifies Landlord of its desire to lease such Available Space, Landlord shall not be obligated to lease any portion of the Available Space which consists of the Subordinate Right of First Offer Space or the Other Right of First Offer Space to Tenant unless or until Landlord has determined, in Landlord’s commercially reasonable judgment, that the Other Tenant or any Existing Tenant does not wish to lease such space on terms and conditions which Landlord wouldaccept.

If Landlord and Tenant fail to mutually agree upon the terms of Tenant’s lease of the Available Space and to execute a written amendment to this Lease within five (5) business days after the date that Landlord accepts Tenant’s offer notice, then Landlord shall be free to lease the Available Space without restriction after such five (5)  business day period.

{W6393204.9}

Tenant's rights under this Exhibit Bare exclusive to Tenant and any assignee of Tenant’s position under this Lease, whether through a Permitted Transfer or otherwise, and shall terminate if (i) the Lease or Tenant's right to possession of the Premises is terminated in accordance with the terms of this Lease or by mutual written agreement, or (ii) Tenant fails to timely exercise its option under this Exhibit B, time being of the essence with respect to Tenant's exercise thereof.

Notwithstanding any term or condition of the Lease or this Exhibit B to the contrary, Tenant hereby acknowledges and agrees that Landlord shall have no obligation under this Exhibit B to offer Tenant the right to lease any portion of the Offer Right Space in instances where a then existing tenant of the Building is occupying such space and Landlord offers such tenant the opportunity to renew its lease thereof or such tenant exercises a right to renew its lease for such space. Further, Landlord shall have no obligation under this Exhibit B to offer Tenant the opportunity to lease any portion of the Subordinate Right of First Offer Space or the Other First Offer Space unless or until Landlord has determined, in Landlord’s commercially reasonable judgement, that the Other Tenant (solely with respect to the Subordinate Right of  First Offer Space) or any Existing Tenant (solely with respect to the Other Right of First Offer Space), as the case may be, does not wish to lease such space on terms and conditions which Landlord wouldaccept.

{W6393204.9}

SCHEDULE B-1

Plan of Offer Right Space

(Identifying the Right of First Offer Space and the Subordinate Right of First Offer Space)

{W6393204.9}

EXHIBIT C

FORM OF PURCHASE AND SALE AGREEMENT

(Attached)

{W6393204.9}

PURCHASE AND SALE AGREEMENT

between

CHERRY HILL DRIVE OWNER, LLC, a Delaware limited liability company,

(as Seller)

and

ABIOMED, INC., a Delaware corporation

(as Buyer)

24-42 Cherry Hill Drive, Danvers,MA

asof ,  

{W6394298.7}

Table of Contents

ARTICLE1.	Description ofProperty
ARTICLE 2.	Sale Subject to Leases
ARTICLE 3.	Purchase Price and Payment
ARTICLE 4.	Conveyance of Title
ARTICLE 5.	Closing
ARTICLE 6.	Approvals and Conditions to Buyer's Obligations
ARTICLE 7.	Conditions to Closing
ARTICLE 8.	Default
ARTICLE 9.	Entire Agreement Herein
ARTICLE 10.	Damage or Destruction: Condemnation
ARTICLE 11.	Representations, Warranties and Covenants of Seller
ARTICLE 12.	Operations
ARTICLE 13.	Apportionment of Taxes and Other Charges
ARTICLE 14.	Broker
ARTICLE 15.	Recording
ARTICLE 16.	Notices
ARTICLE 17.	Captions
ARTICLE 18.	Successors and Assigns
ARTICLE 19.	Closing Costs
ARTICLE 20.	Governing Law
ARTICLE 21.	Multiple Counterparts
ARTICLE 22.	Representations and Warranties of Buyer
ARTICLE 23.	Post-Closing Obligations
ARTICLE 24.	Duties and Responsibilities of Escrow Agent
ARTICLE 25.	Waiver of Jury Trial
ARTICLE 26.	Like Kind Exchange
ARTICLE 27.	Business Days
ARTICLE 28.	Confidentiality
ARTICLE 29.	IRS Real Estate Sales Reporting
ARTICLE 30.	Limitations on Liability
ARTICLE 31.	Press Releases
ARTICLE 32.	Time of the Essence
ARTICLE 33.	Costs and Attorneys’ Fees
ARTICLE 34.	Waivers
ARTICLE 35	Severability

{W6394298.7} -i-

Exhibits
ExhibitA	Legal Description of RealProperty
ExhibitB	List of PersonalProperty
ExhibitC	List ofLeases
ExhibitD	Form ofDeed
ExhibitE	Form of Bill ofSale
ExhibitF	Form of Assignment and Assumption Agreement(re:Leases)
ExhibitG	Form of Assignment and Assumption Agreement(re:Contracts)
ExhibitH	Form of FIRPTAAffidavit
ExhibitI	List of OperatingContracts
ExhibitK	Form of EstoppelCertificate

{W6394298.7} -ii-

PURCHASE AND SALE AGREEMENT

THIS AGREEMENT (the “Agreement”) made as of this ____ day of ___________,

(the “Effective Date”) by and between CHERRY HILL DRIVE OWNER, LLC, a

Delaware limited liability company (“Seller”) and ABIOMED, INC., a Delaware corporation

(“Buyer”).

WITNESSETH THAT, Seller owns the land described on Exhibit A hereto together with the buildings and improvements thereon, commonly known as 24-42 Cherry Hill Drive, Danvers, MA (the “Improved Property”).

WITNESSETH FURTHER THAT, Seller desires to sell and Buyer desires to purchase the Property (as hereinafter defined) on the terms and subject to the conditions set forth herein.

WITNESSETH FURTHER THAT, for the consideration hereinafter named, and for other good and valuable consideration, receipt of which is acknowledged hereby, the parties do hereby agree as follows:

ARTICLE 1. Description of Property: Seller agrees to sell and Buyer agrees to buy upon the terms and conditions hereinafter set forth:

The Improved Property, as more particularly described in Exhibit A attached hereto and incorporated herein by reference, (i) together with all right, title and interest of Seller in and to any land lying in the bed of any street (opened or proposed) adjacent to or abutting or adjoining each such premises, together with all rights, privileges, rights of way and easements appurtenant to each such premises, including, without limitation, any easements, rights of way or other interests in, on, or under any land, highway, alley, street or right of way abutting or adjoining the Improved Property (the "Real Property"), (ii) all buildings, structures and other improvements located thereon, together with all of the fixtures and other property affixed thereto (the "Improvements", and, together with the Real Property, the "Premises"), (iii) all items of personal property owned by Seller and located on the Premises described in Exhibit B attached hereto and incorporated herein by reference (to the extent of Seller’s interest therein and to the extent assignable, collectively, the “Personal Property”) and (iv) any intangible and other property now or hereafter owned by Seller and used in the ownership or operation of the Premises, to the extent of Seller’s ownership interest therein and assignable without cost to Seller, including, without limitation, any plans and specifications, permits, licenses, approvals, authorizations, certificates of occupancy, guaranties, warranties, contracts, lease agreements, utility contracts, development rights, the non-exclusive rights to use any trade name or trademark associated with the Property (so long as Landlord has the right to convey such trade name or trademark) or other rights relating to the ownership, use or operation of the Premises (but excluding attorney and accountant work product) (collectively, the "Intangible Property"). The Improved Property, together with all items referred to in clauses (i), (ii) (iii) and (iv) are herein sometimes referred to as the "Property."

ARTICLE 2. Sale Subject to Leases: Subject to the provisions of Article 4 hereof, the Premises will be conveyed subject to certain leases (hereinafter called the "Leases") described in Exhibit C attached hereto and incorporated herein by reference, or as hereafter added pursuant to the provisions of Article 12 hereof.

ARTICLE 3. Purchase Price and Payment: (a) The total purchase price (the "Purchase Price") for the Property is [TO BE INSERTED]. The Purchase Price shall be payable at the Closing, as hereinafter defined, in lawful currency of the United States of America in immediately available funds by wire transfer to an account or accounts designated by Seller.

{W6394298.7} -1-

(b)As security for Buyer's performance hereunder, Buyer shall, within one (1) business day of the Effective Date, deposit Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Deposit”) into escrow with [TO BE INSERTED - TITLE COMPANY SELECTED BY BUYER] ("Escrow Agent") by wire transfer of immediately available federal funds into an account or accounts held by Escrow Agent.  Escrow Agent shall hold the Deposit in an FDIC-insured interest-bearing money market account. Escrow Agent shall not commingle the Deposit with any other funds of Escrow Agent. All interest earned on the Deposit will be the property of Buyer and will be reported to the Internal Revenue Service as income of Buyer unless Seller retains the Deposit pursuant to the provisions hereof whereupon all interest earned on the Deposit shall be the property of Seller and will be reported to the Internal Revenue Service as income of Seller. Buyer and Seller will provide Escrow Agent with their respective taxpayer identification numbers and the party receiving such interest will pay all income taxes due by reason of interest accruing on the Deposit. If Buyer fails to deliver such Deposit to Escrow Agent within the time period required by the provisions hereof, then this Agreement shall, at Seller’s election in its sole discretion, terminate, Seller and Buyer shall have no further obligations or liabilities to each other hereunder. If the Closing does not occur, Escrow Agent shall disburse the Deposit to the party entitled thereto in accordance with the terms and conditions of this Agreement. If the Closing does occur, the Deposit shall be credited against the Purchase Price and disbursed to Seller as part of the Purchase Price. Escrow Agent's duties and responsibilities are governed by the terms of Article 24hereof.

(c)The payment required at the Closing shall be increased or decreased, as the case may be, to account for all items to be apportioned or prorated pursuant to thisAgreement.

ARTICLE 4.  Conveyance of Title:

(a)At Closing, Buyer shall obtain from [TO BE INSERTED – TITLE COMPANY SELECTED BY BUYER] (the “Title Company”) an ALTA 2006 Owner’s Title Insurance Policy (the “Title Policy”) insuring that fee simple title to the Premises is vested in Buyer, in the full amount of the Purchase Price, with all standard and general printed exceptions deleted (subject only to the Permitted Exceptions) so as to afford full “extended form coverage”, together with such endorsements as Buyer shall reasonably request, and otherwise in a form and substance consistent with the Title Commitment (as defined herein). Notwithstanding anything contained herein to the contrary, the Premises shall be conveyed subject to the following matters, which shall be deemed to be “PermittedExceptions:”

(i) the rights of tenants, as tenants only, under the Leases and any new Leases entered into between the date hereof and Closing in accordance with the termsof thisAgreement;

(ii) the lien of all ad valorem real estate taxes and assessments not yet due and payable as of the date of Closing, subject to adjustment as hereinprovided;

(iii) local, state and federal laws, ordinances or governmental regulations, including but not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect relating to theProperty;

(iv) all matters, whether or not of record, that arise out of the actions of Buyer or its agents, representatives orcontractors;

(v) such state of facts as may be shown on the Survey (as defined herein), the Title Policy and/or the Title Commitment, or which would be disclosed by a physical inspection of the Property;and

(vi) those matters which Seller is not obligated to remove as providedbelow.

(b)Notwithstanding the foregoing, all Voluntary Liens (defined below) will be satisfied by Seller on or prior to the Closing Date. For the purposes of this Agreement, a “Voluntary Lien” shall mean (i) any mortgage or deed of trust granted or assumed by Seller and encumbering the Property, (ii) any other monetary lien or monetary encumbrance, including mortgages, judgments and federal, state and municipal tax liens, first appearing on record during Seller’s ownership of the Property created or caused by Seller or that Seller has suffered to exist (such as a tenant’s mechanics’ lien attached to the fee estate of the Property (rightfully or wrongfully) that Seller could have required such tenant to remove but failed to do so) and (iii)all non-monetary liens and encumbrances which Seller has allowed to be placed on the Property without Buyer’s written consent from and after the EffectiveDate.

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ARTICLE 5. Closing: (a) Unless extended pursuant to the terms of this Agreement or earlier terminated, the closing of the transactions contemplated hereunder (the "Closing") shall be conducted by Escrow Agent on the date which is fifteen (15) days after the Due Diligence Expiration Date (as defined herein) (the "Closing Date").

(b)At the Closing, Seller shall deliver the following documents to the Title Company in the forms attached hereto properly executed and acknowledged as required with respect to each of the ImprovedProperty:

(i) Quitclaim deed (the “Deed”) in the form of Exhibit D, which Deedshall include customary Massachusetts quitclaimcovenants;

(ii) Bill of Sale in the form of ExhibitE;

(iii) Original Assignment and Assumption Agreement relating to the Leases and security deposits and accrued interest thereon to the extent required by the Leases or applicable law (collectively, the “Security Deposits”) in the form attached hereto as Exhibit F (the "Lease Assignment"), which will include provisions that the Buyer will indemnify the Seller for all claims, suits, obligations, liabilities, damages, losses, costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements, based upon or arising out of, or resulting from Buyer’s breach of the terms and provisions of such Leases occurring on or after the Closing Date, and subject to the limitations set forth in Section 11(c) of this Agreement, Seller will indemnify the Buyer for all claims, suits, obligations, liabilities, damages, losses, costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements, based upon or arising out of, or resulting from Seller’s breach of the terms and provisions of such Leases occurring prior to the Closing Date, except to the extent any of the foregoing relate to the condition of the Property, including without limitation, the interior, exterior and structure of all Improvements, and the condition of soils andsubsoils;

(iv) Originals (or copies, if originals are not in Seller’s possession) of all Leases, any renewals thereof and all amendments thereto to the extent in Seller’s possession or control will be delivered at thePremises;

(v) Original Assignment and Assumption Agreement in the form attached hereto as Exhibit G relating to the Operating Contracts (as hereinafter defined) (the "Contract Assignment"), which will include provisions that the Buyer will indemnify the Seller for all claims, suits, obligations, liabilities, damages, losses, costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements, based upon or arising out of, or resulting from Buyer’s breach of the terms and provisions of such Operating Contracts occurring on or after the Closing Date, and subject to the limitations set forth in Section 11(c) of this Agreement, Seller will indemnify the Buyer for all claims, suits, obligations, liabilities, damages, losses, costs and expenses, including without limitation, reasonable attorneys’ fees and disbursements, based upon or arising out of, or resulting from Seller’s breach of the terms and provisions of such Operating Contracts occurring prior to the Closing Date, except to the extent any of the foregoing relate to the condition of the Property, including without limitation, the interior, exterior and structure of all Improvements, and the condition of soils andsubsoils;

(vi) Certification of non-foreign status in the form attached hereto as Exhibit H and incorporated herein byreference;

(vii) Evidence satisfactory to the Title Company that all necessary approvals and/or consents have been delivered and such other evidencereasonably satisfactory to the Title Company of Seller’s authority to convey the Premises pursuant to this Agreement;

(viii) All Security Deposits, together with accrued interest thereon if payable under the Leases or pursuant to applicablelaw;

(ix) Affidavits (including a gap indemnity) sufficient for the Title Companyto delete any exceptions for parties in possession (other than tenants under the Leases, as tenants only) and mechanics' or materialmen's liens from the TitlePolicy;

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(x) A copy of a closing statement setting forth the Purchase Price, the closing adjustments and prorations and the application thereof at the Closing (the "ClosingStatement");

(xii) The estoppel certificates to the extent obtained by Seller in accordance with the provisions of Article 7 below and not previouslydelivered;

(xiii) Copy of standard tenant notification letter in a form to be drafted byBuyer and satisfactory to Seller;and

(xiv) Such other instruments and documents as may be reasonably necessaryin order to complete the Closing and to carry out the intent and purposes of thisAgreement.

(c)At the Closing, Buyer shall deliver, or cause to be delivered, thefollowing payment and documents, properly executed and acknowledged asrequired:

(i) The Purchase Price as adjusted in accordance with the terms hereof shall be deposit with the Title Company in good funds by 3:00 p.m. local time at the Property. If the proceeds due from Buyer are not received by Seller in good funds by 3:00 p.m. local time at the Property on the ClosingDate, and Seller elects to proceed to close the transaction notwithstanding Buyer’s late delivery of the Purchase Price, then Buyer shall be responsible for any additional interest or other costs imposed by Seller’s lender in connection with the payoff of any existing mortgage loan on the Property;

(ii) An original of the LeaseAssignment;

(iii) An original of the ContractAssignment;

(iv) A copy of the Closing Statement;and

(v) Such other instruments and documents as may be reasonably necessaryin order to complete the Closing and to carry out the intent and purposes of this Agreement.

ARTICLE 6.  Approvals and Conditions to Buyer's Obligations:

(a)PropertyDiligence.

(i)From and after the Effective Date until the Closing or the earlier termination of this Agreement, Seller shall permit Buyer and its representatives, agents and contractors to inspect the Property (including, without limitation, inspections of all roofs, electrical, mechanical and structural elements, HVAC systems and other building systems located on or within the Improvements), to perform appraisals and due diligence (including, without limitation, any non-invasive water and air sampling analysis or other non-invasive environmental investigations of the Land and zoning investigations), to examine the books and records of Seller, Operating Contracts, governmental approvals, insurance policies, tax, utility and other bills, operating statements, and all other general records with respect to the Property (and to make copies thereof), and to perform such other inspections and investigations with respect to the Property as Buyer shall deem necessary or appropriate (the “Due Diligence Items”).  Notwithstanding the foregoing, the Due Diligence Items shall not include the Excluded Items, as such term is defined below. Buyer acknowledges and agrees that any Due Diligence Items to be delivered or made available to Buyer or its agents are or shall be provided without representation or warranty of any kind, express or implied, as to the completeness or accuracy of the facts, presumptions, conclusions or other matters contained therein and that Buyer shall rely solely on its own investigations, reports and materials prepared by Buyer or any consultants engaged by Buyer and not on any Due Diligence Items provided to Buyer by Seller or its agents, provided however, Seller hereby agrees that such Due Diligence Items shall be true copies of what they purport to be. During the forty-five (45) days after the Effective Date (the “Due Diligence Period”), Buyer may perform surveys, architectural, engineering, non-invasive geotechnical, and property condition and environmental inspections and tests. To the extent that Buyer damages or disturbs the Property in connection with any such inspections or investigations, Buyer shall return the Property to substantially the same condition that it was in immediately prior to such damage or disturbance. Buyer shall indemnify, defend and hold harmless Seller from and against any and all expense, loss or damage which Seller incurs as a result of any entry onto the Property by Buyer or its representatives, agents or contractors, except to the extent that such expense, loss or damage arises out of any act or omission

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of Seller or the mere discovery of any pre-existing condition at the Property. For the purposes of this Agreement, the term “Excluded Items” shall mean: (i) materials relating to Seller’s marketing efforts for the sale of the Property, including communications and agreements with other potential purchasers, (ii) projections and other internal memoranda or materials, (iii) appraisals, budgets, Seller’s strategic plans for the Property, internal analyses (including Seller’s analyses with respect to its leasing of space in the Property), computer software, and submissions relating to Seller’s obtaining of internal authorizations, and property condition and engineering reports, and (iv) attorney and accountant work product, and all other materials subject to any legal privilege in favor of Seller.

(ii)Within five (5) business days after the Effective Date, Seller shall deliver to Buyer copies of the following items and materials to the extent such items and materials are in Seller’s possession or control and are not Excluded Items: the Leases, the Operating Contracts, Seller’s most recent title insurance policy for the Property, Seller’s most recent survey of the Property, all existing zoning reports or other zoning information with respect to the Property, all existing environmental reports with respect to the Property, and all governmental approvals. In addition, except for Excluded Items, Seller shall deliver to Buyer copies of any other items reasonably requested by Buyer to the extent the same are in Seller’s possession orcontrol.

(iii)If the results of the inspections performed by or on behalf of Buyer pursuant to this Article 6(a) shall be unsatisfactory to Buyer in any respect, or if Buyer otherwise determines not to proceed to Closing, in each case as determined by Buyer in its sole and absolute discretion, Buyer shall have the right to terminate this Agreement at any time on or before 5:00 p.m. local time at the Property on the forty-fifth (45th) day of the Due Diligence Period (the “Due Diligence Expiration Date”) by giving written notice thereof to Seller, whereupon the Deposit shall be refunded to Buyer and neither party shall have any further obligations to the other hereunder, except for those obligations and liabilities of Buyer or Seller which expressly survive the Closing or the earlier termination of this Agreement. In the event Buyer fails to terminate this Agreement by the Due Diligence Expiration Date, Buyer shall be deemed to havewaived any objection to the Due Diligence Items and the condition of theProperty.

(b)Title and SurveyMatters

(i)Promptly following the Effective Date, Buyer shall order (i) a commitment by the Title Company to issue an ALTA 2006 Owner’s Policy with respect to the fee simple interest in the Property in the full amount of the Purchase Price (the “Title Commitment”), together with complete and legible copies of all instruments and documents referred to therein as exceptions to title, and (ii) an ALTA survey (or an update to the Seller’s existing survey) with respect to the Property from a licensed surveyor in the jurisdiction in which the Property is located (the “Survey”). Buyer shall have the right from time to time to order such updates or supplements to the Title Commitment and the Survey as Buyer deems necessary. Buyer shall instruct each of the Title Company and the Surveyor to deliver copies of the Title Commitment and the Survey, and any supplements or updates thereto, toSeller.

(ii)At least five (5) business days prior to the Due Diligence Expiration Date, Buyer shall notify Seller of any matters identified in the Title Commitment or shown on the Survey (or any supplements or updates thereto) which Buyer finds objectionable in its sole and absolute discretion. Seller shall have two (2) business days from its receipt of a title objection notice from Buyer to notify Buyer in writing whether Seller commits to cause such objections to be removed from the land records or insured against (and with any matters proposed to be insured against by Seller or Title Company, in a manner satisfactory to Buyer in its sole discretion) at Closing, provided, however that Seller shall be obligated to remove or cause the removal from the land records of all VoluntaryLiens at or prior to Closing. To enable Seller to make conveyance as herein provided, Seller may, at the time of delivery of the Deed, cause Escrow Agent to use the Purchase Price or any portion thereof to clear the title of any or all monetary liens and encumbrances, provided that all instruments so procured are recorded simultaneously with the delivery of said Deed or arrangements have been made for the subsequent recordation in accordance with usual conveyancing practices and the Title Company is ready, willing and able to issue the Title Policy to Buyer without any exceptions for such monetaryliens and encumbrances. Except for Voluntary Liens, Seller shall have no obligation whatsoever to cure any title objections raised by Buyer.  If, for any reason, Seller is unable or unwilling to take such actions as may be required to remedy or remove from the land records any title objections (other than Voluntary Liens) raised by Buyer, Seller shall give Buyer notice thereof, it being understood and agreed that the failure of Seller to give such notice within two (2) business days after receipt of Buyer’s notice of objection shall be deemed an election by Seller not to remedy any such matters. If Seller shall be unable or unwilling (or has been deemed to be unwilling) to remedy any matters (other than Voluntary Liens which Seller shall be obligated to cure

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or remove as provided herein) as to which Buyer has objected, Buyer may elect either (i) to terminate this Agreement by notice given to Seller by written notice on or before 5:00 p.m. local time at the Property on the Due Diligence Expiration Date, whereupon the Deposit shall be refunded to Buyer and neither party shall have any further obligations to the other hereunder, except for those obligations of Seller and Buyer which expressly survive the termination of this Agreement (the “Surviving Obligations”) or (ii) to proceed to Closing in accordance with the terms and conditions of this Agreement, notwithstanding such matter and without any abatement or reduction in the Purchase Price on account thereof.  If Buyer fails to terminate this Agreement by written notice given to Seller by the Due Diligence Expiration Date in accordance with the immediately preceding sentence, Buyer shall be deemed to have elected to proceed to Closing, such title objections which Seller is unable or unwilling (or has been deemed to be unwilling) to cure shall be deemed to be waived by Buyer and shall be deemed to be Permitted Exceptions.

(iii)At the Closing, Seller shall execute and deliver such affidavits and indemnities as the Title Company may reasonably require, including, without limitation, a so-called owner’s affidavit in such reasonable form as will permit the Title Companyto issue the Title Policy without exceptions for parties-in-possession or mechanic’s liens and a so-called gap indemnity in such reasonable form as will permit the Title Company to release the Purchase Price to Seller prior to recording the Deed and the other applicable closingdocuments.

(c)Seller shall make the Property available at all reasonable times (but in no event during weekends, holidays and after 5:00 p.m. local time at the Property on weekdays) to Buyer and its agents, consultants and engineers for such inspections as Buyer deems appropriate, including for Buyer's engineering inspection(s), site evaluations, preparation of a Phase I Environmental Site Assessment (“Buyer’s Phase I Report”) and such other inspections and investigations as Buyer deems appropriate, subject to the following limitations: (i) Buyer hereby agrees to indemnify, defend, protect and hold all Seller Parties (defined in Article 6(d)below) harmless from and defend Seller Parties against, all loss, liability, claims, costs (including reasonable attorneys’ fees), liens and damages resulting from or relating to the activities of Buyer or its agents (excepting losses and liabilities arising from the mere discovery on the Property of conditions not caused by Buyer or its agents), (ii) Buyer shall provide Seller with evidence of at least $2,000,000 per occurrence for property damage, bodily or personal injury or death and naming Seller as an additional insured prior to entering the Premises, (iii) Buyer shall give Seller at least forty-eight (48) hours prior notice of any visit or investigation describing who will visit and the nature of such visit and/or investigation, (iv) Seller shall be entitled to have a representative present during any visits or investigations. Seller’s prior written consent shall be required prior to any tenant interview or other interaction with any tenants or licensees of the Property by Buyer or its agents, employees, consultants, and representatives, and Seller shall have the right to have a representative present during all tenant or licensee interviews or interactions.  Notwithstanding anything set forth in this Agreement to the contrary, no invasive or destructive tests (including, without limitation, air, soils, water samples and soils borings) or environmental samplings shall be conducted on or around the Property without Seller’s written consent, which may be granted or withheld by Seller in its sole and absolute discretion, and all investigations shall be subject to the rights of tenants and shall be done on an expeditious and efficient basis and in a manner which minimizes disruption to tenants. In the event this Agreement is terminated for any reason, Buyer shall either destroy or, at Seller’s request (andnot otherwise) shall furnish Seller with copies of all environmental and engineering reports prepared by or for Buyer with respect to theProperty.

(d)Except as set forth in this Agreement, the Property is being acquired by Buyer in “AS IS” condition and “WITH ALL FAULTS” existing as of the Closing Date. Buyer acknowledges that it will be acquiring the Property on the basis of its own investigations. Except as expressly set forth in this Agreement, no representations or warranties have been made or are made and no responsibility has been or is assumed by Seller or by any officer, director, member, manager, person, firm, agent, advisor, trustee or representative acting or purporting to act on behalf of Seller (collectively, the “Seller Parties”) as to condition or repair of the Property or the value, expense of operation, or income potential thereof, the reliability of any information furnished to Buyer or as to any other fact or condition which has or might affect the Property or the condition, repair, value, expense of operation or income potential of the Property or any portion thereof. Except with respect to a breach by Seller of any representation or warranty expressly contained herein, Buyer hereby waives, releases and forever discharges all Seller Parties and any affiliate of the Seller Parties of and from any and all claims, actions, causes of action, demands, rights, damages, liabilities and costs whatsoever, direct or indirect, known or unknown, which Buyer now has or which may arise in the future, against Seller or any such other parties related in any way to the Property. Except with respect to a breach by Seller of any representation or warranty expressly contained herein, Buyer hereby agrees not to assert any

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claim for contribution, cost recovery or otherwise against Seller or any such affiliate relating directly or indirectly to the physical or environmental condition of the Property, whether known or unknown, including, without limitation, the existence of “Oil” or “Hazardous Materials” on or under the Property as such terms are definedinM.G.L. Chapter 21E (“Chapter 21E”) and the Massachusetts Contingency Plan, 310 CMR 40.0000 (the “MCP”).  The parties agree that all understandings and agreementsheretofore made between them or their respective agents or representatives are merged in this Agreement and the Exhibits hereto annexed, which alone fully and completely express their agreement, and that this Agreement has been entered into after full investigation, or with the parties satisfied with the opportunity afforded for investigation, neither party relying upon any statement or representation by the other unless such statement or representation is specifically embodied in this Agreement or the Exhibits annexed hereto. Buyer acknowledges that Seller has required Buyer to inspect fully the Property and investigate all matters relevant thereto, and, except with respect to information provided and certified to by Seller to Buyer, to rely solely upon the results of Buyer’s own inspections or other information obtained or otherwise available to Buyer, provided that the foregoing shall not diminish Buyer’s rights with respect to any representations or warranties expressly made by Seller in this Agreement.

(e)In the event that Buyer’s due diligence reveals any condition of the Property that in Buyer’s judgment requires disclosure to any governmental agency or authority, Buyer shall immediately notify Seller thereof. In such event, Seller, and not Buyer or anyone acting on Buyer’s behalf, shall make such disclosures as required by Law, as determined by Seller in its sole and absolutediscretion.

The indemnification obligations set forth in this Article 6 shall survive the Closing or earlier termination of this Agreement.

ARTICLE 7. Additional Conditions to Closing: Without limiting any other conditions to Buyer's obligations to close set forth in this Agreement, the obligations of Buyer under this Agreement are subject to the satisfaction at the time of Closing of each of the following conditions (any of which may be waived in whole or in part by Buyer at or prior to Closing):

(i) It shall be a condition precedent to Buyer’s obligation to close the transaction contemplated by this Agreement that Buyer shall have received, on or before Closing, estoppel certificates dated no earlier than thirty (30) days prior to the originally-scheduled Closing, complying with the requirements of this Article 7 (each a “Tenant Estoppel Certificate”) from all of the tenants who, together with the Buyer, lease at least eighty percent (80%) of the Building as of the Effective Date (“Tenant Estoppel Requirement”), provided however, Seller shall not be required to deliver a Tenant Estoppel Certificate from the Buyer. Notwithstanding the foregoing, Seller shall use commercially reasonable efforts to have all tenants provide Tenant Estoppel Certificates even if the Tenant Estoppel Certificate Requirement is satisfied. Each Tenant Estoppel Certificate shall be substantially in the form of Exhibit K attached hereto (provided that any Tenant Estoppel Certificate shall be acceptable if in the form or containing the information required by the applicable Lease) and shall not disclose (x) any matters which are inconsistent in any material respect with the terms and provisions of the Leases or the representations and warranties of Seller made in Article 11 hereof, or (y) any uncured default(s) by the tenants or the Seller under the Lease(s). In the event any Tenant Estoppel Certificate does not meet the requirements of (x) and (y) above based on a monetary obligation of Seller,Seller

may, but shall not be obligated to, elect to provide to Buyer, at Closing, a credit against the Purchase Price in an amount equal to the amount required to cure such monetary obligation.  In no event shall Seller be obligated to deliver updates to any Tenant Estoppel Certificate. Buyer agrees not to unreasonably object to or withhold Buyer’s consent to any alternate estoppel form or changes made by any tenant to the form attached hereto so long as such estoppel  does not disclose (a) any matters which are inconsistent in any material respect with the terms and provisions of the Leases or the representations and warranties of Seller made in Article 11 hereof, or (b) any uncured default(s) by the tenant or the Seller under such lease and Buyer shall not object to any provision in a Tenant Estoppel Certificate which (x) is qualified to tenant’s knowledge, or (y) was disclosed to Buyer prior to the Due Diligence Expiration Date. Seller shall prepare the Tenant Estoppel Certificates subject to Buyer’s review and approval (provided that if Buyer has not provided any comments to the Tenant Estoppel Certificates or approved same in writing within three (3) business days after its receipt of same from

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Seller, Buyer shall be deemed to have approved the Tenant Estoppel Certificates), and promptly after the Due Diligence Expiration Date (if Buyer has not elected to terminate this Agreement), distribute the estoppel certificates to each of the tenants under the Leases. Seller shall promptly provide Buyer with copies of all comments to the Tenant Estoppel Certificates received from tenants. If any Tenant Estoppel Certificate provided to Buyer prior to Closing containsany information that is materially inconsistent with any Seller representation and is accepted by Buyer, in Buyer’s sole discretion, such Seller representation shall be deemed modified by the information contained in such Tenant Estoppel Certificate. If Buyer fails to furnish Seller with a written notice of disapproval (which notice, in order to be effective, must include Buyer’s specific objections), within three (3) business days from the date of Seller’s delivery thereof, such Tenant Estoppel Certificate will be deemed approved by Buyer. Seller’s failure to fulfill the Estoppel Certificate Requirement shall constitute a failure of a condition precedent hereunder but shall not constitute a default by Seller under thisAgreement.

(ii) All of the representations and warranties made by Seller set forth in this Agreement or any Exhibit attached hereto shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if made on and as of such date, subject to changes that: (y) are caused by the acts or omissions of Buyer or its agents or affiliates; or (z) are a result of the operation of the Property in the normal course of business since the Effective Date and in accordance with the terms of this Agreement and do not, individually or in the aggregate, have a material adverse effect on the value or operation of the Property, provided that any such changes are disclosed by Seller to Buyer in writing prior to the Closing Date;and

(iii) Seller shall have performed, observed, and complied in all material respects with all covenants and agreements required by this Agreement to be performed by Seller at or prior toClosing.

If any condition set forth herein is not fully satisfied on or before the Closing Date, Seller may elect to attempt to satisfy any such unsatisfied condition, and if Seller so elects, Seller shall have until the date occurring thirty (30) days after the Closing Date in which to satisfy such condition, and the Closing Date shall be extended for such period.

ARTICLE 8. Default: (a) If Buyer discovers prior to Closing that Seller shall have made any representation or warranty herein that is untrue, incorrect or misleading in any material respect, or if Seller fails to fulfill or perform any of its obligations hereunder to be performed by Seller at or prior to the Closing, subect to Seller’s right to extend the closing as set forth in Article 7 above, Buyer shall have any one of the following rights and remedies:

(i) Buyer shall have the right to terminate this Agreement by written notice to Seller, in which event the Deposit shall be paid to Buyer, and all obligations of the parties under this Agreement shall terminate except for the SurvivingObligations; or

(ii) Buyer shall have the right to waive the breach or default and proceed to Closing in accordance with the provisions of this Agreement without reduction of the PurchasePrice.

In the event that Buyer fails to terminate the Agreement pursuant to clause 8(a)(i) above, Buyer shall automatically be deemed to have waived the breach or default pursuant to clause 8(a)(ii) above and shall be required to proceed to Closing. If Buyer discovers following the Closing but prior to the expiration of the Survival Period (as defined below) that Seller made any representation or warranty herein which is untrue or misleading in any material respect, or if Seller shall fail to perform any of its Surviving Obligations, then Buyer shall have all rights and remedies available to it, at law or in equity, provided however, Seller’s liability therefor shall be limited to the Claim Cap (as defined below) and no claim may be made against Seller after the expiration of the Survival Period.

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(b)IN THE EVENT THE SALE OF THE PROPERTY ISNOTCONSUMMATEDBECAUSE OF A BREACH OR UNCURED DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER, BUYER AND SELLER AGREE THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICAL TO DETERMINE THE AMOUNT AND EXTENT OF DETRIMENT TO SELLER. BUYER AND SELLER THEREFORE AGREE THAT, IF BUYER DEFAULTS HEREUNDER, BUYER’S DEPOSIT IS A REASONABLE ESTIMATE OF SELLER’S DAMAGES AND THAT SELLER SHALL BE ENTITLED TO SAID SUM AS LIQUIDATED DAMAGES AND NOT AS A PENALTY, WHICH SHALLBE SELLER’S SOLE AND EXCLUSIVE REMEDY, EITHER AT LAW OR IN EQUITY, AS A RESULT OF SUCH DEFAULT. IN SUCH EVENT, ESCROW AGENT SHALL UPON WRITTEN DEMAND BY SELLER WITHOUT JOINDER OF BUYER, IMMEDIATELY DELIVER THE DEPOSIT TO SELLER. TO SIGNIFY THEIR AWARENESS AND AGREEMENT TO BE BOUND BY THE TERMS AND PROVISIONS OF THIS SECTION, BUYER AND SELLER HAVE SEPARATELY INITIALED THISSECTION.

ARTICLE 9. Entire Agreement Herein:  The parties understand and agree that their entire agreement is contained herein and that no warranties, guarantees, statements, or representations shall be valid or binding on a party unless set forth in this Agreement. It is further understood and agreed that all prior understandings and agreements heretofore had between the parties are merged in this Agreement which alone fully and completely expresses their agreement and that the same is entered into after full investigation, neither party relying on any statement or representation not embodied in this Agreement. This Agreement may be changed, modified, altered or terminated only by a written agreement signed by the parties hereto.

ARTICLE 10. Damage or Destruction: Condemnation: (a) If after the expiration of the Due Diligence Expiration Date, the Improved Property shall have been damaged by fire or other casualty prior to the Closing, such that Seller’s reasonable estimate of the cost to repair the same exceeds ten percent (10%) of the Purchase Price (a “Material Casualty”), then unless Seller has previously repaired or restored such Improved Property to its former condition prior to the Closing Date, then, at Buyer’s sole option, Seller shall either (i) pay over or assign to Buyer, on delivery of the Deed all physical damage proceeds of any insurance policies payable to Seller, less any amounts reasonably expended by Seller for partial restoration, with a credit to Buyer for the amount of any deductible, or (ii) direct Escrow Agent to return the Deposit and accrued interest thereon to Buyer in which case, except for the Surviving Obligations, all other obligations of the parties hereto shall cease and this Agreement shall terminate and be without further recourse or remedy to the parties hereto.

(b)If after the expiration of the Due Diligence Expiration Date, all or a material part of the Improved Property is taken by condemnation, eminent domain or by agreement in lieu thereof prior to the Closing such that Seller’s reasonable estimate of the loss of value of the remaining applicable Improved Property exceeds an amount equal to ten percent (10%) of the Purchase Price (a “Material Taking”), Buyer may, at Buyers’ sole option, either (i) terminate this Agreement (in which event Buyer shall be entitled to a return of the Deposit, and, except for the Surviving Obligations, all other obligations of the parties hereto shall cease and this Agreement shall terminate and be without further recourse or remedy to the parties hereto) or(ii) close title to the Property in accordance with the terms hereof, without reduction in the Purchase Price, together with an assignment of Seller's rights to any award paid or payable by or on behalf of the condemning authority.  If Seller has received payments from the condemning authority and if Buyer elects to close title to the Property, Seller shall credit the amount of said payments against the Purchase Price at theClosing.

(c)With respect to any Material Casualty or Material Taking, Buyer shall bedeemed to have elected to proceed under Article 10(a)(i) and 10(b)(ii) above respectively and as applicable, unless, within ten (10) days from the date of Seller’s delivery of written notice of such Material Casualty or Material Taking to Buyer, Buyer provides Seller with written notice that Buyer has elected to terminate this Agreement as provided for in this Article10.

ARTICLE 11. Representations, Warranties and Covenants of Seller: (a) In order to induce Buyer to enter into this Agreement and to consummate the purchase of the Property,

Seller hereby represents and warrants to Buyer as of the Effective Date and as of the Closing Date (updated to reflect the then state of facts) as follows:

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(i) Seller is, and on the Closing Date shall be, duly and validly formed and existing and governed by the laws of the State of its organization and, if necessary, registered to do business in the jurisdiction where the Property is located. Seller has all requisite power and authority under the laws of such State and its organizational and/or charter documents to enter into and perform its obligations under this Agreement and to consummate the transactions contemplatedhereby.

(ii) Seller has taken all necessary action to authorize the execution, delivery and performance of this Agreement and each document to be delivered by Seller hereunder, and upon the execution and delivery of this Agreement and any such document, this Agreement and each such document shall constitute the valid and binding obligations and agreements of Seller, enforceable against Seller in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general application affecting the rights and remedies ofcreditors.

(iii) None of the execution, delivery or performance of this Agreement or any other document to be executed, delivered or performed by Seller hereunder, nor compliance with the terms and provisions hereof orthereof, will result in any breach of the terms, conditions or provisions of, or conflict with or constitute a default under, or result in the creation of any lien, charge or encumbrance upon the Property pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument by which Seller or the Property is bound.

(iv) There are no proceedings pending or, to Seller’s knowledge, threatened against it in any court or before any governmental authority or any tribunal which, if adversely determined, would have a material adverse effect on its ability to purchase the Property or to carry out its obligations under this Agreement.

(v) Exhibit C attached hereto (the "List of Leases") is, in all materialrespects, a correct listing of all Leases at the Property in effect as of a date not earlier than five (5) business days preceding the Effective Date.  Other than the Leases, Seller has not entered into, and the Property is not subject to, any contract or agreement with respect to the occupancy of the Property (or any portion thereof). To Seller’s knowledge, there are no defaults currently existing under the Lease and there are no facts or circumstances which with the giving of notice, the passage of time or both would constitute a default by Buyer under theLease.

(vi) Exhibit I attached hereto is a complete list of all service, supply and maintenance agreements with respect to or affecting the Property as of the Effective Date (herein collectively referred to as the "Operating Contracts"). Other than the Operating Contracts, Seller has not entered into, and the Property is not subject to, any contract or agreement with respect to the management, operation or maintenance of the Property (or any portion thereof) or otherwise affecting the Property (or any portion thereof). The copies of the Operating Contracts heretofore delivered (or to be delivered) by Seller to Buyer are (or will be) true, correct and complete copies thereof; the Operating Contracts have not been amended except as evidenced by amendments similarly delivered. Each of the Operating Contracts is in full force and effect on the terms set forth therein, and, to Seller’s knowledge, except as disclosed to Buyer in writing, there are no defaults under the Operating Contracts, or circumstances which with the giving of notice, the passage of time or both, would constitute a default by any partythereunder.

(vii) Other than the Leases, the Operating Contracts and any Permitted Exceptions which are approved (or deemed to have been approved) by Buyer, Seller has not entered into any contract or agreement withrespect to the Property which will be binding on Buyer or the Property after the Closing.

(viii) Seller has not received any written notice alleging that the Property violates any Law, and, to Seller’s knowledge, the Property does notviolate any Law in any material respect.  To Seller’s knowledge, there are presently in effect all material licenses, permits and other authorizations necessary for the current use, occupancy and operationthereof.

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(ix) No investigation, action or proceeding is pending and, to Seller’s knowledge, no action or proceeding is threatened and no investigation looking toward any action or proceeding has begun, which involves any condemnation or eminent domain proceeding against any part of the Property, or which involves any modification or realignment of any intersection, street or highway adjacent to the Property or which could affect the present use or zoning of theProperty.

(x) To Seller’s knowledge, no taxes or special assessments of any kind (special, bond or otherwise) are or have been levied with respect to the Property, or any portion thereof, which are outstanding or unpaid, other than amounts not yet due and payable, and no such assessments or levies are pending or threatened. Seller has not received any written notice of, and has no knowledge of, any proposed or pending increase in the assessed valuation or rate of taxation of any or all of the Property from that reflected on such real estate tax bills.  To Seller’s knowledge, noTax Proceedings are currently pending or subject to appeal or will be currently pending or subject to appeal as of the Closing Date.

(xi) No attachments, execution proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization, or other proceedings are pending or, to Seller’s knowledge, threatened against Seller, nor are any such proceedings contemplated by Seller, nor to Seller’s knowledge do any grounds exist for any such proceedings to be instituted against Seller. Seller has not made a general assignment for the benefit of creditors, filed any voluntary petition in bankruptcy, or admitted in writing its inability to pay its debts as they come due or made an offer of settlement, extension or composition to its creditors generally, and Seller has received no written notice of and has no knowledge of (i) the filing of any involuntary petition by Seller’s creditors, (ii) the appointment of a receiver to take possession of all, or substantially all, of Seller’s assets, or (iii) the attachment or other judicial seizure of all, or substantially all, of Seller’sassets.

(xii) To Seller’s knowledge, all due diligence information and other itemsand documents delivered by or on behalf of Seller to Buyer pursuant to this Agreement, are true copies of what they purport to be, without any representation or warranty with respect to the accuracy ofsame.

(xiii) Seller has no employees, and there are no employment agreements, union agreements, benefit agreements, pension plans, or collective bargaining agreements, at or otherwise affecting the Property to which Seller isbound which will survive the Closing or for which Buyer will be responsible for or have any liability for after theClosing.

(xiv) There are no capital improvement projects at the Property presently being performed by or at the direction of Seller, or any of its agents or sub-contractors, other than budgeted maintenance required in the ordinary course of business, and no material structural portion of the Property has been damaged or destroyed by fire, storm or other casualty that remains unrepaired.

(xv) Seller is not a “foreign person” within the meaning of Section 1445 ofthe Internal Revenue Code of 1986, as amended, and the regulations promulgatedthereunder.

(xvi) Neither Buyer nor any of its affiliates, nor any of their respectivepartners, members, shareholders or other equity owners, and to their knowledge none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute,executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action.

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(b)Any representations and warranties made to the knowledge of Seller, shall be based solely on the current, actual (as opposed to constructive or imputed) knowledge of Brandon D. Kelly and shall not be construed to refer to the knowledge of any other partner, beneficial owner, officer, employee or agent of Seller, nor shall such term impose any duty to investigate the matters to which such knowledge, or absence thereof, pertain. There shall be no personal liability on the part of such person arising out of any representations or warrantiesmade herein or otherwise. If after the Due Diligence Expiration Date but prior to the Closing, Buyer first obtains knowledge (through disclosure by Seller or otherwise) that any of the representations or warranties made herein by Seller are untrue, inaccurate or incorrect in any material respect, Buyer shall give Seller written notice thereof within five (5) business days of obtaining such knowledge (but, in any event, prior to the Closing). In such event, Seller shall have the right (but not the obligation) to attempt to cure such misrepresentation or breach and shall, at its option, be entitled to a reasonable adjournment of the Closing (not to exceedthirty(30) days) for the purpose of such cure. If Seller elects to attempt to so cure but is unable to so cure any misrepresentation or breach of warranty, then Buyer, as its sole remedy for any and all such materially untrue, inaccurate or incorrect representations or warranties, shall elect either (i) to waive such misrepresentations or breaches of representations and warranties and consummate the transaction contemplated hereby without any reduction of or credit against the Purchase Price, or (ii) if Buyer first obtained knowledge of such material misrepresentation or breach of warranty after the expiration of the Due Diligence Expiration Date, to terminate this Agreement in its entirety by written notice given to Seller on the Closing Date, in which event this Agreement shall be terminated, the Deposit shall be returned to Buyer and, thereafter, neither party shall have any further rights or obligations hereunder except for the Surviving Obligations.

(c)Seller agrees that, following the Closing, it shall be liable for the direct, but not consequential or punitive, damages resulting from any breach of its representations and warranties expressly set forth in this Article 11 of this Agreement and shall indemnify Buyerfor any direct, but not consequential or punitive, damages suffered by Buyer resulting from any breach of its representations and warranties expressly set forth in this Article 11 of this Agreement; provided, however, that: (i) the total liability of Seller for all such breaches, indemnity obligations and any matters relating thereto or under any law applicable to the Property or this transaction shall not, in the aggregate, exceed Three Hundred Thousand and 00/100 Dollars ($300,000.00) (the “Claim Cap”); (ii) such representations and warranties are personal to Buyer and may not be assigned to or enforced by any other Person, other than to an assignee of Buyer in accordance with this Agreement; and (iii) the representations, warranties and other obligations of Seller set forth in this Agreement or in any document or certificate delivered by Seller in connection herewith shall survive the Closing for a period of nine (9) months (the “Survival Period”), and no action or proceeding thereon shall be valid or enforceable, at law or in equity, if a legal proceeding is not commenced within that time. Notwithstanding the foregoing, however, if the Closing occurs, Buyer hereby expressly waives, relinquishes and releases any right or remedy available to it at law or in equity, underthis

Agreement or otherwise to make a claim against Seller for damages that Buyer may incur, or to rescind this Agreement and the transactions contemplated hereby, as the result of any of Seller’s representations or warranties in this Agreement or any document executed by Seller in connection herewith being untrue, inaccurate or incorrect if Buyer knew or is deemed to know that such representation or warranty was untrue, inaccurate or incorrect at the time of the Closing. Buyer agrees that, following the Closing, no claim may or shall be made for any alleged breach of any representations or warranties made by Seller under or relating to this Agreement unless the amount of such claim or claims, individually or in the aggregate, exceeds Ten Thousand and 00/100 Dollars ($10,000.00) (in which event the full amount of such valid claims against Seller shall be actionable up to, but not in excess of, the Claim Cap) (the “Floor Amount”).

(d)From and after the Effective Date until the Closing or the earlier termination of this Agreement, Seller hereby covenants with Buyer asfollows:

(i)To use commercially reasonable efforts to comply in all material respects with all federal, state, county, municipal and other governmental statutes, ordinances, by-laws, rules, regulations or any other legal requirements applicable to the Property, including, without limitation, those relating to the environment, zoning, construction, occupancy, occupational health and safety or fire safety,but specifically excluding the Americans With Disabilities Act, 42 U.S.C. §12101 (et seq.), the regulations and guidelines issued pursuant thereto; provided, however, in no event shall Seller be obligated to perform any capital improvements in connection with thisprovision.

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(ii)To comply with all of the terms, covenants and conditions contained in the Leases, the Operating Contracts and any other agreement affecting the Property and to monitor compliance thereunder in a manner consistent with Seller’s current practices.

(iii)To promptly notify Buyer of any material change in the condition of the Property or of any event or circumstance which makes any representation or warranty of Seller to Buyer under this Agreement untrue or misleading in any materialrespect.

(iv)To not market the Property or otherwise solicit or accept any offers or inquiries regarding the Property, or entertain offers or take or enter intoback-up offers or back-up salecontracts.

(v)To not commence any tax abatement, tax certiorari or similar tax proceedings for the reduction of the assessed valuation of the Property for anytax year or challenging the tax rates or other components used in determining real estatetaxes.

(vi)To reasonably cooperate with Buyer, at no out-of-pocket cost orexpense to Seller, with respect to all matters related to thisAgreement.

ARTICLE 12. Operations:  (a) Between the date hereof and the Closing, Seller agrees that it will operate the Property in a good and businesslike fashion consistent with Seller’s current practices and to continue to maintain the Property in good working order and condition and in a manner consistent with Seller’s current practices, reasonable wear and tear and casualty excepted. Until the Closing Date, Seller shall maintain insurance on the Premises as currently insured, provided that Seller may make adjustments in Seller’s insurance coverage for the Property which are consistent with Seller’s general insurance program.

(b)Seller shall not remove any material item of the Personal Property from the Property unless the same is obsolete and is replaced by tangible personal property of equal or greater utility andvalue.

(c)Seller shall not, between the date hereof and the Closing, (i) grant any consent or waive any material rights under the Leases, (ii) terminate any Lease, or (iii) enter into a new lease, modify an existing Lease or renew, extend or expand an existing Lease (collectively and individually a “Lease Proposal”) in each case without the prior written approval of Buyer (which, once so approved, whether expressly or by non-response as set forth below, shall be deemed an “Approved New Lease,” and once executed, shall be included in the term “Lease” for all purposes under this Agreement), which may be withheld in Buyer’s sole discretion, but which shall be deemed granted if Buyer fails to respond to a request for approval within five (5) business days after receipt of the request therefor together with a copy of each Lease Proposal. Seller shall provide copies of all Lease Proposals to Buyer after the Effective Date but Buyerhas no right to approve any Lease Proposal or any Lease prior to the Due Diligence Expiration Date. Seller agrees to furnish Buyer copies of any Approved New Lease signed prior to the Due Diligence Expiration Date promptly following receipt thereof. Notwithstanding the foregoing, Seller shall not be required to obtain Buyer’s consent or approval to (i) enter into any modification, renewal, extension or expansion of any Lease, or to grant any consent under any Lease, to the extent that the same is required pursuant to the applicable terms of the Lease;and

(ii) exercise any recapture or termination rights expressly provided for in any Lease.

(d)Seller shall not without the prior written consent of Buyer, which consent shall not be unreasonably withheld, enter into any contract (other than leases as provided above) which could bind Buyer or the Property after the Closing unless the same may be canceled on thirty (30) days’ notice without payment of any penalty or termination fee. Failure of Buyer to respond within five (5) business days of written request from Seller for consent shall bedeemed consent byBuyer.

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(f)By not later than 5:00 p.m. local time at the Property on theDue Diligence Expiration Date, Buyer shall provide written notice to Seller identifying the Operating Contracts, if any, Buyer elects to assume at Closing (to the extent the same are assumable). At Closing, Seller shall send notices of termination of all Operating Contracts which Buyer has not elected to assume which by its terms may be terminated by notice without cost to Seller or the paymentofany penalty or possible damages or liability for early termination. Any Operating Contract for which notice of termination has been given, as requested by Buyer, but which will not terminate until the expiration of any notice period, shall be assigned to Buyer, and, except as set forth below, all other Operating Contracts shall be assigned to Buyer. Any Operating Contracts requiring the consent of the vendor to assign such contract shall not be assigned to Buyer (unless the vendor has consented to the assignment and Buyer has paid, or credited to Seller, any fee related to such consent and assignment, if any), but shall be terminated by Seller as of Closing. Buyer shall pay any termination fee (or credit such amount to Seller at Closing) which is due upon the termination of any Operating Contract that Buyer may request pursuant to this paragraph.

ARTICLE 13.  Apportionment of Taxes and Other Charges:

(a)All normal and customarily proratable items, including without limitation, personal property taxes, utility bills (except as hereinafter provided), collected rents and other income, Operating Contract payments (under Operating Contracts assumed by Buyer including those for which notice of termination has been given pursuant to Article 12(f) but have not yet expired), and license and permit fees shall be prorated as of the Apportionment Time (definedin the succeeding sentence), Seller being charged and credited for all of the same relating to the period up to the Closing Date and Buyer being charged and credited for all of the same relating to the period on and after the Closing Date. As used herein, the term “Apportionment Time” shall mean 11:59 p.m. local time at the Property on the date immediately prior to the Closing Date.

(b)Real estate, personal property and ad valorem taxes for the year in which the Closing occurs will be prorated between Seller and Buyer as of the Apportionment Time on the basis of actual bills therefor, if available.  If such bills are not available, then such taxes and other charges shall be prorated on the basis of the most current available tax bills and,thereafter, promptly re-prorated upon the availability of actual bills for the period. If any proceeding to determine the assessed value of the Real Property or the real estate taxes payable with respect to the Real Property has been commenced before the Due Diligence Expiration Date and shall be continuing as of the Closing Date, Seller shall be authorized to continue to prosecute such proceeding. Any costs or expenses payable to any tax consultant or tax appeal attorney and any tax savings from abatement or reduced assessment shall be allocated and apportioned between Buyer and Seller in accordance with their share of ownership during such tax period. Buyer agrees to cooperate as reasonably requested with Seller and to execute any and all documents reasonably requested by Seller in furtherance of theforegoing.

(c)No proration shall be made in relation to delinquent rents existing, if any, as of the Closing Date.  In adjusting for uncollected rents, no adjustment shall be made in Seller's favor for rents which have accrued and are unpaid as of Closing, but Buyer shall pay Seller such accrued and unpaid rents, as and when collected by Buyer, it being agreed that Buyer shall notbe deemed to have collected any such arrearages attributable to the period prior to Closing until such time as the tenant is current in the payment of all rents accruing after the Closing. Buyer agrees to bill tenants of the Property for all past due rents and to take any additional reasonable actions requested by Seller to collect rents that are accrued but unpaid as of theClosing, provided that Buyer shall not be obligated to incur any out-of-pocket third party expenses in connection with such actions and Buyer shall not be obligated to take any action to terminate a tenancy. Seller reserves the right to bring suit against tenants of the Property to collect for accrued but unpaid rents owed Seller as of the Closing Date, but Seller may not, subsequent to Closing, bring suit for possession of the premises occupied by such tenants.

(d)Final readings and final billings for utilities will be made if possible as of the Closing Date, in which event no proration shall be made at the Closing with respect to utility bills. Otherwise, a proration shall be made based upon the parties' reasonable good faith estimate and a re-adjustment made within sixty (60) days afterClosing.

(e)No proration will be made in relation to insurance premiums and the insurance policies will not be assigned to Buyer. Seller shall be entitled to receive a return of all deposits presently in effect with the utility providers, and Buyer shall be obligated to make its own arrangements for deposits with the utilityproviders.

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(f)Buyer shall receive a credit for all cash Security Deposits, and if required by law, with interest thereon. With respect to any Security Deposits which are other than cash, Seller shall deliver to Buyer at the Closing the original documentation related thereto with such transfer and assignment documentation as may be necessary, including without limitation, the original letter of credit, if applicable. Buyer will indemnify, defend, and hold Seller harmless from and against all demands and claims made by tenants arising out of the transfer or disposition of any Security Deposits to the extent credited to Buyer as provided above and will reimburse Seller for all reasonable attorneys’ fees incurred or that may be incurred as a result of any such claims or demands as well as for all loss, expenses, verdicts, judgments, settlements, interest, costs and other expenses incurred or that may be incurred by Seller as a result of any such claims or demands bytenants.

(g)CAM Charges. Notwithstanding the foregoing, if any portion of the Rent, such as operating cost pass-throughs, common area expenses or additional rent and charges are paid on an estimated basis ("Estimated Rent Payment"), then the Estimated Rent Payment shall be prorated at Closing based on such estimates. At such time as Buyer is required to provide to the tenant a final reconciliation of the Estimated Rent Payment for the year of the Closing (but no later than March 31, [TO BE INSERTED]), Buyer will provide a copy of same to Seller.  If such final reconciliation shows that Seller owes Buyer additional sums, Seller shall deliver such amount to Buyer within ten (10) days after Seller's receipt of such final reconciliation, and if the final reconciliation shows that Buyer owes Seller additional sums, Buyer shall pay such amount to Seller within ten (10) days after Buyer's receipt of such payments from the tenants.  Buyer shall be responsible for and conduct any audit of the Estimated Rent Payments that a tenant may request with respect to all years prior to the Closing, and responsible for the payment of any amounts to which a tenant may be entitled as a result of suchaudit.

(h)Leasing Costs. Seller shall pay (or provide Buyer a credit at Closing for) all leasing commissions and tenant improvement costs (“Lease Costs”) that are due and payable for the current lease term of any Lease.  Buyer shall assume and be responsible to pay all Lease Costs that first arise or accrue on or after the expiration of the current term of anyLease, including as a result of (X) new Leases executed after the Effective Date in accordance with this Agreement, (Y) Lease extensions, renewals and expansions pursuant to existing Leases exercised by the tenants thereunder after the Effective Date, and (Z) amendments or modifications to, or renewals of, existing Leases entered into after the Effective Date in accordance with this Agreement.

(i)A detailed statement shall be prepared at the Closing setting forth the mannerof computation of the aforesaid pro-rationadjustments.

(j)The provisions of this Article 13 shall survive the Closing for a period ofninety

(90) days at which time there will be a one-time readjustment, if necessary; provided, however, with respect to ad valorem taxes, readjustments shall be made during the thirty (30) day period following the date final tax bills for the year of Closing are received by Buyer and with respect to Estimated Rent Payments, Article 13(g) shall control.

ARTICLE 14. Broker: Each party represents hereby to the other that it dealt with no broker in the consummation of this Agreement and each party indemnifies the other from any claim arising from the failure of such representation by the indemnifying party, except for the broker fee to be paid by Seller to Jones Lang LaSalle pursuant to a separate agreement.

ARTICLE 15. Recording: It is agreed hereby that this Agreement shall not be filed for recording with any other governmental body.

ARTICLE 16. Notices. Any notice, consent or approval required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given upon (i) hand delivery, (ii) one business day after being deposited with Federal Express or another reliable overnight courier service for next day delivery, (iii) upon electronic signature (it being agreed that PDF email shall have the same force and effect as an original signature for all purposes), or, (iv) two (2) business days after being deposited in the United States mail, registered or certified mail, postage prepaid, return receipt required, and addressed as follows:

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ToSeller: Cherry Hill DriveOwnerLLC c/o RJ KellyCompany

55 Cambridge Street

Burlington, MA 01803 Attn: [TO BEINSERTED]

Phone: [TO BE INSERTED] Email: [TO BE INSERTED]

with a copy to:

[TO BE INSERTED]

ToBuyer:

Abiomed,Inc.

22 Cherry Hill Drive

Danvers, MA 01923

Attention: Steve McEvoy

Phone:978-777-5410

Email: smcevoy@abiomed.com

with a copyto:

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199-3600

Attention: John M. Creedon

Phone: 617-951-7981

Email: john.creedon@ropesgray.com

TitleCompany: [ TO BEINSERTED]

or such other address as either party may from time to time specify in writing to the other. Either party’s respective legal counsel may provide notices on behalf of such party. Unless otherwise specifically provided for herein, notices required to be delivered pursuant to the terms and provisions of this Agreement must be delivered by 5:00 p.m. local time at the Property to whichever party is the intended recipient to be considered timely delivered pursuant to such term or provision of this Agreement.

ARTICLE 17. Captions: The captions in this Agreement are inserted only for the purpose of convenient reference and in no way define, limit or prescribe the scope or intent of this Agreement or any part hereof.

ARTICLE 18. Successors and Assigns: (a) This Agreement shall be binding upon the parties hereto and their respective successors and assigns.

(b)Subject to Buyer's right to designate a nominee, in which Buyer holds allofthe beneficial interest, to take title to the Premises, in which case Buyer shall remain fully liable hereunder, Buyer may not assign this Agreement nor any of the rights or benefits thereof including, without limitation, the benefit of the representations and warranties contained in Article 11 hereof, to any third party either before or after the Closing without the writtenconsent of Seller which may be given or withheld in Seller’s sole discretion, and any such unauthorized attempted assignment shall be null and void. In accordance with the terms of this paragraph, Buyer shall send written notice to Seller of its designated nominee, if any, no later than five (5) business days prior toClosing.

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ARTICLE 19. Closing Costs: Except as hereinafter specifically provided, Seller and Buyer shall allocate all closing costs between them in accordance with standard practice in the jurisdiction where the Property is located. Seller and Buyer shall be responsible for preparing such documents as it is obligated to deliver pursuant to Article 5 hereof and for its own legal, consultant and agent expenses.  Seller and Buyer agree to allocate closing costs as follows:

(a) The transfer tax shall be paid bySeller.

(b) All title examination costs and the cost of the base premium for the Title Policy in the amount of the Purchase Price and additional title premiums, costs or charges for extended coverage or endorsements to the Title Policy shall be paid byBuyer.

(c) The cost of the Survey, and any update, revision or re-certification of the Survey, shall be paid byBuyer.

(d) The cost of preparation and recordation of any releases and termination statements required to clear Voluntary Liens from title to the Property shall be paid bySeller.

(e) The cost of recordation of the Deed and all other recording costs other than those described in Article 19(d) above shall be paid byBuyer.

(f) Escrow charges, if any, shall be split equally between Seller andBuyer.

ARTICLE 20. Governing Law: The laws of the State where the Property is located shall govern the validity, construction, enforcement and interpretation of this Agreement.

ARTICLE 21. Multiple Counterparts: This Agreement may be executed in any number of identical counterparts. If so executed, each of such counterparts shall constitute this Agreement. In proving this Agreement, it shall not be necessary to produce or account for more than one such counterpart. Execution and delivery of this Agreement by .pdf or other electronic format shall constitute valid execution and delivery and shall be effective for all purposes.

ARTICLE 22. Representations and Warranties of Buyer: Buyer hereby represents and warrants to Seller as of the date hereof and as of the Closing Date as follows:

(a)This Agreement and all documents executed by Buyer that are to be deliveredto Seller at the Closing are, or at the time of Closing will be, duly authorized, executed and delivered by Buyer. This Agreement and such documents are, or at the Closing will be, legal, valid, and binding obligations of Buyer, and do not, and, at the time of Closing will not, violate any provisions of any agreement or judicial order to which Buyer is a party or to which it is subject.

(b)There are no proceedings pending or, to Buyer's knowledge, threatened against it in any court or before any governmental authority or any tribunal which, if adverselydetermined, would have a material adverse effect on its ability to purchase the Property or to carry out its obligations under thisAgreement.

(c)Buyer acknowledges that it is experienced and sophisticated in the acquisition, development, management, leasing, ownership and operation of commercial real estate projects such as the Property and that, prior to the Due Diligence Expiration Date, it will have a full and complete opportunity to conduct such investigations, examinations, inspections and analyses of the Property as Buyer, in its absolute discretion, may deem appropriate.  Buyerfurther acknowledges that, except for Seller representations set forth in Article 11 of this Agreement, Buyer has not relied upon any statements, representations or warranties by Seller or any agent of Seller. Without limiting the foregoing, Buyer acknowledges and agrees that: (1) any environmental, physical condition or other reports provided to Buyer by Seller or its agents are provided without any representation or warranty of any kind, express or implied, as to the completeness or accuracy of the facts, presumptions, conclusions or other matters contained therein; (2) Buyer shall rely solely on its own investigations and on reports prepared by any consultants engaged by Buyer and not on any environmental, physical condition or other reports provided to Buyer by Seller or its agents.

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(d)Neither Buyer nor any of its affiliates, nor any of their respective partners, members, shareholders or other equity owners, and to their knowledge none of their respective employees, officers, directors, representatives or agents, is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmentalaction.

(e)Buyer is not, and is not acquiring the Property on behalf of or with the assetsof,

(i) an “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and its applicable regulations as issued by the Department of Labor and the Internal Revenue Service (collectively, “ERISA”), which is subject to Title I of ERISA, (ii) a “plan” as defined in and subject to Section 4975 of the IRC, or (iii) an entity deemed to hold “plan assets” (within the meaning of 29 C.F.R. 2510.3-101, as modified by Section 3(42) of ERISA) of either of the foregoing.

(f)Buyer shall indemnify and defend Seller against and hold Seller harmless from any and all losses, costs, damages, liabilities and expenses (including, without limitation, reasonable counsel fees) arising out of any breach by Buyer of its representations andwarranties hereunder, provided that no action based on a breach of any such representations or warranties shall be commenced after the first anniversary of the ClosingDate.

ARTICLE 23. Post-Closing Obligations: After the Closing, Seller and Buyer shall cooperate with one another at reasonable times and on reasonable conditions and shall execute and deliver such instruments and documents as may be necessary in order fully to carry out the intent and purposes of the transactions contemplated hereby. Except for such instruments and documents as the parties were originally obligated to deliver by the terms of this Agreement, such cooperation shall be without additional cost or liability.

ARTICLE 24. Duties and Responsibilities of Escrow Agent: Escrow Agent shall deliver the Deposit to Seller or Buyer promptly after receiving a joint written notice (which notice may be by e-mail) from Seller and Buyer directing the disbursement of the same, such disbursement to be made in accordance with such direction. If Escrow Agent receives written notice from Buyer or Seller that the party giving such notice is entitled to the Deposit, which notice shall describe with reasonable specificity the reasons for such entitlement, then Escrow Agent shall (i) promptly give notice to the other party of Escrow Agent's receipt of such notice and enclosing a copy of such notice and (ii) subject to the provisions of the following paragraph which shall apply if a conflict arises, on the fifth (5th) business day after the giving of the notice referred to in clause (i) above, deliver the Deposit to the party claiming the right to receive it.

In the event that Escrow Agent shall be uncertain as to its duties or actions hereunder or shall receive instructions or a notice from Buyer or Seller which are in conflict with instructions or a notice from the other party or which, in the reasonable opinion of Escrow Agent, are in conflict with any of the provisions of this Agreement, it shall be entitled to take any of the following courses of action:

(a) Hold the Deposit as provided in this Agreement and decline to take any further action until Escrow Agent receives a joint written direction (which direction may be by e-mail) from Buyer and Seller or any order of a court of competent jurisdiction directing the disbursement of the Deposit, in which case Escrow Agent shall then disburse the Deposit in accordance with suchdirection;

(b) In the event of litigation between Buyer and Seller, Escrow Agent may deliverthe Deposit to the clerk of any court in which such litigation is pending;or

(c) Escrow Agent may deliver the Deposit to a court of competent jurisdiction and therein commence an action for interpleader, the cost thereof to Escrow Agent to be borne by whichever of Buyer or Seller does not prevail in thelitigation.

{W6394298.7} -18-

Notwithstanding the foregoing, Escrow Agent shall comply with the unilateral instructions of Buyer regarding the disposition of the Deposit prior to the Due Diligence Expiration Date.

Escrow Agent acts hereunder as a depositary only, and except as expressly set forth herein is not responsible or liable in any manner for the sufficiency of any amounts deposited with it. Escrow Agent shall not be liable for any action taken or omitted in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Agreement and it may rely upon, and shall be protected in acting or refraining from acting in reliance upon, an opinion of counsel and upon any directions, instructions, notice, certificate, instrument, request, paper or other documents believed by it to be genuine and to have been made, sent, signed or presented by the proper party or parties. Escrow Agent shall not be liable for any error in judgment, or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, except its own bad faith, negligence or misconduct. In no event shall Escrow Agent's liability hereunder exceed the aggregate amount of the Deposit. Escrow Agent shall be under no obligation to take any legal action in connection with the Deposit or this Agreement or to appear in, prosecute or defend any action or legal proceedings which would or might, in its sole opinion, involve it in cost, expense, loss or liability unless, in advance, and as often as reasonably required by it, Escrow Agent shall be furnished with such security and indemnity as it finds reasonably satisfactory against all such cost, expense, loss or liability. Escrow Agent hereby agrees to indemnify, protect and hold Buyer and Seller harmless from and against anylosses, costs, damages or expenses (including reasonable attorneys’ fees) resulting from Escrow Agent’s fraud, negligence or willful misconduct.  Subject to the preceding sentence, Seller and Buyer each hereby release Escrow Agent from any act done or omitted to be done by Escrow Agent in good faith in the performance of its duties hereunder.

Escrow Agent shall not be bound by any modification of this Agreement affecting Escrow Agent’s duties hereunder unless the same is in writing and signed by Buyer, Seller and Escrow Agent. From time to time on or after the date hereof, Buyer and Seller shall deliver or cause to be delivered to Escrow Agent such further documents and instruments that fall due, or cause to be done such further acts as Escrow Agent may reasonably request (it being understood that Escrow Agent shall have no obligation to make any such request) to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance with this Agreement or to assure itself that it is protected in acting hereunder.

Buyer may remove Escrow Agent at any time upon not less than five (5) business days’ prior notice to Escrow Agent and Seller; in such case, Buyer, by notice to Seller, shall appoint a successor Escrow Agent reasonably satisfactory to Seller who shall accept such appointment and agree in writing to be bound by the terms and conditions of this Agreement. If no suchsuccessor Escrow Agent is appointed and acting hereunder within five (5) business days after the removal of Escrow Agent, Escrow Agent shall deliver the Deposit into a court of competent jurisdiction as provided pursuant the terms hereof.  Upon delivery of the Deposit to a successor Escrow Agent or a court of competent jurisdiction as aforesaid, the applicable Escrow Agent shall be released and discharged from all further obligations hereunder first arising after the date of such delivery.

Escrow Agent shall serve hereunder for the compensation described in Article 19 above; provided, however, any expenses of Escrow Agent that are associated with litigation between Buyer and Seller shall be borne by the party that does not prevail in the litigation. Escrow Agent agrees that it will not seek reimbursement for the services of its employees or partners, but only for its actual and reasonably incurred out-of-pocket expenses. Escrow Agent executes this Agreement solely for the purpose of consent to, and agreeing to be bound by the provisions of this Article 24, and to the extent applicable to Escrow Agent, Article 3.

ARTICLE 25. Waiver Of Jury Trial: EACH OF SELLER AND BUYER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT EITHER OR BOTH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.

{W6394298.7} -19-

ARTICLE 26. Like Kind Exchange: Buyer agrees to cooperate reasonably with Seller and Seller agrees to cooperate reasonably with Buyer, in effecting an exchange transaction which includes any or all of the Property pursuant to Section 1031 of the United States Internal Revenue Code if Seller and/or Buyer, as applicable, elects to complete such anexchange,provided that any exchange initiated by Seller or Buyer shall be at the sole cost and expense of the initiating party, not cause Buyer to actually take title to any property other than the Property and not delay the Closing. In addition, each of Seller and Buyer shall indemnify and hold the other harmless from any and all cost, expense or liability incurred solely as a result of Buyer or Seller, as applicable, accommodating such tax deferred exchange. The provisions of this paragraph shall survive the Closing indefinitely.

ARTICLE 27. Business Days. As used in this Agreement, the term “business day” shall mean any day other than a Saturday, Sunday or recognized federal holiday or a recognized state holiday of the state where the Property is located. If the last date for performance by either party under this Agreement occurs on a day which is not a business day, then the last date for such performance shall be extended to the next occurring business day.

ARTICLE 28. Confidentiality. (a)  Each of Seller and Buyer agrees to hold all materials and information related to the Property and this transaction, including the existence and terms of this Agreement, whether received from Seller, Buyer, third parties, or generated by Buyer or Seller, in the strictest confidence and not disclose the same to any third parties; provided, however, each of Seller and Buyer may disclose such information for use only in connection with evaluating this transaction to its officers, directors, employees, consultants, attorneys, advisors and agents so long as such persons are informed by Seller or Buyer, as applicable of the confidential nature of such information and are directed by Seller or Buyer, as applicable, to treat such information confidentially. If this Agreement is terminated prior to the Closing Date, all such confidences shall continue to be maintained. In the event this Agreement is terminated, whether before or after the Due Diligence Expiration Date, each of Seller and Buyer and their respective officers, directors, employees, consultants, advisors, attorneys, and agents shall deliver to Seller or Buyer, as applicable, upon request, all documents and other materials, and all copies thereof, obtained from Seller, Buyer or their respective agents in connection with this Agreement. By execution of this Agreement, Escrow Agent hereby agrees to maintain the existence of this Agreement and the nature and details of the transaction contemplated hereby in confidence, unless Escrow Agent is required by law to disclose some or all of suchinformation.

(b) Notwithstanding the above provisions of this Article 28, and in accordance with Section 1.6011-4(b)(3)(iii) of the Treasury Regulations, each party to this Agreement (and each employee, representative, or other agent of each party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure, for federal tax purposes, ofthe transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure; provided, however, that, pursuant to Section 1.6011-4(b)(3)(ii) of the Treasury Regulations, such disclosure shall not be permitted to the extent, but only to the extent, such disclosure would reasonably be considered to result in noncompliance with the securities laws of any applicablejurisdiction.

ARTICLE 29. IRS Real Estate Sales Reporting. Buyer and Seller hereby agree that Escrow Agent shall act as “the person responsible for closing” the transaction which is the subject of this Agreement pursuant to Section 6045(e) of the Code and shall prepare and file all informational returns, including IRS Form 1099-S, and shall otherwise comply with the provisions of Section 6045(e) of the Code. The provisions of this Article 29 shall survive the Closing.

ARTICLE 30. Limitations on Liability. Notwithstanding anything to the contrary in this Agreement, and subject to any additional limitations on Seller’s liability set forth elsewhere in this Agreement: (a) Buyer’s recourse against Seller under this Agreement or any agreement, document, certificate or instrument delivered by Seller hereunder, or under any law, rule or regulation relating to the Property, shall be limited to Seller’s interest in the Property (or, following the Closing, to the net proceeds of the sale of the Property actually received by Seller); and (b) in no event shall any of Seller Parties have any personal liability hereunder or otherwise. The acceptance of the Deed shall constitute full performance of all of Seller’s obligations hereunder other than those obligations of Seller, if any, that by the express terms hereof are to survive the Closing. For purposes of this Article 30, no negative capital account or any contribution or payment obligation of any partner or member of Seller shall constitute an asset of Seller. The provisions of this Article 30 shall survive the Closing or termination of this Agreement.

{W6394298.7} -20-

ARTICLE 31. Press Releases. Each of Seller and Buyer agrees that, without the prior written approval of the other party, neither Seller nor Buyer shall issue any press release, advertisement, internet posting or other similar announcement, statement or disclosure of this Agreement, the transactions contemplated hereby, or the parties hereto (or their respective affiliates and advisors), whether before or after the Closing, except to the extent otherwise required by law. The provisions of this Article 31 shall survive the Closing or termination of this Agreement.

ARTICLE 32. Time of the Essence. Time is of the essence in the performance of each and every one of the parties' respective obligations contained in Articles 3, 5, 6, 7, 11(solely with respect to the expiration of any survival periods set forth therein) and 22 (solely with respect to the expiration of any survival periods set forth therein) of this Agreement.

ARTICLE 33. Costs and Attorneys’ Fees. In the event of any arbitration, litigation or dispute between the parties arising out of or in any way connected with this Agreement, including actions maintained by the parties subsequent to the Closing Date, resulting in any litigation, then the prevailing party in such litigation shall be entitled to recover its costs of prosecuting and/or defending same, including, without limitation, reasonable attorneys’ fees at trial and all appellate levels. Regardless of whether Closing occurs hereunder, and except as otherwise expressly provided herein, each party hereto shall be responsible for its own costs in connection with this Agreement and the transactions contemplated hereby, including, without limitation, fees of attorneys, engineers and accountants. The provisions of this Article 33 shall survive the Closing of the transaction contemplated hereby.

ARTICLE34.Waivers.        Any waiver of any term or condition of thisAgreement, or of the breach of any covenant, representation or warranty contained herein, in any one instance, shall not operate as or be deemed to be or construed as a further or continuing waiver of any other breach of such term, condition, covenant, representation or warranty or any other term, condition, covenant, representation or warranty, nor shall any failure at any time or timesto enforce or require performance of any provision hereof operate as a waiver of or affect in any manner such party’s right at a later time to enforce or require performance of such provision or any other provision hereof.

ARTICLE35.Severability.         If any provision of this Agreement shall be heldor deemed to be, or shall in fact be, invalid, inoperative or unenforceable as applied to any particular casein any jurisdiction or jurisdictions, or in all jurisdictions or in all cases, because of the conflict of any provision with any constitution or statute or rule of public policy or for any other reason, such circumstance shall not have the effect of rendering the provision or provisions in question invalid, inoperative or unenforceable in any other jurisdiction or in any other case or circumstance or of rendering any other provision or provisions herein contained invalid, inoperative or unenforceable to the extent that such other provisions are not themselves actually in conflict with such constitution, statute or rule of public policy, but this Agreement shall be reformed and construed in any such jurisdiction or case as if such invalid, inoperative or unenforceable provision had never been contained herein and such provision reformed so that it would be valid, operative and enforceable to the maximum extent permitted in such jurisdiction or in suchcase.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

{W6394298.7} -21-

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an instrument under seal as of the day and date first written above.

SELLER:

CHERRY HILL DRIVE OWNER, LLC,

a Delaware limited liability company

By:

Name:  Brandon D.Kelly

Title: Authorized Signatory

BUYER:

ABIOMED, INC.,

a Delaware corporation

By:

Name:

Title:

THE UNDERSIGNED HEREBY JOINS IN THIS AGREEMENT AS ESCROW AGENT AND ACKNOWLEDGES AND AGREES TO BE BOUND BY THE PROVISIONS OF ARTICLES 3, 24 AND 29 OF THIS AGREEMENT:

[TO BE INSERTED]

By:

Name:

Title:

{W6394298.7} -22-

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY

24-42 Cherry Hill Drive, Danvers, Massachusetts

That certain parcel of land with any improvements thereon situate in Danvers, County of Essex, Commonwealth of Massachusetts, being shown as Lots 3, 4, 5 and 6 on a plan entitled "Plan of Land in Danvers, Mass., owned by Thomas J. Flatley, Scale: 1 in. = 100 ft., dated May 13, 1983, by The Russell A Wheatley Co., Inc., Land Surveyors and Engineers, 700 Bedford Street, Abington, Massachusetts" recorded with Essex South District Registry of Deeds in Plan Book 183 as Plan 94, and further bounded and described as follows:

NORTHERLY:	by land now or formerly of the Beverly Airport as shownon said plan by 4 bounds measuring respectively, 739.06 ft., 41.69ft., 189.28 ft. and 105.00 ft.;
NORTHEASTERLY:	by land now or formerly of Terra-Light Inc. as shown onsaid plan 2 bounds measuring respectively, 369.69 ft. and 178.66 ft.
EASTERLY:	by Cherry Hill Drive as shown on said plan2 bounds measuring respectively 87.60 ft. and 205.65ft.
SOUTHERLY:	by land now or formerly of The PacificLumberCompany as shown on said plan 1093.66 ft.,and
WESTERLY:	by land now or formerly of Sawyer as shown onsaid plan by 2 bounds measuring respectively 231.87 ft. and 339.78ft.

The above-described land is also referred to as Lots 3, 4, 5 and 6 on a Plan dated January 8, 1980 by Frank C. Gelinas and Associates, recorded with said Deeds in Plan Book 160 as Plan 1.

[Note: Remaining Exhibits to be agreed upon by Seller and Buyer in advance of Purchase and Sale Agreement being executed]

{W6394298.7}

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Michael R. Minogue certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ABIOMED, Inc.

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2018	/s/ Michael R. Minogue
	Michael R. Minogue
	Chairman, President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

I, Ian W. McLeod certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ABIOMED, Inc.

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 6, 2018	/s/ IAN W. MCLEOD
	Ian W. McLeod
	Vice President and Corporate Controller (Interim Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of ABIOMED, Inc., (the “Company”) for the quarter ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned President and Chief Executive Officer, and Vice President and Corporate Controller, of the Company, certifies, to the best knowledge and belief of the signatory, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MICHAEL R. MINOGUE	/s/ IAN W. MCLEOD
Michael R. Minogue Chairman, President and Chief Executive Officer	Ian W. McLeod Vice President and Corporate Controller (Interim Principal Financial and Accounting Officer)
Date: February 6, 2018	Date: February 6, 2018

XML

Document and Entity Information - shares	9 Months Ended
	Dec. 31, 2017	Jan. 31, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Trading Symbol	ABMD
Entity Registrant Name	ABIOMED INC
Entity Central Index Key	0000815094
Current Fiscal Year End Date	--03-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		44,277,825

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Mar. 31, 2017
Current assets:
Cash and cash equivalents	$ 50,502	$ 39,040
Short-term marketable securities	250,751	190,908
Accounts receivable, net	64,862	54,055
Inventories	46,891	34,931
Prepaid expenses and other current assets	9,192	8,024
Total current assets	422,198	326,958
Long-term marketable securities	49,485	47,143
Property and equipment, net	107,977	87,777
Goodwill	34,814	31,045
In-process research and development	16,241	14,482
Long-term deferred tax assets, net	75,201	34,723
Other assets	13,686	8,286
Total assets	719,602	550,414
Current liabilities:
Accounts payable	21,991	20,620
Accrued expenses	41,565	37,703
Deferred revenue	11,797	10,495
Current portion of capital lease obligation		799
Total current liabilities	75,353	69,617
Other long-term liabilities	466	3,251
Contingent consideration	10,423	9,153
Long-term deferred tax liabilities	878	783
Capital lease obligation, net of current portion		15,539
Total liabilities	87,120	98,343
Commitments and contingencies (Note 10)
Stockholders' equity:
Class B Preferred Stock, $.01 par value Authorized - 1,000,000 shares; Issued and outstanding - none
Common stock, $.01 par value Authorized - 100,000,000 shares; Issued - 45,995,445 shares at December 31 , 2017 and 45,249,281 shares at March 31, 2017 Outstanding - 44,271,905 shares at December 31, 2017 and 43,673,286 shares at March 31, 2017	443	437
Additional paid in capital	605,697	565,962
Retained earnings (accumulated deficit)	103,610	(46,959)
Treasury stock at cost - 1,723,540 shares at December 31, 2017 and 1,575,995 shares at March 31, 2017	(66,622)	(46,763)
Accumulated other comprehensive loss	(10,646)	(20,606)
Total stockholders' equity	632,482	452,071
Total liabilities and stockholders' equity	$ 719,602	$ 550,414

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Mar. 31, 2017
Statement Of Financial Position [Abstract]
Class B Preferred Stock, par value	$ 0.01	$ 0.01
Class B Preferred Stock, Authorized	1,000,000	1,000,000
Class B Preferred Stock, Issued	0	0
Class B Preferred Stock, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, Authorized	100,000,000	100,000,000
Common stock, Issued	45,995,445	45,249,281
Common stock, Outstanding	44,271,905	43,673,286
Treasury stock, shares	1,723,540	1,575,995

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Revenue:
Product revenue	$ 153,989	$ 114,624	$ 419,202	$ 320,541
Funded research and development	33	50	111	83
Total Revenue	154,022	114,674	419,313	320,624
Costs and expenses:
Cost of product revenue	24,994	18,987	68,483	51,366
Research and development	17,706	16,349	54,027	50,061
Selling, general and administrative	66,556	53,935	187,233	158,053
Costs and Expenses, Total	109,256	89,271	309,743	259,480
Income from operations	44,766	25,403	109,570	61,144
Other income (expense):
Investment income, net	969	457	2,385	1,068
Other expense, net	(81)	(34)	(25)	(225)
Nonoperating Income (Expense), Total	888	423	2,360	843
Income before income taxes	45,654	25,826	111,930	61,987
Income tax provision	32,208	10,394	36,607	24,770
Net income	$ 13,446	$ 15,432	$ 75,323	$ 37,217
Basic net income per share	$ 0.30	$ 0.36	$ 1.71	$ 0.86
Basic weighted average shares outstanding	44,247	43,431	44,095	43,125
Diluted net income per share	$ 0.29	$ 0.34	$ 1.65	$ 0.83
Diluted weighted average shares outstanding	45,869	44,770	45,731	44,597

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 13,446	$ 15,432	$ 75,323	$ 37,217
Other comprehensive gain (loss):
Foreign currency translation gains (losses)	1,557	(5,873)	10,406	(6,760)
Net unrealized losses on marketable securities	(401)	(269)	(446)	(137)
Other comprehensive gain (loss)	1,156	(6,142)	9,960	(6,897)
Comprehensive income	$ 14,602	$ 9,290	$ 85,283	$ 30,320

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Operating activities:
Net income	$ 75,323	$ 37,217
Adjustments required to reconcile net income to net cash provided by operating activities:
Depreciation expense	8,100	4,488
Bad debt expense	(8)	(12)
Stock-based compensation	29,170	24,521
Write-down of inventory and other assets	3,212	2,059
Excess tax benefit from stock-based awards		(4,595)
Deferred tax provision	34,740	18,817
Change in fair value of contingent consideration	1,270	612
Changes in assets and liabilities:
Accounts receivable	(10,342)	(7,555)
Inventories	(11,974)	(8,615)
Prepaid expenses and other assets	(1,033)	(3,923)
Accounts payable	2,595	3,542
Accrued expenses and other liabilities	3,874	11,040
Deferred revenue	1,220	265
Net cash provided by operating activities	136,147	77,861
Investing activities:
Purchases of marketable securities	(209,834)	(177,591)
Proceeds from the sale and maturity of marketable securities	148,095	144,670
Purchase of other investment	(6,400)	(149)
Purchases of property and equipment	(44,168)	(24,039)
Net cash used for investing activities	(112,307)	(57,109)
Financing activities:
Proceeds from the exercise of stock options	7,626	8,265
Excess tax benefit from stock-based awards		4,595
Taxes paid related to net share settlement of vesting of stock awards	(19,860)	(19,898)
Proceeds from the issuance of stock under employee stock purchase plan	1,063	769
Principal payments on capital lease obligation	(517)	(264)
Net cash used for financing activities	(11,688)	(6,533)
Effect of exchange rate changes on cash	(690)	(1,381)
Net increase in cash and cash equivalents	11,462	12,838
Cash and cash equivalents at beginning of period	39,040	48,231
Cash and cash equivalents at end of period	50,502	61,069
Supplemental disclosure of cash flow information:
Cash paid for income taxes	845	735
Cash paid for interest on capital lease obligation	302	223
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment under capital lease obligation		16,784
Property and equipment in accounts payable and accrued expenses	$ 3,836	$ 3,717

XML

Nature of Business

9 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Nature of Business

Note 1. Nature of Business

Abiomed, Inc. (the “Company” or “Abiomed”) is a provider of mechanical circulatory support devices and offers a continuum of care to heart failure patients. The Company develops, manufactures and markets proprietary products that are designed to enable the heart to rest, heal and recover by improving blood flow and/or performing the pumping function of the heart. The Company’s products are used in the cardiac catheterization lab, or cath lab, by interventional cardiologists and in the heart surgery suite by heart surgeons for patients who are in need of hemodynamic support prophylactically or emergently before, during or after angioplasty or heart surgery procedures.

XML

Basis of Preparation and Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Preparation and Summary of Significant Accounting Policies

Note 2. Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting and in accordance with Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by GAAP for complete financial statements. These statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 that has been filed with the Securities and Exchange Commission (the “SEC”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments that are necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period may not be indicative of results for the full fiscal year or any other subsequent period.

There have been no changes in the Company’s significant accounting policies for the three and nine months ended December 31, 2017 as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2017 that has been filed with the SEC.

New Accounting Pronouncements Adopted

Effective April 1, 2017, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) which simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, recognition of stock compensation award forfeitures, classification of awards as either equity or liabilities, the calculation of diluted shares outstanding and classification on the statement of cash flows.

The following table summarizes the most significant impacts of ASU 2016-09 for the three and nine months ended December 31, 2017:

Description of Change:	Impact of Change Upon Adoption on April 1, 2017 and for the Three and Nine Months Ended December 31, 2017:	Adoption Method:
The new standard eliminates the requirement that excess tax benefits be realized through a reduction in income taxes payable before a company can recognize them in the statement of operations.	As a result, on April 1, 2017, the Company recorded a cumulative-effect adjustment to increase retained earnings and deferred tax assets by $76.4 million for excess tax benefits not previously recognized.	Modified-retrospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are recorded through the statement of operations.	The income tax benefit for the three and nine months ended December 31, 2017, included excess tax benefits of $3.2 million and $24.5 million, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.	Prospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are classified as operating cash flows instead of financing cash flows.	Increase in cash flow from operating activities and decrease in cash flow from financing activities by approximately $24.5 million for the nine months ended December 31, 2017. The statement of cash flows for the prior period has not been adjusted.	Prospective (elected)
Calculation of diluted weighted average shares outstanding under the treasury method no longer assume that tax benefits related to stock-based awards are used to repurchase common stock.	The Company excluded the related tax benefits when applying the treasury stock method for computing diluted shares outstanding on a prospective basis as required by  ASU 2016-09.	Prospective (required)
An accounting policy election can be made to reduce stock-based compensation expense for forfeitures as they occur instead of estimating forfeitures that are expected to occur.	The Company made an accounting policy election to account for forfeitures as they occur with the change applied on a modified retrospective basis with a cumulative effect adjustment on April 1, 2017 to increase additional paid-in capital by $1.8 million, increase deferred tax assets by $0.7 million and decrease retained earnings by $1.1 million. The Company elected to make this accounting policy change to simplify the accounting for stock-based compensation and believes this method provides a more accurate reflection of periodic stock based compensation cost. Prior to the adoption of this accounting standard, the Company estimated at grant the likelihood that the award would ultimately vest, and revised the estimate, if necessary, in future periods if the actual forfeiture rate differed.	Modified-retrospective (elected)
Cash payments to tax authorities for shares withheld to meet employee tax withholding requirements on restricted stock units are classified as financing cash flow instead of operating cash flow.	No change since the Company has historically presented these amounts as a financing activity. Prior to ASU 2016-09, U.S. GAAP has not specified how these types of transactions should be classified in the statement of cash flows.	N/A

See table below for the changes in beginning stockholders' equity as a result of this implementation.

	Common Stock					Treasury Stock
	Number of shares			Par value		Number of shares			Amount				Additional Paid in Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
Balance, March 31, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		565,962	$		(46,959	)	$		(20,606	)	$		452,071
Cumulative effect of adoption of new accounting standard														1,835			75,246								77,081
Balance, April 1, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		567,797	$		28,287		$		(20,606	)	$		529,152

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customersto provide updated guidance on revenue recognition. This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under the current accounting guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.

The Company is assessing all of the potential impacts of the revenue recognition guidance. Although the Company has not yet completed its assessment of the new revenue recognition guidance, the Company believes that the new revenue recognition guidance generally supports the recognition of revenue at a point-in-time for product sales and over an extended period of time for preventative maintenance service agreements, which is consistent with its current revenue recognition model. The Company does anticipate that the new revenue standard will result in expanded financial statement disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is reviewing and updating its internal controls and processes over revenue recognition in order to prepare for the adoption of and ongoing accounting under the new standard. As the Company completes its evaluation of this new accounting standard, new information may arise that could change the Company’s current understanding of the impact to revenue and expense recognized and financial statement disclosures. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly, if required. ASU 2014-09 can be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company will apply the new guidance effective April 1, 2018 using the modified retrospective method to contracts that are not completed as of April 1, 2018. The Company does not expect the adoption of this standard, including the cumulative effect of any adjustment to the opening balance of retained earnings, to have a material impact to its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  This guidance changes accounting for financial assets and financial liabilities under the fair value option and includes additional presentation and disclosure requirements for financial instruments. ASU 2016-01 requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. ASU 2016-01 eliminates the available-for-sale classification for marketable securities in which changes in fair value are currently recorded as a component of other comprehensive income. ASU 2016-01 also impacts the recognition and measurement of equity investments, which are currently carried at cost, but will be measured at fair value in the Company’s consolidated statement of operations. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted with specific application guidance. ASU 2016-01 will become effective for the Company beginning in fiscal 2019. The Company is evaluating the impact to its consolidated financial statements but ASU 2016-01 could have a significant impact, including additional volatility in other income (expense) within its statement of operations in future periods if there are measurable changes in fair value of equity investments.

In February 2016, the FASB issued ASU 2016-02, Leases. The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lessee arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities.  ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company beginning in fiscal 2020.

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Net Income Per Share

9 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Net Income Per Share

Note 3. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of dilutive common shares outstanding during the period. Diluted shares outstanding are calculated by adding to the weighted average shares outstanding any potential dilutive securities outstanding for the period. Potential dilutive securities include stock options, restricted stock units, performance-based stock awards and shares to be purchased under the Company’s employee stock purchase plan. The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2017 and 2016 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Basic Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Net income per share - basic	$	0.30	$	0.36	$	1.71	$	0.86

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Diluted Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Effect of dilutive securities		1,622		1,339		1,636		1,472
Weighted average shares used in computing diluted    net income per share		45,869		44,770		45,731		44,597
Net income per share - diluted	$	0.29	$	0.34	$	1.65	$	0.83

For the three and nine months ended December 31, 2017, approximately 2,600 and 4,800 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 128,000 restricted shares in each of the three and nine months ended December 31, 2017, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

For the three and nine months ended December 31, 2016, approximately 28,000 and 17,000 shares underlying out-of-the-money stock options, respectively, were excluded in the computation of diluted earnings per share because their effect would have been anti-dilutive. Also, approximately 185,000restricted shares in each of the three and nine months ended December 31, 2016, respectively, related to performance-based and market-based awards for which milestones have not been met, were not included in the computation of diluted earnings per share.

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Marketable Securities and Fair Value Measurements

9 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Marketable Securities and Fair Value Measurements

Note 4. Marketable Securities and Fair Value Measurements

Marketable Securities

The Company’s marketable securities are classified as available-for-sale securities and, accordingly, are recorded at fair value. The difference between amortized cost and fair value is included in stockholders’ equity. At December 31, 2017 and March 31, 2017, the Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and contingent consideration. The carrying amounts of accounts receivable and accounts payable are considered reasonable estimates of their fair value, due to the short maturity of these investments.

The Company’s marketable securities at December 31, 2017 and March 31, 2017 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	21,068	$	—	$	(25	)	$	21,043
Short-term government-backed securities		152,586		—		(343	)		152,243
Short-term corporate debt securities		77,592		3		(130	)		77,465
Long-term government-backed securities		47,587		—		(96	)		47,491
Long-term corporate debt securities		1,997		—		(3	)		1,994
	$	300,830	$	3	$	(597	)	$	300,236

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	45,199	$	—	$	(13	)	$	45,186
Short-term government-backed securities		90,199		1		(87	)		90,113
Short-term corporate debt securities		55,465		—		(31	)		55,434
Long-term U.S. Treasury mutual fund securities		1,998		—		(3	)		1,995
Long-term government-backed securities		43,484		5		(18	)		43,471
Long-term corporate debt securities		1,853		—		(1	)		1,852
	$	238,198	$	6	$	(153	)	$	238,051

Fair Value Hierarchy

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Level 1 primarily consists of financial instruments whose values are based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 is comprised of unobservable inputs that are supported by little or no market activity. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flows, or similar techniques, and at least one significant model assumption or input is unobservable.

The following table presents the Company’s financial instruments recorded at fair value in the condensed consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	21,043	$	—	$	21,043
Short-term government-backed securities		—		152,243		—		152,243
Short-term corporate debt securities		—		77,465		—		77,465
Long-term government-backed securities		—		47,491		—		47,491
Long-term corporate debt securities		—		1,994		—		1,994
Liabilities
Contingent consideration		—		—		10,423		10,423

	Level 1		Level 2		Level 3		Total
March 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	45,186	$	—	$	45,186
Short-term government-backed securities		—		90,113		—		90,113
Short-term corporate debt securities		—		55,434		—		55,434
Long-term U.S. Treasury mutual fund securities		—		1,995		—		1,995
Long-term government-backed securities		—		43,471		—		43,471
Long-term corporate debt securities		—		1,852		—		1,852
Liabilities
Contingent consideration		—		—		9,153		9,153

The Company has determined that the estimated fair value of its investments in U.S. Treasury mutual fund securities, government-backed securities, and corporate debt securities are reported as Level 2 financial assets as they are not exchange-traded instruments.

The Company’s financial liabilities consisted of contingent consideration potentially payable related to the acquisition of ECP Entwicklungsgesellschaft mbH (“ECP”) and AIS GmbH Aachen Innovative Solutions (“AIS”), in July 2014. The Company acquired ECP for $13.0 million in cash, with additional potential payouts totaling $15.0 million based on the achievement of certain clinical and regulatory and revenue-based milestones related to the development of the future Impella ECP^TM expandable catheter pump technology. These potential milestone payments may be made, at the Company’s option, by a combination of cash or Abiomed common stock. The Company uses a combination of an income approach, based on various revenue and cost assumptions and applying a probability to each outcome and a Monte-Carlo valuation model. For the clinical and regulatory milestone, probabilities were applied to each potential scenario and the resulting values were discounted using a rate that considers weighted average cost of capital as well as a specific risk premium associated with the riskiness of the earn out itself, the related projections, and the overall business. The revenue-based milestone is valued using a Monte-Carlo valuation model, which simulates estimated future revenues during the earn out-period using management's best estimates. Projected revenues are based on our most recent internal operational budgets and long-range strategic plans.

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Fair Value at December 31, 2017 (in $000's)		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
Clinical and regulatory milestone	$	5,654	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
				Discount rate	2.8% to 3.3%
				Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 12% to 30% for various upside and downside scenarios
Revenue-based milestone		4,769	Monte Carlo simulation model	Projected fiscal year of milestone payments	2023 to 2035
				Discount rate		18%
				Expected volatility for forecasted revenues		50%
	$	10,423

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Level 3 liabilities, beginning balance	$	9,835	$	7,749	$	9,153	$	7,563
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		588		426		1,270		612
Level 3 liabilities, ending balance	$	10,423	$	8,175	$	10,423	$	8,175

The change in fair value of the contingent consideration was primarily due to the passage of time on the fair value measurement of milestones related to the ECP acquisition. Adjustments associated with the change in fair value of contingent consideration are included in research and development expenses in the Company’s condensed consolidated statements of operations. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones could result in a significantly higher or lower fair value of the liability. The fair value of the contingent consideration at each reporting date is updated by reflecting the changes in fair value reflected in the Company’s statement of operations. There is no assurance that any of the conditions for the milestone payments will be met.

Other Investments

The Company periodically makes investments in private medical device companies that focus on heart failure, heart pump and other medical device technologies. The aggregate carrying amount of the Company’s other investments was $12.6 million and $7.2 million at December 31, 2017 and March 31, 2017, respectively, and is classified within other assets in the unaudited condensed consolidated balance sheets. During the nine months ended December 31, 2017, the Company made investments of $6.4 million in private medical device companies. These investments are accounted for using the cost method and are evaluated for impairment and measured at fair value only if there are identified events or changes in circumstances that may have a significant adverse effect on the fair value of these investments.

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Property and Equipment

9 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Property and Equipment

Note 5. Property and Equipment

The components of property and equipment are as follows:

	December 31, 2017			March 31, 2017
	(in $000's)
Land	$	7,550		$	4,046
Building and building improvements		61,086			10,900
Capital lease asset		—			16,784
Leasehold improvements		2,173			34,854
Machinery and equipment		38,336			27,989
Furniture and fixtures		7,503			3,899
Construction in progress		15,958			9,257
Total cost		132,606			107,729
Less accumulated depreciation		(24,629	)		(19,952	)
	$	107,977		$	87,777

In October 2017, the Company entered into a purchase and sale agreement to acquire the Company’s headquarters that it had been leasing in Danvers, Massachusetts. The total acquisition cost for the land and building was approximately $16.5 million, with $3.0 million being recorded to land and $13.0 million being recorded to building and building improvements. In addition, the Company reclassified $32.6 million in leasehold improvements to building and building improvements due to the termination of the lease agreement upon the property acquisition.

In December 2016, the Company entered into a purchase and sale agreement to acquire its existing European headquarters in Aachen, Germany, consisting of 33,000 square feet of space. The Company acquired the property in February 2017. The original acquisition cost for the land and building was approximately $12.6 million, with $4.0 million being recorded to land and $8.6 million being recorded to the building and building improvements.

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Goodwill and In-Process Research and Development

9 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and In-Process Research and Development

Note 6. Goodwill and In-Process Research and Development

The carrying amount of goodwill at December 31, 2017 and March 31, 2017 was $34.8 million and $31.0 million, respectively, and has been recorded in connection with the Company’s acquisition of Impella Cardiosystems AG, in May 2005 and ECP and AIS in July 2014. The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2017	$	31,045
Foreign currency translation impact		3,769
Balance at December 31, 2017	$	34,814

The Company evaluates goodwill and in-process research and development (“IPR&D”) assets at least annually at October 31, as well as whenever events or changes in circumstances suggest that the carrying amount may not be recoverable.  The Company has no accumulated impairment losses on goodwill or IPR&D assets.

The carrying amount of IPR&D assets at December 31, 2017 and March 31, 2017 was $16.2 million and $14.5 million, respectively, and was recorded in conjunction with the Company’s acquisition of ECP and AIS, in July 2014. The estimated fair value of IPR&D assets at the acquisition date was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flow estimates for the future Impella ECP^TM expandable catheter pump technology were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 21% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions.

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2017 are as follows:

	(in $000's)
Balance at March 31, 2017	$	14,482
Foreign currency translation impact		1,759
Balance at December 31, 2017	$	16,241

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Accrued Expenses

9 Months Ended

Dec. 31, 2017

Payables And Accruals [Abstract]

Accrued Expenses

Note 7. Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2017		March 31, 2017
	(in $000's)
Employee compensation	$	26,077	$	23,290
Sales and income taxes		4,612		3,180
Professional, legal and accounting fees		3,294		2,019
Research and development		2,271		2,349
Marketing		2,254		1,827
Warranty		1,010		717
Accrued capital expenditures		—		2,300
Other		2,047		2,021
	$	41,565	$	37,703

Employee compensation consists primarily of accrued bonuses, accrued commissions and accrued employee benefits at December 31, 2017 and March 31, 2017.

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Stock-Based Compensation

9 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note 8. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Cost of product revenue	$	489	$	234	$	1,221	$	754
Research and development		1,673		900		4,217		4,793
Selling, general and administrative		9,070		5,340		23,732		18,974
	$	11,232	$	6,474	$	29,170	$	24,521

Stock Options

The following table summarizes the stock option activity for the nine months ended December 31, 2017:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,646		$	32.09		5.46
Granted		152			140.41
Exercised		(371	)		20.54
Cancelled and expired		(55	)		100.57
Outstanding at end of period		1,372		$	44.49		5.42	$	196,132
Exercisable at end of period		1,048		$	24.03		4.42	$	171,235
Options vested and expected to vest at end of period		1,347		$	43.85		5.37	$	193,386

The aggregate intrinsic value of options exercised was $46.1 million for the nine months ended December 31, 2017. The total fair value of options that vested during the nine months ended December 31, 2017 was $4.8 million.

The remaining unrecognized stock-based compensation expense for unvested stock option awards at December 31, 2017 was approximately $10.6 million and the estimated weighted-average period over which this cost will be recognized is 2.4 years.

The Company estimates the fair value of each stock option granted at the grant date using the Black-Scholes option valuation model. The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted during the three and nine months ended December 31, 2017 and 2016 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2017			2016			2017			2016
Weighted average grant-date fair value	$	70.14		$	48.15		$	51.20		$	42.21
Valuation assumptions:
Risk-free interest rate		2.13	%		1.37	%		1.86	%		1.32	%
Expected option life (years)		4.08			4.17			4.07			4.14
Expected volatility		42.2	%		48.5	%		43.6	%		49.5	%

Restricted Stock Units

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2017:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		1,056		$	80.50
Granted		295		$	136.80
Vested		(363	)	$	53.16
Forfeited		(94	)	$	98.08
Restricted stock units at end of period		894		$	108.35

The remaining unrecognized compensation expense for outstanding restricted stock units, including performance and market-based awards, as of December 31, 2017 was $38.5 million and the estimated weighted-average period over which this cost will be recognized is 2.0 years.

Performance-Based Awards

In May 2017, performance-based awards of restricted stock units for the potential issuance of approximately 159,000 shares of common stock were issued to certain executive officers and employees, which vest upon achievement of prescribed service milestones by the award recipients and performance milestones by the Company. As of December 31, 2017, the Company is recognizing compensation expense based on the probable outcome related to the prescribed performance targets on the outstanding awards.

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Income Taxes

9 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 9. Income Taxes

On December 22, 2017, the Tax Cut and Jobs Act, or the Tax Reform Act, was signed into law. The Tax Reform Act included significant changes to existing law, including among other items, a reduction to the U.S. federal statutory corporate tax rate from 35% to 21% effective January 1, 2018. ASC 740, Income Taxes (Topic 740), or ASC 740, requires that the effects of changes in tax laws or rates be recognized in the period in which the law is enacted. Those effects, both current and deferred, are reported as part of the tax provision, regardless of income in which the underlying pretax income (expense) or asset (liability) was or will be reported.

The Company’s estimated fiscal 2018 blended U.S. federal statutory corporate income tax rate of 31.5% was applied in the computation of the income tax provision for the three and nine months ended December 31, 2017. The blended U.S. federal statutory corporate tax rate of 31.5% represents the weighted average rate between the pre-enactment U.S. federal statutory corporate tax rate of 35% prior to the January 1, 2018 effective date and the post-enactment U.S. federal statutory corporate tax rate of 21% thereafter.

The Company’s income tax provision was $32.2 million and $36.6 million for the three and nine months ended December 31, 2017, respectively, and $10.4 million and $24.8 million for the three and nine months ended December 31, 2016, respectively. The Company’s effective tax rate was 70.6% and 32.7% for the three and nine months ended December 31, 2017, respectively, and 40.2% and 40.0% for the three and nine months ended December 31, 2016, respectively. Consistent with guidance issued by the SEC, which provides for a measurement period of one year from the enactment date to finalize the accounting for effects of the Tax Reform Act, the Company provisionally recorded an income tax expense of $22.0 million during the three and nine months ended December 31, 2017, due to the re-measurement of its net deferred tax assets due to the lower U.S. federal statutory corporate tax rate. This provisional estimate reflects estimable current year impacts of the Tax Reform Act on the Company’s estimated annual effective tax rate and discrete items resulting directly from the enactment of the Tax Reform Act based on the information available, prepared, or analyzed (including computations) in reasonable detail. Any adjustments to this provisional estimate will be recorded as adjustments to income tax expense in the period in which those adjustments become estimable and/or are finalized, if necessary.

As discussed in “Note 2. Basis of Presentation and Summary of Significant Accounting Policies,” the Company also recognized excess tax benefits associated with stock-based awards of $3.2 million and $24.5 million as an income tax benefit for three and nine months ended December 31, 2017, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.

The significant differences between the statutory income tax rate and effective income tax rate for the three and nine months ended December 31, 2017 and 2016 were as follows:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2017			2016				2017			2016
Statutory income tax rate		31.5		%	35.0		%		31.5		%	35.0		%
Increase resulting from:
Excess tax benefits from stock-based awards		(7.0	)		—				(21.9	)		—
Credits		(2.1	)		(1.2	)			(2.1	)		(1.2	)
State taxes, net		3.7			3.3				3.7			3.3
Permanent differences		1.7			2.7				1.7			2.7
Effect of the Tax Reform Act on net deferred tax assets		42.1			—				19.6			—
Other		0.7			0.4				0.2			0.2
Effective tax rate		70.6		%	40.2		%		32.7		%	40.0		%

The recently enacted Tax Reform Act allows for a 100% deduction for the repatriation of foreign subsidiary earnings with minimal U.S. income tax consequences other than the one-time deemed repatriation toll charge. Since most of the Company’s cash and cash equivalents are held by foreign subsidiaries which are disregarded entities for domestic tax purposes, any repatriation of such funds to the U.S. would likely have a nominal tax impact, if any.

The Company and its subsidiaries are subject to U.S. federal income tax, as well as income tax of multiple state and foreign jurisdictions. Fiscal years 2012 through 2017 remain open to examination in Germany and Abiomed Europe GmbH, the Company’s main operating subsidiary in Germany, is currently being audited for fiscal years 2012 through 2015. In July 2017, the Company was notified by the Internal Revenue Service, or IRS, that it has selected the Company’s federal tax return for fiscal 2016 for examination. In September 2017, the Company was notified by German tax authorities that our ECP subsidiary in Germany will be audited for the year ended December 31, 2014 and the three months ended March 31, 2015. All tax years remain subject to examination by the IRS and state tax authorities, because the Company has net operating loss and tax credit carryforwards which may be utilized in future years to offset taxable income, those years may also be subject to review by relevant taxing authorities if the carryforwards are utilized.

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Commitments and Contingencies

9 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 10. Commitments and Contingencies

Commitments

Leases

The Company’s corporate headquarters is located in Danvers, Massachusetts. This facility encompasses most of the Company’s U.S. operations, including research and development, manufacturing, sales and marketing and general and administrative departments. In October 2017, the Company entered into a purchase and sale agreement to purchase its corporate headquarters for approximately $16.5 million and terminated its existing lease arrangement (See Note 5).

In February 2017, the Company entered into a lease agreement for an additional 21,603 square feet of office space in Danvers, Massachusetts, which expires on July 31, 2022. In December 2017, the Company entered into an amendment to this lease to extend the lease term through August 31, 2025 and to add an additional 6,607 square feet of space in which rent would begin around June 1, 2018.  The amendment also allows the Company a right of first offer to purchase the property from January 1, 2018 through August 31, 2035, if the lessor decides to sell the building or receives an offer to purchase the building from a third-party buyer. The annual rent expense for the lease is estimated to be $0.4 million.

In September 2016, the Company entered into a lease agreement in Berlin, Germany which commenced in May 2017 and expires in May 2024. The annual rent expense for the lease is estimated to be $0.3 million.

In October 2016, the Company entered into a lease agreement for an office in Tokyo, Japan and expires in September 2021. The office houses administrative, regulatory, and training personnel in connection with the Company’s commercial launch in Japan. The annual rent expense for the lease is estimated to be $0.9 million.

Contingencies

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. In some actions, the claimants seek damages, as well as other relief, which, if granted, would require significant expenditures. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in liability and the amount of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements.

In April 2014, the Company received an administrative subpoena from the Boston regional office of the United States Department of Health and Human Services, or HHS, Office of Inspector General requesting materials relating to the Company’s reimbursement of employee expenses and remuneration to healthcare providers from July 2012 through December 2012, in connection with a civil investigation under the False Claims Act (the “FCA Investigation”). Subsequently, the Company received Civil Investigative Demands from the U.S. Attorney’s Office for the District of Massachusetts that collectively sought additional information relating to this matter for the time period of January 1, 2011 through September 14, 2016. The Company continues to cooperate with the government in this investigation and is exploring ways to resolve this matter with the government. The Company is not able to predict what action, if any, might be taken in the future as a result of the investigation, or the potential impact on its financial position.

Thoratec Corporation, or Thoratec, a subsidiary of Abbott Laboratories, has challenged a number of Company owned patents in Europe in connection with the launch of their HeartMate PHP medical device, or PHP, in Europe. These actions relate to Thoratec’s ability to manufacture and sell their PHP product in Europe. These actions do not relate to the Company’s ability to manufacture or sell its Impella line of devices.

In December 2014, Thoratec filed a nullity suit in the German Federal Patent Court against a German “pigtail” patent owned by the Company with a flexible extension feature, and auxiliary pigtail, basket and funnel features. The validity hearing was held in November 2016 and the Federal Patent Court found the patent invalid. The Company is appealing this decision.

In August 2015, Thoratec filed a nullity action in the German Federal Patent Court against two Company owned patents covering a “magnetic clutch” feature. These magnetic clutch patents were acquired by the Company in July 2014, in connection with its acquisition of ECP and AIS. The validity hearing for the magnetic clutch patents was held in June 2017. The Company’s patents were upheld in an amended form to focus on the structure and interaction of the magnets in the clutch. The Federal Patent Court found certain unamended claims to be invalid.  The Company is appealing the decision with respect to the unamended claims.

In September 2015, the Company filed counterclaims in the magnetic clutch action in Germany asserting that the PHP product infringes the two magnetic clutch patents, a European pigtail patent, and the German pigtail patent. The infringement trial has been stayed, pending resolution of the German nullity actions.  

In February 2017, Thoratec filed an opposition in the European Patent Office against a Company owned patent acquired in connection with the acquisition of ECP and AIS relating to a housing structure for an expandable pump. The Company filed an initial response to the opposition in July 2017. In December 2017, Thoratec filed an opposition in the European Patent Office against a Company owned patent acquired in connection with the acquisition of ECP and AIS relating to a pump having a shaft cap with an atraumatic ball. The Company’s due date for responding to the opposition is May 27, 2018.

In December 2015, the Company received a letter from Maquet Cardiovascular LLC, or Maquet, a subsidiary of the Getinge Group, asserting that the Company’s Impella devices infringe certain claims having guidewire, lumen and sensor features, which were in two Maquet patents and one pending patent application in the U.S. and elsewhere, and attached a draft litigation complaint and encouraged the Company to take a license from Maquet.  In January 2016, the Company responded to Maquet stating that it believed that the cited claims were invalid and that its Impella devices did not infringe the cited patents.  In May 2016, Maquet notified the Company that its pending U.S. patent application had been issued as a U.S. patent, repeated their earlier assertion and encouraged the Company to discuss taking a license from Maquet. The three patents expire September 2020, December 2020 and October 2021. In May 2016, the Company filed suit in U.S. District Court for the District of Massachusetts, or D. Mass., against Maquet seeking a declaratory judgment that the Company’s Impella devices do not infringe Maquet’s cited patent rights.  

In August 2016, Maquet sent a letter to the Company identifying four new U.S. continuation patent filings with claims that Maquet alleges are infringed by the Company’s Impella devices. Of the four U.S. continuation applications, one issued as a patent on January 17, 2017, one issued as a patent on February 7, 2017, one issued as a patent on March 21, 2017, and one issued as a patent on October 17, 2017.  These four issued patents will expire in September 2020.

In September 2016, Maquet filed a response to the Company’s suit in D. Mass., including various counterclaims alleging that the Company’s Impella 2.5, Impella CP, Impella 5.0, and Impella RP heart pumps infringe certain claims of the three original issued U.S. patents. On June 15, 2017, Maquet filed a motion for leave to amend its infringement counterclaims to add the first three additional U.S. continuation patents mentioned above and to file various false advertising, unfair competition claims under state law and under the Lanham Act, and a trademark cancellation in the pending case.  Maquet’s amended complaint and counterclaim, like those it originally filed, seek injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. The amended complaint admits that Maquet’s currently commercially available products do not embody the claims of the asserted patents. On July 21, 2017, the Court granted the motion in part, allowing the three additional continuation patents to be added to the case, and denied the motion to add the false advertising claims, Lanham Act claims, and the trademark cancellation claims.  On October 26, 2017, Maquet filed an amended answer, adding a new counterclaim alleging infringement of an additional seventh patent. Maquet did not seek leave to amend the pleadings and did not first consult with the Company concerning this addition. On November 11, 2017, after Maquet refused to withdraw the patent, the Company filed a motion to strike the seventh patent of Maquet’s counterclaims on the grounds that Maquet did not seek leave to add the patent and had amended its pleadings after the deadline set by the Court. On November 15, 2017, Maquet informed the Court that it would agree to voluntarily withdraw the seventh patent. In response on November 22, 2017, Maquet filed a second lawsuit in D. Mass alleging that the Company’s Impella 2.5, Impella CP, and Impella 5.0 heart pumps infringe certain claims of the seventh patent.  In the complaint Maquet seeks injunctive relief and monetary damages in the form of a reasonable royalty, with three times the amount for alleged willful infringement. Discovery is ongoing and the Markman Hearing on claim interpretation has been rescheduled for March 13, 2018.

With regard to the first six Maquet patents mentioned above, in March and April 2017 the Company filed requests for inter partes review, or IPR, at the U.S. Patent & Trademark Office’s Patent Trial and Appeals Board, or PTAB, asserting that the claims are invalid in view of prior art blood pump technology. In September and October 2017, the PTAB denied institution on these IPR requests filed by the Company.  In September 2017, the Company filed additional IPRs and the institution decisions are expected in March 2018.  

The Company cannot estimate what the potential outcome of these claims will be at this time.  Discovery is ongoing and the hearing on claim interpretation is scheduled for March 2018.  

The Company is unable to estimate the potential liability with respect to the legal matters noted above. There are numerous factors that make it difficult to meaningfully estimate possible loss or range of loss at this stage of the legal proceedings, including that the FCA Investigation and patent disputes with Thoratec and Maquet remain either in relatively early stages, or there are significant factual and legal issues to be resolved and information obtained or rulings made during any lawsuits or investigations that could affect the methodology for calculation.

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Segment and Enterprise Wide Disclosures

9 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Segment and Enterprise Wide Disclosures

Note 11. Segment and Enterprise Wide Disclosures

The Company operates in one business segment—the research, development and sale of medical devices to assist or replace the pumping function of the failing heart. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. International sales (sales outside the U.S. and primarily in Europe) accounted for 11% of total product revenue in each of the three and nine months ended December 31, 2017, respectively, and 9% of total product revenue in each of the three and nine months ended December 31, 2016, respectively. Most of the Company’s long-lived assets are located in the U.S. except for $31.7 million and $23.2 million at December 31, 2017 and March 31, 2017, respectively, which are located primarily in Germany.

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Basis of Preparation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

New Accounting Pronouncements Adopted

New Accounting Pronouncements Adopted

Effective April 1, 2017, the Company adopted the Financial Accounting Standards Board (“FASB”) standard update ASU 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”) which simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, recognition of stock compensation award forfeitures, classification of awards as either equity or liabilities, the calculation of diluted shares outstanding and classification on the statement of cash flows.

The following table summarizes the most significant impacts of ASU 2016-09 for the three and nine months ended December 31, 2017:

Description of Change:	Impact of Change Upon Adoption on April 1, 2017 and for the Three and Nine Months Ended December 31, 2017:	Adoption Method:
The new standard eliminates the requirement that excess tax benefits be realized through a reduction in income taxes payable before a company can recognize them in the statement of operations.	As a result, on April 1, 2017, the Company recorded a cumulative-effect adjustment to increase retained earnings and deferred tax assets by $76.4 million for excess tax benefits not previously recognized.	Modified-retrospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are recorded through the statement of operations.	The income tax benefit for the three and nine months ended December 31, 2017, included excess tax benefits of $3.2 million and $24.5 million, respectively. These recognized excess tax benefits resulted from restricted stock units that vested or stock options that were exercised during the three and nine months ended December 31, 2017.	Prospective (required)
Excess tax benefits related to restricted stock unit vestings or stock option exercises are classified as operating cash flows instead of financing cash flows.	Increase in cash flow from operating activities and decrease in cash flow from financing activities by approximately $24.5 million for the nine months ended December 31, 2017. The statement of cash flows for the prior period has not been adjusted.	Prospective (elected)
Calculation of diluted weighted average shares outstanding under the treasury method no longer assume that tax benefits related to stock-based awards are used to repurchase common stock.	The Company excluded the related tax benefits when applying the treasury stock method for computing diluted shares outstanding on a prospective basis as required by  ASU 2016-09.	Prospective (required)
An accounting policy election can be made to reduce stock-based compensation expense for forfeitures as they occur instead of estimating forfeitures that are expected to occur.	The Company made an accounting policy election to account for forfeitures as they occur with the change applied on a modified retrospective basis with a cumulative effect adjustment on April 1, 2017 to increase additional paid-in capital by $1.8 million, increase deferred tax assets by $0.7 million and decrease retained earnings by $1.1 million. The Company elected to make this accounting policy change to simplify the accounting for stock-based compensation and believes this method provides a more accurate reflection of periodic stock based compensation cost. Prior to the adoption of this accounting standard, the Company estimated at grant the likelihood that the award would ultimately vest, and revised the estimate, if necessary, in future periods if the actual forfeiture rate differed.	Modified-retrospective (elected)
Cash payments to tax authorities for shares withheld to meet employee tax withholding requirements on restricted stock units are classified as financing cash flow instead of operating cash flow.	No change since the Company has historically presented these amounts as a financing activity. Prior to ASU 2016-09, U.S. GAAP has not specified how these types of transactions should be classified in the statement of cash flows.	N/A

See table below for the changes in beginning stockholders' equity as a result of this implementation.

	Common Stock					Treasury Stock
	Number of shares			Par value		Number of shares			Amount				Additional Paid in Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
Balance, March 31, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		565,962	$		(46,959	)	$		(20,606	)	$		452,071
Cumulative effect of adoption of new accounting standard														1,835			75,246								77,081
Balance, April 1, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		567,797	$		28,287		$		(20,606	)	$		529,152

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09,Revenue from Contracts with Customersto provide updated guidance on revenue recognition. This new standard will replace most of the existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies may need to use more judgment and make more estimates than under the current accounting guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. The guidance also requires expanded disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Additionally, qualitative and quantitative disclosures are required about customer contracts, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract.

The Company is assessing all of the potential impacts of the revenue recognition guidance. Although the Company has not yet completed its assessment of the new revenue recognition guidance, the Company believes that the new revenue recognition guidance generally supports the recognition of revenue at a point-in-time for product sales and over an extended period of time for preventative maintenance service agreements, which is consistent with its current revenue recognition model. The Company does anticipate that the new revenue standard will result in expanded financial statement disclosures relating to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company is reviewing and updating its internal controls and processes over revenue recognition in order to prepare for the adoption of and ongoing accounting under the new standard. As the Company completes its evaluation of this new accounting standard, new information may arise that could change the Company’s current understanding of the impact to revenue and expense recognized and financial statement disclosures. Additionally, the Company will continue to monitor industry activities and any additional guidance provided by regulators, standards setters, or the accounting profession and adjust the Company’s assessment and implementation plans accordingly, if required. ASU 2014-09 can be applied retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company will apply the new guidance effective April 1, 2018 using the modified retrospective method to contracts that are not completed as of April 1, 2018. The Company does not expect the adoption of this standard, including the cumulative effect of any adjustment to the opening balance of retained earnings, to have a material impact to its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities.  This guidance changes accounting for financial assets and financial liabilities under the fair value option and includes additional presentation and disclosure requirements for financial instruments. ASU 2016-01 requires certain financial assets to be measured at fair value with changes in fair value recognized in the statement of operations. ASU 2016-01 eliminates the available-for-sale classification for marketable securities in which changes in fair value are currently recorded as a component of other comprehensive income. ASU 2016-01 also impacts the recognition and measurement of equity investments, which are currently carried at cost, but will be measured at fair value in the Company’s consolidated statement of operations. ASU 2016-01 is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted with specific application guidance. ASU 2016-01 will become effective for the Company beginning in fiscal 2019. The Company is evaluating the impact to its consolidated financial statements but ASU 2016-01 could have a significant impact, including additional volatility in other income (expense) within its statement of operations in future periods if there are measurable changes in fair value of equity investments.

In February 2016, the FASB issued ASU 2016-02, Leases. The new guidance significantly impacts lessee accounting and financial statement disclosures.  Specifically, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a one year term, a right-of-use asset and lease obligation is recorded by the lessee for all leases on the balance sheet, whether operating or financing, while the statement of operations includes lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of one year or less will be accounted for similar to existing guidance for operating leases. The Company is currently in the process of evaluating its lessee arrangements to determine the impact of ASU 2016-02 on its consolidated financial statements. This evaluation includes a review of the Company’s existing leasing arrangements on its facilities.  ASU 2016-02 must be adopted using a modified retrospective approach for all leases existing at, or entered into after the date of initial adoption, with an option to elect to use certain transition relief.  ASU 2016-02 will become effective for the Company beginning in fiscal 2020.

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Basis of Preparation and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Schedule of Changes in Beginning Stockholders' Equity

See table below for the changes in beginning stockholders' equity as a result of this implementation.

	Common Stock					Treasury Stock
	Number of shares			Par value		Number of shares			Amount				Additional Paid in Capital			Accumulated Deficit				Accumulated Other Comprehensive Income (Loss)				Total Stockholders' Equity
Balance, March 31, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		565,962	$		(46,959	)	$		(20,606	)	$		452,071
Cumulative effect of adoption of new accounting standard														1,835			75,246								77,081
Balance, April 1, 2017		43,673,286	$		437		1,575,995	$		(46,763	)	$		567,797	$		28,287		$		(20,606	)	$		529,152

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Net Income Per Share (Tables)

9 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The Company’s basic and diluted net income per share for the three and nine months ended December 31, 2017 and 2016 were as follows (in thousands, except per share data):

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Basic Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Net income per share - basic	$	0.30	$	0.36	$	1.71	$	0.86

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
	2017		2016		2017		2016
Diluted Net Income Per Share
Net income	$	13,446	$	15,432	$	75,323	$	37,217
Weighted average shares used in computing basic net    income per share		44,247		43,431		44,095		43,125
Effect of dilutive securities		1,622		1,339		1,636		1,472
Weighted average shares used in computing diluted    net income per share		45,869		44,770		45,731		44,597
Net income per share - diluted	$	0.29	$	0.34	$	1.65	$	0.83

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Marketable Securities and Fair Value Measurements (Tables)

9 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Marketable Securities

The Company’s marketable securities at December 31, 2017 and March 31, 2017 are invested in the following:

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
December 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	21,068	$	—	$	(25	)	$	21,043
Short-term government-backed securities		152,586		—		(343	)		152,243
Short-term corporate debt securities		77,592		3		(130	)		77,465
Long-term government-backed securities		47,587		—		(96	)		47,491
Long-term corporate debt securities		1,997		—		(3	)		1,994
	$	300,830	$	3	$	(597	)	$	300,236

	Amortized		Gross Unrealized		Gross Unrealized			Fair Market
	Cost		Gains		Losses			Value
	(in $000's)
March 31, 2017:
Short-term U.S. Treasury mutual fund securities	$	45,199	$	—	$	(13	)	$	45,186
Short-term government-backed securities		90,199		1		(87	)		90,113
Short-term corporate debt securities		55,465		—		(31	)		55,434
Long-term U.S. Treasury mutual fund securities		1,998		—		(3	)		1,995
Long-term government-backed securities		43,484		5		(18	)		43,471
Long-term corporate debt securities		1,853		—		(1	)		1,852
	$	238,198	$	6	$	(153	)	$	238,051

Financial Instruments Recorded at Fair Value

The following table presents the Company’s financial instruments recorded at fair value in the condensed consolidated balance sheets, classified according to the three categories described above:

	Level 1		Level 2		Level 3		Total
December 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	21,043	$	—	$	21,043
Short-term government-backed securities		—		152,243		—		152,243
Short-term corporate debt securities		—		77,465		—		77,465
Long-term government-backed securities		—		47,491		—		47,491
Long-term corporate debt securities		—		1,994		—		1,994
Liabilities
Contingent consideration		—		—		10,423		10,423

	Level 1		Level 2		Level 3		Total
March 31, 2017:	(in $000's)
Assets
Short-term U.S. Treasury mutual fund securities	$	—	$	45,186	$	—	$	45,186
Short-term government-backed securities		—		90,113		—		90,113
Short-term corporate debt securities		—		55,434		—		55,434
Long-term U.S. Treasury mutual fund securities		—		1,995		—		1,995
Long-term government-backed securities		—		43,471		—		43,471
Long-term corporate debt securities		—		1,852		—		1,852
Liabilities
Contingent consideration		—		—		9,153		9,153

Valuation Method Used to Calculate Level 3 Liabilities Measured at Estimated Fair Value of Contingent Consideration Related to Acquisition

This liability is reported as Level 3 as the estimated fair value of the contingent consideration related to the acquisition of ECP requires significant management judgment or estimation and is calculated using the following valuation methods:

	Fair Value at December 31, 2017 (in $000's)		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
Clinical and regulatory milestone	$	5,654	Probability weighted income approach	Projected fiscal year of milestone payments	2019 to 2022
				Discount rate	2.8% to 3.3%
				Probability of occurrence	Probability adjusted level of 40% for the base case scenario and 12% to 30% for various upside and downside scenarios
Revenue-based milestone		4,769	Monte Carlo simulation model	Projected fiscal year of milestone payments	2023 to 2035
				Discount rate		18%
				Expected volatility for forecasted revenues		50%
	$	10,423

Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs

The following table summarizes the change in fair value, as determined by Level 3 inputs, of the contingent consideration for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Level 3 liabilities, beginning balance	$	9,835	$	7,749	$	9,153	$	7,563
Additions		—		—		—		—
Payments		—		—		—		—
Change in fair value		588		426		1,270		612
Level 3 liabilities, ending balance	$	10,423	$	8,175	$	10,423	$	8,175

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Property and Equipment (Tables)

9 Months Ended

Dec. 31, 2017

Property Plant And Equipment [Abstract]

Components of Property and Equipment

The components of property and equipment are as follows:

	December 31, 2017			March 31, 2017
	(in $000's)
Land	$	7,550		$	4,046
Building and building improvements		61,086			10,900
Capital lease asset		—			16,784
Leasehold improvements		2,173			34,854
Machinery and equipment		38,336			27,989
Furniture and fixtures		7,503			3,899
Construction in progress		15,958			9,257
Total cost		132,606			107,729
Less accumulated depreciation		(24,629	)		(19,952	)
	$	107,977		$	87,777

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Goodwill and In-Process Research and Development (Tables)

9 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill Activity

The goodwill activity is as follows:

	(in $000's)
Balance at March 31, 2017	$	31,045
Foreign currency translation impact		3,769
Balance at December 31, 2017	$	34,814

Carrying value of In-Process Research and Development

The carrying value of the Company’s IPR&D assets and the change in the balance for the nine months ended December 31, 2017 are as follows:

	(in $000's)
Balance at March 31, 2017	$	14,482
Foreign currency translation impact		1,759
Balance at December 31, 2017	$	16,241

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Accrued Expenses (Tables)

9 Months Ended

Dec. 31, 2017

Payables And Accruals [Abstract]

Accrued Expenses

Accrued expenses consist of the following:

	December 31, 2017		March 31, 2017
	(in $000's)
Employee compensation	$	26,077	$	23,290
Sales and income taxes		4,612		3,180
Professional, legal and accounting fees		3,294		2,019
Research and development		2,271		2,349
Marketing		2,254		1,827
Warranty		1,010		717
Accrued capital expenditures		—		2,300
Other		2,047		2,021
	$	41,565	$	37,703

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Stock-Based Compensation (Tables)

9 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation Recognized

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statements of operations for the three and nine months ended December 31, 2017 and 2016:

	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
		2017		2016		2017		2016
	(in $000's)				(in $000's)
Cost of product revenue	$	489	$	234	$	1,221	$	754
Research and development		1,673		900		4,217		4,793
Selling, general and administrative		9,070		5,340		23,732		18,974
	$	11,232	$	6,474	$	29,170	$	24,521

Summary of Stock Option Activity

The following table summarizes the stock option activity for the nine months ended December 31, 2017:

						Weighted
				Weighted		Average		Aggregate
				Average		Remaining		Intrinsic
	Options			Exercise		Contractual		Value
	(in thousands)			Price		Term (years)		(in thousands)
Outstanding at beginning of period		1,646		$	32.09		5.46
Granted		152			140.41
Exercised		(371	)		20.54
Cancelled and expired		(55	)		100.57
Outstanding at end of period		1,372		$	44.49		5.42	$	196,132
Exercisable at end of period		1,048		$	24.03		4.42	$	171,235
Options vested and expected to vest at end of period		1,347		$	43.85		5.37	$	193,386

Summary of Weighted Average Grant-Date Fair Values And Weighted Average Assumptions Used to Calculate Fair Value of Options Granted

The weighted average grant-date fair values and weighted average assumptions used in the calculation of fair value of options granted during the three and nine months ended December 31, 2017 and 2016 was as follows:

	For the Three Months Ended December 31,						For the Nine Months Ended December 31,
		2017			2016			2017			2016
Weighted average grant-date fair value	$	70.14		$	48.15		$	51.20		$	42.21
Valuation assumptions:
Risk-free interest rate		2.13	%		1.37	%		1.86	%		1.32	%
Expected option life (years)		4.08			4.17			4.07			4.14
Expected volatility		42.2	%		48.5	%		43.6	%		49.5	%

Summary of Restricted Stock Units Activity

The following table summarizes activity of restricted stock units for the nine months ended December 31, 2017:

	Number of Shares			Weighted Average Grant Date Fair Value
	(in thousands)			(per share)
Restricted stock units at beginning of period		1,056		$	80.50
Granted		295		$	136.80
Vested		(363	)	$	53.16
Forfeited		(94	)	$	98.08
Restricted stock units at end of period		894		$	108.35

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Income Taxes (Tables)

9 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Differences Between Statutory Income Tax Rate and Effective Income Tax Rate

The significant differences between the statutory income tax rate and effective income tax rate for the three and nine months ended December 31, 2017 and 2016 were as follows:

	For the Three Months Ended December 31,							For the Nine Months Ended December 31,
		2017			2016				2017			2016
Statutory income tax rate		31.5		%	35.0		%		31.5		%	35.0		%
Increase resulting from:
Excess tax benefits from stock-based awards		(7.0	)		—				(21.9	)		—
Credits		(2.1	)		(1.2	)			(2.1	)		(1.2	)
State taxes, net		3.7			3.3				3.7			3.3
Permanent differences		1.7			2.7				1.7			2.7
Effect of the Tax Reform Act on net deferred tax assets		42.1			—				19.6			—
Other		0.7			0.4				0.2			0.2
Effective tax rate		70.6		%	40.2		%		32.7		%	40.0		%

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Basis of Preparation and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Apr. 01, 2017
Summary Of Significant Accounting Policy [Line Items]
Cumulative effect to increase retained earnings and deferred tax assets				$ 77,081
Excess tax benefits related to restricted stock unit vestings or stock option exercises, decrease in financing activities			$ 4,595
Excess tax benefits related to restricted stock unit vestings or stock option exercises, increase in operating activities			$ 4,595
ASU 2016-09
Summary Of Significant Accounting Policy [Line Items]
Excess tax benefit	$ 3,200	$ 24,500
Excess tax benefits related to restricted stock unit vestings or stock option exercises, decrease in financing activities		24,500
Excess tax benefits related to restricted stock unit vestings or stock option exercises, increase in operating activities		$ 24,500
Increase additional paid in capital				1,800
Increase deferred tax assets				700
Decrease retained earnings				(1,100)
Adjustment to Increase Retained Earnings and Deferred Tax Assets | ASU 2016-09
Summary Of Significant Accounting Policy [Line Items]
Cumulative effect to increase retained earnings and deferred tax assets				$ 76,400

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Schedule of Changes in Beginning Stockholders' Equity (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Apr. 01, 2017	Mar. 31, 2017
Balance	$ 632,482	$ 529,152	$ 452,071
Common stock, Outstanding	44,271,905		43,673,286
Cumulative effect of adoption of new accounting standard		77,081
Common Stock
Balance		$ 437	$ 437
Common stock, Outstanding		43,673,286	43,673,286
Treasury Stock
Balance		$ (46,763)	$ (46,763)
Common stock, Outstanding		1,575,995	1,575,995
Additional Paid in Capital
Balance		$ 567,797	$ 565,962
Cumulative effect of adoption of new accounting standard		1,835
Accumulated Deficit
Balance		28,287	(46,959)
Cumulative effect of adoption of new accounting standard		75,246
Accumulated Other Comprehensive Income (Loss)
Balance		$ (20,606)	$ (20,606)

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Computation of Basic and Diluted Net Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Basic Net Income Per Share
Net income	$ 13,446	$ 15,432	$ 75,323	$ 37,217
Weighted average shares used in computing basic net income per share	44,247	43,431	44,095	43,125
Net income per share - basic	$ 0.30	$ 0.36	$ 1.71	$ 0.86
Diluted Net Income Per Share
Net income	$ 13,446	$ 15,432	$ 75,323	$ 37,217
Weighted average shares used in computing basic net income per share	44,247	43,431	44,095	43,125
Effect of dilutive securities	1,622	1,339	1,636	1,472
Weighted average shares used in computing diluted net income per share	45,869	44,770	45,731	44,597
Net income per share - diluted	$ 0.29	$ 0.34	$ 1.65	$ 0.83

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Net Income Per Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted weighted average shares outstanding	2,600	28,000	4,800	17,000
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares excluded from the calculation of diluted weighted average shares outstanding	128,000	185,000	128,000	185,000

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Investable Marketable Securities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	$ 300,830	$ 238,198
Gross Unrealized Gains	3	6
Gross Unrealized Losses	(597)	(153)
Fair Market Value	300,236	238,051
U.S. Treasury mutual fund securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	21,068	45,199
Gross Unrealized Losses	(25)	(13)
Fair Market Value	21,043	45,186
U.S. Treasury mutual fund securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost		1,998
Gross Unrealized Losses		(3)
Fair Market Value		1,995
Government-backed securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	152,586	90,199
Gross Unrealized Gains		1
Gross Unrealized Losses	(343)	(87)
Fair Market Value	152,243	90,113
Government-backed securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	47,587	43,484
Gross Unrealized Gains		5
Gross Unrealized Losses	(96)	(18)
Fair Market Value	47,491	43,471
Corporate Debt Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	77,592	55,465
Gross Unrealized Gains	3
Gross Unrealized Losses	(130)	(31)
Fair Market Value	77,465	55,434
Corporate Debt Securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amortized Cost	1,997	1,853
Gross Unrealized Losses	(3)	(1)
Fair Market Value	$ 1,994	$ 1,852

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Financial Instruments Recorded at Fair Value (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 300,236	$ 238,051
Contingent consideration	10,423	9,153
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	10,423	9,153
U.S. Treasury mutual fund securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	21,043	45,186
U.S. Treasury mutual fund securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		1,995
U.S. Treasury mutual fund securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	21,043	45,186
U.S. Treasury mutual fund securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure		1,995
Government-backed securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	152,243	90,113
Government-backed securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	47,491	43,471
Government-backed securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	152,243	90,113
Government-backed securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	47,491	43,471
Corporate Debt Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	77,465	55,434
Corporate Debt Securities | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	1,994	1,852
Corporate Debt Securities | Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	77,465	55,434
Corporate Debt Securities | Level 2 | Long-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities, fair value disclosure	$ 1,994	$ 1,852

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Marketable Securities and Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jul. 31, 2014	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Aggregate carrying amount of other investments		$ 12,600		$ 7,200
Additional investments in private medical device company		$ 6,400	$ 149
ECP Entwicklungsgesellschaft mbH
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Payments to acquire businesses, cash paid	$ 13,000
Potential payouts payments	$ 15,000

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Valuation Method Used to Calculate Level 3 Liabilities Measured at Estimated Fair Value of Contingent Consideration Related to Acquisition (Detail) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jul. 31, 2014	Dec. 31, 2017	Mar. 31, 2017
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		$ 10,423	$ 9,153
ECP Entwicklungsgesellschaft mbH
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Discount rate	21.00%
Level 3
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		10,423	$ 9,153
Level 3 | ECP Entwicklungsgesellschaft mbH
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		10,423
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		$ 5,654
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Base Case Scenario | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Probability of occurrence		40.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Minimum | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Projected fiscal year of milestone payments		2019
Discount rate		2.80%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Minimum | Various Upside and Downside Scenarios | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Probability of occurrence		12.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Maximum | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Projected fiscal year of milestone payments		2022
Discount rate		3.30%
Level 3 | ECP Entwicklungsgesellschaft mbH | Probability weighted income approach | Clinical and regulatory milestone | Maximum | Various Upside and Downside Scenarios | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Probability of occurrence		30.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Contingent consideration		$ 4,769
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Discount rate		18.00%
Expected volatility for forecasted revenues		50.00%
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Minimum | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Projected fiscal year of milestone payments		2023
Level 3 | ECP Entwicklungsgesellschaft mbH | Monte Carlo simulation model | Revenue-based milestone | Maximum | Contingent Consideration
Fair Value Inputs, Liabilities, Quantitative Information [Line Items]
Projected fiscal year of milestone payments		2035

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Change in Fair Value of Contingent Consideration as Determined by Level 3 Inputs (Detail) - Contingent Consideration - ECP Entwicklungsgesellschaft mbH - Level 3 - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Level 3 liabilities, beginning balance	$ 9,835	$ 7,749	$ 9,153	$ 7,563
Additions	0	0	0	0
Payments	0	0	0	0
Change in fair value	588	426	1,270	612
Level 3 liabilities, ending balance	$ 10,423	$ 8,175	$ 10,423	$ 8,175

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Components of Property and Equipment (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Mar. 31, 2017
Property Plant And Equipment [Abstract]
Land	$ 7,550	$ 4,046
Building and building improvements	61,086	10,900
Capital lease asset		16,784
Leasehold improvements	2,173	34,854
Machinery and equipment	38,336	27,989
Furniture and fixtures	7,503	3,899
Construction in progress	15,958	9,257
Total cost	132,606	107,729
Less accumulated depreciation	(24,629)	(19,952)
Property and equipment, net	$ 107,977	$ 87,777

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Property and Equipment - Additional Information (Detail) $ in Thousands	1 Months Ended		9 Months Ended
	Oct. 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) ft²
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment			$ 44,168	$ 24,039
Danvers
Property Plant And Equipment [Line Items]
Reclassification of leasehold improvement to building and building improvements	$ 32,600
Danvers | Land and Building
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment	16,500
Danvers | Land
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment	3,000
Danvers | Building and Building Improvements
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment	$ 13,000
Europe | Lease Agreements
Property Plant And Equipment [Line Items]
Office space under lease | ft²				33,000
Europe | Land and Building
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment		$ 12,600
Europe | Land
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment		4,000
Europe | Building and Building Improvements
Property Plant And Equipment [Line Items]
Acquisition cost for property and equipment		$ 8,600

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Goodwill and In-Process Research and Development - Additional Information (Detail) - USD ($)	1 Months Ended
	Jul. 31, 2014	Dec. 31, 2017	Mar. 31, 2017
Goodwill [Line Items]
Goodwill		$ 34,814,000	$ 31,045,000
Accumulated impairment loss, goodwill		0
In-process research and development		16,241,000	14,482,000
ECP Entwicklungsgesellschaft mbH
Goodwill [Line Items]
In-process research and development		$ 16,200,000	$ 14,500,000
Fair value inputs, discount rate	21.00%

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Goodwill Activity (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2017 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 31,045
Foreign currency translation impact	3,769
Ending balance	$ 34,814

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Carrying value of In-Process Research and Development (Detail) $ in Thousands	9 Months Ended
	Dec. 31, 2017 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 14,482
Foreign currency translation impact	1,759
Ending balance	$ 16,241

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Accrued Expenses (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Mar. 31, 2017
Payables and Accruals [Abstract]
Employee compensation	$ 26,077	$ 23,290
Sales and income taxes	4,612	3,180
Professional, legal and accounting fees	3,294	2,019
Research and development	2,271	2,349
Marketing	2,254	1,827
Warranty	1,010	717
Accrued capital expenditures		2,300
Other	2,047	2,021
Accrued expenses	$ 41,565	$ 37,703

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Stock-Based Compensation Recognized (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 11,232	$ 6,474	$ 29,170	$ 24,521
Cost of product revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	489	234	1,221	754
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	1,673	900	4,217	4,793
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 9,070	$ 5,340	$ 23,732	$ 18,974

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Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended	12 Months Ended
	Dec. 31, 2017	Mar. 31, 2017
Options
Outstanding at beginning of period	1,646
Granted	152
Exercised	(371)
Cancelled and expired	(55)
Outstanding at end of period	1,372	1,646
Exercisable at end of period	1,048
Options vested and expected to vest at end of period	1,347
Weighted-Average Exercise Price
Outstanding at beginning of period	$ 32.09
Granted	140.41
Exercised	20.54
Cancelled and expired	100.57
Outstanding at end of period	44.49	$ 32.09
Exercisable at end of period	24.03
Options vested and expected to vest at end of period	$ 43.85
Weighted-Average Remaining Contractual Term (years)
Outstanding	5 years 5 months 1 day	5 years 5 months 15 days
Exercisable at end of period	4 years 5 months 1 day
Options vested and expected to vest at end of period	5 years 4 months 13 days
Aggregate Intrinsic Value
Outstanding at end of period	$ 196,132
Exercisable at end of period	171,235
Options vested and expected to vest at end of period	$ 193,386

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended	9 Months Ended
	May 31, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value of options exercised in period		$ 46.1
Fair value of options vested in period		4.8
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense		$ 10.6
Unrecognized stock-based compensation expense, estimated weighted-average recognition period		2 years 4 months 25 days
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized stock-based compensation expense		$ 38.5
Unrecognized stock-based compensation expense, estimated weighted-average recognition period		2 years
Restricted share unit issued		295,000
Performance Based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted share unit issued	159,000

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Summary of Weighted Average Grant-Date Fair Values And Weighted Average Assumptions Used to Calculate Fair Value of Options Granted (Detail) - Stock Options - $ / shares	3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value	$ 70.14	$ 48.15	$ 51.20	$ 42.21
Valuation assumptions:
Risk-free interest rate	2.13%	1.37%	1.86%	1.32%
Expected option life (years)	4 years 29 days	4 years 2 months 1 day	4 years 25 days	4 years 1 month 20 days
Expected volatility	42.20%	48.50%	43.60%	49.50%

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Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units shares in Thousands	9 Months Ended
	Dec. 31, 2017 $ / shares shares
Number of Shares
Beginning Balance | shares	1,056
Granted | shares	295
Vested | shares	(363)
Forfeited | shares	(94)
Ending Balance | shares	894
Weighted Average Grant Date Fair Value
Beginning Balance | $ / shares	$ 80.50
Granted | $ / shares	136.80
Vested | $ / shares	53.16
Forfeited | $ / shares	98.08
Ending Balance | $ / shares	$ 108.35

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands				3 Months Ended		9 Months Ended
	Jan. 01, 2018	Dec. 31, 2017	Dec. 22, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Income Taxes [Line Items]
U.S. federal statutory corporate tax rate		35.00%			35.00%		35.00%
Blended U.S. federal statutory corporate income tax rate				31.50%		31.50%
Income tax provision				$ 32,208	$ 10,394	$ 36,607	$ 24,770
Effective income tax rate				70.60%	40.20%	32.70%	40.00%
Measurement period			1 year
Income tax expense				$ 22,000		$ 22,000
Repatriation of foreign subsidiary earnings						100.00%
ASU 2016-09
Income Taxes [Line Items]
Excess tax benefits from stock-based awards				$ 3,200		$ 24,500
Subsequent Event
Income Taxes [Line Items]
U.S. federal statutory corporate tax rate	21.00%

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Differences Between Statutory Income Tax Rate and Effective Income Tax Rate (Detail)		3 Months Ended		9 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Statutory income tax rate (blended)		31.50%		31.50%
Statutory income tax rate	35.00%		35.00%		35.00%
Excess tax benefits from stock-based awards		(7.00%)		(21.90%)
Credits		(2.10%)	(1.20%)	(2.10%)	(1.20%)
State taxes, net		3.70%	3.30%	3.70%	3.30%
Permanent differences		1.70%	2.70%	1.70%	2.70%
Effect of the Tax Reform Act on net deferred tax assets		42.10%		19.60%
Other		0.70%	0.40%	0.20%	0.20%
Effective tax rate		70.60%	40.20%	32.70%	40.00%

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	1 Months Ended						9 Months Ended
	Oct. 31, 2017 USD ($)	Feb. 28, 2017 ft²	Oct. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	May 31, 2016	Sep. 30, 2015 Patent	Dec. 31, 2017 USD ($) ft²
Magnetic Clutch Patents
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent						2
European Pigtail Patent
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent						1
German Pigtail Patent
Commitments and Contingencies [Line Items]
Patents allegedly infringed upon, number | Patent						1
Patent One
Commitments and Contingencies [Line Items]
Patent expiration period					2020-09
Patent Two
Commitments and Contingencies [Line Items]
Patent expiration period					2020-12
Patent Three
Commitments and Contingencies [Line Items]
Patent expiration period					2021-10
Lease Agreements
Commitments and Contingencies [Line Items]
Corporate headquarters acquisition	$ 16.5
Lease Agreements | Massachusetts
Commitments and Contingencies [Line Items]
Annual rent expense							$ 0.4
Lease expiration date		Jul. 31, 2022
Extend lease term							Aug. 31, 2025
Additional office space | ft²		21,603					6,607
Lease Agreements | Germany
Commitments and Contingencies [Line Items]
Annual rent expense				$ 0.3
Lease commencement period				2017-05
Lease expiration period				2024-05
Lease Agreements | Japan
Commitments and Contingencies [Line Items]
Annual rent expense			$ 0.9
Lease expiration period			2021-09

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Segment and Enterprise Wide Disclosures - Additional Information (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016	Dec. 31, 2017 USD ($) Segment	Dec. 31, 2016	Mar. 31, 2017 USD ($)
Segment Reporting Information [Line Items]
Number of business segments | Segment			1
International
Segment Reporting Information [Line Items]
Long-lived assets | $	$ 31.7		$ 31.7		$ 23.2
Customer Concentration Risk | Product Revenue | International
Segment Reporting Information [Line Items]
Percentage of revenue accounted	11.00%	9.00%	11.00%	9.00%