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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
FORM 10-Q
__________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2022
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 000-28275
___________________________________________
PFSweb, Inc.
(Exact name of registrant as specified in its charter)
___________________________________________
Delaware75-2837058
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
 
505 Millennium Drive,
Allen, Texas
75013
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (972881-2900
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valuePFSWNasdaq Capital Market

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 checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 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 filerAccelerated filer
Non-accelerated filerSmaller 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 a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes      No  
As of June 6, 2022, there were 22,641,560 shares of registrant’s common stock outstanding.



PFSWEB, INC. AND SUBSIDIARIES
Form 10-Q
INDEX
PART I. FINANCIAL INFORMATIONPage
Number
2


PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
3


PFSWEB, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
(Unaudited) March 31,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$154,781 $152,332 
Restricted cash214 214 
Accounts receivable, net of allowance for doubtful accounts of $651 and $867 at March 31, 2022 and December 31, 2021, respectively
55,533 78,024 
Inventories, net of reserves of $0 and $57 at March 31, 2022 and December 31, 2021, respectively
 3,133 
Other receivables6,579 7,005 
Prepaid expenses and other current assets7,164 7,244 
Total current assets224,271 247,952 
Property and equipment:
Cost92,930 92,079 
Less: accumulated depreciation(74,246)(72,764)
18,684 19,315 
Operating lease right-of-use assets, net33,811 35,371 
Goodwill21,984 22,218 
Other assets1,784 1,610 
Total assets$300,534 $326,466 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable$22,759 $36,450 
Accrued expenses30,061 31,643 
Current portion of operating lease liabilities10,054 10,104 
Current portion of finance lease obligations138 222 
Deferred revenues4,061 4,391 
Total current liabilities67,073 82,810 
Finance lease obligations, less current portion69 89 
Deferred revenue, less current portion664 833 
Operating lease liabilities, less current portion28,512 30,393 
Other liabilities2,675 2,565 
Total liabilities98,993 116,690 
Commitments and Contingencies
Shareholders' equity:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none issued or outstanding
  
Common stock, $0.001 par value; 35,000,000 shares authorized; 22,474,862 and 22,131,546 issued and 22,441,395 and 22,098,079 outstanding at March 31, 2022 and December 31, 2021, respectively
21 21 
Additional paid-in capital177,250 177,511 
Retained earnings26,055 33,522 
Accumulated other comprehensive loss(1,660)(1,153)
Treasury stock at cost, 33,467 shares
(125)(125)
Total shareholders’ equity201,541 209,776 
Total liabilities and shareholders’ equity$300,534 $326,466 








The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4


PFSWEB, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In Thousands, Except Per Share Data)


Three Months Ended
March 31,
20222021
Revenues:
Service fee revenue$45,531 $45,520 
Product revenue, net3,197 4,308 
Pass-through revenue17,759 10,876 
Total revenues66,487 60,704 
Costs of Revenues:
Cost of service fee revenue36,492 33,530 
Cost of product revenue2,951 4,086 
Cost of pass-through revenue17,759 10,876 
Total costs of revenues57,202 48,492 
Gross profit9,285 12,212 
Selling, general and administrative expenses16,428 12,931 
Loss from operations(7,143)(719)
Interest expense, net6 375 
Loss from continuing operations before income taxes(7,149)(1,094)
Income tax expense, net318 279 
Net loss from continuing operations(7,467)(1,373)
Loss from discontinued operations before income taxes (820)
Income tax expense, net 29 
Net loss from discontinued operations (849)
Net loss $(7,467)$(2,222)
Basic loss per share:
Net loss from continuing operations per share$(0.33)$(0.06)
Net loss from discontinued operations per share (0.04)
Basic loss per share$(0.33)$(0.10)
Diluted loss per share:
Net loss from continuing operations per share$(0.33)$(0.06)
Net loss from discontinued operations per share (0.04)
Diluted loss per share$(0.33)$(0.10)
Weighted average number of shares outstanding:
Basic22,44521,274
Diluted22,44521,274
Comprehensive loss:
Net loss $(7,467)$(2,222)
Foreign currency translation adjustment(507)(355)
Total comprehensive loss$(7,974)$(2,577)









The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5


PFSWEB, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In Thousands, Except Share Data)


Three Months Ended March 31, 2022
Accumulated
AdditionalOtherTotal
Common StockPaid-InRetained ComprehensiveTreasury StockShareholders'
SharesAmountCapitalEarningsLossSharesAmountEquity
Balance, December 31, 202122,131,546 $21 $177,511 $33,522 $(1,153)33,467 $(125)$209,776 
Net loss— — — (7,467)— — — (7,467)
Stock-based compensation— — 739 — — — — 739 
Exercise of stock options55,999 — 303 — — — — 303 
Issuance of shares under stock-based compensation awards287,317 — — — — — — — 
Tax withholding on shares issued under stock-based compensation awards— — (1,303)— — — — (1,303)
Foreign currency translation— — — — (507)— — (507)
Balance, March 31, 202222,474,862 $21 $177,250 $26,055 $(1,660)33,467 $(125)$201,541 

Three Months Ended March 31, 2021
Retained Accumulated
AdditionalEarningsOtherTotal
Common StockPaid-In(AccumulatedComprehensiveTreasury StockShareholders'
SharesAmountCapitalDeficit)LossSharesAmountEquity
Balance, December 31, 202020,408,558 $20 $168,244 $(113,712)$(329)33,467 $(125)$54,098 
Net loss— — — (2,222)— — — (2,222)
Stock-based compensation— — 853 — — — — 853 
Exercise of stock options74,416 — 377 — — — — 377 
Foreign currency translation— — — — (355)— — (355)
Balance, March 31, 202120,482,974 $20 $169,474 $(115,934)$(684)33,467 $(125)$52,751 




















The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6


PFSWEB, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net loss$(7,467)$(2,222)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization1,955 2,216 
Deferred income taxes68 15 
Stock-based compensation expense739 853 
Other(74)37 
Changes in operating assets and liabilities:
Accounts receivable22,517 19,916 
Related party receivable 283 
Inventories3,186 (258)
Prepaid expenses, other receivables and other assets320 (1,289)
Operating leases(394)(158)
Trade accounts payable, deferred revenues, accrued expenses and other liabilities(15,440)(10,909)
Net cash provided by operating activities5,410 8,484 
Cash flows from investing activities:
Purchases of property and equipment(1,662)(969)
Proceeds from sale of property and equipment10  
Net cash used in investing activities(1,652)(969)
Cash flows from financing activities:
Net proceeds from issuance of common stock303 377 
Taxes paid on behalf of employees for withheld shares(1,303) 
Payments on finance lease obligations(102)(262)
Payments on revolving loan (50,817)
Borrowings on revolving loan 45,325 
Payments on other debt (1,646)
Net cash used in financing activities(1,102)(7,023)
Effect of exchange rates on cash, cash equivalents and restricted cash(207)(399)
Net increase in cash and cash equivalents2,449 93 
Cash and cash equivalents, beginning of period152,332 10,359 
Restricted cash, beginning of period214 214 
Cash and cash equivalents discontinued operations, beginning of period 392 
Cash, cash equivalents and restricted cash, beginning of period152,546 10,965 
Cash and cash equivalents, end of period154,781 7,888 
Restricted cash, end of period214 214 
Cash and cash equivalents discontinued operations, end of period 2,956 
Cash, cash equivalents and restricted cash, end of period$154,995 $11,058 
Supplemental cash flow information:
Cash paid for income taxes$146 $352 
Cash paid for interest$5 $309 
Non-cash investing and financing activities:
Property and equipment acquired under long-term debt and finance leases$ $600 





The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7


PFSWEB, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of PFSweb, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and include all normal and recurring adjustments necessary to present fairly the unaudited condensed consolidated balance sheets, statements of operations and comprehensive loss, statements of shareholders' equity, and statements of cash flows for the periods indicated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2021.  We refer to PFSweb, Inc. and its consolidated subsidiaries collectively as “PFSweb,” the “Company,” “us,” “we” and “our” in these unaudited condensed consolidated financial statements.
In July 2021, we announced an agreement to sell our LiveArea Professional Services business unit ("LiveArea") and the divestiture was completed on August 25, 2021 (the "LiveArea Transaction"). As such, the three months ended March 31, 2021 presented in the Company's Quarterly Report on Form 10-Q (this "Form 10-Q") has been recast to present LiveArea as a discontinued operation. See Note 3. Discontinued Operations for additional information on our sale of LiveArea.
Results of our operations for interim periods may not be indicative of results for the full fiscal year.

2. Significant Accounting Policies
Use of Estimates
The preparation of consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The recognition and allocation of certain revenues, costs of revenues and selling, general and administrative expenses in these unaudited condensed consolidated financial statements also require management estimates and assumptions.
Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the operating environment changes. These changes have been included in the unaudited condensed consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. Based on a critical assessment of accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes the Company’s unaudited condensed consolidated financial statements are fairly stated in accordance with U.S. GAAP and provide a fair presentation of the Company’s financial position and results of operations.
Furthermore, we considered the impact of the COVID-19 pandemic on the use of estimates and assumptions used for financial reporting and determined that there was no adverse material impact to our results of operations for the three months ended March 31, 2022; however, the extent and duration of future impacts of the COVID-19 pandemic and any resulting economic impact are largely unknown and difficult to predict due to these unknown factors which may have a material impact on our financial position and results of operations in the future.
Income Taxes
For the three months ended March 31, 2022 and 2021, we have utilized the discrete effective tax rate method, as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18, “Income Taxes—Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year to date period as if it was the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as (i) the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pretax earnings by certain jurisdictions and (ii) our ongoing assessment that the recoverability of our deferred tax assets is not likely in certain jurisdictions.

8


Impact of Recently Issued Accounting Standards
Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," ("ASU 2016-13") which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019 for all public entities, excluding smaller reporting companies, and after December 15, 2022 for smaller reporting companies. It requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. We will adopt ASU 2016-13 on January 1, 2023. We are currently in the early phase of evaluating the impact of the adoption of ASU 2016-13 on our condensed consolidated financial statements.

3. Discontinued Operations
On July 2, 2021, the Company entered into a definitive agreement to sell LiveArea. As of June 30, 2021, the Company met the criteria set forth in ASC 205-20, "Presentation of Financial Statements - Discontinued Operations," therefore, the LiveArea segment has been presented as a discontinued operation in the Company's June 30, 2021 Form 10-Q, the Company's September 30, 2021 Form 10-Q, the Company's December 31, 2021 Form 10-K and is reported as a discontinued operation in this Form 10-Q for the three months ended March 31, 2021. The LiveArea Transaction closed on August 25, 2021. As a result of the LiveArea Transaction, we now only operate in one business segment, PFS Operations, and therefore we no longer present segment data.
In connection with the LiveArea Transaction, the Company entered into a transition services agreement with the purchaser to provide certain accounting and administrative services for a period of up to twelve months. Income generated from transition services provided to the purchaser was $0.6 million for the three months ended March 31, 2022 and is recorded in selling, general and administrative expenses in the consolidated statement of operations and comprehensive loss. The transition services agreement was substantially completed by March 31, 2022.
The following table presents the major components of net loss of LiveArea for three months ended March 31, 2021 and a reconciliation to the amounts reported in the unaudited condensed consolidated statements of operations and comprehensive loss (in thousands):
Three months ended
March 31, 2021
Revenues:
Service fee revenue$16,798 
Related party revenue468 
Total revenues17,266 
Costs of revenues:
Cost of service fee revenue9,714 
Total costs of revenues9,714 
Gross profit7,552 
Selling, general and administrative expenses(8,372)
Loss from discontinued operations before income taxes(820)
Income tax expense29 
Net loss from discontinued operations$(849)

9


The following table presents the depreciation and amortization, capital expenditures and significant noncash operating items for the three months ended March 31, 2021 (in thousands):
Three months ended
March 31, 2021
Cash flows from operating activities discontinued operations:
Depreciation and amortization $205 
Stock-based compensation expense$236 
Cash flows from investing activities discontinued operations:
Capital expenditures$30 

4. Revenue from Contracts with Clients and Customers
Contract Assets and Contract Liabilities
Costs to fulfill contract assets decreased $1.2 million from December 31, 2021 to March 31, 2022, primarily due to amortization and recognition of costs. Costs to fulfill contract assets relate to deferred costs, which are included within other current assets and/or other assets, and software development costs, which are included within property and equipment, in our condensed consolidated balance sheets.
Contract liabilities were $7.9 million at December 31, 2021, of which $1.3 million was recognized as revenue during the three months ended March 31, 2022.
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and customer advances and deposits (contract liabilities) on the condensed consolidated balance sheets. Changes in the contract asset and liability balances during the three months ended March 31, 2022 were not materially impacted by any other factors.
Contract balances consist of the following (in thousands):
March 31, 2022December 31, 2021
Contract Assets
Costs to fulfill$3,171 $4,392 
Total contract assets$3,171 $4,392 
Contract Liabilities
Accrued contract liabilities$2,913 $2,673 
Deferred revenue4,725 5,224 
Total contract liabilities$7,638 $7,897 

Remaining performance obligations represent the transaction price of firm orders for which work has not yet been performed. The amount reported for remaining performance obligations does not include 1) contracts that are less than one year in duration, 2) contracts for which we recognize revenue based on the right to invoice for services performed, or 3) variable consideration allocated entirely to a wholly unsatisfied performance obligation. Much of our revenue qualifies for one of these exemptions. As of March 31, 2022, the aggregate amount of the transaction price allocated to remaining performance obligations for contracts with an original expected duration of one year or more was $8.7 million. We expect to recognize revenue on approximately 52% of the remaining performance obligations in 2022, 24% in 2023, and the remaining recognized thereafter.

10


Disaggregation of Revenues
The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by timing of revenue recognition (in thousands):
Three Months Ended March 31,
20222021
Revenues:
Over time$63,290 $56,396 
Point-in-time3,197 4,308 
Total revenues$66,487 $60,704 

The following table presents our revenues, excluding sales and usage-based taxes, disaggregated by region (in thousands):
Three Months Ended March 31,
20222021
Revenues by region:
United States$55,940 $47,173 
Canada1,232 1,371 
Europe9,315 12,160 
Total revenues$66,487 $60,704 


5. Inventory Financing
Supplies Distributors, an indirect wholly-owned subsidiary of the Company, had a short-term credit facility with Peridot Financing Solutions (as successor to IBM Credit LLC) and its assignees (“IBM Credit Facility”) to finance its purchase and distribution of Ricoh products in the United States, providing financing for eligible Ricoh inventory and certain receivables up to $5.5 million, as per the amended agreement. The agreement has no stated maturity date and provides either party the ability to exit the facility following a 90 day notice.
There was no outstanding balance under the IBM Credit Facility at March 31, 2022. The outstanding balance under the IBM Credit Facility, which represented inventory purchases, was $3.5 million as of December 31, 2021 and was classified as trade accounts payable in the consolidated balance sheets.
Product revenue and the related inventory are dependent on the Ricoh distributor agreement. Effective March 2022, as part of Ricoh's continued restructuring of its operations, the Ricoh distributor agreement was terminated and as a result, our product revenue model with Ricoh was discontinued. The Company does not expect to have inventory following the termination of this agreement.
The IBM Credit Facility was subsequently terminated in connection with the termination of the Ricoh distributor agreement. As a result, the lender waived all compliance requirements with restrictive covenants for the quarter ended March 31, 2022.

6. Loss Per Share
Basic loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding for the reporting period. Diluted loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common stock and common stock equivalents outstanding for the reporting period. In periods when we recognize a net loss from continuing operations, we exclude the impact of outstanding common stock equivalents from the diluted loss per share calculation as their inclusion would have an antidilutive effect. As of March 31, 2022 and 2021 we had outstanding common stock equivalents of approximately 1.5 million and 2.5 million, respectively, that have been excluded from the calculations of diluted earnings per share attributable to common stockholders because their effect would have been antidilutive.

11


7. Commitments and Contingencies
The Company is subject to claims in the ordinary course of business, including claims of alleged infringement by the Company or its subsidiaries of the patents, trademarks and other intellectual property rights of third parties as well as confidentiality and data privacy matters. The Company is generally required to indemnify its service fee clients against any third party claims asserted against such clients alleging infringement by the Company of the patents, trademarks and other intellectual property rights of third parties. While we are unable to determine the ultimate outcome of any liabilities resulting from these claims, we do not believe the resolution of any particular matter will have a material adverse effect on the Company’s financial position or results of operations.

8. Related Party Transactions
In December 2020, on behalf of a client, the Company entered into an agreement with Pilot Freight Services ("Pilot") under which Pilot provides the Company various freight services. David Beatson, a member of our Board of Directors is also on the Board of Directors of Pilot and holds less than 1% of the outstanding shares in Pilot. Pilot is a portfolio company of ATL Partners, LLC, where Mr. Beatson serves on the Executive Board and is a shareholder of its two funds (less than 1% holdings of each). On May 2, 2022, ATL Partners, LLC closed on the sale of Pilot to an unrelated third party and as such, Pilot is no longer a related party of the Company.
We recognized $0.1 million related party cost of revenues in three months ended March 31, 2022 and as of March 31, 2022, we had no trade accounts payable balance due to Pilot. There were no related party cost of revenues in the three months ended March 31, 2021.
12


ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our results of operations and financial condition should be read in conjunction with the unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Form 10-Q.
Forward-Looking Information
This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, or management strategies). You can identify these forward-looking statements by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “plan,” “potential,” “project,” “predict,” “future,” “target,” “seek,” “continue” and other similar expressions. These forward-looking statements involve risks and uncertainties and may include assumptions as to how we may perform in the future. Although we believe the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee these expectations will actually be achieved. In addition, some forward-looking statements are based upon assumptions about future events that may not prove to be accurate. Therefore, our actual results may differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in “Part I, Item 1A: Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission (the "SEC") on May 9, 2022 (the “Annual Report”), as well as in our consolidated financial statements, related notes, and the other information appearing elsewhere in the Annual Report and our other filings with the SEC, including any quarterly reports on Form 10-Q. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. There may be additional risks we do not currently view as material or that are not presently known or that are beyond our ability to control or predict. Given these risks and uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.
Key Events and Trends
On July 2, 2021, the Company entered into a definitive agreement to sell LiveArea for approximately $250.0 million in cash, subject to certain adjustments and customary closing conditions including receipt of regulatory approvals (the "LiveArea Transaction"). The LiveArea Transaction closed on August 25, 2021 ("the LiveArea Transaction Date"). As of June 30, 2021, the criteria for reporting LiveArea as a discontinued operation were met and, as such, the three months ended March 31, 2021 presented in this Form 10-Q have been recast to present LiveArea as a discontinued operation. Unless otherwise specified, the financial information and discussion in this Form 10-Q are based on our continuing operations (i.e., PFS Operations) and exclude any results of our discontinued operations (i.e., LiveArea).
See Note 3. Discontinued Operations to the condensed consolidated financial statements included in this Form 10-Q for additional information on our discontinued operations.
COVID-19 Pandemic
We continue to monitor the impact of the COVID-19 pandemic (and any variants thereof) on all aspects of our business. While the COVID-19 pandemic has not had a material adverse impact on our results of operations to date, the future impacts of the pandemic and any continuing and/or additional future economic impacts are still uncertain, especially as the pandemic continues. We have experienced labor rate increases in certain of our markets for fulfillment activities and labor shortages in all markets. We believe this will continue and will impact our overall fulfillment related costs and staffing. In the interim, we are leveraging our multi-node network and distributing work to our centers with more available labor and/or lower costs, implementing certain productivity enhancements, working together with our clients to reduce costs, and offsetting the cost increases with price increases where necessary.
We have taken a number of precautionary measures designed to help minimize the risk of the spread of the virus to our employees and adjusted our operations wherever necessary to help ensure a safe environment for our staff across business functions. As a result of the impact of COVID-19, many businesses continue to experience short-term or long-term liquidity issues. Based on our current expectations, we believe we have the appropriate financial structure in place to support our own business operations through the pandemic. However, we do expect potential risk from the viability of clients and their ability to make payments on time. We have and will continue to closely monitor our clients’ financial results, payment patterns and business updates in an effort to minimize any potential credit risk impact.
While many of the related restrictions have been lifted, we have also seen a resurgence of the virus (including new variants) in many geographic regions, which could have a negative impact on our business and adversely affect the Company’s results of operations, cash flows and financial position as well as that of our clients.
We incurred additional costs related to the enhanced cleaning regimen implemented in our facilities and purchases of personal protective equipment ("PPE") for employees. However, for the three months ended March 31, 2022 and 2021, the increased costs related to the COVID-19 pandemic, excluding hourly wage rate related labor cost increases, were not material. We will continue to monitor these for potential impacts to future cash flow.
13


While the COVID-19 pandemic has not had a material adverse impact on our operations to date, the extent and duration of future impacts of the pandemic (including any variants of COVID-19) and any resulting economic impact on our business are largely unknown and difficult to predict.
Overview
PFSweb is a Global Commerce Services Company. We manage the customer shopping experience for major branded manufacturers and retailers. We provide services to support or improve the physical, post-click experience, such as logistics and order fulfillment, customer care, and order-to-cash services including distributed order orchestration and payment services. We offer each of these services on an à la carte basis or as a complete solution. Major brands and other companies turn to us to optimize their customer experiences and enhance their traditional and online business channels, creating commerce without compromise.
Operating Results
The following table discloses certain financial information about our continuing operations for the periods presented and excludes results of our discontinued operations. The financial information below is expressed in terms of dollars, dollar change, percentage change and as a percentage of total revenues (in thousands, except percentages):
Three Months Ended
March 31,
% of Total
Revenues
20222021Change20222021
Revenues
Service fee revenue$45,531 $45,520 $11 68.5 %75.0 %
Product revenue, net$3,197 $4,308 $(1,111)4.8 %7.1 %
Pass-through revenue$17,759 $10,876 $6,883 26.7 %17.9 %
Total revenues$66,487 $60,704 $5,783 100.0 %100.0 %
Costs of Revenues
Cost of service fee revenue$36,492 $33,530 $2,962 80.1 %(1)73.7 %
Cost of product revenue$2,951 $4,086 $(1,135)92.3 %(2)94.8 %
Cost of pass-through revenue$17,759 $10,876 $6,883 100.0 %(3)100.0 %
Total costs of revenues$57,202 $48,492 $8,710 86.0 %79.9 %
Service fee gross profit$9,039 $11,990 $(2,951)19.9 %(1)26.3 %
Product revenue gross profit$246 $222 $24 7.7 %(2)5.2 %
Total gross profit$9,285 $12,212 $(2,927)14.0 %20.1 %
Selling, General and Administrative expenses$16,428 $12,931 $3,497 24.7 %21.3 %
Loss from continuing operations$(7,143)$(719)$(6,424)(10.7)%(1.2)%
Interest expense, net$$375 $(369)— %0.6 %
Loss from continuing operations before income taxes$(7,149)$(1,094)$(6,055)(10.8)%(1.8)%
Income tax expense, net$318 $279 $39 0.5 %0.5 %
Net loss from continuing operations$(7,467)$(1,373)$(6,094)(11.2)%(2.3)%
(1)    Represents the percentage of Service fee revenue.
(2)    Represents the percentage of Product revenue, net.
(3)    Represents the percentage of Pass-through revenue.


14


Total revenues for the three months ended March 31, 2022 increased by $5.8 million compared with the corresponding period in 2021. Service fee revenue for the three months ended March 31, 2022 was relatively flat, compared to the corresponding period in 2021 as new client activity and expansion of existing client relationships were offset by the impact of certain client terminations and the impact on service fee revenue of certain contracts shared with LiveArea (as described in the next paragraph).
Certain client contracts supported by the LiveArea segment were not fully transferred to the buyer as part of the LiveArea Transaction. Subsequent to the LiveArea Transaction Date, PFSweb is acting as a prime contractor for these certain client contracts and the related services are being provided by the former LiveArea business as a subcontractor of PFSweb. The services provided under these client contracts are currently being managed by PFSweb, and as such, the related service fee revenues, costs of revenues and gross profit previously generated by this LiveArea related activity have been included in our continuing operations during the three months ended March 31, 2021 period. Subsequent to the LiveArea Transaction in August 2021, revenue billed under this contractor-subcontractor relationship are recorded as pass-through revenue and pass-through costs for as long as such contracts continue to be managed directly by PFSweb. Service fee revenues generated under these contracts applicable to our former LiveArea segment of $3.1 million are included in service fee revenue in the condensed consolidated statement of operations and comprehensive loss for the three months ended March 31, 2021.
Product revenue, net, for the three months ended March 31, 2022, decreased by $1.1 million, compared with the corresponding period in 2021. Product revenue declined as it was primarily dependent on one client, which restructured its operations and discontinued certain product lines. Effective March 2022, our agreement with this client was terminated and as a result our product revenue model with this client was discontinued.
Pass-through revenue for the three months ended March 31, 2022 increased by $6.9 million compared to the corresponding period in 2021. The increase is primarily due to increased freight activity (the primary component of pass-through revenue) applicable to certain client accounts and the impact of approximately $3.4 million on pass-through revenue of certain contracts shared with LiveArea (as noted above).
Gross margin decreased by 6.1% to 14.0% for the three months ended March 31, 2022 as compared to 20.1% in the same period of the prior year. The decreased gross margin is due to a decrease of our service fee margin of 6.4% to 19.9% for the three months ended March 31, 2022 as compared to 26.3% in the same period of the prior year, primarily as a result of increased fulfillment labor costs, which were partially offset by certain price increases. We continue to implement actions to offset labor costs including leveraging our multi-node network and distributing work to our centers with more available labor and/or lower costs, implementing certain productivity enhancements, working together with our clients to reduce costs, and offsetting the cost increases with price increases where necessary. Additionally, our comparative gross margin for the three months ended March 31, 2022 versus the prior year period was negatively impacted by reduced levels of both technology-related project activity and other higher margin non-fulfillment related activity, as well as the negative gross margin impact of the LiveArea related contract activity which generated gross margin in the three months ended March 31, 2021 and, as described above, subsequent to the LiveArea Transaction was accounted for as pass-through revenue and pass-through costs in the three months ended March 31, 2022. The overall gross margin decrease was also due to our service fee business, which generates a higher gross margin than the product revenue and pass-through revenue activity, representing a smaller proportion of our total revenues for the quarter ended March 31, 2022, as compared to the prior year.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $3.5 million for the three months ended March 31, 2022, compared to the corresponding period in 2021. The increase was primarily attributable to (1) professional fees and other costs related to regaining SEC filing compliance, (2) increased personnel related costs, including severance costs applicable to our ongoing efforts to optimize certain corporate functions and (3) costs related to the Company's ongoing strategic alternatives assessment process. These increases were slightly offset by $0.6 million of other income applicable to the transition services agreement related to the LiveArea Transaction which was substantially completed at March 31, 2022.
Income Taxes
For the three months ended March 31, 2022 loss from continuing operations before income taxes was $7.1 million and income tax expense was $0.3 million resulting in an effective tax rate of 4.4%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2022 primarily due to state and foreign tax expense.
For the three months ended March 31, 2021, loss from continuing operations before income taxes was $1.1 million and income tax expense was $0.3 million resulting in an effective tax rate of 25.5%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended March 31, 2021 primarily due to state and foreign tax expense.
Discontinued Operations
See Note 3. Discontinued Operations to the unaudited condensed consolidated financial statements included in this Form 10-Q for information regarding discontinued operations.
15


Liquidity and Capital Resources
As of March 31, 2022, we have $154.8 million of cash and cash equivalents, no bank debt and only $0.2 million of finance leases. Our cash position will satisfy our known operating cash needs, working capital and capital expenditure requirements, debt and lease obligations, and loans to our subsidiaries, if needed, and potential distributions to shareholders for at least the next twelve months. However, our cash position could be adversely impacted by the increasing labor costs as a result of labor market shortages and our ability to adjust our overall cost structure to support a smaller remaining business following the completion of the LiveArea Transaction.
Cash Flows from Operating Activities
During the three months ended March 31, 2022, net cash provided by operations was $5.4 million, compared to net cash provided by operations of $8.5 million in the same period of the prior year. The three months ended March 31, 2022 included a net use from cash related to operations before changes in operating assets and liabilities. The three months ended March 31, 2021 included a benefit from cash income generated from operations before changes in operating assets and liabilities. Such cash use and benefit were then either increased or decreased, depending on period, by the net impact of changes in assets and liabilities, primarily related to the amount and timing of client revenue billings and collections and vendor purchasing and payment activity, all of which fluctuated during our seasonal peak periods.
Cash Flows from Investing Activities
Cash used in investing activities include capital expenditures of $1.7 million and $1.0 million during the three months ended March 31, 2022 and 2021, respectively, exclusive of property and equipment acquired under debt and finance lease financing, which consisted primarily of capitalized software costs and equipment purchases. Due to the proceeds received applicable to the LiveArea Transaction, the Company is now primarily using its existing cash to fund capital expenditures, whereas in the past the company would utilize a combination of cash and debt. Capital expenditures have historically consisted of additions to upgrade our management information systems, development of customized technology solutions to support and integrate with our service fee clients and general expansion and upgrades to our facilities, both domestic and foreign. We expect to incur capital expenditures to support new facilities, contracts and anticipated future growth opportunities. Based on our current client business activity and our targeted growth plans, we anticipate our total investment in additions and upgrades to facilities and information technology solutions and services for the upcoming twelve months, including costs to implement new clients, will be approximately $8.0 million to $10.0 million, although additional capital expenditures may be necessary to support the infrastructure requirements of new clients. To maintain our current operating cash position, a portion of these expenditures may be financed through client reimbursements, debt, operating or finance leases or additional equity.
Cash Flows from Financing Activities
During the three months ended March 31, 2022, cash used in financing activities was $1.1 million primarily driven by taxes paid on behalf of employees for withheld shares. Cash used in financing activities was $7.0 million during the three months ended March 31, 2021 primarily due to net borrowing and payment activity on our revolving loan and other debt.
Working Capital
During the three months ended March 31, 2022, our working capital decreased to $157.2 million compared to $165.1 million at December 31, 2021, which was primarily a result of the losses incurred from operations, $1.7 million of capital expenditures and $1.3 million of tax withholding on shares issued under stock-based compensation awards in the three months ended March 31, 2022.
To obtain any necessary additional financing in the future, in addition to our current cash position, we continue to evaluate our needs in light of various financing alternatives potentially available including the sale of equity, utilizing capital or operating leases, or entering into new debt agreements. No assurances can be given we will be successful in obtaining any additional financing or the terms thereof. We currently believe our cash position and funds generated from operations will satisfy our presently known operating cash needs, our working capital and capital expenditure requirements, our current debt and lease obligations, and additional loans to our subsidiaries, if necessary, for at least the next twelve months.
Inventory Financing
Supplies Distributors, an indirect wholly-owned subsidiary of the Company, had a short-term credit facility with Peridot Financing Solutions (as successor to IBM Credit LLC) and its assignees (“IBM Credit Facility”) to finance its purchase and distribution of Ricoh products in the United States, providing financing for eligible Ricoh inventory and certain receivables up to $5.5 million, as per the amended agreement. The agreement has no stated maturity date and provides either party the ability to exit the facility following a 90 day notice.
16


There was no outstanding balance under the IBM Credit Facility at March 31, 2022. The outstanding balance under the IBM Credit Facility, which represented inventory purchases, was $3.5 million as of December 31, 2021 and was classified as trade accounts payable in the consolidated balance sheets.
Product revenue and the related inventory are dependent on the Ricoh distributor agreement. Effective March 2022, as part of Ricoh's continued restructuring of its operations, the Ricoh distributor agreement was terminated and as a result, our product revenue model with Ricoh was discontinued. The Company does not expect to have inventory following the termination of this agreement.
The IBM Credit Facility was subsequently terminated in connection with the termination of the Ricoh distributor agreement. As a result, the lender waived all compliance requirements with restrictive covenants for the quarter ended March 31, 2022.
Product revenue decreased to $3.2 million for the three months ended March 31, 2022 and was not a substantial part of the Company's business following several years of product revenue and associated profitability declines.
Debt and Finance Lease Obligations
Master Lease Agreements. We have various agreements that provide for leasing or financing transactions of equipment and other assets and will continue to enter into such arrangements as needed to finance the purchasing or leasing of certain equipment or other assets. Borrowings under these agreements, which generally have terms of three to five years, are generally secured by the related equipment, and in certain cases, by a Company guarantee.
Other than our finance and operating lease commitments, we do not have any other material financial commitments, although future client contracts may require capital expenditures and lease commitments to support the services provided to such clients.
17



ITEM 3. Quantitative and Qualitative Disclosure about Market Risk
Not applicable.
ITEM 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report, under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO” and together with the CEO, the “Certifying Officers”), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Certifying Officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Based upon this evaluation, and the above criteria, our CEO and CFO concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2022 due to our untimely filing of our Form 10-Q for the quarter ended March 31, 2022.
Notwithstanding the previously identified material weaknesses described below, our management, including our CEO and CFO, concluded that the consolidated financial statements in this Quarterly Report on Form 10-Q for the three months ended March 31, 2022 fairly present, in all material respects, the Company’s financial condition, results of operations and cash flows for the periods presented, in conformity with U.S. GAAP. However, because the material weaknesses create a reasonable possibility that a material misstatement to our consolidated financial statements may not have been prevented or detected on a timely basis, the Company’s management concluded that at March 31, 2022, the Company’s internal control over financial reporting was ineffective.

Previously Reported Material Weakness in Internal Control over Financial Reporting
As previously described in Part II—Item 9A – Controls and Procedures of our Annual Report on Form 10-K for the year ended December 31, 2021,
our management concluded that the Company did not design, implement, and operate effective process-level control activities related to our order-to-cash process (specifically controls over revenue recognition pertaining to client invoicing) resulting in deficiencies in our process-level control activities.
we identified a material weakness in our internal control over financial reporting relating to accounting for unusual transactions. Specifically, deficiencies were identified relating to the financial reporting requirements triggered by the LiveArea Transaction, including the required financial statement presentation of discontinued operations.
we identified deficiencies in various aspects of our income tax controls related to the preparation and review of our income tax provision, including the tax complexities triggered by the disposition of LiveArea in multiple jurisdictions as part of the LiveArea Transaction, which management concluded such deficiencies aggregated to a material weakness.
we identified a material weakness in internal control over financial reporting related to ineffective information technology general controls (“ITGCs”) in the areas of user access and segregation of duties related to administration of certain information technology (“IT”) systems that support the Company’s financial reporting processes. These control deficiencies were a result of inadequate risk-assessment processes to identify and assess user access and change management controls in certain IT systems.
We have not remediated the material weaknesses described above as of the date of this Quarterly Report on Form 10-Q for the three months ended March 31, 2022.

Management’s Plan for Remediation
In response to these material weaknesses, management, with oversight of the Audit Committee of the Board of Directors, has identified and begun to implement steps to remediate the material weaknesses. Specifically:
The Company has prepared training documentation and held training meetings with invoice preparers and reviewers and designed certain mitigating controls which include monthly analytical review procedures to ensure accuracy of client invoices. Management believes significant progress has been made and the implemented mitigating controls will remediate this material weakness in 2022.
18


The Company has hired additional accounting personnel (including temporary personnel with requisite accounting and reporting experience) to fill needed roles and assist in our accounting and financial reporting. The Company has augmented its accounting and reporting resources, improved controls over financial reporting related to unusual transactions and significantly reduced the untimeliness of its reports filed with the SEC. Management believes this material weakness will be remediated in 2022.
The Company has engaged a third-party advisory accounting firm and hired additional temporary resources with requisite tax experience to fill needed roles and assist in proper accounting and financial reporting for income taxes. Management believes the Company has made significant progress improving controls related to preparation and review of our income tax provision, and with passage of adequate time will remediate the material weakness in 2022.
Regarding the ITCG deficiencies, the Company has identified and implemented certain mitigating controls in 2021. Our remediation plan with respect to the ITGC deficiencies includes training of personnel tasked with reviewing IT system user access and segregation of duties risks. In addition, the Company will work with its third-party advisory firm to strengthen the design, execution and documentation of certain controls over user access and segregation of duties of certain IT systems. Management believes this material weakness will be remediated in 2022.
The Company continues to implement certain remediation actions and continues to test and evaluate the elements of the remediation plan. Other potential remediation activities that may be considered include further training of employees and the design and implementation of additional mitigating controls.
We are committed to ensuring that our internal controls over financial reporting are designed and operating effectively. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Other than discussed above, during the three months ended March 31, 2022, there was no change in internal control over financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


19


PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.

ITEM 1A. Risk Factors
There have been no material changes from the risk factors disclosed in Part I, Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.

ITEM 3. Defaults Upon Senior Securities
None.

ITEM 4. Mine Safety Disclosures
None.

ITEM 5. Other Information
None.
20


ITEM 6. Exhibits
a)    Exhibits:
Exhibit No.Description of Exhibits
2.1
2.1.1
3.1
3.1.1
3.1.2
3.1.3
3.1.4
3.2
4.1
4.1.8
4.2
10.5
10.5.1
10.5.2**
10.5.3
10.7*
10.8
10.11
10.12*
10.12.1*
10.12.2*
10.12.3
10.44
10.44.1**
10.45
10.48
10.61
10.63
10.63.1**
21


10.63.2**
10.82
10.82.1**
10.82.2**
10.86*
10.87*
10.88
10.89
10.89.1**
10.90
10.91*
10.92*
10.93*
10.94*
10.95*
10.96*
10.97*
10.98*
10.99*
10.100*
10.101*
10.102*
10.103*
10.105*
10.106*
10.107*
10.108*
10.109*
10.110*
10.111**
10.112**
10.113**
31.1**
22


31.2**
32.1**
101**The following unaudited financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Shareholders' Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
104**Cover Page Interactive Data file, formatted in Inline XBRL (included as Exhibit 101).


*    Denotes management or compensatory agreements
**    Filed herewith
23


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.
Date: June 13, 2022
PFSweb, Inc.
By:/s/    Thomas J. Madden
Thomas J. Madden
Chief Financial Officer
Executive Vice President
24
a10111southamptonukdcmou
28117851.5 DATED 1 � Ottobif (1) MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L (2) CONEXUS LIMITED (3) PFSWEB, INC. AGREEMENT FOR LEASE 2018 UNIT 7, MOUNTPARK SOUTHAMPTON, WIDE LANE, SOUTHAMPTON,SO182NQ


 
1. Z,. 3.a 1a � 2a L 8. l1.. 1Q,_ • 11. jl. ll. 14. ll. 1§. .1L 11!. 1l1.. ZQ.. • 21117"1.I CONTENTS DEFINITIONS AND INTERPRETATION ................................................................................. 1 AGREEMENT FOR LEASE .................................................. ................................................. 8 I!ILE ..................................................................................................................................... 9 ENCUMBRANCES ............................................................................................................... 10 THE LEASE ........................................................................................................... ............. 11 MEASUREMENT OF THE INTERNAL AREA ......................................................... .. ......... 11 CONFIDENTIALITY ................................................................................. ........................... 12 GUARANTEE ....................................................................................................................... 12 TERMINATION ......................................................... ........................................................... 13 EFFECT OF TERMINATION .................... ... .... ............................................ ..................... 13 LANDLORD'S LIABILITY............................. . .............................................................. 13 NON-ASSIGNMENT ............................................................................................................. 14 ENTIRE AGREEMENT ............. ........................................................................................... 14 NON-MERGER .......................................... ...................... .................................................. 14 � ................................................................................... .................................................. 14 NOTICES .................................................................. ....... .................................................. 15 INTEREST ........................................................................ .................................................. 15 MONEY LAUNDERING .............. ...................................... ....... .......................................... 15 CONTRACTS /RIGHTS OF THIRD PARTIES} ACT 1999 .. ... ... ............... 16 JURISDICTION ................................................................ ..... ............................................. 16


 
DATE PARTIES JS- O c.:tobu 2018 (1) MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L. a Luxembourg private limited liability company (societe a responsabilite limitee) with its registered office at 18, rue Robert Stumper, L-2557 Luxembourg, being registered with the Luxembourg Register of Commerce and Companies (Registre de commerce et des societes) under number 0218933 and with a share capital of £12,000 (the Landlord); (2) CONEXUS LIMITED incorporated and registered in England and Wales with company number 03616118 with its registered office at Eastlands One, London Road, Basingstoke, Hampshire RG21 4FB (the Tenant); and (3) PFSWEB, INC. incorporated and registered in the State of Delaware in the United States of America with file number 3062550, whose registered office in Delaware is 251 Little Falls Drive, Wilmington, DE 19808 and address is at 505 Millennium Drive, Allen, Texas TX75013 USA (the Guarantor). IT IS AGREED 1. 1.1 28617851.5 DEFINITIONS AND INTERPRETATION In this agreement, including the schedules, the following definitions shall apply unless the context otherwise requires: Access Date the date the Tenant takes access to or occupies the Property; Actual Completion actual completion of the grant of the Lease and Date of Actual Completion is to be interpreted accordingly; Adjoining Property the property developed and being developed by the Landlord known as Mountpark Southampton, Wide Lane, Southampton, SO18 2NQ shown for identification purposes only edged blue on the plan attached to the Lease; Applicable Law any one or more of the following: (a) any Acts of Parliament, European legislation and any statutory instruments, rules, orders, regulations, notices, directions, bye-laws, permissions and plans for the time being made under or deriving validity from any Act of Parliament or European legislation; and (b) any regulations, orders, bye-laws or codes of practice of any local or statutory authority having jurisdiction over the Landlord's Works; Approved Planning Permission the planning permission for the Landlord's Works including approval of use, whether or not reserving approval for landscaping and materials; Architect Michael Sparks trading as Michael Sparks Associates of 11 Plato Place, St Dionis Road, London SW6 4TU or such other architect appointed by the Landlord or the Building Contractor; Basic Rent the sum per annum calculated by multiplying the Internal Area by £9.25; Building the building to be constructed on the Property as part of the Landlord's Works;


 
• • 2N17111.I Building Contract the building contract for carrying out the Landlord's Works to be entered into by the Landlord and the Building Contractor in the fonn of the JCT Design and Build Contract 2016 edition together with such amendments or variations as the Landlord may reasonably require; Building Contractor Winvic Construction Limited (Company number 04135363) whose registered office is at Brampton House, 19 Tenter Road, Moulton Park, Northampton, NN3 6PZ or such other building contractor as the Landlord appoints as the building contractor for the purposes of the Landlord's Works; COM Regulations the Construction (Design and Management) Regulations 2015; Civil and Structural Engineer Complete Design Partnership Limited (company number 03866200) whose registered office is at Charford Lodge, Rock Hill, Bromsgrove, Worcestershire B61 7LH or such other structural engineer appointed by the Landlord or the Building Contractor; Contract Rate 4% per annum above the base lending rate from time to lime of Bardays Bank Pie; Contribution the sum payable by the Landlord pursuant to clause 2.10; Date of Practical Completion the date of Practical Completion as certified in the Statement of Practical Completion; Defects any defects, shrinkages or other faults in the Landlord's Works due to materials or workmanship not being in accordance with the tenns of the Building Contract or this agreement; Deleterious Materials materials specified for use other than in accordance with the guidelines contained in the edition of 'Good Practice in the Selection of Construction Materials • (British Council for Offices) current at the date of use or any products, substances or materials or any combination of them which are themselves or which incorporate substances which at the time of use: (a) do not confonn with current British or applicable European Standards or codes of practice; and (b) are generally known in the construction industry to be deleterious to health and safety or to the durability of buildings and/or other structures and/or plant and machinery in the particular circumstances in which they are specified to be used or are used; Desig n Sub-Contractors the sub-contractors appointed or to be appointed by the Building Contractor who have a material design responsibility for the Landlord's Works including for the carrying out of the following elements of the Landlord's Works: (a) lift; (b) structural steelwork and roof structure; (c) pre-cast concrete; (d) profiled metal cladding or curtain walling; (e) cladding and roofing; 2


 
• • 2H17tlU (f) mechanical and electrical installation; (g) ground floor slab; and (h) syphonic drainage; Encumbrances the agreements, covenants, declarations, exceptions, provisions, reservations and other matters, if any, set out in Schedule 1; Energy Perfonnance Certificate a certificate which complies with the Energy Performance of Buildings (England and Wales) Regulations 2012 (S1 2012/3118) or regulation 29 Building Regulations 2010; Employer's Agent KAM Projects Consultants Limited (company number 08638566) whose registered office is at The White House, Middle Lane, Leckhampstead, Buckingham MK18 5NS or such other employer's agent as the Landlord appoints in connection with the Landlord's Works under the Building Contract; Expert has the meaning given to it in paragraph 1 Schedule 3; Initial Property has lhe same meaning as the definition of Initial Property under the Lease; Internal Area the gross internal area of the Building measured in square feet in accordance with Part 3 of the RICS Property Measurement 6'" edition, May 2015 and on the basis that: (a) all such relevant measurements within the warehouse of the Building will be taken to the internal face of the cladding rails; and (b) all plant platforms, plant decks and plant floor areas will be excluded from such calculations; Insolvent if a person is a company: (a) it enters into a voluntary arrangement under Part I Insolvency Ad 1986 or it enters into a scheme of arrangement with its creditors in satisfaction or composition of its debt; (b) an administrator is appointed under Part II Insolvency Act 1986; (c) a receiver or manager, including an administrative receiver, is appointed whether under Part Ill Insolvency Act 1986, under the Law of Property Act 1925 or otherwise; (d) a resolution to wind-up is passed or a provisional liquidator is appointed or a winding-up order is made under Part IV Insolvency Ad 1986 unless the purpose of a solvent amalgamation or reconstruction of the company; (e) a scheme of arrangement is made under Part 26 Companies Act 2006; (f) it changes its status from unlimited to limited; or (g) it is struck off the register of companies or otherwise ceases to exist; 3


 
• • ZN17N1.5 if a person is an individual: (a) an interim order or voluntary arrangement is made under Part VIII Insolvency Act 1986; (b) a trustee in bankruptcy is appointed or the individual is otherwise made bankrupt; (c) the individual enters into a deed of arrangement or composition with his or her creditors; (d) a receiver is appointed under the Mental Health Act 1983 or the individual becomes incapable of managing his or her affairs; or (e) the individual dies; if tw::i or more people are in partnership and: (a) they enter into a voluntary arrangement under Part II Insolvency Partnerships Order 1994; (b) an administration order is made under Part Ill Insolvent Partnerships Order 1994; or (c) a winding-up order is made under Parts IV or V Insolvent Partnerships Order 1994; or (d) a person is incorporaled or resident in a jurisdiction outside England and Wales and any event or circumstance occurs which under the laws of that jurisdiction has an analogous or equivalent effect to any of the above events; Justifiable Delay Events any one or more of the following: (a) delay by an electlicity undertaking in pursuance of its statutory obligations or failure by such an undertaking to carry out such work; (b) loss or damage by any one or more of the Insured Risks; (C) act of God; (d) any act or omission of the Tenant; Landlord's Solicitors Gateley Pie of One Eleven Edmund Street, Birmingham B3 2HJ (ref: RXP/CS/125230.002) or such other solicitors as the Landlord appoints in relation to this agreement and notifies to the Tenant's Solicitors in writing); Landlord's Works the works in relation to the Property and the Off Site Works (if any) detailed in the Specification; Lease a lease to be granted by the Landlord to the Tenant at the request of the Guarantor in the form attached to this agreement at Appendix 3 incorporating the details to be included under clause 5.2; Lease Completlon Date five Working Days after the Date of Practical Completion;


 
• • 2N1711t.l Licence to Carry Out Works a licence to carry out worlcs to be granted by the Landlord to the Tenant in the fonn attached to this agreement at Appendix 3 in respect of the Tenant's Worlcs; Licence Period the period from and including the date of this agreement to and including the Lease Completion Date; Long Stop Date 29 January 2019 as to which time is of the essence; Notice of Completion of Making Good the notice, statement or certificate to be issued under the Building Contract certifying that all Defects which appear during the Rectification Period and which are the responsibility of the Building Contractor have been made good in accordance with the tenns of the Building Contract; Off Site Works any worlcs that must be completed other than on the Adjoining Property (whether pursuant to the Planning Pennission or any Statutory Agreement or otherwise) as part of the Landlord's Works so as to afford proper and reasonable access to the Property; Opinion Letter Guarantor an opinion letter in the fonn annexed at Appendix 5 given by a reputable finn of lawyers practising in the jurisdiction in which the Guarantor is incorporated; Opinion Letter Landlord an opinion letter in the fonn annexed at 6 given by a reputable finn of lawyers practising in the jurisdiction in which the Landlord is incorporated; Practical Completion completion of the Landlord's Worlcs in accordance with the provisions of the Building Contract but disregarding any minor defects that are the subject of a snagging list to be attached to the Statement of Practical Completion in accordance with the provisions of the Building Contract; President the President for the time being of the Royal Institution of Chartered Surveyors or any person authorised to act on his behalf; Professional Team the following professionals: (a) the Architect; (b) the Employer's Agent; (c) the Civil and Structural Engineer; Property the industrial premises known as Unit 7 Mountpark Southampton, Wide Lane, Southampton SO18 2NQ fanning part of the Tide Number intended to be let to the Tenant as shown edged red on the plan attached to the Lease; Recommendation Report the recommendation report required by regulation 9 Energy Perfonnance of Buildings (England and Wales) Regulations 2012 (SI 2012/3118), including a report issued by an Energy Assessor for the purposes of regulation 29(5) Building Regulations 2010 SI 201/2214) or regulation 20(1) Building (Approved Inspectors etc.) Regulations 2010 (SI 2010/2215); 5


 
28617851.5 Rectification Period the defects liability period or rectification period under the Building Contract; Rent Commencement Date G I O e. (., un b if 20 IC\ provided that if the date of Practical Completion occurs /J (_ C after 29 November 2018 then the rent commencement date shall be postponed by the number of days that the Date of Practical Completion occurs after 29 November 2018; Requisite Consents all agreements, approvals (including approval of reserved matters), consents, permissions and licences required from any local or other competent authority under any statute, by-law or regulation which are necessary to enable the Landlord lawfully to carry out and complete the Landlord's Works or to reinstate them if they are damaged or destroyed; Review Date the date calculated as the 5th anniversary of the Term Commencement Date; Specification the specification and plans detailing the Landlord's Works as attached at Appendix 4 and includes any changes to them made under the terms of this agreement or otherwise agreed in writing between the Landlord and the Tenant; Standard Conditions the Standard Commercial Property Conditions (2nd Edition) and Standard Condition shall be interpreted accordingly; Statement of Practical Completion the sectional completion statement of the Landlord's Works to be issued in accordance with the Building Contract certifying that Practical Completion has taken place; Statutory Agreement an agreement or undertaking in respect of and affecting the Property or the Adjoining Property in relation to the Landlord's Works (whether or not also affecting other property) pursuant to: (a) section 106 Town and Country Planning Act 1990; (b) section 111 Local Government Act 1972; (c) section 33 Local Government (Miscellaneous Provisions) Act 1982; (d) section 104 Water Industry Act 1991 or any other provision of similar intent within the meaning of the Water Act 1989 with an appropriate authority for the supply of water or the drainage of surface or foul water from the Property or the Adjoining Property; or (e) any agreement with an appropriate authority or utility company relating to the passage or transmission of gas, water, electricity, foul or surface water drainage or any of them; (f) any highways agreement. Target Area 107,392 square feet of Internal Area; Target Date of Practical Completion 29 October 2018 subject to any changes made in accordance with paragraph 3 of Schedule 2; 6


 
• • Tenant's Representative JLL Limited of 30 Warwick Street London W1B SNH (ref:Simon Nicholls) or such member of the Royal Institution of Chartered Surveyors appointed by the Tenant and notice of whose appointment has been given in writing to the Landlord; Tenant's Solicitors VLAW Limited of 9 Savoy Street London WC2E 7EG (ref DB/PFS001/006) or such other solicitors as the Ten ant appoints in relation to this agreement and notifies the Landlord's Solicitors in writing; Tenant's Works the fitting-out works to warehouse, ground floor and first floor office at the Property to be carried out by the Tenant briefly described in the Licence to Carry Out Works and includes any changes to them agreed in writing between the Landlord and the Tenant; Tenn Commencement Date the Lease Completion Date: Title Number HP810602; Utilities electricity, gas, water, surface water, foul drainage, heating, air conditioning, ventilation, telecommunications, satellite and data communications and any other services or supplies; Utlllty Agreements any agreements or deeds (including leases or agreements for the grant of rights, easements, wayleaves and connection agreements) with statutory undertakers or other utility providers which relate to the provision of Utilities to the Property or the Adjoining Property and which are reasonably required as part of or to facilitate the carrying out of the Landlord's Works; VAT value added tax chargeable under the Value Added Tax 1994 and any similar replacement tax and any similar additional tax; Warranties the warranties to be provided by the Building Contractor and the Professional Team in the fonns annexed at Appendix 1; Sub-contractor Warranties the warranties to be provided by the Design-Sub Contractors in the forms annexed at Appendix 7; Working Day any day except Saturday, Sunday and bank or other public holidays in England. 1.2 In this agreement, unless the context otherwise requires: ZN1716U 1.2.1 the clause headings are for reference only and do not affect its interpretation; 1.2.2 unless otherwise indicated, references to clauses and schedules are to clauses of and schedules to this agreement and references in a schedule to a paragraph are to a paragraph of that schedule; 1.2.3 references to any statute or statutory provision include references to: (a) all Acts of Parliament and all other legislation having legal effect in the United Kingdom; and (b) any subsequent statutes directly or indirectly amending, consolidating, extending, replacing or re-enacting that statute and also include any 7


 
• • 2. 2.1 2.2 2.3 24 orders, regulations, instruments or other subordinate legislation made under that statute; 1.2.4 references to the Property, the Building and the Adjoining Property include any part of them; 1 2.5 the words other, Include, lncludlng and in particular do not limit the generality of any preceding words and any words which follow them shall not be construed as being limited in scope to the same class as the preceding words where a wider construction is possible; 1.2.6 indemnify means to indemnify against all actions, claims, demands and proceedings taken or made against a party and all costs, damages, expenses, liabilities and losses incurred by the party; 1.2. 7 if there is more than one person as a party to this agreement, the obligations that they undertake can be enforced against them all jointly or against each individually; 1.2.8 if any provision is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remainder of the agreement shall be unaffected; 1.2.9 as between the landlord and the Tenant unlit informed in writing to the contrary by the Tenant the Landlord shall be entitled to rely on any written confirmations, approvals, agreements or consents of the Tenant's Representative alone as being binding and given on behalf of the Tenant in relation to any matter contained in this agreement and any information which the Tenant is bound to provide under this agreement shall be properly provided if so provided by the Tenant's Representative alone; and 1.2.10 if there is any conflict between the Specification and the terms of this agreement the latter shall prevail. AGREEMENT FOR LEASE The landlord and the Tenant shall comply with their obligations in respect of the Landlord's Works as set out in Schedule 2. The Landlord agrees to grant or procure the grant of and the Tenant agrees to accept the grant of the Lease and to enter into the Licence to Carry Out Works on the Lease Completion Date. No purchase price, premium, or deposit is payable. On the Date of Actual Completion the Guarantor shall provide to the Landlord an opinion letter in respect of the Guarantor relating to the Lease in the form of the Opinion Letter Guarantor with such amendments as may be approved by the Landlord (such approval not to be unreasonably withheld). Upon completion of the Licence to Carry Out Works the Guarantor shall provide to the landlord an opinion letter in respect of the Guarantor relating to the Licence to Carry Out Works in the form of the Opinion Letter Guarantor with such amendments as may be approved by the Landlord (such approval not to be unreasonably withheld). 2.5 On the Date of Actual Completion the Landlord shall provide to the Tenant and the Guarantor an opinion letter in respect of the Landlord relating to the Lease in the form of the Opinion Letter Landlord with such amendments as may be approved by the Tenant (such approval not to be unreasonably withheld). 2.6 Upon completion of the Licence to Carry Out Works the Landlord shall provide to the Tenant and the Guarantor an opinion letter in respect of the landlord relating to the Licence to Carry Out Works in the form (mutatis mutandis) of the Opinion Letter Landlord with such amendments as may be approved by the Tenant (such approval not to be unreasonably withheld). 2.7 During the Licence Period the Tenant shall be permitted to occupy the Initial Property on the terms of Schedule 4 but shall not otherwise be entiUed to occupation or possession of the Property until the Lease has been completed. The Landlord shall procure that an electricity IN17Ht.5 8


 
• • power supply for the Property in accordance with the Specification is maintained and available for use by the Tenant free of charge throughout the Licence Period. The Landlord shall as necessary provide such power by means of mobile generation plant. 2.8 On or before the Date of Actual Completion the Landlord shall deliver to the Tenant's Solicitors copies of the documents listed in Schedule 5 and, where possible, duly certified by the Landlord's Solicilors to be complete and true copies of the originals. 2.9 On or before the Date of Actual Completion the Landlord shall deliver to the Tenant's Solicitors the Warranties duly executed and completed and the Tenant shall not be obliged to accept the Lease in the absence of any of the Warranties. 2.10 The Landlord shall pay the Contribution to the Tenant in respect of the proper costs incurred by the Tenant in fitting out of the ground floor offices in the Building as part of the Tenant's Works, such payment shall: 2.10.1 be made without deduction or set off by the Landlord in amounts equal to the sums invoiced by the Tenant's fitting out contractor as evidenced in the invoice referred to at dause 2.10.2; 2.10.2 2.10.3 be made within 15 Working Days of receipt by the Landlord of a copy of each such valid invoice addressed to the Tenant from the Tenant's fitting out contractor or contractors in respect of the carrying out of such fitting out works or an element of the fitting out works; and not exceed a total maximum sum of £140,000. 3. TITLE 3.1 Title to the Property having been investigated by (or on behalf of) the Tenant before the date of this agreement. the Tenant shall be deemed to have accepted such tiUe and shall not be entiUed to raise any objection, enquiry or requisition to the title except in respect of: 3.1.1 any matters registered against the Title Number(s) after 29 May 2018 at 11 :40:58 that relate to matters that the Landlord has not previously disclosed to the Ten ant; and 3.1.2 any financial charges registered against the Title Number(s). 3.2 The Landlord lets with full tiUe guarantee but the implied covenants for title are modified so that: 3.2.1 the covenant set out in section 2(1)(b) Law of Property (Miscellaneous Provisions) Act 1994 (LP(MP)A 1994) shall not extend to costs arising from the Tenant's failure to: (a) make proper searches; or (b) raise requisitions on title or on the results of the Tenant's searches before the date of this agreement; and 3.2.2 the covenant set out in section 3(3) LP(MP)A 1994 shall extend only to charges or encumbrances created by the Landlord. 3.3 This agreement is executory only and shall not operate or be deemed to operate as a demise of the Property until Actual Completion. 3.4 Vacant possession of the Property will be given to the Tenant upon Actual Completion. STANDARD CONDITIONS 3.5 This agreement incorporates the Standard Conditions in so far as they apply to the grant of a lease and are not varied by or inconsistent with the provisions of this agreement (which shall prevail in the case of a conflict). 3.6 For the purposes of the Standard Conditions, references to 'the seller" and 'the buyer" shall be deemed to be references to the Landlord and the Tenant respectively. 3.7 The conditions set out in Part 1 of the Standard Conditions shall be varied as follows ZM17MU 3. 7.1 in Standard Condition 1.1.1(c) insert at the end 'or its successors in tide"; 9


 
• • 3.7.2 in Standard Condition 1.1.1(e) the contract rate shall be the Contract Rate specified in this agreement; 3. 7.3 in Standard Condition 1.1.3(b) all the words after "secured on the property" shall be deleted and there shall be added the words "and (c) in the case of the seller notwithstanding that the seller does not at the completion date have the legal estate vested in it"; 3.7.4 Standard Condition 1.1.4(a) shall not apply; 3.7.5 Standard Condition 3.3 shall be replaced in its entirety with: "The buyer shall have no rights of light or air or other rights over any land which the seller will be retaining near the property other than any expressly granted or reserved in the transfer or lease of the property to the buyer"; 3. 7.6 in Standard Condition 4.2.4 insert ·or if earlier the date two working days prior to the date on which the seller is to take the step in such proceedings" after "ten working days" and also at the end of 4. 2.7(b)(ii); 3.7.7 3.7.8 Standard Condition 8.8.2 shall be varied to read: "The parties are to complete the contract before 2.00pm on the tenth working day following the giving of the notice to complete, excluding the day on which the notice is given. For this purpose, time is of the essence of the contract"; in standard Condition 9.1.2 the word "represented" shall be deleted and the words "expressly stated in the contract" shall be substituted in its place. 3.8 Part 2 of the Standard Conditions shall not apply to this agreement. 4. ENCUMBRANCES 4.1 The Property is let subject to the Encumbrances so far as they are still subsisting and affect the Property. 4.2 The Tenant is to be treated as accepting the grant of the Lease with full knowledge of any Encumbrances and will not raise any requisition or objection to them. 4.3 The Property is let subject to such of the following as affect the Property and are still subsisting: 21111111.1 4.3.1 all matters contained or referred to in the Lease; 4.3. 2 4.3.3 4.3.4 435 the matters contained or referred to in standard Condnion 3.1.2; any registered local land charges and any matter capable of being registered as a local land charge even if not so registered at the Date of Actual Completion; any notice, order or proposal given or made by a government department or by any public or local authority, statutory undertaker or other competent body or person; all charges, orders, proposals, restrictions, agreements, notices or other matters arising under the town and country planning or highways legislation which affect or relate to the Property and to any orders or regulations made under that or any other legislation; 4.3.6 all rates, charges and other outgoings which affect or are charged on the Property except for any mortgage or legal charge relating to money secured on the Property; 4.3.7 any unregistered interest that overrides the disposition effected pursuant to this agreement under Schedules 1, 3 or 12 Land Registration Act 2002 or which would override the disposition if the Lease were subject to first registration; 4.3.8 any Statutory Agreement; 4.3.9 all public or private rights of way and other rights, easements or quasi-easements and wayleaves affecting the Property and other like matters 10


 
• • 4.3.10 and the Landlord shall not be required to give any evidence or information as to the existence or otherwise of any such matters; and all liability to repair and maintain roads, paths, conduits, fences and other like matters or to contribute to the cost of their repair and maintenance, and the Landlord shall not be required to give any evidence or information as to the existence or otherwise of any such matters; 5. THE LEASE 5.1 The Lease and its counterpart and the Licence to Carry Out Works and its counterpart shall be prepared by the Landlord's Solicitors. 5.2 The following details shall be inserted in the Lease and its counterpart when they are engrossed or, if this is not possible, inserted in manuscript and initialled by or on behalf of the parties on the Date of Actual Completion: 5.2.1 the Term Commencement Date; 5.2.2 the Rent Commencement Date; 5.2.3 the Basic Rent; 5.2.4 5.2.5 the Review Date; any amendment to the Lease, as referred to in paragraph 1.3 Schedule 2. 5.3 The liability to pay the contribution towards the insurance premiums under the Lease shall commence on the Term Commencement Date and the liability to pay the contribution towards the service charge under the Lease shall commence on the Term Commencement Date. 5.4 The Landlord may make such minor additions or modifications to the form of the Plan as may be reasonably required properly to describe the Property or the Building as eventually designed and constructed in accordance with this agreement or to describe the Property or the Building as named. 5.5 As soon as reasonably practicable after the Date of Actual Completion the Tenant shall use all reasonable endeavours to register the Lease and remove any notice in respect of this agreement at the Land Registry and, on completion of that registration, shall provide the Landlord with official copies of the title to the Lease showing the Tenant registered as proprietor together with any tide plan produced or updated by the Land Registry as part of that registration. 6. 6.1 6.2 6.3 6.4 6.5 ZH17HU MEASUREMENT OF THE INTERNAL AREA The Landlord and the Tenant shall co-operate to ensure that the Building is measured for the purposes of agreeing the Internal Area as soon as the Internal Area can be accurately determined, whether before, on or after the Date of Practical Completion. The Landlord shall give the Tenant not less than three Working Days' prior written notice of the date and time, being a Working Day, when the Employer's Agent and/or the Building Contractor will measure the Building for the purposes of determining the Internal Area. If the Employer's Agent and the Tenant's Representative are unable to agree the lnlernal Area within five Working Days of the measurement of the Building, either the Landlord or the Tenant may apply for the matter to be determined in accordance with Schedule 3. The Basic Rent shall be calculated upon the agreement or determination of the Internal Area. Notwithstanding that the Internal Area of the Building may not have been agreed, the Landlord and Tenant shall complete the Lease on the Lease Completion Date and in such circumstances the Basic Rent shall be the sum of £9g3,376.00 per annum and in the event that following the agreement or determination of the Internal Area the Basic Rent is greater or lesser than the above figure then any difference shall either be paid by the Tenant within 1 O Working Days of such determination or agreement or if relevant credited for the Ten ant's benefit in the next rental demand issued following the agreement or determination of the 11


 
• • lntemal Area and the parties shall as soon as reasonably practicable enter into a deed of variation of the Lease recording the change in the Basic Rent. 7. CONFIDENTIALITY 7.1 Each of the parties to this agreement agrees that ii shall take all reasonable steps to keep confidential and shall not (without the prior written approval of the other party such approval not to be unreasonably withheld or delayed) seek to publicise to any other person the existence of and the terms of this agreement (but not so as to restrict the parties in any way in the performance of their obligations under this agreement) PROVIDED that no consent shall be required where disclosure is required by law or under the rules binding on the party concemed of a stock exchange or to any professional or other advisor of the party concerned provided that the party concemed requires that the advisor to whom the information is disclosed keeps it confidential. 7.2 The Tenant agrees with the Landlord not to protect this agreement (or any rights created by it) on the register of the Landlord's title except by way of unilateral notice and not to produce a copy or extract of this agreement to the Land Registry (except where the Tenant is making an application for first registration of the Lease or an application to note rights granted in the 8. 8.1 8.2 8.3 8.4 8.5 8.6 8.7 Lease after completion) . GUARANTEE This agreement has been entered into by the Tenant with the consent of and at the request of the Guarantor and in consideration of the Landlord agreeing to let the Property to the Tenant. The Guarantor covenants with and guarantees to the Landlord and (without the need for any express assignment) with the Landlord's successors in tijle by way of primary obligation, that the Tenant will comply with the terms of this agreement. As an independent obligation, the Guarantor agrees with the Landlord to comply with the terms of this agreement if the Tenant does not do so and to indemnify the Landlord against any breach of those terms. The Guarantor agrees that the Landlord may make a claim under this guarantee and indemnity without first making a claim against the Tenant. The Guarantor shall pay all sums due to the Landlord under this guarantee and indemnity without any legal or equitable set-off, counterclaim or deduction. If the Tenant fails to complete the Lease the Guarantor will on written demand of the Landlord enter into a lease with the Landlord in the same terms as the Lease save with the Guarantor as the Tenant and excluding the Guarantor's separate guarantee covenant and the Guarantor will pay the Landlord's reasonable legal costs (including VAT) in connection with such lease. The obligations of the Guarantor shall not be released by: 8. 7.1 any delay or neglect by the Landlord in enforcing the terms of this agreement or any time allowed by the Landlord for their performance; 8.7.2 any variation of the terms of this agreement; 8.7.3 the Landlord or the Tenant giving consent to any matter under this agreement; 8.7.4 any legal limitation, immunity, disability, incapacity or other circumstances relating to the Tenant, whether or not known to the Landlord; or 8.7.5 anything else which would have released the Guarantor whether by the variation of the obligations guaranteed or by the conduct of the parties. 8.8 If any liquidator or trustee in bankruptcy of the Tenant shall disclaim this agreement the Guarantor will on written demand by the Landlord within three months of such disclaimer enter into an agreement with the Landlord in the same terms as this agreement save with the Guarantor as tenant and excluding the Guarantor's separate guarantee obligation. The Guarantor will also pay the Landlord's reasonable legal costs (including VAT) in connection with such agreement. 2"17111.1 12


 
• • 8.9 The Guarantor shall be party to the Lease and the Licence to Carry Out Works to give the guarantees to the Landlord contained in them. 9. TERMINATION 9.1 The Landlord will be entitled to end this agreement by serving written notice on the Tenant if: 9.2 10 . 10.1 10.2 10.3 11. 11.1 11.2 2M17MU 9 1.1 the Tenant does not pay any monies within 14 days after they become due under this agreement; 9.1.2 the Tenant or the Guarantor breaches the terms of this agreement and either: (a) that breach is incapable of remedy; or (b) that breach is capable of remedy and the Tenant or the Guarantor does not remedy the breach within 14 days of a written notice from the Landlord requiring the breach to be remedied; 9.1.3 the Tenant or the Guarantor becomes Insolvent: or 9.1.4 anything occurs in relation to the Tenant or the Guarantor which, had the Lease been granted, would entitle the Landlord to exercise its right of re-entry under the Lease . The Tenant will be entitled to end this agreement by serving notice on the Landlord if: 9.2.1 the Landlord breaches the terms of this agreement and either, (a) that breach is incapable of remedy; or (b) that breach is capable of remedy and the Landlord does not remedy the breach within 21 days of receipt of a written notice from the Tenant requiring the breach to be remedied; 9.2.2 the Landlord becomes Insolvent; or 9.2.3 the Statement of Practical Completion has not been issued on or before the Long Stop Date whether or not the failure to issue the same is due to any event or the act or defalJt of any person other than the Tenant or the Guarantor, or 9.2.4 the Building or the means of access to the Property is destroyed or so damaged after the date of this agreement but before the Date of Practical Completion so as to render the Property or the Building (as appropriate) incapable of use or occupation or inaccessible and such destruction or damage cannot be made good before the Long Stop Date. EFFECT OF TERMINATION If this agreement comes to an end before the grant of the Lease: it will not prejudice the rights of the parties in respect of any breach of this agreement outstanding at the date this agreement ends: the Tenant will immediately procure the cancellation of any land charges registered at the Land Charges Registry or any notice registered at the Land Registry in respect of this agreement and provide written evidence to the Landlord both of the application for cancellation and any acknowledgment of the cancellation; and except in relation to this clause 10, neither the Landlord nor the Tenant will be under any future liability to the other under this agreement and the Guarantor will be released from any future liability under dause 8. LANDLORD'S LIABILITY The Landlord's obligations and duties in respect of the carrying out and completion of the Landlord's Works and generally in relation to the Property are exclusively limlted to the contractual obligations and duties contained in this agreement. The obligations of the Landlord contained in Schedule 2 will not be enforceable against any successor in title to the Landlord's interest in the Property once the Notice of Making Good has been issued. 13


 
• • 12. NON-ASSIGNMENT 12.1 Subject to dause 12.2, the Tenant shall not assign or deal with its interest in this agreement or any part of it before the grant of the Lease and shall take up occupation of the Property and accept the grant of the Lease itself. 12.2 If the Lease has not been completed by the date six months after the Date of Practical Completion through no default or omission of the Tenant, the Tenant may assign the benefit of this agreement with the prior written consent of the Landlord, such consent not to be unreasonably withheld or delayed, to a person who would be a permitted assignee under the Lease. 12.3 12.4 1 3. 13 1 13.2 13.3 The Landlord is not under any obligation to grant the Lease to anyone other than the Tenant named in this agreement or to a permitted assignee under clause 12.2. The Tenant shall not mortgage or charge or in any way pledge as security its interest under this agreement. ENTIRE AGREEMENT This agreement and the documents annexed to it constitute the whole agreement between the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter of this agreement. The Tenant acknowledges that: 13.2.1 in entering into this agreement. the Tenant has not relied on and shall have no right or remedy in respect of any statement, representation, assurance or warranty (whether made negligently or innocently) other than: 13.2.2 13.2.3 (a) as expressly set out in this agreement or the documents annexed to it; or (b) in any written replies which the Landlord's Solicitors have given to any written enquiries raised by the Tenant's Solicitors before the date of this agreement; no representation or warranty is given or is to be implied by: (a) the Landlord entering into this agreement; or (b) any step taken by or on behalf of the Landlord in connection with this agreement; as to the suitability of the Property for the Tenant or the Tenant's use; and nothing in this clause 13.2 shall limit or exclude any liability for fraud; Standard Condition 9.1.1 is varied to read "If any plan or statement in the contract or in written replies which the seller's conveyancer has given to any written enquiries raised by the buyer's conveyancer before the date of this contract is or was misleading or inaccurate due to any error or omission, the remedies available are as follows.· 13.4 This agreement may be signed in any number of duplicate parts all of which taken together will on exchange constitute one agreement. 14. NON-MERGER Insofar as they remain to be performed or observed, the terms and conditions of this agreement shall remain in full force and effect notwithstanding the grant of the Lease to the Tenant. 15. VAT 15.1 Standard Conditions 1.4. 1 and 1 4 2 shall not apply. 15.2 Save as otherwise stated, the amount of any payment or the value of any supply as expressed in this agreement is exdusive of VAT. Where any payment or taxable supply falls to be made pursuant to this agreement any VAT property chargeable thereon shall, against provision of a VAT invoice for it, be paid in addition by the recipient of the supply for which the payment (if any) is or is deemed to be consideration 21117111.1 14


 
• • 15.3 15.4 15.5 16. 16.1 If any payment under this agreement (not being a supply to which clause 15.2 applies) shall be in reimbursement of any expenditure made by or on behalf of the Landlord on which the Landlord has paid VAT or shall otherwise be subject to VAT, the Tenant or the Guarantor (as the case may be) shall in addition to such payment reimburse or pay (as appropriate) such VAT except to the ex1ent that the Landlord is able to recover that VAT except to the extent that the Landlord is able to recover that VAT. The Tenant declares that it has no intention of using the Property or any part of it or allowing it to be used whether by sub-letting or otherwise in such a way as to give rise to the disapplication of any option to tax made by the Landlord. The Tenant shall indemnify and keep indemnified the Landlord against all VAT which the Landlord has to repay to HM Revenue & Customs including any under the Capital Goods Scheme and against all VAT which is irrecoverable by the Landlord (together in each case with interest, penalties and costs) due to the disapplication of any election to waive exemption to tax made by the Landlord arising in any way from the Tenant's use of the Property or part or parts of it for an exempt purpose. NOTICES Any notice given under this agreement must be in writing and signed by or on behalf of the party giving it. 16.2 Any notice or document to be given or delivered under this agreement must be given by delivering it personally or sending it by pre-paid first class post or recorded delivery, to the addresses stated below: Landlord: Mountpark Logistics EU 2017 23 SARL care of Mountpark Properties Ltd, 22-23 Old Burtington Street, London W1 S 2JJ marked for the attention of Philip O'Callaghan and a copy sent to 18 rue Robert Stumper, L-2557, Luxembourg. Tenant or Guarantor: Eastlands One, London Road, Basingstoke RG21 4FB 16.3 Any such notice or document will be deemed to have been received: 16.4 16.3.1 if delivered personally, at the time of delivery provided that if delivery occurs before 9.00am on a Working Day, the notice will be deemed to have been received at 9.00am on that day, and if delivery occurs after 5 OOpm on a Working Day, or on a day which is not a Working Day, the notice will be deemed to have been received at 9.00am on the next Working Day; and 16.3.2 in the case of pre-paid first class or recorded delivery post, at 9.00am on the second Working Day after posting. In proving delivery, it will be sufficient to prove that delivery was made or that the envelope containing the notice or document was property addressed and posted as a prepaid first class or recorded delivery letter. 16.5 A notice or document delivered under this agreement shall not be valicly given or delivered if sent by e-mail or fax. 17. INTEREST If either party to this agreement shall fail to pay to the other party any sums within 14 days of the date such sums are due to such party pursuant to any of the provisions of this agreement, the party in default shall in addition to such sum pay interest at the Contract Rate from and including the date upon which the sum should have been paid up to and including the date of actual payment. 18. MONEY LAUNDERING ZN17NU No party to this agreement nor their solicitor is obliged to accept any monies payable under this agreement from or drawn on an institution which does not carry on activities of the nature listed in regulation 3(1) Money Laundering Regulations 2007 (SI 2007/2157) and any such payment shall not be treated as a payment made in accordance with the terms of this agreement. 15


 
• • 19 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 Save as expressly provided none of the provisions of this agreement are intended to or will operate to confer any benefit (pursuant to the Contracts (Rights of Third Parties) Act 1999) on a person who is not named a party to the agreement. 20. JURISDICTION 20.1 This agreement shall be governed by and construed in all respects in accordance with the laws of England and Wales to the exclusive jurisdiction of whose courts the parties shall be deemed (lo the extent necessary) irrevocably to have submitted. 20.2 The Guarantor irrevocable authorises and appoints the Tenant to accept service of all legal process arising out of or connected with this agreement and service on the Tenant shall be treated as service on the Guarantor provided that a copy of the notice shall also have been sent to the Guarantor at its registered office set out at the beginning of this agreement. THE PARTIES have signed this agreement on the date first set out above . Zlt17HU: 16


 
• • ZN17161.I SCHEDULE 1 Title The following matters contained or referred to in the registers of title of the Title Number(s) in so far as they relate to affect or fall to be complied with in respect of the Property:- 1. Deed dated 8 May 2018 between (1) Inchcape Estates Limited and (2) Mountpark Logistics EU 2014 05 SARL. 2. Transfer dated 18 May 2018 between (1) Mountpark Logistics EU 2014 05 S.A.R.L. and (2) Mountpark Logistics EU 2017 23 S.A.R.L. 3. Transfer dated 18 August 2017 between (1) Balmoral Land Limited and (2) Ford Motor Company Limited. 4. Lease dated 21 September 2018 between (1) Mountpark Logistics EU 2017 23 S.A.R.L. and (2) Energetics Electricity Limited . 17


 
• • SCHEOULE2 Landlord's Works Obligations 1. LANDLORD'S CONSENTS 1 .1 If it has not already obtained them, the Landlord shall use all reasonable endeavours to obtain the Requisite Consents at its own cost and expense as soon as reasonably practicable after the date of this agreement. 1.2 The Landlord will be at liberty to grant such easements or wayleaves or other rights over the Property as may be requisite for the supply of Utilities to the Property or the Adjoining Property provided that there will be no material interference with the Tenant's use and occupation of the Property. 1.3 2. Within ten Working Days of being called upon to do so by the Landlord, the Tenant shall enter into any Utility Agreements in such form as the relevant statutory undertakers or utility provider shall require or, if such statutory undertaker or utility provider require, the Tenant shall consent to any such Utility Agreements. If the Landlord enters into any Utility Agreements before the Date of Actual Completion, then whether or not the Tenant is also required to enter into them, details of the relevant Utility Agreements shall be added to Schedule 6 of the Lease before Actual Completion as matters to which the Lease shall be subject. CARRYING OUT THE WORKS 2.1 Subject to obtaining the Requisite Consents, the Landlord shall procure that the Building Contractor proceeds diligenUy with and carries out and completes the Landlord's Works: 2.2 2.1.1 in a proper and workmanlike manner; 2.1.2 using good quality and suitable materials to the extent nol otherwise specified in the Specification; 2.1.3 in accordance with: (a) the Specification; (b) the terms of the Building Contract; (c) the Approved Planning Permission; (d) the Requisite Consents; (e) all Applicable Law, including the CDM Regulations; (f) British standards and any applicable codes of building practice; and 2.1.4 without using or specifying the use of any Deleterious Materials. Without prejudice to paragraph 2.1, the Landlord shall use its all reasonable endeavours to ensure that the whole of the Landlord's Works are carried out and completed by the Target Date of Practical Completion. 2.3 In carrying out the Landlord's Works, the Landlord shall procure that all conditions attached to and requirements of the Requisite Consents relating to the Landlord's Works and within the Landlord's control are discharged or complied with before the Date of Actual Completion and shall use all reasonable endeavours to procure that all other conditions outside the control of the Landlord are discharged or complied with before the Date of Actual Completion but compliance with all post-occupation conditions relating to the Property shall be the responsibility of the Tenant (excluding any conditions which require the payment of money or financial contributions directly to the local authority). 3. EXTENSIONS OF TIME 3.1 The Target Date of Practical Completion is to be put back by a period of time equal to any extension of time allowed to the Building Contractor under the Building Contract that does not result from the act, omission or default of the Landlord or that arises from a Justifiable Delay Event. 3.2 If there is any delay in completing the landlord's Works arising from: 2"11111.1 18


 
• 3.2.1 a Justifiable Delay Event; 3.2.2 any default of the Building Contractor under the terms of the Building Contract; or 3.2.3 the Insolvency of the BLilding Contractor or any member of the Professional Team; the Target Date of Practical Completion is to be changed to such date as the Employer's Agent certifies as being reasonable and proper in the light of the reasons for the delay. 4. COM REGULATIONS The Landlord as client shall comply with its duties under the COM Regulations and shall procure that the Building Contractor as the principal contractor for the Landlord's Works shall comply with their duties under the COM Regulations and that the Employer's Agent as the principal designer for the Landlord's Works shall comply with its duties under the COM Regulations. 5. LANDLORD'S VARIATIONS 5.1 5.2 If any of the materials, plant or equipment required for the Landlord's Works cannot be obtained within a reasonable time or at a reasonable cost the Landlord may substitute attemative materials, plant or equipment of no lesser quality than the materials, plant or equipment which they replace. The Landlord may make changes to the Specification: 5.2.1 which are required in order to comply with the terms of the Approved Planning Permission, any Requisite Consents or Applicable Law; or 5.2.2 which the Landlord, the Employer's Agent or the Building Contractor reasonably considers necessary. 5.3 The Landlord will provide at Actual Completion full details of all changes and/or variations to the Building Contract and the Specification. 6. APPOINTMENT OF THE BUILDING CONTRACTOR AND PROFESSIONAL TEAM 6.1 The Landlord shall appoint the BLilding Contractor and the Professional Team. 6.2 The Landlord shall use all reasonable endeavours to ensure that the Building Contractor: 6.3 7. 7.1 7.2 8. 8.1 6.2.1 complies with its obligations in the Building Contract; and 6.2.2 enforces the obligations of the members of the Professional Team under their appointments; and 6.2.3 enforces the obligations of the Design Sub-Contractors under their sub-contracts. The Landlord shall use all reasonable endeavours to ensure that each member of the Professional Team complies with the terms of their appointments. WARRANTIES The Warranties shall be in the form of the draft warranties attached to this agreement at Appendix 1. The Sub-contractor Warranties shall be in the form of the draft warranties attached to this agreement at Appendix 7. STATEMENT OF PRACTICAL COMPLETION The Landlord shall ensure that the Employer's Agent inspects the Landlord's Works with a view to the issue of the Statement of Practical Completion and is to instruct the Employer's Agent to give the Tenant not less than three Working Days' prior written notice of the date and time, being a working day, when the Employer's Agent will do so. 8.2 The Tenant and the Tenant's Representative will be entiUed to accompany the Employer's Agent on the inspection of the Landlord's Works and to make representations on the proposal to issue the Statement of Practical Completion. The Employer's Agent will have Zll17MU 19


 
• • due regard to any such representations made but the Employer's Agent will be at liberty to issue the Statement of Practical Completion as in its opinion it thinks it ought to be issued under the terms of the Building Contract. 8.3 If the Employer's Agent does not believe that the statement of Practical Completion can be issued the Employer's Agent shall give notice to the Tenant or the Tenant's Representative, which may be oral notice given during the inspection, of when it is intended to re-inspect the Landlord's Works for the purpose of issuing the Statement of Practical Completion and the procedure in this paragraph 8 will then be repeated as often as necessary until the Statement of Practical Completion is issued. 8.4 Subject to Practical Completion having taken place, the landlord shall procure that the Employer's Agent shall serve a copy of the Statement of Practical Completion on the Tenant and the Tenant's Representative forthwith after issue. 8.5 The issue of the Statement of Practical Completion shall be conclusive evidence binding on the parties that the Landlord's Works have been completed in accordance with the terms of this agreement, subject to the Landlord's obligations during the Rectification Period. 8.6 9. The Landlord and the Tenant acknowledge that the presence of minor Defects in the Landlord's Works at the time of any inspection relating to the issue of the Statement of Practical Completion or the deferment of any work of planting or landscaping until the proper season will not be a ground for delaying the issue of the Statement of Practical Completion and such minor Defects and deferred planting or landscaping will be the subject of a snagging list to the statement of Practical Completion. CONTINUING DEVELOPMENT OF ADJOINING PROPERTY The Tenant: 9.1 acknowledges and accepts that the Landlord is intending to develop the whole of the Adjoining Property and that works at the Adjoining Property may continue after the Date of Practical Completion; and 9.2 waives any right against the Landlord under the Lease or otherwise to claim damages, compensation or any other remedy arising from the disturbance, nuisance or inconvenience caused by such continuing works. 10. FOLLOWING PRACTICAL COMPLETION 10.1 The Landlord shall forthwith after issue of the Statement of Practical Completion: prepare and provide the Tenant with copies of: 10.1 .1 the commissioning reports, test certificates and operating manuals for all plant and machinery installed as part of the Landlord's Works; 10.1 2 a complete set of the as-built plans, drawings and specifications of the Landlord's Works; and 10 1 3 the health and safety file for the Property; 10.2 leave the Property in a good and clean condition, cleared of all unused building materials, plant and equipment used in the carrying out of the Landlord's Works and temporary structures. 11. DEFECTS 11 . 1 The Landlord will at its own expense make good or procure that the Building Contractor makes good all minor Defects which have been identified in the snagging list to the Statement of Practical Completion as soon as reasonably practicable after the Date of Practical Completion. 11.2 The Landlord will at its own expense make good or procure that all Defects for which the Building Contractor is responsible under the Building Contract that arise within the Rectification Period are made good to the reasonable satisfaction of the Tenant in accordance with the terms of the Building Contract 20


 
• • 11.3 Not less than one month before the end of the Rectification Period, the Landlord shall inspect the Landlord's Worils and prepare a schedule of Defects. 11.4 The Landlord shall: 11.5 11.4.1 11.4.2 11.4.3 11.4.4 serve a copy of the schedule of Defects on the Tenant within ten (10) Working Days after the inspection under paragraph 11.3; include in the schedule of Defects any additional Defects notified in writing by the Tenant or the Tenant's Representative within five Working Days of the service of the schedule of Defects under paragraph 11.4.1; deliver the schedule of Defects to the Building Contractor within the time limits required under the Building Contract; and ensure that a copy of the Notice of Completion of Making Good is provided to the Tenant as soon as reasonably practicable after the Building Contractor has made good the Defects. The Tenant shall allow access to the Property at all reasonable times to enable the schedule of Defects to be prepared and any works required under this paragraph 11 to be carried out and completed. If the Tenant assigns the Lease before the Landlord has complied with its obligations under this paragraph 11 , it shall procure that its assignee allows the Landlord access to the Property to comply with its obligations under this paragraph 11. 11.6 Except in relation to minor defects contained in the snagging list for the Statement of Practical Completion or properly notified to the Landlord in accordance with this paragraph 11, the Landlord will not be liable to the Tenant in respect of any defects in the Landlord's Works. 11. 7 Following the issue of the Notice of Completion Making Good the Landlord will have no further liability whatsoever to the Tenant in connection with the construction of the Landlord's Works whether under this agreement under statute in contract in tort or otherwise save in respect of disputes or breaches of this agreement. if any, notified to the Landlord on or before the date of issue of the Notice of Completion Making Good. 12. DISPUTES 12.1 If any dispute arises under this Schedule 2 which cannot be resolved between the Landlord and the Tenant either the Landlord or the Tenant may require that the dispute be resolved by an Expert in accordance with Schedule 3. 12.2 ntt71&t.5 Unless otherwise specified in this Schedule: 12.2.1 a dispute may be referred in accordance with Schedule 3 only if it cannot be resolved between the Landlord and the Tenant within 14 days of the dispute arising; and 12.2.2 time will not be of the essence for referring the dispute. 21


 
• • SCHEDULE3 Expert Detennlnatlon 1. APPOINTMENT OF EXPERT 1 .1 The Expert shall be: 1.1.1 in relation to any dispute under Schedule 2: (a) if the dispute relates to the issue of the Statement of Practical Completion, an independent architect of not less than ten years' standing who is experienced in the construction of developments of a similar size and nature to the Landlord's Works who is a member of the Royal Institute of British Architects; (b) if the dispute relates to a question of costs payable, an independent quantity surveyor of not less than ten years' qualification who is experienced in the construction of developments of a similar nature and size to the Landlord's Works who is a member of the Royal Institution of Chartered Surveyors: and (c) in relation to any other dispute, an independent chartered surveyor of not less than ten years' qualification who is experienced in the construction of developments of a similar nature and size to the Landlord's Works who is a member of the Royal Institution of Chartered Surveyors; or 1.1.2 in relation to any other dispute, any person agreed upon the Landlord and the Tenant or in the absence of agreement such person nominated by the President on the application of either party pursuant to the provisions of this schedule such person being an independent suitably qualified professional person (including but not limited to a solicitor or a surveyor or planning counsel) having regard to the subject matter of the dispute with at least ten years post qualification experience in commercial property matters similar to the subject matter of the dispute. 1.2 The Landlord and the Tenant will use reasonable endeavours to agree the identity of the Expert to determine the dispute. 1.3 Unless the Landlord and the Tenant agree the identity of the Expert within two weeks of a request to do so. the Expert shall be appointed at the written request of the Landlord or the Tenant by the President if the Expert is to be a surveyor or by the president or other most senior officer of the Royal Institute of British Architects if the Expert is an architect 1.4 The reference to an Expert shall be made to him as an expert unless paragraph 1.5 applies or the Landlord and the Tenant agree at the time of his appointment that he should act as an arbitrator. 1.5 If any dispute raises or relates to the same or parallel issues as those which have been or are being submitted to independent determination under the Building Contract. the Landlord and the Tenant will endeavour to appoint the same person acting in the same capacity as may be appointed to resolve the dispute under the Building Contract and to have the dispute proceedings under this agreement and the Building Contract consolidated. 2. CONDUCT OF THE DISPUTE 2.1 Where the Expert is to act as an expert: 21t17UU 2.1.1 the landlord and the Tenant may make written representations within ten Working Days of his appointment and will copy the written representations to the other party; 2.1.2 the Landlord and the Tenant shall have a further ten Working Days to make written comments on each other's representations and will copy the written comments to the other party; 22


 
• • 2 1.3 the Expert shall be at liberty to call for such written evidence from the parties and to seek such legal or other expert assistance as he or she may reasonably require; 2.1.4 the Expert shall not take oral representations from the Landlord or the Tenant without giving both parties the opportunity to be present and to give evidence and to cross examine each other; 2.1.5 the Expert shall have regard to all representations and evidence before him or her when making his or her decision, which shall be in writing, and will contain reasons for his decision; 2. 1 .6 the Expert shall use reasonable endeavours to publish his decision within 30 Working Days of his appointment; and 2. 1 . 7 the Expert shall act impartially and in good faith between the parties; 2.2 Where the Expert is to act as an arbitrator: 2.2. 1 2.2.2 2.2.3 2.2.4 2.2.5 all submissions made or evidence supplied to him shall be in writing unless the parties agree within ten Working Days of his appointment that this requirement does not apply; the date of his award will be deemed to be the date on which he serves a copy of the award on the Landlord and the Tenant or the latest date if there is more than one; he will not be entiUed to order the rectification, setting aside or cancellation of this agreement or any other deed or document; he will not be entitled to direct that the recoverable costs of the arbitration, or any part of it, be limited to a specified amount; and he will not be entitled to require that security be provided in respect of the costs of the arbitration; 2.3 Responsibility for the costs of referring a dispute to an Expert under this Schedule including costs connected with the appointment of the Expert and the Expert's own costs, but not the legal and other professional costs of any party in relation to a dispute, will be decided by the Expert or, in the absence of any such decision, borne equally between the parties . Jlt1711U 23


 
• • ---------- --- -- SCHEDULE4 Early Access Licence 1. RIGHT TO OCCUPY THE PROPERTY 1.1 During the Licence Period the Tenant will be pem,itted to occupy the Initial Property as a licensee only and the Tenant does not have, nor is entiUed to any, estate right or interest in the Initial Property either as completed or in the course of construction, or in any materials (apart from those materials deposited by the Tenant on the Initial Property in connection with the Tenant's Works). 1.2 During the licence Period, the Tenant shall comply with the Tenant's obligations in the Lease, so far as they are applicable to the occupation of the Initial Property as a licensee, as if the Lease had been granted on the Access Date (including the provisions relating to alterations and planning pem,issions in so far as they relate to the Tenant's Works). 2. USE OF THE PROPERTY 2.1 The Tenant shall not use the Initial Property during the licence Period for any purpose other than carrying out the Tenant's Works and for receiving deliveries of and storing goods and materials for the purposes of carrying on its business. 2.2 If the Tenant carries out the Tenant's Works before the licence to Carry Out Works is granted, it shall do so on the terms of the Licence to Carry Out Works as if it had been granted to the Tenant on the Access Date. 2.3 The Tenant may not assign or undertet to or hold its right to occupy the Initial Property under this agreement on trust for any other person. 2.4 The Tenant must not breach the conditions of the Approved Planning Permission if it occupies and/or uses the Property during the licence Period and the Tenant shall indemnify the Landlord against all liabilities, expenses, costs, claims and losses suffered or incurred by the Landlord arising out of or in connection with any such breach by the Tenant. 3. CONCURRENT WORKS 3.1 If the Tenant enters onto the Initial Property to carry out the Tenant's Works before the Date of Practical Completion the Tenant and its contractors will: 3.1.1 co-operate with the Landlord and the Building Contractor to ensure that any remaining Landlord's Works, including making good defects, and the Tenant's Works can be carried out simultaneously; 3.1.2 3.1.3 comply with the proper and reasonable directions of the Building Contractor; ensure that no material interruption or delay in the completion of the Landlord's Works is caused by the carrying out of the Tenant's Works; and 3.1.4 indemnify the Landlord in respect of any material interruption or delay in the Landlord's Works arising from any breach of the Tenant's obligations in this paragraph 3.1 and any infringement of the temis of any Landlord's consent by the carrying out of the Tenant's Works; 3.2 Before entering on the Initial Property the Tenant shall submit a method statement to the Landlord for approval (such approval not to be unreasonably withheld or delayed) seWng out the proposed working methods for the carrying out of the Tenant's Works. The method statement shall contain: 21117M1.5 3.2.1 details of the consultants' and contractors' proposals for the design and carrying out of each part of the Tenant's Works; 3.2.2 proposals for regular liaison, co-ordination and co-operation of the Tenant, its consultants and contractors with the Landlord and the Building Contractor with the intention of avoiding hindering or endangering the Landlord's Works; 3.2.3 details of the order and timing of the Tenant's Works, including proposals for: 24


 
• • (a) means and timing of access to the Initial Property; (b) the frequency of delivery to the Initial Property of materials and equipment for incorporation or use in the Tenant's Works; (c) the protection of the Landlord's Works and the storage of materials, plant and equipment. 4. ENDING OF THE LICENCE PERIOD The Licence Period will end on the grant of the Lease or, if ea�ier, if this agreement comes to an end. 5. COM REGULATIONS 5.1 5.2 5.3 If the COM Regulations apply to the Tenant's Works, the Tenant shall: agree in writing with the Landlord that the Tenant is to be treated as the only cliern in respect of the Tenant's Works for the purposes of the COM Regulations and the parties agree that this paragraph is such an agreement; comply with its obligations as a ctient for the purposes of the COM Regulations; ensure that the principal designer and the principal contractor that it appoints in relation to the Tenarn's Works comply with their respective obligations under the COM Regulations; 5.4 ensure that all relevarn documerns relating to the Tenant's Works are placed in the health and safety file for the Property by the principal designer or principal cornractor in accordance with the COM Regulations and otherwise comply with its obligations in the Lease relating to those documents and the file . JM17M1.i 25


 
SCHEDULES Documents to be supplied on Actual Completlon Date Document Parties 5/12/2017 S 106 agreement Southampton City Council (1) Mountpark Logistics EU 2014 05 SARL (2) 9/8/2017 s.278 agreement Southampton City Council (1) ) Mountpark logistics EU 2014 05 SARL (2) Winvic Construction Limited (3) and Euler Hermes S.A. (N.V.) (4) 19/12/2017 Architect (1) Mountpark Logistics EU 2014 05 SARL (2) Michael Sparks appointment Associates LLP 2/1/2018 Novation agreement (1) Mountpark Logistics EU 2014 05 SARL (2) Michael Sparks - architect Associates LLP (3) Winvic Construction limited • 19/12/2017 Engineer ( 1) Mountpark Logistics EU 2014 05 SARL (2) Complete appointment Design Partnership Limited 2/1/2018 Novation agreement (1) Mountpark Logistics EU 2014 05 SARL (2) Complete -engineer Design Partnership Limited (3) Winvic Construction limited 19/12/2017 Appointment (1) Mountpark Logistics EU 2014 05 SARL (2) KAM Project employer's agent Consultants Limited 18/5/2018 Novation agreement (1) KAM Project Consultants Limited (2) Mountpark logistics EU 2014 05 SARl (3) Mountpark logistics EU 2017 23 SARL 19/12/2017 Building contract (1) Mountpark Logistics EU 2014 05 SARL (2) Winvic Construction Limited Variations to Building (1) Mountpark Logistics EU 2014 05 SARL (2) Winvic Contract issued by Construction Limited the Employer's Agent • 18/5/2018 Novation agreement (1) Winvic Construction Limited (2) Mountpark Logistics EU building contract 2014 05 SARL (3) Mountpark Logistics EU 2017 23 SARl 24/5/2018 Agreement (steel (1) Winvic Construction Limited (2) Caunton Engineering ltd frame) 24/5/2018 Agreement (concrete (1) Winvic Construction Limited (2) Concast Building limited works) 24/5/2018 Agreement (M & E) (1) Winvic Construction Limited (2) HWM Building Services ltd 24/5/2018 Agreement (1) Winvic Construction Limited (2) IRC Carocelle ltd (cladding) 24/5/2018 Agreement (syphonic ( 1) Winvic Construction limited (2) Sapoflow ltd drainage) 24/5/2018 Agreement (lifts) (1) Winvic Construction limited (2) Schincler Ltd 24/5/2018 Agreement (windows (1) Winvic Construction limited (2) Speedclad ltd and curtain walling) 2tc1711U 26


 
24/512018 Agreement (1) Winvic Construction Limited (2) Stanfords Industrial (structural slab) Concrete Flooring Ltd 24/5/2018 Agreement (dock (1) Winvic Construction Limited (2) Stertil UK Ltd doors etc) 14/8/2018 Agreement (1) Winvic Construction Limited (2) G&H Sustainability Limited 11/4/2018 Agreement (1) Stanford Industrial Concrete Flooring Limited (2) Face Consultants Limited • • 21117111.1 27


 
Signed for and on behalf of the Landlord ... Mana Manager Signed for and on behalf of the Tenant Director Signed for and on behalf of the Guarantor Duly authorised 28617851.5 28


 
a10112southamptonukdcmou
• • • • • • • • Ref: CS\125230.002 28617812 5 ·Gateley Plc DATED 9' Uo Vtf(\ bu (1) MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L (2) CONEXUS LIMITED (3) PFSWEB, INC . LEASE 2018 UNIT 7, MOUNTPARK SOUTHAMPTON, WIDE LANE, SOUTHAMPTON,SO182NQ


 
• • • • • • • • • • 1. CONTENTS DEFINITO NS AND 11\!TERPRETA T.Q N ................................................................................. 1 DEMISE ................................................................................................................... , ............ . 6 TENANT'S COVENANTS ..................................................................... ................................ .. 6 PROVISOS ......................................................................... ................................................. 20 LANDlOR.DS COVENANTS ................................................................................. , .. , ........... 24 INSURANCE ........................................................................................................................ 24 RENT REVIEW ................................................... ...................................... ........................... 27 GUARANTOR PROVISIONS ................................................................................................ 29 SC HEDJ LE 1 - O...S$CH.IPT,KJ N OF THE PROPERTY ....................................................................... 32 SCHEDULE 2 - RIGHTS GRANTED ................................................................................................. 33 SCHEDJ LE 3 - RIGHTS RESERVEQ ............................................................ , ................................ 34 SC HED!.JLE 4 - A!.JTt:PR ISED GUARANTEE AGREEMENT. ........................................... ................ 35 SCHEDULE 5 - SERVICE CHARGE PROVISIONS .......................................................................... 39 PART 1 ..... .................... ...................................................................... ................................. 39 PART 2 ................................... , ............................................................................................ 41 SCHEDULE 6 - ENCUMBRANCES. .................................................................................................. 43 28617812.2


 
• LAND REGISTRY PRESCRIBED CLAUSES • LR1. Date of lease C\ I\Jovt1'0bif �o 1 � LR2. Title number(s) LR2.1 Landlord's title number(s) HP810602 LR2-2 Other title numbers • None LR3. Parties to this lease Landlord MOUNTPARK LOGISTICS EU 2017 23 SAR.L. a Luxembourg private limited liability company (societe a responsibilite limitee) with its registered office at 18, rue Robert Stumper, L-2557 Luxembourg, being registered • with the Luxembourg Register of Commerce and Companies (registre de commerce et des societies) under number 8218933 and with a share capital of £12,500. Tenant CONEXUS LIMITED incorporated and registered in England and Wales with company number 03616118 with • its registered office at Eastlands One, London Road, Basingstoke, Hampshire RG21 4FB. Guarantor PFSWEB, INC. incorporated and registered in the State of Delaware in the United States of America with file number 3062550, whose registered office in Delaware is 251 Little Falls Drive, Wilmington, DE 19808 and whose address is • at 505 Millennium Drive, Allen, TX75013 USA LR4. Property In the case of a conflict between this clause and the remainder of this lease then, for the purposes of registration, this clause shall prevail. • The property described in schedule 1 . LR5. Prescribed statements etc. None required for this Lease LR6. Term for which the Property is The term is as follows: leased Ten years from and including the S"" day oftvO\.l('.JY\bV ..,, • 2011:, and ending on and including the4day oft\.) O\.,UY-..t 202'\) LR7. Premium None LR8. Prohibitions or restrictions on This lease contains a provision that prohibits or restricts disposing dispositions • of this lease LR9. Rights of acquisition etc. LR9.1 Tenant's contractual rights to renew this lease, • 28617812.2


 
• • • • • • • • • • LR10. Restrictive covenants given in this lease by the Landlord in respect of land other than the Property LR11. Easements LR12. Estate rentcharge burdening the Property LR13.Application for standard form of restriction LR14. Declaration of trust where there is more than one person comprising the Tenant 28617812.2 to acquire the reversion or another lease of the Property, or to acquire an interest in other land None LR9.2 Tenant's covenant to (or offer to) surrender this lease None LR9.3 Landlord's contractual rights to acquire this lease None None LR11, 1 Easements granted by this lease for the benefit of the Property See schedule 2. LR11.2 Easements granted or reserved by this lease over the Property for the benefit of other property See schedule 3. None None None


 
• • • • • • • • • • 1, DEFINITIONS AND INTERPRETATION 1.1 21617112.2 In this Lease, including the schedules, the following definitions shall apply unless the context requires otherwise: Additional Rent such rates, taxes, Insurance Rent, Service Charge and any other costs, expenses or liabilities for which the Landlord is responsible or which are payable by it (whether at the time of demand have been paid by or demanded of the Landlord or not) relating to or arising from the Deferred Part for the period from the date hereof until and including 30 June 2019; Advisory Report has the meaning given in the EPB Regulations; Asset Rating has the meaning given in the EPB Regulations; Authorised Guarantee Agreement an authorised guarantee agreement within the meaning of section 16 of the 1995 Act; Basic Rent £�93,376i per annum subject to the provisions for review contained in clause 7; C\9� 044 Commo� Parts: all roads, footpaths, paved and service areas, accessways, Conducting Media, landscaped areas, gates, boundary walls and fences or other areas or amenities within or pertaining to the Estate which are not demised or intended to be demised to any tenant; Conducting Media drains, sewers, conduits, flues, gutters, gullies, channels, ducts, shafts, watercourses, pipes, cables, wires, fibres and any other medium for the passage or transmission of soil, water, gas, electricity, air, smoke, light, information or other matters and includes where relevant all ancillary equipment and structures; Customer any company or organisation with whom the tenant has a customer supplier relationship from time to time; Deferred Part means the ground floor area shown coloured pink on Plan [1] and all of the internal air space vertically above the same bounded by and within the walls doors and roof of the building containing the same; Encumbrances the matters brief particulars of which are set out in schedule 6; Energy Assessor an individual who is a member of an accreditation scheme approved by the Secretary of State in accordance with Regulation 25 of the EPB Regulations; Environmental Law all treaties, directives, common laws, statutes, statutory instruments, bye-laws, regulations and orders from time to time enacted or in force in any jurisdiction and all codes of practice, circulars and guidance notes of or issued by a regulatory authority and applicable from time to time in any jurisdiction (whether or not having the force of law) which relate in any way to human health, workplace conditions, hazardous substances and the protection of the environment;


 
• • • • • • • • • • 21617112.2 EPB Regulations the Energy Performance of Buildings (England and Wales) Regulations 2012 (SI 2012/3118) and any subsequent legislation; EPC an Energy Performance Certificate as defined in the EPB Regulations; Estate all the land and buildings known as Mountpark Southampton, Wide Lane, Southampton SO18 2NQ shown for the purpose of identification only edged blue on the Plan; Event of Incapacity has the meaning set out in clause 4.1; Guarantor any person who has guaranteed the tenant covenants of this Lease including any person who has entered into an Authorised Guarantee Agreement and in the case of an individual the expression includes his personal representatives; Insurance Rent the monies payable by the Tenant under clause 6.2.1; Insured Risks fire, storm, tempest, lightning, explosion, flood, earthquake, aircraft and other aerial devices and articles dropped therefrom (in time of peace), impact by road vehicles, riot, civil commotion, malicious damage, terrorism, bursting and overflowing of water tanks, apparatus and pipes (except always such of those risks as cannot reasonably be insured against by the Landlord on satisfactory terms or as the Landlord's insurers or underwriters have refused to insure against) and such other risks against which the Property is required to or which may from time to time be insured under the provisions of this Lease subject to any excesses, exclusions, limitations or conditions as may be imposed by the insurers or underwriters with whom such insurance is placed; Initial Property the property briefly described in clause LR4 and more fully described in schedule 1 and refers to each and every part thereof and includes all Landlord's fixtures and fittings therein and all Conducting Media and plant and machinery within and exclusively serving the Property and all alterations and additions thereto but excluding the Deferred Part; Interest interest at the rate of 4 per centum per annum over the base rate of Barclays Bank pie for the time being and from time to time prevailing (as well after as before any judgment) or such other comparable clearing bank base rate as the Landlord may reasonably designate if the base rate of Barclays Bank pie shall cease to be published; Internal Area the gross internal area of a building measured in square feet in accordance with Part 3 of the RICS Property Measurement 6th edition, May 2015 and on the basis that: (a) all such relevant measurements within the warehouse of the building will be taken to the internal face of the cladding rails; and (b) all plant platforms plant decks and plant floor areas of the building will be excluded from such calculations; Landlord the person described in clause LR3 as the Landlord which expression includes the person or persons from time to time entitled to the reversion immediately expectant upon the determination of the Term: 2


 
• • • • • • • • • • 28617812.2 Landlord's Surveyor any person appointed by the Landlord from time to time to perform the function of a surveyor for any purposes of this Lease (who may be an employee of the Landlord or an associated company of the Landlord); Land Registry Prescribed Clauses clauses LR1 to LR14 appearing at the front of this Lease; Lease this Lease and includes any document supplemental to it; Licence to Alter the licence to carry out alterations dated Cl' I\J o\r-{,('Y")b if 2018 between (1) the Landlord and (2) the Tenant; Logistics Provider a company or organisation which provides logistics services to the Tenant in connection with the Tenant's business and occupies the Property solely in connection with providing logistics services to the Tenant; 1954 Act the Landlord and Tenant Act 1954; 1995 Act the Landlord and Tenant (Covenants) Act 1995; 2002 Act the Land Registration Act 2002; Outgoings all existing and future rates, taxes, charges, assessments, impositions and outgoings whatsoever whether parliamentary, municipal, parochial or otherwise and whether or not of a capital or non-recurring nature which are now or may at any time in the future be payable charged or assessed on property or the owner or occupier of property; Permitted Use the use of the Property for any use falling within Classes B1(c) and/or B2 and/or B8 with ancillary offices of the Schedule to the Town and Country Planning (Use Classes) Order 1987; Plan the plan annexed hereto; Planning Acts the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning (Hazardous Substances) Act 1990, the Local Government Planning and Land Act 1980, the Planning and Compensation Act 1991 and the Planning and Compulsory Purchase Act 2004; Plant all the electrical, mechanical and other plant. machinery, equipment, fixtures and fittings of ornament or utility in use for common benefit from time to time on in or at the Estate including without prejudice to the generality of the foregoing equipment cleaning equipment, public address systems, fire precaution equipment, fire and burglar alarm systems, closed circuit television, refuse compactors and all other such equipment including stand-by and emergency systems; 3


 
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• • • • • • • • • 1.2 • 28617812.2 Property the property briefly described in clause LR4 and more fully described in schedule 1 and refers to each and every part thereof and includes all Landlord's fixtures and fittings therein and all Conducting Media and plant and machinery within and exclusively serving the Property and all alterations and additions thereto; Recommendation Report has the meaning given in the EPB Regulations; Rent Commencement Date Q., c. un b u 201 <i Rent Review Date s {\J6vt.rn bu 2023: Rents all sums reserved as rent by this Lease; Section 106 Agreement the section 106 agreement dated 5 December 2017 between (1) Southampton City Council and (2) Mountpark Logistics EU 2014 05 S.A.R.L. relating to the Estate; Service Charge has the meaning set out in schedule 5; Services has the meaning set out in schedule 5; Superior Landlord the holder of a reversion whether immediate or not to the lease under which the Landlord holds its interest in the Property; Superior Lease any lease under which the Landlord holds its interest in the Property and includes any leasehold reversion whether immediate or not to such lease: Tenant the person described in clause LR3 as the Tenant which expression includes its successors in title and assigns in whom this Lease shall for the time being be vested; Term the terms of years granted by this Lease and any period of holding over or continuation or extension thereof whether by statute or common law; Term Commencement Date s- "-.lovvnbif 2013• � Second Commencement Date 1 July 2019; VAT value added tax or any tax of a similar nature that may be substituted for it or levied in addition to it; Working Day any day (other than a Saturday, Sunday or public holiday) during which banks in London are open for normal business . In this Lease where the context so admits: 4


 
• • • • • • • • • • 21617812.2 1.2.1 in any case where the Tenant is placed under a restriction by reason of the covenants and conditions contained in this Lease the restriction shall be deemed to include an obligation on the Tenant not to permit or allow the infringement of the restriction by any person claiming rights to use enjoy or visit the Property through under or in trust for the Tenant; 1.2.2 the clause, schedule and paragraph headings in this Lease are for ease of reference only and shall not be taken into account in the construction or interpretation of any covenant, condition or proviso to which they refer; 1.2.3 1.2.4 1.2.5 1.2.6 1.2.7 1.2.8 references in this Lease to a clause, schedule or paragraph are references where the context so admits to a clause, schedule or paragraph in this Lease and references in a schedule to a paragraph are (unless the context otherwise requires) references to a paragraph of that schedule; words in this Lease importing the singular meaning shall include the plural meaning and vice versa; words in this Lease importing the masculine gender shall include the feminine and neuter genders and vice versa; words denoting natural persons shall include corporations and vice versa and any reference in this Lease to a company shall include a limited liability partnership; references in this Lease to any Act of Parliament or statutory instrument shall include any modification or re-enactment thereof for the time being in force and shall include all instruments, orders, plans, regulations, permissions, consents and directions for the time being made issued or given thereunder or deriving validity therefrom (save that any reference in this Lease to the Town and Country Planning (Use Classes) Order 1987 shall mean that order as it is in force as at the date of this Lease); where the Landlord or the Tenant or the Guarantor for the time being consists of two or more individuals or companies or any combination thereof the expressions "the Landlord" or "the Tenant• or "the Guarantor" shall include the plural number and covenants expressed to be made by or with such party shall be deemed to be made by or with such individuals or companies jointly or severally; 1.2.9 references to any period in the last year of the Term shall include any period in the last year thereof if the same shall determine otherwise than by effluxion of time; 1.2.10 1.2.11 1.2.12 references to any right of the Landlord to have access to the Property shall be construed as extending to any mortgagee of the Landlord and any Superior Landlord and to all persons authorised by the Landlord and any mortgagee of the Landlord and any Superior Landlord (including agents, professional advisers, contractors, workmen and others); when an Event of Incapacity is expressed to take place in relation to an individual or a company then whenever either the Tenant or the Guarantor consists of more than one individual or company or any combination thereof an Event of Incapacity shall be deemed to have been suffered by the Tenant or the Guarantor (as the case may be) whenever an Event of Incapacity takes place in relation to any one such individual or company; whenever and to the extent that any provision of this Lease would or might contravene the provisions of section 25 of the 1995 Act (section 25) then: (a) such provision is to take effect only insofar as it may do so without contravening section 25; (b) where such provision is incapable of having an effect without contravening section 25 this Lease is to be construed and interpreted as if such provision were deleted; and 5


 
• • • • • • • • • 1.2.13 1.2.14 1.2.15 (c) the legality validity and enforceability of any of the remaining provisions of this Lease are not in any way to be affected or impaired as a result; the Land Registry Prescribed Clauses are included in and form part of this Lease; except to the extent provided in clause LR4 where there is an inconsistency between a provision contained in the Land Registry Prescribed Clauses and a provision contained in the rest of the Lease, the latter provision is to prevail over the former; the expression "Property" shall be construed to mean the Initial Part and the Deferred Part as soon as the demise of the Deferred Part takes effect and until then to include only the Initial Part. 2. DEMISE 2.1 In consideration of the Rents and the Tenant's covenants reserved by and contained in this Lease the Landlord DEMISES to the Tenant with full title guarantee FIRST ALL THAT the Initial Property for the TERM of years specified in clause LR6 AND the Landlord DEMISES to the Tenant with full title guarantee SECONDLY ALL THAT the Deferred Part for the TERM of years commencing on the Second Commencement Date and ending at the same time as the foregoing demise of the Initial Property TO HOLD the same unto the Tenant TOGETHER WITH (but to the exclusion of all other liberties, easements, rights or advantages) the rights set out in schedule 2 EXCEPT AND RESERVING to the Landlord and all other persons entitled thereto as stated in schedule 3 SUBJECT to the Encumbrances YIELDING AND PAYING therefor during the Term yearly and proportionately for any fraction of a year by way of rent: the Basic Rent which shall be paid by equal quarterly payments in advance on the usual quarter days in every year the first of such payments (or a proportionate part) in respect of the period commencing on the Rent Commencement Date and ending on the day preceding the quarter day next following to be made on the Rent Commencement Date; 2.2 the Service Charge which shall be paid as stated in Part 1 schedule 5 as from the Term Commencement Date; 2.3 2.4 3 3.1 28617812.2 the Insurance Rent which shall be paid as stated in clause 6.2.1 as from the Term Commencement Date: and any other sums (including VAT) which may become due from the Tenant to the Landlord under the provisions of this Lease which shall be payable as from the Term Commencement Date. TENANT'S COVENANTS The Tenant COVENANTS with the Landlord during the Term as follows: Rent 3.1.1 to pay the Rents at the times and in the manner required by this Lease without any deduction and not to exercise or seek to exercise any right or claim to withhold any Rents or any right or claim to legal or equitable set-off: 3.1.2 to pay the Basic Rent by banker's standing order; 3.1.3 to pay the Additional Rent to the Landlord within 14 days of written demand provided that the Landlord shall not issue such demand any earlier than 1 July 2019; 3.1.4 without prejudice to any other rights or remedies of the Landlord if the whole or any part of the Rents shall remain unpaid seven days after becoming due (in the case of the Basic Rent whether formally demanded or not) or if the Landlord shall refuse to accept the tender of the whole or any part of the Rents because of a breach of covenant on the part of the Tenant then to pay Interest on the sum in question from the date on which it became due until the date of actual payment such Interest to be recoverable as rent; 6


 
• • • • • • • • • 3.2 Outgoings 3.3 3.2-1 3-2.2 to pay and discharge all Outgoings in respect of the Property (other than taxes imposed on the Landlord in respect of the Basic Rent or relating to any dealing with the reversion of this Lease); to pay for all gas, water and electricity consumed on the Property and all charges for meters and all standing charges including any taxes levied thereon; Service Charge to pay to the Landlord the Service Charge and to observe and perform the obligations relating to the Service Charge as set out in schedule 5; 3-4 Repair 3.4.1 3-4.2 3-4.3 well and substantially to repair and clean the Property and to keep the Property in good and substantial repair and condition and from time to time when necessary to rebuild, reinstate or replace the same together with all improvements and additions to the Property and all Landlord's fixtures fittings and appurtenances of whatever nature affixed or fastened to the Property (damage by the Insured Risks excepted unless and to the extent that the policies of insurance in respect of the Insured Risks effected by the Landlord are vitiated or the policy monies are withheld by reason of any act, omission, neglect or default of the Tenant or any sub-tenant or their respective employees, agents, licensees or invitees); to clean the inside and outside of all windows in the Property as often as shall be reasonably necessary; to ensure that all areas comprised in the Property which are unbuilt upon are kept clean and tidy and that all grassed areas are kept mown and free from weeds and overgrowth; 3.5 Decoration 28617112.2 3.5.1 3-5.2 3.5.3 subject to clauses 3.5.3 and 3.5.4, as often as reasonably necessary during the Term and also in the last six months of the Term howsoever determined to decorate the inside of the Property with two coats of good quality paint and with paper for those parts normally papered or other suitable and appropriate materials of good quality in a workmanlike manner provided that the colour of the paint and the materials used in the last six months of the Term shall be subject to the prior written approval of the Landlord; subject to clauses 3.5.3 and 3,5.4, as often as reasonably necessary during the Term and also in the last six months of the Term howsoever determined to decorate the exterior of the Property with three coats of good quality paint or other suitable and appropriate materials of good quality in a proper and workmanlike manner provided that the colour of the paint and the materials used in the last six months of the Term shall be subject to the prior written approval of the Landlord; notwithstanding clauses 3.5-1 and 3-5•2, the Tenant shall not be obliged to redecorate in the last six months of the Term if redecoration has been carried out in the last two years of the Term; 3.5.4 the Tenant shall not be obliged to repaint the steel frame of the unit on the Property except in respect of such part or parts where the paint is in disrepair or is damaged; Entry 3-6.1 subject always to clause 6.6, to permit the Landlord and its agents and all persons authorised by them with or without workmen, appliances and equipment at all reasonable times to enter upon the Property for any of the following purposes: 7


 
• • • • • • • • • • 3.6.2 3. 7 Alterations 3.7.1 (a) to ascertain whether or not the covenants and conditions of this Lease have been observed and performed; (b) to examine the state of repair and condition of the Property and (where necessary in order to do so) to open up floors and other parts of the Property; (c) to take a schedule of the Landlord's fixtures and fittings and any Plant in the Property; (d) to repair and maintain and execute any work upon the Property or any part thereof and Landlord's fixtures and fittings and any Plant therein (including where reasonable to do so the installation of additional or the extension of existing Plant therein) or to cleanse, empty, repair or renew any Conducting Media or for the provision of any of the Services; (e) to estimate the current value of the Property for insurance purposes; (f) for any other reasonable purpose (including measurement for rent review or relating to any pending or intended step under the 1954 Act) connected with the interest of the Landlord in the Property where there is no reasonable alternative to such entry; (g) to exercise any of the rights herein excepted and reserved; without payment of compensation for any nuisance, annoyance, inconvenience or damage caused to the Tenant; if any breach of covenant, defects, disrepair, removal of fixtures or unauthorised alterations or additions shall be found upon such inspection for which the Tenant is liable then upon notice by the Landlord to the Tenant to execute all repairs works, replacements or removals required within two months (or sooner if necessary) after service of such notice to the reasonable satisfaction of the Landlord or the Landlord's Surveyor and in case of default by the Tenant it shall be lawful for the Landlord with all necessary workmen, appliances and equipment to enter upon the Property and execute such repairs works replacements or removals and all expenses so incurred by the Landlord shall be repayable by the Tenant to the Landlord forthwith on demand with Interest from the date of expenditure until the date they are paid by the Tenant to the Landlord (such expenses and Interest to be recoverable as if they were rent in arrear); not to make any alterations or additions that substantially change the external appearance of the Property; 3.7-2 not to make any other alterations or additions to the Property except 3.7.3 21617112.2 (a) with the prior written consent of the Landlord which shall not be unreasonably withheld or delayed; (b) subject to such terms and conditions (including provision for reinstatement at the Tenant's cost at the expiration or earlier determination of the Term) as the Landlord may reasonably require; (c) in accordance with drawings and specifications previously submitted in triplicate to and approved in writing by the Landlord such approval not to be unreasonably withheld or delayed; provided that the Tenant may without the Landlord's prior approval, subject to the remaining provisions of this clause 3.7, install alter and remove internal demountable partitioning and install alter and remove internal cabling and wiring (including any necessary drilling of holes that do not affect structural stability) within the buildings on the Property; unless otherwise agreed by the Landlord in writing at least 6 months prior to the determination of the Term, at the expiration or earlier determination of the Term 8


 
• • • • • • • • • • 28617812.2 3.7.4 3.7.5 3.7.6 if and to the extent required by the Landlord to reinstate the Property to the same condition as it was in prior to the alterations or at the grant of this Lease such reinstatement to be carried out under the supervision (such supervision to be at no cost to the Tenant) and to the reasonable satisfaction of the Landlord or the Landlord's Surveyor; to procure that any alterations or additions to the Property permitted by the Landlord under this clause shall be carried out only by a contractor approved by the Landlord in writing provided that the Landlord may only withhold its consent if: (a) the Landlord believes acting reasonably that the competence of the proposed contractor may in the context of the proposed works adversely affect or invalidate any warranties, guarantees or insurance in respect of the Property; or (b) the proposed contractor is not of sufficient financial standing and/or does not have professional indemnity cover for an appropriate amount taking into account the nature of the proposed works and the potential impact upon the Property and the Building and upon the value of the Property; provided that if the Landlord does not respond to a request for approval of a contractor within 10 Working Days of receipt of the request then the Landlord's approval shall be deemed to be given; in relation to all works at the Property to which the Construction (Design and Management) Regulations 2015 (the Regulations) apply and which are undertaken by or on behalf of the Tenant or any person deriving title or authority from the Tenant: (a) prior to commencement of any such works to make and serve a declaration to the Health and Safety Executive to the effect that the Tenant shall act as the sole client in respect of such works for the purpose of the Regulations (and to supply a copy of the same to the Landlord); (b) to act as the sole client in respect of such works for the purposes of the Regulations and to comply with all the obligations imposed upon the client by the Regulations; (c) to procure that the Tenant's COM principal designer (appointed from time to time under the Regulations) and the Tenant's contractors and designers shall comply in all respects with the Regulations; (d) on completion of such works to supply to the Landlord for retention by the Landlord a full and complete copy of the health and safety file for the works prepared in accordance with the Regulations and any code of practice or other guidance issued by any competent authority together with a royalty free irrevocable and non-exclusive copyright licence or licences to use and reproduce the same for any purposes relating to the Property or any part thereof (which licences shall carry the right to grant sub-licences and shall be transferable to third parties); not to make any alterations or additions to the Property which have an adverse effect on the asset rating in any EPC commissioned in respect of the Property; 3.7.7 before giving consent under clause 3.7.6 the Landlord may require the Tenant to submit sufficient information to enable the Landlord to assess the impact of the proposed alterations on the Asset Rating of the Property: 3.7.8 3.7.9 on completion of any works of alteration and if required by the EPB Regulations to obtain a valid EPC for the Property from an Energy Assessor approved by the Landlord (such approval not to be unreasonably withheld or delayed) and deliver a copy to the Landlord together with details of the reference number of such EPC (if not apparent from the copy); 9


 
• • • • 3,8 • • • • • • 28617812.2 3-7.10 3.7.11 Alienation if any alterations made by the Tenant invalidate a valid EPC for the Property or materially adversely affect any such EPC the Tenant will obtain a new EPC for the Property from an Energy Assessor approved by the Landlord (such approval not to be unreasonably withheld or delayed) and provide a copy to the Landlord; the Tenant may without any consent of the Landlord: (a) install alter and remove internal non-structural partitions racking and other fittings and install alter and remove internal cabling and wiring (including any necessary drilling of holes that does not adversely affect structural stability): (b) make minor non-structural alterations to fitting out works previously approved by the Landlord (including without limitation operational machinery and equipment heating lighting racking sprinklers and mezzanine floors); PROVIDED that the Tenant shall in any such case inform the Landlord at least ten Working Days before undertaking any such works and shall notify the Landlord of completion of the same within 5 Working Days afterwards; 3.8.1 not to assign, or charge part only of the Property; 3.8.2 not to part with possession or share occupation of or allow any other person to occupy the whole or any part of the Property except by way of a permitted assignment or underletting and not to hold the whole or any part of the Property on trust for another; 3.8.3 3-8-4 3.8-5 3-8-6 not to charge the whole of the Property without the prior written consent of the Landlord which shall not be unreasonably withheld or delayed provided that if the Landlord does not respond to a request for approval of charging within 1 O Working Days of receipt of the request then the Landlord's approval shall be deemed to be given; not to assign the whole of the Property without the prior written consent of the Landlord which shall not be unreasonably withheld or delayed provided that the Landlord shall be entitled: (a) to withhold its consent in any of the circumstances set out in clause 3.8.6; (b) to impose all or any of the matters set out in clause 3-8-7 as a condition of its consent: the provisos to clause 3.8-3 shall operate without prejudice to the right of the Landlord to withhold such consent on any other ground or grounds where such withholding of consent would be reasonable or to impose any further condition or conditions upon the grant of consent where the imposition of such condition or conditions would be reasonable; if any of the following circumstances which are specified for the purposes of section 19(1A) Landlord and Tenant Act 1927 apply either at the date when application for consent to assign is made to the Landlord or after that date but before the Landlord's consent is given the Landlord may withhold its consent and if after the Landlord's consent has been given but before the assignment has taken place any such circumstances apply the Landlord may revoke its consent whether its consent is expressly subject to a condition as referred to in clause 3.8-7 or not. The circumstances are: (a) where any sum due (and demanded in the case of Insurance Rent and Service Charge) from the Tenant under this Lease remains unpaid; (b) where there is a material outstanding breach of any of the Tenant's covenants in this Lease which is not the subject of a bona fide dispute; 10


 
• • • • • • • • • • 21&17812.2 (c) where in the reasonable opinion of the Landlord the proposed assignee is not of sufficient financial standing to enable it to comply with the Tenant's covenants in this Lease; (d) where the proposed assignee is a member of the same group of companies (within the meaning of section 42 of the 1954 Act) as the person who is the Tenant at the time of the relevant application (or any former tenant who by virtue of section 11 of the 1995 Act has not been released) and in the Landlord's reasonable opinion the proposed assignee is less likely to be able to comply with the Tenant's covenants in this Lease than that person; (e) where the proposed assignee or any guarantor other than any guarantor under an Authorised Guarantee Agreement is a corporation registered or otherwise resident in a jurisdiction in which the order of a court obtained in England and Wales will not necessarily be enforced against the proposed assignee or guarantor without any consideration of the merits of the case; (f) where the proposed assignment will result in the Landlord ceasing to have the right to charge VAT on supplies made by it in respect of the Property or to recover VAT on supplies made to it in respect of the Property; 3.8.7 the Landlord may impose any or all of the following conditions which are specified for the purposes of section 19(1A) Landlord and Tenant Act 1927 on giving any consent to an assignment by the Tenant: (a) that the Tenant who is to assign this Lease enters into an Authorised Guarantee Agreement with the Landlord in the form set out in schedule 4 with such modifications as the Landlord reasonably requires; (b) that all sums due from the Tenant under this Lease are paid prior to completion of the proposed assignment; (c) that the proposed assignee covenants with the Landlord that as from the date of the deed of assignment to it of this Lease until it assigns this Lease with the Landlord's consent it will pay the rent and observe and perform all the Tenant's covenants and obligations in this Lease; (d) that if at any time before the proposed assignment any of the circumstances specified in clause 3.8.6 apply the Landlord may revoke the consent by written notice to the Tenant; (e) if reasonably required by the Landlord the execution and delivery to the Landlord prior to the proposed assignment of a valid rent deposit deed for such sum as the Landlord may reasonably determine (but not in any event exceeding six months' Basic Rent) and in such form as the Landlord may reasonably require together with the payment by way of cleared funds of the sum specified in the said rent deposit deed; (f) that if reasonably required by the Landlord such persons as the Landlord may approve (such approval not to be unreasonably withheld or delayed) act as guarantors for the proposed assignee who shall covenant by way of indemnity and guarantee (and if more than one jointly and severally) with the Landlord in such terms as the Landlord may reasonably require; (g) that if reasonably required by the Landlord any guarantor (other than a person who has entered into an Authorised Guarantee Agreement or who has guaranteed an Authorised Guarantee Agreement) whose guarantee is subsisting immediately before the proposed assignment enters into a guarantee with the Landlord in such form as the Landlord may reasonably require in respect of the obligations undertaken in the Authorised Guarantee Agreement referred to in clause 3.8.7(a); 3.8.8 not to underlet the Property: 11


 
• • • • • • • • • • 28617812.2 (a) without the prior written consent of the Landlord which shall not be unreasonably withheld or delayed; (b) unless the property to be underlet falls wholly within the Property and does not include any property or right over any property which is not demised by this Lease; (c) unless in the case of an underletting of part of the Property the underlease contains a lawful agreement excluding in relation to the tenancy to be created by the underlease the provisions of sections 24 to 28 (inclusive) of the 1954 Act; and (d) if in the case of an underletting of part of the Property more than two underlettings of part of the Property would subsist. 3.8.9 upon the grant of any underlease to obtain covenants on the part of the sub­ tenant directly with the Landlord in such form as the Landlord shall reasonably require that the sub-tenant will: 3-8-10 3.8.11 (a) not assign, underlet or charge part only of the underlet premises; (b) not underlet the whole of the underlet premises nor part with or share possession or occupation of the whole or any part thereof nor grant to third parties rights over them otherwise than by a permitted assignment of the whole of the same; (c) not assign or charge the whole of the underlet premises without obtaining the previous consent of the Landlord under this Lease which shall not be unreasonably withheld or delayed; (d) observe and perform in respect of the underlet premises the Tenant's covenants and obligations in this Lease (except the covenant to pay rent): upon the grant of any underlease: (a) where necessary to include provisions for the rev1s1on of the rent reserved by the underlease in an upward only direction to correspond in time and effect with the provisions for the review of the Basic Rent contained in this Lease; (b) not to grant give reserve or take a premium or fine; (c) to reserve the open market rent of the underlet premises as at the date of the underlease PROVIDED always that such inducements may be granted as are in line with those prevailing in the market; (d) to include provisions not to underlet the whole or any part of the underlet premises: (e) to include such covenants on the part of the sub-tenant as shall secure the due performance and observance of the covenants on the part of the Tenant contained in this Lease; (f) to include a condition for re-entry on breach of any covenant by the sub­ tenant; (g) to procure that such persons as the Landlord may reasonably require act as guarantors for the sub-tenant who shall covenant by way of indemnity and guarantee (and if more than one jointly and severally) with the Landlord to guarantee the observance and performance by the sub­ tenant of its covenants with the Landlord mentioned in clause 3.8.9; (h) to obtain the written approval of the Landlord to the form of the underlease such approval not to be unreasonably withheld or delayed; notwithstanding clause 3.8.2 and subject to the Tenant giving prior written notice to the Landlord of the identity of the company and of the part of the Property affected (if less than the whole) the Tenant may without the Landlord's 12


 
• • • • • • • • • • 3.8.12 3.8.13 consent share occupation of the Property with a company within the same group of companies (within the meaning of section 42 of the 1954 Act) as the Tenant: (a) for so long only as such company shall remain within such group; (b) on terms whereby such company is not given exclusive occupation of the Property or any part thereof and no relationship of landlord and tenant is created; and (c) subject to the Tenant promptly notifying the Landlord in writing of the date upon which such sharing of occupation ends; notwithstanding clause 3-8-2 and subject to the Tenant giving prior written notice to the Landlord of the identity of each such Customer (if more than one) and of the part of the Property affected (if less than the whole) the Tenant may without the Landlord's consent share occupation of the Property with a Customer of the Tenant: (a) for so long as that Customer remains a Customer of the Tenant; (b) on terms whereby such Customer is not given exclusive occupation of the Property or any part thereof and no relationship of landlord and tenant is created and; (c) subject to the Tenant promptly notifying the Landlord in writing of the date upon which such sharing of occupation ends; notwithstanding clause 3-8.2 and subject to the Tenant giving prior written notice to the Landlord of the identity of each such Logistics Provider (if more than one) and of the part of the Property affected (if less than the whole) the Tenant may without the Landlord's consent share occupation of the Property with a Logistics Provider to the Tenant or its business: (a) for so long as that Logistics Provider is a Logistics Provider of the Tenant; (b) on terms whereby such Logistics Provider is not given exclusive occupation of the Property or any part thereof and no relationship of landlord and tenant is created and; (c) subject to the Tenant promptly notifying the Landlord in writing of the date upon which such sharing of occupation ends; 3-9 Enforcement of underleases 28617812.2 3.9.1 not without the consent of the Landlord (such consent not to be unreasonably withheld or delayed) to vary the terms or waive the benefit of any covenant on the part of a sub-tenant or any condition contained in an underlease of the Property; 3.9.2 diligently to enforce the covenants on the part of the sub-tenant and the conditions contained in an underlease of the Property and (if reasonably so required by the Landlord) to exercise by way of enforcement the powtlrs of re­ entry contained in such underlease; 3.9,3 3-9.4 3,9.5 3-9.6 not without the consent of the Landlord to accept any sum or payment in kind by way of commutation of the rent payable by a sub-tenant of the Property; not to accept the payment of rent from a sub-tenant of the Property otherwise than by regular quarterly (or more frequent) payments in advance; duly and punctually to exercise all rights to review the rent reserved by an underlease of the Property and not to agree with a sub-tenant a reviewed rent without the approval of the Landlord (such approval not to be unreasonably withheld or delayed); not to permit an assignment of any underlease without obtaining from the person who is assigning the underlease an Authorised Guarantee Agreement with the Landlord in the form set out in this lease at schedule 4. 13


 
• • • • • • • • • • 3, 10 Registration/supply of information 3.11 3.10.1 if the Lease should be registered at the Land Registry under the 2002 Act: 3.10.2 3.10.3 User 3.11.1 3.11.2 (a) to use its best endeavours to procure that the Tenant is registered at the Land Registry as proprietor of the Lease as soon as reasonably possible; (b) to use its best endeavours to procure that all rights granted or reserved by the Lease are properly noted against the affected titles; and (c) to deliver to the Landlord, within ten days of registration, official copies of the registered title evidencing that the Tenant is the registered proprietor of the Lease; within one month after the execution of any disposition of this Lease or the Property whether by assignment, charge, transfer or underlease or assignment or surrender of any underlease or upon any transmission by reason of a death or otherwise affecting the Property to produce to and leave with the solicitors for the time being of the Landlord: (a) a certified copy of the deed instrument or other document of disposition and on each occasion to pay to such solicitors a reasonable registration fee (not being less than £50 plus VAT) and also any registration fees payable to the Superior Landlord: (b) a copy of any EPC and Recommendation Report; to supply the Landlord with any details required by the Landlord pursuant to section 40 of the 1954 Act and to supply the Landlord with full details of any notices given pursuant to section 25 of the 1954 Act by the Tenant and any sub­ tenant and full details of any notices received by the Tenant from any sub­ tenant pursuant to section 26 or section 27 of the 1954 Act; not to use the Property otherwise than for the Permitted Use; to observe and perform or cause to be observed and performed any rules and regulations from time to time reasonably made by the Landlord in connection with the conduct management or security of the Estate; 3-12 Restrictions affecting use not to: 3.12-1 3.12.2 3.12.3 3.12.4 3.12-5 28617812.2 erect or install in the Property any engine, furnace or machinery whether driven by steam, oil or electric energy or otherwise which causes noise, fumes or vibration which can be heard, smelled or felt outside the Property; use the Property for any noxious, noisy or offensive trade or business nor for any illegal or immoral act or purpose and not to do in or upon the Property anything which may be or grow to be a legal nuisance or disturbance or cause damage to the Landlord or to the owners, tenants and occupiers of any adjoining and neighbouring property; hold any sales by auction on the Property or use or permit the same to be used for residential purposes or permit livestock of any kind to be kept on the Property; hold in or on the Property any exhibition, public meeting or public entertainment or permit any vocal or instrumental music in the Property so that it can be heard outside the Property; do or permit or suffer or bring in or upon the Property anything which in the Landlord's reasonable opinion may impose on the floors, ceilings or walls of the Property any excessive weight or strain and not to overload any lifts, electrical installations or Conducting Media in the Property; 14


 
• • • • • • • • • • 3-13 3.14 3.12.6 3-12 7 3-12.8 3.12.9 3.12.10 place in any Common Parts any goods, trade empties, rubbish or other obstruction; place leave or install any articles, merchandise, goods or other things in front of or elsewhere outside the Property; permit the drains to be obstructed by oil, grease or other deleterious matter and in the event of any such obstruction forthwith to make good any damage to the satisfaction of the Landlord's Surveyor; use any part of the accessways or service areas on the Estate for the parking of vehicles otherwise than during the course of loading and unloading nor to carry out any repairs or maintenance to vehicles on any such accessways or service areas; load or unload vehicles except in the service areas on the Estate provided for such purpose and in the course of such loading or unloading to comply with any regulations of the Landlord and the requirements of the local highway authority and not to cause any avoidable obstruction; Advertisements and signs 3.13.1 not to place or display on the exterior of the Property or on the windows or inside the Property so as to be visible from the exterior of the Property any name, writing, notice, sign, illuminated sign, display of lights, placard, poster, sticker or advertisement other than: (a) a suitable sign of a size and kind first approved by the Landlord or the Landlord's Surveyor showing the Tenant's name and trade such approval not to be unreasonably withheld or delayed; (b) such notices as the Landlord may approve such approval not to be unreasonably withheld or delayed; Provided That for so long as the Tenant under this lease is Conexus Limited (company number 03616118) the Landlord's approval is not required for any signage installed pursuant to this clause which is in line with the Tenant's nationally adopted signage policy from time to time; 3.13.2 if any name, writing, notice, sign, placard, poster, sticker or advertisement shall be placed or displayed in breach of these provisions to permit the Landlord to enter the Property and remove such name, writing, notice, sign, placard, poster, sticker or advertisement and to pay to the Landlord on demand the expense of so doing; Acts of Parliament 3.14-1 3.14.2 at all times during the Term at the Tenant's expense to observe and comply with and do or execute or cause to be done or executed all such works and do all such things as under or by virtue of any Act of Parliament are or shall be directed or necessary to be observed complied with done or executed upon or in respect of the Property or any part thereof or in respect of the user thereof or the employment therein of any person whether by the owner or any occupier; not to do or permit to be done any act or thing by reason of which the Landlord may under any Act of Parliament incur or have imposed upon it or become liable to pay any penalty, damages, compensation, costs, charges or expenses; 3-15 Planning/environmental matters 3.15.1 3.15.2 21617112.2 at all times to comply with the provisions and requirements of the Planning Acts and of Environmental Law and not at any time to do or omit anything which would result in a contravention of them; not without the consent in writing of the Landlord (such consent not to be unreasonably withheld or delayed) to make any application under the Planning Acts to any local planning authority for permission to develop (including change of use of) the Property provided that the Tenant shall not be required to 15


 
• • • 3.16 • • 3.17 • • • 3.18 • • 28617812.2 3.15.3 3.15.4 Notices reimburse any professional fees or other costs which the Landlord incurs in considering any such application for its consent under this subclause and provided further that if the Landlord does not respond to a request for approval under this subclause within 10 Working Days of receipt of the request then the Landlord's approval shall be deemed to be given; forthwith to give to the Landlord full particulars in writing of the grant of any planning permission in respect of the Property and not to implement any planning permission if the Landlord shall make reasonable objection to any of the conditions subject to which it has been granted; to be responsible for and indemnify the Landlord against any liability for contamination and/or pollution of the environment or damage to property or harm to human health caused to the Property (Contamination), or any substance on it caused or arising as result of the acts or omissions of the Tenant, any undertenant or occupier of the Property or their occupation or use of the Property; within seven days of receipt of notice of the same to give full particulars to the Landlord of any notice, order, requisition, direction or any other thing whatsoever given made or issued under or by virtue of any statute or regulation relating to planning or otherwise during the Term by a competent authority affecting the Property or any part thereof and also without delay to take all reasonable steps to comply with any such notice, order, requisition, direction or other thing and also to make or join in making such objections or representations in respect thereof as the Landlord may reasonably require or deem expedient; General indemnity 3.17.1 to indemnify the Landlord against all losses, costs, expenses, damages, claims, proceedings, demands and liabilities incurred or sustained by the Landlord as a consequence (whether directly or indirectly) of any breach, non-observance or non-performance of any of the Tenant's covenants herein or of any act, neglect or default of the Tenant its sub-tenants or their respective employees, agents, licensees or invitees; 3.17.2 the provisions of clause 3.17.1 and all other provisions in this Lease whereby the Tenant or the Guarantor covenants to indemnify the Landlord shall apply subject to: (a) the Landlord using its reasonable endeavours to mitigate its loss; (b) before claiming the Landlord shall serve notice on the Tenant or the Guarantor (as the case may be) specifying the breach in question and giving a reasonable period in which to remedy it; (c) no third party claims as to which the Landlord is seeking an indemnity shall be settled without the prior written consent of the Tenant or Guarantor (as the case may be) such consent not to be unreasonably withheld or delayed; (d) the Tenant or the Guarantor (as the case may be) shall not be liable to indemnify the Landlord in respect of any matter arising as a result of the act, neglect or default of the Landlord or the Superior Landlord; Costs to pay to the Landlord within seven days of written demand the reasonable costs, expenses, losses and liabilities properly incurred by the Landlord as a result of or in connection with: 3.18.1 3.18.2 any breach by the Tenant of its covenants or obligations in this Lease and/or the enforcement or attempted enforcement of those covenants and obligations by the Landlord; the preparation and service of a notice under section 146 Law of Property Act 1925 or incurred in or in contemplation of proceedings under sections 146 or 16


 
• • • • • • • • • • 3.19 3.18.3 147 of that Act notwithstanding in any such case that forfeiture is avoided otherwise than by relief granted by the Court; any application for any consent or approval made under this Lease whether or not such consent or approval shall be granted or lawfully refused or the application is withdrawn; 3.18.4 the preparation, negotiation and service of all schedules relating to wants of repair to the Property and whether served during or after the expiration or sooner determination of the Term (but relating in all cases to such wants of repair which accrued not later than the expiration or sooner determination of the Term) and agreeing such schedules with the Tenant; Obstruction 3.19.1 3.19.2 3.19.3 3.19.4 not to stop up, darken or obstruct any window or lights belonging to the Property or any other buildings belonging to the Landlord nor permit any new window, light, opening, doorway, path, passage, drain or other restriction, encroachment or easement to be made or acquired over against out of or upon the Property; where any such window, light, opening, doorway, path, passage, drain or other restriction, encroachment or easement shall be made or attempted to be made or acquired forthwith to give notice of the circumstances to the Landlord and at the request and cost of the Landlord to adopt such course as may be reasonably required or deemed proper by the Landlord for preventing any such restriction or encroachment or the acquisition of any such easement; not to assert any claim to light or air over any adjacent or neighbouring land or building; not to obstruct any means of access to the Property or the Estate; 3.20 Telecommunications 3.21 28617112.Z 3.20.1 not to erect or permit the erection of any pole or mast or any television or radio aerials on the exterior of any part of the Property or in or upon the Property without the prior written consent of the Landlord (such consent not to be unreasonably withheld or delayed); 3.20.2 not to install within the Property or anywhere else in or upon the Property any telecommunications apparatus (within the meaning specified in Schedule 2 to the Telecommunications Act 1984) of a kind in respect of which the Landlord's rights to require removal of the apparatus is restricted by virtue of paragraph 21 of the Telecommunications Code (as set out in Schedule 2 to the Telecommunications Act 1984); To pay VAT Where by virtue of any of the provisions of this Lease the Tenant is required to pay repay or reimburse to the Landlord or any person or persons any rent, premium, cost, fee, charge, insurance premium, expense or other sum or amount whatsoever in respect of the supply of any goods and/or services by the Landlord or any other person or persons to the Tenant in accordance with the provisions of this Lease to pay in addition by way of additional rent or (as the case may be) to keep the Landlord indemnified against: 3.21.1 3.21.2 the amount of any VAT as and when charged in respect of such supply to the Tenant; the amount of VAT as and when charged on any other person (or charged to the Landlord in the case of supplies which the Landlord is deemed to make itself) in respect of supplies the cost of which is included in the calculation of the sums which the Tenant is required to pay repay or reimburse to the Landlord save to the extent that such VAT is recoverable by the Landlord; and for the avoidance of doubt the Landlord shall not be under a duty to exercise or not exercise any option or right conferred on it by the legislation relating to VAT so as to reduce or avoid any liability to VAT as referred to above; 17


 
• • • • • • • • • • 3.22 Notice boards 3.22.1 3.22.2 3.23 Yield up to allow the Landlord or its agents to enter upon the Property at any time: (a) during the six months immediately preceding the determination of the Term to fix upon any part of the Property a notice board for reletting the Property; (b) during the Term to fix on any part of the Property a notice board for the sale of the Landlord's reversionary interest; and not to remove or obscure any such notice board; subject always to clause 6.6 to permit all persons authorised by the Landlord or its agents to view the Property on prior appointment at reasonable hours without interruption in connection with any such reletting or sale; at the expiration or earlier determination of the Term or at such later time as the Landlord recovers possession of the Property from the Ten ant 3.23.1 3.23.2 3.23.3 quietly to yield up the Property (together with all additions and improvements to the Property and all fixtures which during the Term may be fixed or fastened to or upon the Property other than tenant's fixtures removable by the Tenant) decorated, repaired, cleaned and kept in accordance with the Tenant's covenants contained in this Lease; if so requested by the Landlord to remove from the Property all the Tenant's belongings that is to say trade fixtures and fittings and all notices, notice boards and signs bearing the name of or otherwise relating to the Tenant (including in this context any persons deriving title to the Property under the Tenant) or its business and to make good to the satisfaction of the Landlord all damage to the Property resulting from such removal; at the expiration or earlier determination of the Term: (a) to execute such document as the Landlord shall reasonably require in order to cancel any entry or title relating to the Lease at the Land Registry; (b) a copy of any EPC and Recommendation Report DEC and Advisory Report; 3.24 New Guarantor 3.24.1 28617812.2 to notify the Landlord within 28 days of any of the following events: (a) if any Guarantor being an individual (or if individuals any one of them) shall be made bankrupt or shall make any assignment for the benefit of or enter into any arrangement with its creditors either by composition or otherwise or suffer execution to be levied on its goods or have a receiver appointed under the Mental Health Act 1983; (b) if any Guarantor being an individual (or if individuals any one of them) shall die; (c) if any Guarantor being a body corporate (or if bodies corporate any one of them) has a winding up order made in respect of it other than a members' voluntary winding up of a solvent company for the purposes of amalgamation or reconstruction approved by the Landlord (such approval not to be unreasonably withheld or delayed) or has a receiver, administrator or an administrative receiver appointed of it or any of its assets or suffers execution to be levied on its goods or is dissolved or struck off the Register of Companies or (being a body corporate incorporated outside England and Wales) is dissolved or ceases to exist under the laws of its country or state of incorporation; 18


 
• • • • • • • • • • 3.24.2 and if the Landlord reasonably so requires then at the Tenant's expense within 28 days of such requirement to procure that some other person or persons or body or bodies corporate reasonably acceptable to the Landlord shall execute a guarantee in the terms of clause 8 with such amendments as the Landlord shall reasonably require in the circumstances; the expression aGuarantor" in the immediately preceding subclause shall not include any person who has entered into an Authorised Guarantee Agreement or who has guaranteed an Authorised Guarantee Agreement provided that the Tenant shall notify the Landlord within 28 days of becoming aware of any of the events set out in clauses 3.24.1 (a) - (c) occuring in respect of any such guarantor; 3.25 Encumbrances 3.26 3.27 28617112.2 to observe and perform the matters contained in the Encumbrances so far as they relate to affect and fall to be performed upon the Property; Energy Performance Certificates 3.26.1 to allow the Landlord and/or any person authorised by it to have such access to the Property and to all documentation, data and information in the Tenant's possession or under its control reasonably required in order to: (a) prepare an EPC or Recommendation Report for the Property; (b) undertake an air-conditioning inspection; and (c) comply with any duty imposed upon the Landlord under the EPB Regulations and the Tenant will co-operate with the Landlord and any persons so authorised so far as is reasonably necessary to enable them to carry out such functions; 3.26.2 to use reasonable endeavours to procure that the terms of appointment of any Energy Assessor engaged by it to issue an EPC and/or Recommendation Report for the Property provide that (a) the Energy Assessor must carry out the energy assessment for the Property with reasonable care and skill; (b) the matters referred to in clauses 3.26.1 and 3.26.2 are expressed to be in addition to the statutory duty of care contained in Regulation 27 of the EPB Regulations; and (c) the duty referred to in clause 3.26.1 is owed to the Landlord; 3.26.3 not to commission an EPC for the Property without the Landlord's consent (such consent not to be unreasonably withheld). If a valid EPC for the Property is held by the Landlord at the written request of the Tenant the Landlord shall provide the Tenant with a copy of any EPC held by the Landlord free of charge; 3.26.4 if the Landlord confirms that it does not hold a valid EPC for the Property the Tenant may obtain a new EPC for the Property at its own cost; 3.26.5 if an EPC obtained by the Tenant invalidates or materially adversely affects a valid EPC for the Property held by the Landlord of which the Tenant has notice, the Tenant will repay to the Landlord the reasonable cost of procuring a replacement EPC; 3.26.6 either party will provide the other with a copy of any EPC obtained pursuant to clause 3.26 together with details of the reference number (if not apparent from the copy) within seven days of the later of its receipt of the copy EPC and payment of any costs due under clause 3.26. Management Company 19


 
• • • • • • • • • • 3.28 3.29 3.27.1 3.27.2 to act reasonably in relation to any subsequent formation of a management company by the Landlord to undertake all or any of its obligations in relation to the Estate; and if the Landlord forms such management company it shall do so free of any expense to the Tenant and the Tenant will if requested to do so by the Landlord: (a) free of expense to the Tenant apply to such management company in accordance with its articles of association to become a member of such management company; (b) not withdraw from membership of the management company or dispose of any of the rights attaching to the membership of the management company while it remains the Tenant; Section 106 Agreement to comply with clause 15.1.2, paragraph 4.2 of schedule 1 and paragraph 3 of schedule 2 of the Section 106 Agreement in so far as the obligations relate to the Property provided that the Tenant shall have no liability or obligation to make any payments to the local authority under nor contribute financially towards any matter within the section 106 agreement; Deferred Part 3.29.1 3.29.2 not until such time as the demise of the Deferred Part takes effect to: (a) enter into all or any part of the Deferred Part except in the case of emergency irrespective of whether or not there is any physical barrier separating the Deferred Part from the Initial Part; (b) to place, store or in any other way utilise or use all or any part of the Deferred Part; in the event of any damage to or destruction of all or any part of the Deferred Part prior to the same forming part of the Property which arises directly or indirectly as a result of the Tenant's or any third party at the Property breach of the foregoing covenant to indemnify the Landlord for all or any costs, losses, expenses or liabilities which the Landlord may incur or suffer as a result except in so far as such damage or destruction is caused by an Insured Risk save to the extent that the insurance policy shall have been vitiated by any act, neglect, default or omission of the Tenant or any sub-tenant or their respective employees, agents, licensees or invitees; 4. PROVISOS 4.1 28817112.2 The parties AGREE to the following provisos: Event of Incapacity for the purposes of this Lease an Event of Incapacity means (by reference to the Insolvency Act 1986 (the 1986 Act) and the Insolvent Partnerships Order 1994 (the 1994 Order): 4.1.1 in relation to a company that: (a) it is unable or admits its inability to pay its debts when they become due (whether within the circumstances specified in section 123 of the 1986 Act or otherwise); or (b) it summons a meeting of its creditors or a proposal is made for a voluntary arrangement under Part I of the 1986 Act or it enters into a scheme of arrangement with its creditors in satisfaction or composition of its debts; or (c) an application for an administration order is made or notice of appointment of an administrator is filed at court; or (d) a receiver or manager (including an administrative receiver) is appointed whether under Part 111 of the 1986 Act or under the Law of Property Act 1925 or otherwise; or 20


 
• • • • • • • • • • (e) a resolution or determination to wind-up is passed or made or a provisional liquidator is appointed or a winding-up order is made under Part IV of the 1986 Act (save that in the case of a voluntary winding-up solely for the purpose of amalgamation or reconstruction if the Tenant can first demonstrate to the satisfaction of the Landlord that the covenant of the company will be as strong after as it was before the reconstruction or amalgamation then provided that such turns out to be the case no Event of Incapacity will have taken place); or (f) a proposal is made for a scheme of arrangement under Part 26 Companies Act 2006; or (g) it is the subject of a successful notice issued to strike-off the Register at Companies House; 4-1.2 in relation to an individual that: (a) an application is made for an interim order or a proposal is made for a voluntary arrangement under Part VIII of the 1986 Act; or (b) a bankruptcy petition is presented to the court or the circumstances of the individual are such that a bankruptcy petition could be presented under Part IX of the 1986 Act or the individual applies for an adjudication that he be made bankrupt; or (c) the individual enters into a deed of arrangement or composition with his creditors; or (d) a receiver is appointed under the Mental Health Act 1983 or the individual becomes incapable of managing his affairs; or (e) the individual dies; 4.1.3 in relation to a partnership that: (a) it enters into a voluntary arrangement under Part II of the 1994 Order; or (b) an application for an administration order is made or notice of appointment of an administrator is filed at court; or (c) a petition is presented for winding-up as an unregistered company under Parts IV or V of the 1994 Order; 4-2 Re-entry 4.3 28617812.2 the Landlord may re-enter the Property (or any part in the name of the whole) at any time in any of the following circumstances: 4-2-1 the whole or any part of the Rents shall be unpaid for 21 days after becoming due (whether or not formally demanded); or 4.2.2 there is a breach by the Tenant or the Guarantor of any of the provisions of this Lease; or 4.2.3 either the Tenant or the Guarantor suffers an Event of Incapacity; or 4.2.4 the Tenant suffers execution to be levied on its goods; and upon such entry the Term shall absolutely cease and determine but without prejudice to any right of action of the Landlord in respect of any antecedent breach of any of the covenants herein contained PROVIDED that the expression "Guarantor" in this subclause shall not include a person who has entered into an Authorised Guarantee Agreement or who has guaranteed an Authorised Guarantee Agreement; Disputes if any dispute or disagreement shall at any time arise between the Tenant and the tenants and occupiers of the Estate or any adjoining or contiguous premises belonging to the Landlord relating to the Conducting Media serving the Property or any adjoining or 21


 
• • 4.4 • • • • 4.5 • 4.6 • 4.7 • • 28617812.2 contiguous premises or any easements or privileges whatsoever affecting or relating to the Property or any adjoining or contiguous premises the dispute or disagreement shall from time to time be settled and determined by the Landlord or the Landlord's Surveyor to which determination the Tenant shall from time to time submit; Exclusion of liability 4.4.1 the Landlord shall not be liable for: (a) any loss, damage, nuisance, annoyance or inconvenience which may at any time during the Term be caused or be done to the Tenant, its employees or visitors or to the Property or to any goods or property of the Tenant, its employees or visitors in or about the Property or the Estate by reason of any act, neglect or default of any other lessee or occupier of the Estate or by reason of any permanent, temporary or partial breakdown, failure, malfunction or suspension in any of the Services or any Plant connected with the same or forming part of the Common Parts or for any interruption in the Services caused by strikes, lockouts, labour disputes, shortages of materials or other matters beyond the Landlord's control or necessary repair, maintenance or overhaul of any installations or apparatus provided that the Landlord shall use its reasonable endeavours to procure the remedying of any such breakdown, failure, malfunction, suspension or interruption in the supply of the Services as soon as reasonably practicable; (b) any breach of any obligation on its part for repair and maintenance of any part of the Property or the Estate which can be discovered only by entry upon the relevant premises until it shall have written notice of such repairs being necessary and then subject to its being able to obtain any necessary consent of any local or other authority and to the availability of labour and materials; 4.4.2 the Landlord shall not be liable in respect of any breach of a landlord covenant of this Lease occurring at a time when the Landlord is not entitled to the reversion immediately expectant upon the determination of the Term; Compensation except where any statutory provision prohibits the Tenant's right to compensation being reduced or excluded by agreement the Tenant shall not be entitled on quitting the Property to claim from the Landlord any compensation under section 37 of the 1954 Act or under any corresponding provision in any statute amending or replacing the same; Tenant's effects if at such time as the Tenant has vacated the Property after the determination of the Term any property of the Tenant shall remain in or on the Property and the Tenant shall fail to remove the same within 14 days after being requested by the Landlord so to do by a notice to that effect then the Landlord may as the agent of the Tenant sell such property and shall then hold the proceeds of sale after deducting the costs and expenses of removal, storage and sale reasonably and properly incurred by it to the order of the Tenant provided that the Tenant hereby indemnifies the Landlord against any liability incurred by it to any third party whose property shall have been sold by the Landlord in the bona fide mistaken belief (which shall be presumed unless the contrary be proved) that such property belonged to the Tenant and was liable to be dealt with as such pursuant to this clause 4.6; Notices 4.7.1 any notice given under this Lease shall be in writing signed by, or on behalf of, the person giving the notice. Any notice shall be delivered by hand, or by commercial courier, or by first class post or prepaid recorded delivery first class post or other next Working Day delivery service to a party at its registered office address for the time being if the party is a company or a limited liability partnership or in the case of the Guarantor and in any other case, to a party's 22


 
• • • • • 4.8 4.9 • 4.10 • 4.11 • 4.12 • • 28617812.2 4.7.2 4.7.3 4.7.4 4.7.5 Waiver last known address and in the case of the Landlord (but only while the Landlord is Mountpark Logistics EU 2017 23 S.A.R.L. Luxembourg company number B218933 party to this Lease) a copy shall also be sent to Mountpark Properties Limited (English company number 07739703) at its registered office marked for the attention of Philip O'Callaghan; in the absence of evidence of earlier receipt and subject to clause 4.7.3, a notice served in accordance with clause 4.7.1 shall be deemed to have been received: (a) if delivered by hand, at the time of actual delivery to the address referred to in clause 4.7.1; or (b) if delivered by commercial courier, on the date and at the time (if given) that the courier's delivery receipt is signed; or (c) if delivered by first class post or prepaid recorded delivery first class post or other next Working Day delivery service, at 9.00 a.m. on the second Working Day after posting; if deemed receipt under clause 4.7.2 occurs on a day which is not a Working Day or after 5.00 p.m. on a Working Day, the notice shall be deemed to have been received at 9.00 a.m. on the next Working Day; for the avoidance of doubt, notice given under this Lease shall not be validly served if sent by fax or e-mail; if the Tenant comprises more than one person, the service of any notice on any one of those persons shall constitute good service on all of them; the demand for and/or acceptance of rent by the Landlord or its agents shall not constitute a waiver of any breach of the covenants on the part of the Tenant herein contained or of the Landlord's remedies for the non-performance or non-observance thereof; No warranty nothing herein contained or implied shall be taken to be a warranty or representation as to the purpose for which the Property may lawfully be used; Governing law; Jurisdiction; Service of Process 4.10.1 4.10.2 4.10.3 this Lease is and shall be governed by and construed in all respects in accordance with the laws of England; the parties irrevocably submit to the jurisdiction of the English courts; the Guarantor irrevocably authorises and appoints the Tenant to accept service of all legal process arising out of or connected with this Lease and service on the Tenant shall be treated as service on the Guarantor provided that a copy of the notice shall also have been sent to the Guarantor at its registered office set out at the beginning of this Lease; Third parties save as expressly provided, none of the provisions of this Lease are intended to or will operate to confer any benefit (pursuant to the Contracts (Rights of Third Parties) Act 1999) on a person who is not named as a party to this Lease; Declaration this Lease does not operate to create or convey any easements rights or privileges over any adjacent or neighbouring land or buildings other than those expressly set out in schedule 2; 23


 
• • • • • • • • • • 4-13 4-14 4-15 5 6 Party walls any walls dividing the Property from any adjoining buildings or premises shall be deemed to be party walls and shall be repaired and maintained accordingly; Superior Interests: 4-14.1 the powers, rights, matters and discretions granted and reserved to the Landlord under this Lease shall also be granted and reserved to or exercisable by any Superior Landlord and its employees to the extent required under the Superior Lease; 4.14.2 if the Tenant shall do or propose to do any matter or thing for which the consent of the Superior Landlord shall be required the Tenant shall bear and indemnify the Landlord against the reasonable cost of obtaining such consent together with all incidental surveyors' professional or other fees and disbursements: 4.14.3 the Landlord shall be entitled to withhold the Landlord's consent in any matter where the Superior Landlord's consent or the consent of any mortgagee is required and the Landlord is unable to obtain it or them . Deferred Part If required by the Landlord after the demise of the Deferred Part has become effective, the Tenant and the Guarantor shall execute any additional documentation as may be reasonably required by the Landlord to procure and ensure that the provisions of this Lease including the Guarantor's covenants apply to the Deferred Part and the Initial Property until the end of the Term. LANDLORD'S COVENANTS The Landlord COVENANTS with the Tenant that the Tenant paying the Rents and performing the Tenant's covenants reserved by and contained in this Lease may lawfully and peaceably enjoy the Property throughout the Term without any lawful suit eviction or interruption by the Landlord or by any person lawfully claiming through under or in trust for the Landlord. INSURANCE 6.1 Landlord's obligations 28617812.2 The Landlord COVENANTS with the Tenant as follows: 6.1.1 6.1.2 save to the extent that any insurance shall be vitiated by any act, neglect, default or omission of the Tenant or any sub-tenant or their respective employees, agents, licensees or invitees to insure or cause to be insured: (a) the Estate against loss or damage by the Insured Risks and such other risks against which the Landlord may from time to time reasonably deem appropriate to insure in a sum equal to the likely cost of completely rebuilding, reinstating and replacing the same (taking into account estimated increases in building costs) including the cost of demolition, shoring, removal of debris and other expenses and a proper provision for professional fees in respect of rebuilding and reinstating together in each case with VAT; (b) the loss of Basic Rent from time to time (having regard to any review of the Basic Rent which may become due under this Lease) for three years; (c) the public liability of the Landlord arising out of or in connection with any matter involving or relating to the Estate; as soon as reasonably practicable after any material change occurring to the insurance and at other times at the request of the Tenant and free of expense to the Tenant to produce evidence of the terms and conditions of every insurance policy effected by the Landlord pursuant to this Lease and whether or not 24


 
• requested by the Tenant evidence each year of the payment of the current premium; 6.1.3 when lawful to do so to expend all monies received (other than in respect of • rent) by virtue of any such insurance towards reinstating so far as practicable the Property and (as the case may be) the Common Parts after the destruction thereof or any damage thereto; 6.1.4 to use the Landlord's reasonable endeavours to procure that the names of the Tenant and all lawful undertenants of the Property are noted by the insurers whether specifically or generically. • 6.2 Tenant's obligations The Tenant COVENANTS with the Landlord as follows: 6.2.1 to pay to the Landlord on demand: (a) a fair and proper proportion attributable to the Property (as determined by the Landlord's Surveyor) of the premiums from time to time paid by the • Landlord for insuring the Estate against loss or damage by the Insured Risks and insuring the public liability of the Landlord in accordance with clauses 6.1.1 (a) and 6.1.1 (c), such premiums to be reasonable and competitive in the London insurance market; (b) all premiums from time to time paid by the Landlord for insuring the loss of the Basic Rent under clause 6.1.1 (b); (c) a fair and proper proportion attributable to the Property (as determined by • the Landlord's Surveyor) of any excess deducted by insurers in respect of any claim relating to the Estate; (d) a fair and proper proportion attributable to the Property (as determined by the Landlord's Surveyor) of the cost of any professional valuation of the Estate which may at any time be required by the Landlord in connection with the insurance of the Estate; • 6.2.2 not to effect any separate insurance of the Property against loss or damage by any of the Insured Risks but if the Tenant shall become entitled to the benefit of any insurance on the Property then the Tenant shall apply all monies received by virtue of such insurance in making good the loss or damage in respect of which the same shall have been received; 6.2.3 not to carry on upon the Property any trade or business or occupation in any manner nor do any other thing which in the reasonable opinion of the Landlord • may make void or voidable any policy for the insurance of the Property or any adjoining or neighbouring property on the Estate against any risk for the time being required by the Landlord to be covered or render any increased or extra premium to be payable for such insurance (without in the latter event first having paid every such increase or extra premium) and to pay to the Landlord on demand any increased premium payable in respect of the Property or any adjoining or neighbouring premises on the Estate arising by reason of the Property being unoccupied; • 6.2.4 to comply with the requirements of the Landlord's insurers in respect of the Property; 6.2.5 in the event of the Property or any part thereof being destroyed or damaged by any peril whatsoever to give notice thereof to the Landlord as soon as such destruction or damage shall come to the notice of the Tenant stating whether and to what extent such destruction or damage was brought about directly or indirectly by any of the Insured Risks; • 6.2.6 in the event of the Estate or the Property or any part thereof or any adjoining or neighbouring property of the Landlord or any part thereof being destroyed or damaged by any of the Insured Risks and the insurance money under any such insurance against the same effected thereon by the Landlord being wholly or • 21617112.2 25


 
• • • • • • • • • • 6.3 6.2.7 6.2.8 partly irrecoverable by reason solely or in part of any act or default of the Tenant or any sub-tenant or their respective employees, agents, licensees or invitees then and in every such case to pay forthwith to the Landlord the whole or (as the case may be) the irrecoverable portion of the cost (induding professional and other fees and VAT) of completely rebuilding and reinstating the same; to keep the Property supplied with such fire fighting equipment as the insurers and/or the competent fire authority may require and to maintain such equipment to the satisfaction of all such persons; not to store inflammable or explosive substances or goods at the Property (except for goods and products stored or used in the usual course of business of the Tenant and/or any undertenant) or obstruct the access to any fire equipment or the means of escape from or over the Property and in the event of anything happening which might affect any insurance policy relating to the Property give notice forthwith to the Landlord. Rent suspension If the Property or any part thereof or of the Estate shall be destroyed or damaged by any Insured Risk so as to render the Property unfit for occupation or use or inaccessible then save to the extent that the insurance of the Estate shall have been vitiated by any act, neglect, default or omission of the Tenant or any sub-tenant or their respective employees, agents, licensees or invitees the Basic Rent or a fair proportion thereof according to the nature and extent of the damage sustained shall be suspended until the Property shall have been made fit for occupation and use and accessible or (if earlier) until the money received by the Landlord in respect of loss of rent insurance shall have been exhausted and any dispute with reference to this proviso shall be referred to a single arbitrator to be appointed in default of agreement upon the application of either the Landlord or the Tenant by the President for the time being of the Royal Institution of Chartered Surveyors under the Arbitration Act 1996 and the Landlord shall within 20 Working Days of receipt of any monies by the Landlord in respect of loss of rent insurance repay to the Tenant any Basic Rent paid by the Tenant in respect of the period starting on the date of such destruction or damage and ending on the next usual quarter day . 6.4 Commissions 6.5 6.6 28617112.2 All monies paid by the Tenant under clause 6.2.1 shall be paid without deduction of any agency or other commission paid or allowed to the Landlord in respect thereof or otherwise which the Landlord shall be entitled to retain for the Landlord's own benefit free of any obligation to bring the same into account under this Lease . Termination of Lease If at any time during the Term the Property or any part of the Estate shall be destroyed or damaged so as to render the Property unfit for occupation or use or inaccessible and if reinstatement shall not have been completed so as to render the Property fit for occupation and use or accessible after the expiration of two years and nine months from the date of such destruction or damage then either the Landlord or the Tenant may at any time after the expiration of such period give to the other three months' written notice of termination and on the expiry of such notice (provided that the Property is still not fit for occupation and use or accessible) this Lease will determine without prejudice to the rights of the parties under this Lease in respect of any antecedent breach of any of the covenants and conditions herein contained and any obligation on the Landlord to reinstate the Property shall cease and all insurance monies under any insurance effected pursuant to clause 6.1 shall belong and be paid to the Landlord absolutely: Entry on the Property if the Landlord or any other person enters on to or over the Property whether pursuant to the Tenant's covenants of or the rights reserved by this Lease then; 26


 
• • • • • • • • • • 6-6.1 any person so entering shall complete such inspection works or other task for which entry was made as quickly and efficiently as reasonably possible causing as little damage destruction and inconvenience as reasonably possible and making good any physical damage caused in the exercise of such right to the Property as soon as reasonably possible free of expense to the Tenant to the reasonable satisfaction of the Tenant; 6.6.2 any person so entering shall comply with the reasonable security requirements of the Tenant and any other occupiers of the Property; and 6-6.3 such rights may be exercised for works to be carried out only to the extent that such works cannot otherwise reasonably and economically be carried out without entry on to the Property. RENT REViEW 7.1 Definitions 28617812.2 In this clause 7 the following expressions shall have the following meanings: Market Rent the annual open market rent at which the Property would reasonably be expected to be let at the Rent Review Date upon a letting for a term of ten years at the rate applicable after the expiry of a rent-free period or reduced rent period (if any) of such length (or payment of an equivalent sum of money) as would be negotiated in the open market in respect of fitting out works which would be carried out by the willing tenant on the assumptions that: (a) all parts of the Property are fit for immediate occupation and use by a willing tenant and the Estate is capable of being used for the rights granted; (b) the Property is to be let as a whole by a willing landlord to a willing tenant by a single lease without payment of a fine or premium and with vacant possession and subject to the provisions of this Lease (other than the amount of the Basic Rent but including these provisions for review of the Basic Rent); (c) the unit on the Property has been constructed in accordance with the Specification (as defined in and attached to the Licence to Alter) together with the formation of the ground floor offices within the unit on the Property as part of the Works (as defined in the Licence to Alter) carried out by the Tenant pursuant to the Licence to Alter; (d) the Internal Area of the unit on the Property isl107,3Q� square feet, lo':\-/ !J4� (e) the covenants contained in this Lease on the part of the Landlord and the Tenant have been fully performed and observed; (f) the Property may be lawfully let to and used by any person for the purposes permitted under this Lease as varied or extended by any licence or deed entered into at the request of the Tenant: (g) no work has been carried out on or about the Property by the Tenant, its sub-tenants or their respective predecessors in title which has reduced the lettable floor area of the Property or diminished the rental value of the Property and that in case the Property has been destroyed or damaged it has been fully restored; (h) no reduction is to be made to take account of any rent-free period or payment or other concession which on a new letting with vacant possession might be granted to an incoming tenant in respect of the carrying out by such incoming tenant of fitting out works to the Property; the willing tenant is a taxable person for the purposes of the legislation relating to VAT and is able to recover all input tax paid by it as a credit against output tax or otherwise; 27


 
• • • • • 7.2 7.3 • • • 7.4 • • 28617812.2 but disregarding any effect on rental value of: (a) the fact that the Tenant, its sub-tenants or their respective predecessors in title have been in occupation of the Property; (b) any goodwill attached to the Property by reason of the carrying on at the Property of any business by the Tenant or its sub-tenants or their respective predecessors in title in their respective businesses; (c) the existence at the Rent Review Date of any improvement to the Property or any part thereof carried out with consent where required otherwise than in pursuance of an obligation to the Landlord or its predecessors in title (except obligations requiring compliance with statutes or directions of local authorities or other bodies exercising powers under statute or by royal charter) by and at the sole cost of the Tenant its sub­ tenants or their respective predecessors in title during the Term or during any period of occupation prior thereto arising out of an agreement to grant this Lease; (d) any obligation on the part of the Tenant or its sub-tenants or their respective predecessors in title to remove any alterations or to restore or reinstate the Property whether under this Lease or otherwise; President the President (or if he is unable so to act the Vice-President or other duly authorised officer) for the time being of the Royal Institution of Chartered Surveyors; Amount of rent The Basic Rent shall be reviewed on the Rent Review Date and shall from the Rent Review Date be a rent equal to the Basic Rent payable under this Lease immediately preceding the Rent Review Date (ignoring any cesser of rent or rent abatement) or the Market Rent as at the Rent Review Date as may be ascertained as herein provided whichever be the greater. Provisions for review The Landlord and the Tenant may endeavour to agree the Market Rent at any time not being earlier than six months before the Relevant Review Date but if (for whatever reason) the Market Rent shall not have been unconditionally agreed by the date being three months before the Relevant Review Date then either the Landlord or the Tenant may at any time thereafter by notice in writing to the other require that the Market Rent be determined by a valuer who shall be appointed by the Landlord and the Tenant or in default of agreement appointed on the request of either the Landlord or the Tenant by the President provided that: 7.3.1 the valuer shall be a chartered surveyor who shall have not less than ten years' experience in valuing and letting property similar to the Property and who shall be a partner or director of a reputable firm or company of chartered surveyors; 7.3.2 the valuer shall act as an arbitrator; 7.3.3 in the case of an arbitration: (a) the arbitration shall be conducted in accordance with the Arbitration Act 1996; (b) if the arbitrator shall die or decline to act the President may on the application of either the Landlord or the Tenant by writing discharge the arbitrator and appoint another in his place. Payment of rent If the Market Rent has not been agreed or determined in accordance with this clause 7 by the Rent Review Date then the Basic Rent payable immediately prior to the Rent Review Date shall continue to be payable until such agreement or determination and within seven days after such agreement or determination the Tenant shall pay the balance due (being the shortfall between the Basic Rent actually paid from the Rent Review Date and the Market 28


 
• • • • • • • • • • 7.5 7.6 7.7 7.8 8. 8.1 8.2 28617112.2 Rent as agreed or determined payable from that Rent Review Date up to and including the day preceding the next ensuing quarter day) together with interest at 4% below Interest calculated on a daily basis on each part of such shortfall from the date such part was payable until the date of agreement or determination of the Market Rent provided that in the event of such balance of rent or interest being outstanding at the expiration of the period of ten days after the agreement or determination of the Market Rent then Interest will be forthwith payable thereon with effect from expiry of such ten day period. Statutory rent restrictions If at the Rent Review Date the Landlord is required to comply with any enactment which restricts or modifies the Landlord's right herein to revise the Basic Rent or which shall restrict the Landlord's right to demand or accept payment of the full amount of the Basic Rent for the time being payable under this Lease then on each occasion that any such enactment is removed relaxed or modified the Landlord may on giving written notice to the Tenant call for a review of the Basic Rent as from the date of such notice (or such later date as may be specified therein) and the Basic Rent from such date shall be determined in accordance with this clause 7 as though the date of such notice (or such later date as may be specified therein) were the Rent Review Date . Rent review memorandum Any variation of the Basic Rent pursuant to this clause 7 shall when agreed or determined be recorded by a memorandum endorsed upon or annexed to this Lease and the counterpart hereof signed on behalf of the Landlord and the Tenant and each party shall bear its own costs in respect thereof . Time not of the essence Any delay in seeking the appointment of a valuer shall in no way prejudice the right to review the Basic Rent and time shall not be of the essence in respect of any dates or periods mentioned in this clause 7. Payment of costs If either the Landlord or the Tenant shall fail to pay any costs awarded against it in an arbitration within 21 days of the same being demanded by the arbitrator the other shall be entitled to pay the same and the amount so paid shall be repaid by the party chargeable on demand together with Interest. GUARANTOR PROVISIONS Guarantee The Guarantor covenants with and guarantees to the Landlord as principal debtor that the Tenant will pay the Rents and perform and observe all the covenants and obligations on the Tenant's part contained in this Lease (the Tenant's Obligations) and that the Guarantor will pay and make good to the Landlord on demand all losses, costs and expenses sustained by the Landlord through the default of the Tenant in observing or performing the Tenant's Obligations No release of liability The liability of the Guarantor will continue notwithstanding (and will not be discharged in whole or in part by): 8.2.1 any forbearance by the Landlord to enforce against the Tenant the tenant's covenants in this Lease: 8.2.2 the giving of time or other concessions or the taking or holding of or varying realising releasing or not enforcing any other security for the liabilities of the Tenant or any refusal by the Landlord to accept any Rents tendered by or on behalf of the Tenant at a time when the Landlord is entitled (or will after the 29


 
• • • • • • • • • • 8.2.3 8.2.4 8.2.5 service of a notice under section 146 of the Law of Property Act 1925 be entitled) to re-enter the Property: any legal limitation or incapacity relating to the Tenant; the invalidity or unenforceability of any of the obligations of the Tenant; the Tenant ceasing to exist; 8.2.6 the giving and subsequent withdrawal of any notice to determine this Lease; 8.2.7 8.2.8 any increase or reduction in the extent of the Property or in the rent payable under this Lease or any other variation to this Lease: the surrender of part of the Property in which event the liability of the Guarantor under this Lease is to continue in respect of the part of the Property not surrendered after making any necessary apportionments under section 140 Law of Property Act 1925; 8.2. 9 the disclaimer of this Lease: 8.2.10 any other act or omission of the Landlord or any other circumstances which but for this clause 8-2 would discharge the Guarantor . 8.3 Guarantor to accept new lease 8.4 28617812.2 8.3-1 The Guarantor shall if required by the Landlord in writing within the period beginning on the day of: 8-3.2 8.3.3 (a) a disclaimer of this Lease; or (b) a forfeiture of this Lease; and expiring three months after the Landlord has been notified in writing by the Tenant or the Guarantor of the disclaimer or forfeiture accept a lease of the Property for the residue of the contractual term unexpired at and with effect from the date of the disclaimer or forfeiture at the same yearly rent as then reserved by this Lease (reviewable at the same times as the yearly rent would have been reviewable under this Lease had there been no disclaimer or forfeiture) and subject to all of the other terms of this Lease . The Guarantor will on execution of the new lease pay the Rents for the period from the date of the disclaimer or forfeiture to the quarter day following the date of the new lease and the reasonable legal costs of and incidental to the new lease and will execute and deliver to the Landlord a counterpart of it. If the Guarantor is not required by the Landlord to accept a lease under subclause 8.3.1 the Guarantor may, by serving written notice within one month following the expiry of the three month period referred to in clause 8.3.1, request that it is granted a new lease of the Property for the residue of the contractual term unexpired at and with effect from the date of the disclaimer or forfeiture at the same yearly rent as then reserved by this Lease (reviewable at the same times as the yearly rent would have been reviewable under this Lease had there been no disclaimer or forfeiture) and subject to all of the other terms of this Lease . Security taken by Guarantor 8.4.1 Until the Tenant's Obligations have been paid and performed in full the Guarantor sh.all not without the Landlord's prior written consent exercise any rights: (a) (b) of subrogation or indemnity in respect of the Tenant's Obligations; to take the benefit of share in or enforce any security or other guarantee or indemnity for the Tenant's Obligations; (c) to prove in the bankruptcy or liquidation of the Tenant in competition with the Landlord. 30


 
• • • • • • • • • 8.5 8.4-2 The Guarantor covenants that it has not taken any security from the Tenant and will not do so. 8-4-3 Any security taken by the Guarantor in breach of clause 8.4-2 and all money at any time received in respect of it shall be held in trust for the Landlord as security for the liability of the Guarantor under this Lease. Guarantee of the tenant's liabilities under an Authorised Guarantee Agreement If at any time whilst the Tenant is bound by an Authorised Guarantee Agreement the Tenant defaults in its obligations under that Agreement the Guarantor (being a Guarantor who has guaranteed the tenant covenants of this Lease) shall make good to the Landlord on demand and indemnify the Landlord against all losses resulting from that default notwithstanding: 8-5-1 any time or indulgence granted by the Landlord to the Tenant or any neglect or forbearance of the Landlord in enforcing the payment of any sum or the observance or performance of the covenants or other terms of the Authorised Guarantee; or 8-5-2 that the terms of the Authorised Guarantee Agreement may have been varied by agreement between the Landlord and the Tenant provided that no variation is to bind the Guarantor to the extent that it is materially prejudicial to it; or 8.5.3 anything else which but for this clause the Guarantor would be released. 8-6 Deferred Part For the avoidance of doubt, the Guarantor hereby: 8-6.1 consents to the Deferred Part forming part of the Property from 1 July 2019; and 8.6.2 agrees that its guarantee in this clause 8 and other obligations under this Lease shall remain fully effective and: (a) to the extent that the inclusion of the Deferred Part in the demise of the Property varies this Lease, shall apply to the Lease as varied; and (b) shall not be released or diminished by the inclusion of the Deferred Part in the Property demised by this Lease; (c) extend and apply to the covenants given by, and the obligations on the part of the Tenant under this Lease in respect of the Deferred Part. THE PARTIES have executed this Lease as a deed and delivered it on the date first set out above . 28617812.2 31


 
• • • • • • • • • • SCHEDULE 1 Description of the Property The Property comprises Unit 7, Mountpark Southampton, Wide Lane, Southampton SO18 2NQ shown edged red on the Plan including the northern boundary fence excluding any Conducting Media in, on, under or over the same (whether in existence at the date of this lease or installed in the future) that are used by the Initial Property or the Deferred Part in common with any other part of the Estate or are not used by the Initial Property and the Deferred Part PROVIDED that the fence or other boundary marker with another unit on the Estate leased or intended to be leased for business use shall be a party structure and maintained accordingly and PROVIDED further that the Deferred Part is excluded until the demise of it takes effect . 21617812.2 32


 
• • • • • • • • • • SCHEDULE 2 Rights Granted The following rights are granted to the Tenant its undertenants and occupiers of the Property in common with the Landlord and any other person authorised by the Landlord: 1. the right of free passage and running of water. soil, gas, electricity, telephone and other services in and through all Conducting Media now or at any time during the Term in or over passing through or under the Estate and serving the Property so far as necessary for the enjoyment of the Property and in common with the Landlord and all others so authorised by the Landlord and all other persons entitled thereto; 2. 3. 4. 5. 6 the right of way at all times of the day and night with or without vehicles and in common as aforesaid over and along all roads forming part of the Common Parts (including without limitation the roads shown coloured brown on the Plan) for all purposes in connection with the use and enjoyment of the Property; the right of way at all times of the day and night on foot only and in common as aforesaid over and along all footpaths forming part of the Common Parts for all purposes in connection with the use and enjoyment of the Property; the right of support shelter and protection for the Property from any other part of the Estate; the right at all times and from time to time upon reasonable notice (save in case of emergency) to enter into and upon any adjacent or neighbouring land on the Estate for the purposes of inspecting and executing repairs or alterations to or upon the Property to the extent that the Landlord is able to grant the Tenant such right; and the right in the case of emergency and periodically practising emergency escape procedures only for the Tenant its undertenants and employees, customers and visitors to pass over such parts of any adjacent land on the Estate as are reasonably necessary for the purposes of escape; Provided that the Tenant shall exercise the rights granted by this Lease only in connection with its use of the Property for the Permitted Use and in accordance with any reasonable management regulations made by the Landlord and provided that in exercising the rights granted by this Lease the Tenant shall cause as little damage to the Estate and the other tenants and occupiers of the Estate as is reasonably practicable and shall promptly make good (to the reasonable satisfaction of the Landlord) any damage caused to the Estate by reason of the Tenant exercising such rights . 28617112.2 33


 
• • • • • • • • • 1. 2 4. 5, 6. 7 a. 28817812.2 SCHEDULE 3 Rights Reserved The following rights are excepted and reserved from this Lease to the Landlord for the benefit of the Estate and for all persons authorised by the Landlord to: The free passage and running of water, soil, gas, electricity, telephone and other services coming from or passing to any other land or building in and through all Conducting Media now or at any time during the Term in or over passing through or under the Property or serving the same and the right to maintain alter or divert the same and to connect thereto. The right for the Landlord and the Landlord's Surveyor and the Landlord's agents, workmen and others and the tenants and occupiers of any adjacent or neighbouring land or building at all times and from time to time upon reasonable notice (save in case of emergency) to enter into and upon the Property and all parts thereof for the purposes of inspecting and executing repairs or alterations to or upon the Property or any adjacent or neighbouring land or building. The right of support and shelter and all rights of light, air and other easements and rights now or hereafter belonging to or enjoyed by any adjacent or neighbouring land or building from or over the Property. The right to build or rebuild or alter or permit or suffer to be built or rebuilt or altered any adjacent or neighbouring land or building in any manner whatsoever and to let the same for any purposes or otherwise deal therewith notwithstanding that the light or air to the Property is in any such case thereby diminished or (save in so far as the same are hereby expressly granted or covenanted to be provided) any other liberty, easement, right or advantage belonging to the Tenant is thereby diminished or prejudicially affected . The right for the Landlord and those authorised by the Landlord to enter upon the Property for the purposes and in the manner mentioned in this Lease. The right for the Landlord and those authorised by the Landlord to enter the Property to carry out any assessment or inspection necessary for the preparation or production of an EPC and/or air-conditioning report in relation to the Property or any part thereof. The right in the case of emergency and periodically practising emergency escape procedures only for the owner of any adjacent land on the Estate and its employees, customers and visitors to pass over such parts of the Property as are reasonably necessary for the purposes of escape. The right until the demise of the Deferred Part takes effect for the Landlord and the Landlord's Surveyor and anyone authorised by them to enter upon the Property in order to inspect the same and to carry out such works of repair or maintenance as are reasonably necessary in relation to the Deferred Part . 34


 
• • • • • • • • • • DATE SCHEDULE 4 Authorised Guarantee Agreement 20(•] PARTIES (1) [•] Company number[•] whose registered office is at[•] (the Former Tenant) and; (2) [•] Company number[•] whose registered office is at[•] (the Landlord); (3) 1. [•] Company number[•] whose registered office is at[•] (the Guarantor); and DEFINITIONS AND INTERPRETATION 1.1 In this agreement the following definitions shall apply unless the context otherwise requires: Assignee [The proposed assignee] and (where there is an assignment of the Lease to which section 11 of the 1995 Act applies) its successors-in-title; Property the premises demised by and more particularly described in the Lease; Lease a lease of the Property dated [•] and made between (1) [•] and (2) [•] and includes any deed of variation licence consent or other document supplemental to or associated with the Lease by which the Tenant is bound whether presently existing or not; 1995 Act the Landlord and Tenant (Covenants) Act 1995; Secured Obligations the obligation to pay all sums from time to time due or expressed to be due to the Landlord from the Assignee under the Lease and to perform all other obligations which from time to time are or are expressed to be obligations of the Assignee under the Lease; Term the term granted by the Lease and any period of holding over or continuation or extension thereof whether by statute or common law. 1.2 In this deed unless the context otherwise requires: 1.2.1 references to the singular include the plural and vice versa any reference to a person includes a reference to a body corporate and words importing any gender include every gender; 1.2.2 references to numbered clauses are references to the relevant clause in this deed. The clause headings do not form part of this deed and are not to be taken into account when construing it . 2. GUARANTEE 2.1 This guarantee is given pursuant to a provision in the Lease requiring it to be given and is an authorised guarantee agreement for the purposes of section 16 of the 1995 Act. 2.2 The Former Tenant unconditionally and irrevocably covenants with and guarantees to the Landlord that the Assignee will throughout the Term and until the Assignee lawfully assigns the Lease pay and perform the Secured Obligations on the dates and in the manner required by the Lease. 2.3 The Former Tenant shall upon being requested to do so by the Landlord enter into any deed of variation licence consent or other document to which in each case the Assignee is a party 28617812.2 35


 
• • • • • • • • • 2.4 3. 3-1 and which is in each case supplemental to the Lease for the purpose of acknowledging that the Former Tenant's liabilities under this deed extend to it. The guarantee and covenant contained in clause 2.2 shall impose on the Former Tenant the same liability as if the Former Tenant were the principal debtor in respect of the Assignee's obligations under the Lease and that liability shall continue notwithstanding (and will not be discharged in whole or in part by): 2.4.1 any forbearance by the Landlord to enforce against the Assignee the tenant's covenants in the Lease: 2.4.2 2.4.3 2-4-4 2-4.5 2.4-6 2-4-7 2.4-8 the giving of time or other concessions or the taking or holding of or varying realising releasing or not enforcing any other security for the liabilities of the Assignee or any refusal by the Landlord to accept any rents tendered by or on behalf of the Assignee at a time when the Landlord is entitled (or will after the service of a notice under section 146 Law of Property Act 1925 be entitled) to re-enter the Property; any legal limitation or incapacity relating to the Assignee; the invalidity or unenforceability of any of the obligations of the Assignee; the Assignee ceasing to exist; the giving and subsequent withdrawal of any notice to determine the Lease; any increase or reduction in the extent of the Property or in the rent payable under the Lease or any other variation to the Lease; the surrender of part of the Property in which event the liability of the Former Tenant under this deed is to continue in respect of the part of the Property not surrendered after making any necessary apportionments under section 140 Law of Property Act 1925: 2.4.9 the disclaimer of the Lease; 2.4.10 any other act or omission of the Landlord or any other circumstances which but for this clause 2.4 would discharge the Former Tenant; and for the purposes of this clause 2 the Assignee shall be deemed liable to continue to pay and perform the Secured Obligations notwithstanding any of the above matters and any money expressed to be payable by the Assignee which may not be recoverable for any such reason shall be recoverable by the Landlord from the Former Tenant as principal debtor. NEW LEASE The Former Tenant shall if required by the Landlord in writing within the period beginning on the day of 3.1.1 a disclaimer of the Lease; or 3.1.2 a forfeiture of the Lease; and expiring three months after the Landlord has been notified in writing by the Former Tenant or the Assignee of the disclaimer or forfeiture accept a lease of the Property for the residue of the contractual term unexpired at and with effect from the date of the disclaimer or forfeiture at the same yearly rent as then reserved by the Lease (reviewable at the same times as the yearly rent would have been reviewable under the Lease had there been no disclaimer or forfeiture) and subject to all of the other terms of the Lease. 3.2 The Former Tenant will on execution of the new lease pay rent and other sums payable under the Lease for the period from the date of the disclaimer or forfeiture to the quarter day following the date of the new lease and the costs of and incidental to the new lease and will execute and deliver to the Landlord a counterpart of it. 3.3 If the Landlord requires more than one person to take a new lease those persons shall take that new lease as joint tenants, 21617812.2 36


 
• • • • • • • • • • 3.4 The Former Tenant will indemnify and keep indemnified the Landlord on a full indemnity basis against all solicitors' costs and disbursements and also surveyors' fees incurred by the Landlord in connection with the grant of such lease . 3.5 If the Former Tenant is not required by the Landlord to accept a lease under subclause 3-1 the Former Tenant's liability under this deed shall cease upon expiry of the three month period mentioned in clause 3.1 but without prejudice to any antecedent rights or claims that may have arisen. 4. SECURITY TAKEN BY FORMER TENANT 4.1 4.2 4.3 5 5.1 5.2 6. Until the Secured Obligations have been paid and performed in full the Former Tenant shall not without the Landlord's prior written consent exercise any rights: 4.1.1 of subrogation or indemnity in respect of the Secured Obligations; 4.1.2 to take the benefit of share in or enforce any security or other guarantee or indemnity for the Secured Obligations; 4.1.3 to prove in the bankruptcy or liquidation of the Assignee in competition with the Landlord The Former Tenant covenants that it has not taken any security from the Assignee and will not do so. Any security taken by the Former Tenant in breach of clause 4.2 and all money at any time received in respect of it shall be held in trust for the Landlord as security for the liability of the Former Tenant under this deed. LIMITATION ON FORMER TENANT'S LIABILITY To the extent that this deed purports to impose on the Former Tenant any liability for anything in respect of which the Assignee is released from liability by the provisions of the 1995 Act the relevant provision of this deed shall (to that extent only) be void but without prejudice to: the enforceability of that provision except to that extent; or the enforceability of any other provision of this deed. JOINT AND SEVERAL GUARANTORS 6.1 The liability of the Former Tenant under this deed shall be the joint and several liability of all parties who have executed this deed as Former Tenant and all other parties who from time to time guarantee the Assignee's obligations to the Landlord and any demand for payment by the Landlord on any one or more of such persons jointly and severally liable shall be deemed to be a demand made on all such persons . 6.2 Each person who has executed this deed as Former Tenant or on whose behalf this deed has been so executed agrees to be bound by this deed notwithstanding that the other person intended to execute or be bound by this deed may not do so or may not be effectually bound and notwithstanding that this deed may be determined or become invalid or unenforceable against any other person whether or not the deficiency is known to the Landlord. 7. GUARANTOR'S COVENANTS. 7.1 28617812.2 The Guarantor covenants with the Landlord throughout the Term and until the Assignee lawfully assigns the Lease that: 7.1.1 the Former Tenant will observe all obligations undertaken on its part in this deed and that in case of default by the Former Tenant the Guarantor will pay and make good to the Landlord on written demand all losses, damages, costs and expenses thereby arising or incurred by the Landlord; 7.1.2 if the Former Tenant is required as a result of disclaimer or forfeiture to accept from the Landlord a new lease of the Premises then the Guarantor will join in such lease and will enter into the same covenants mutatis mutandis as are contained in clause 8 of the Lease: 37


 
• • • • • • • • • • 7.1.3 in any of the circumstances set out in clause 3-1 the Landlord may within a period expiring three months after the Landlord has been notified in writing by the Guarantor the Former Tenant or the Assignee of the disclaimer or forfeiture require the Guarantor to accept a lease of the Property for the residue of the contractual term unexpired at and with effect from the date of the disclaimer or forfeiture at the same yearly rent as reserved by the Lease (reviewable at the same times as the yearly rent would have been reviewable under the Lease had there been no disclaimer or forfeiture) and subject to all of the other terms of the Lease and the Guarantor on execution of the new lease will pay rent for the period from the date of the disclaimer or forfeiture to the quarter day following the date of the new lease and the costs of and incidental to the new lease and will execute and deliver to the Landlord a counterpart of it. 7.2 It is agreed that any neglect or forbearance by or on the part of the Landlord in endeavouring to enforce the Secured Obligations any other indulgence which may be given to the Former Tenant and/or the Assignee by the Landlord or any variation of the terms of the Lease agreed between the Landlord and Assignee will not release or exonerate or in any way reduce or affect the liability of the Guarantor under the provisions of this deed. THE PARTIES have executed this agreement as a deed and delivered it on the date first set out above 21617112.2 38


 


 
• • • • • • • • • • from the Tenant but if it shall be less the amount of the overpayment shall be credited to the Tenant against the next quarterly payment of Service Charge or (if the Term shall have come to an end) shall be repaid to the Tenant . The provisions of this paragraph 5 shall continue to apply notwithstanding the expiry or earlier determination of this Lease in respect of any Service Charge Period then current. 5-4 The Tenant shall be entitled to inspect the records and vouchers relating to the Service Costs at such location as the Landlord may reasonably appoint for the purpose during normal working hours on weekdays and at the Tenant's expense take copies of them. 6. EXCEPTIONAL EXPENDITURE 6-1 6-2 If the Landlord is required during any Service Charge Period to incur heavy or exceptional expenditure which forms part of the Service Costs the Landlord shall be entitled to recover from the Tenant the Service Charge representing the whole of that expenditure on the quarter day next following. If funds collected by way of advance payments of Service Costs prove insufficient to meet any immediate liability (and there is no reserve fund available or which may be applied to meet the liability and the circumstances arose otherwise than as mentioned in paragraph 7.1) the Landlord shall be entitled to borrow monies for the purpose from reputable banks at commercially competitive rates of interest and the interest payable on the borrowing shall be recoverable as an item of the Service Costs. 7. SINKING FUND AND RESERVES 7.1 With a view to securing so far as may reasonably be practicable that the Service Costs shall be progressive and cumulative rather than irregular and that tenants for the time being shall bear a proper part of accumulating liabilities which accrue in the.future the Landlord shall be entitled to include in the Service Costs for any Service Charge Period an amount which the Landlord reasonably determines is appropriate to build up and maintain a sinking fund and a reserve fund in accordance with the principles of good estate management. 7.2 Any such sinking fund shall be estabhshed and maintained on normal commercial principles for the renewal and replacement of Plant. 7.3 Any such reserve fund shall be established and maintained to cover prospective and contingent costs of carrying out repairs, decoration, maintenance and renewals and of complying with statutes, bye-laws and regulations of all competent authorities and of the insurers in relation to the use occupation and enjoyment of the Estate. 8. LANDLORD'S PROTECTION PROVISIONS 8.1 The Tenant shall not be entitled to object to the Service Charge (or any item comprised in the Service Costs) or otherwise on any of the following grounds: the inclusion in a subsequent Service Charge Period of any item of expenditure or liability omitted from the Service Costs for any preceding Service Charge Period; 8.2 that any item of Service Costs might have been provided or performed at a lower cost; 8-3 8.4 8-5 g_ 28617812.2 disagreement with any estimate of future expenditure for which the Landlord requires to make provision so long as the Landlord acts reasonably and in good faith and in the absence of manifest error; the manner in which the Landlord exercises its discretion in providing the Services so long as the Landlord acts in good faith and in accordance with the principles of good estate management; the employment of managing agents or contractors to carry out and provide on the Landlord's behalf the Services in accordance with this schedule. SERVICE COSTS TO EXCLUDE CERTAIN COSTS There shall be excluded from the Service Costs 40


 
• • • • • • • • • • 9.1 any liability or expense for which the Tenant or other tenants or occupiers of the Estate shall individually be responsible under the terms of the tenancy or other arrangement by which it or they use or occupy any part of the Estate; 9.2 9.3 costs arising from any damage or destruction caused by an Insured Risk; capital costs of the construction alteration redevelopment or extension of the Common Parts other than capital costs incurred in repair or replacement thereof; 9.4 the costs of the initial provision of any Plant prior to the date of this Lease and the costs of the initial provision of any Plant after the date of this Lease in so far as such Plant was part of the original design of the Estate and was not provided in the original construction works; 9.5 9.6 9.7 9.8 9.9 10. 10.1 enforcement of covenants to pay rent and other monies payable under an occupier's lease; unpaid costs due from the tenant of another part of the Estate; costs arising from any chancel repair liability; costs incurred in dealing with the Landlord's interest in the Estate including the costs of advertising or publicity activities; costs relating to any unit upon the Estate which is capable of being let but which is not let. THE LANDLORD'S OBLIGATIONS If the Tenant pays the Service Charge and observes its obligations under this Lease the Landlord shall use all reasonable endeavours to provide the Services provided always that the Landlord may add to withhold or vary the Services if it considers the addition withholding or variation to be necessary or desirable even if it increases the Service Costs or if required to do so by any competent authority . 10.2 The Landlord shall comply at all times with the edition of the Code of Practice for Service Charges in Commercial Property issued by the Royal Institution of Chartered Surveyors from time to time. 1. Part 2 The repair, maintenance, redecoration, rebuilding, renewal, cleaning and lighting of the Common Parts . 2. The operation, repair, maintenance and, if beyond reasonable economic repair, the renewal and replacement of all Plant. 3. The provision of any Plant that the Landlord acting reasonably considers necessary or desirable or that is required by law or by any government department or local public or regulatory or other authority or court to be supplied and maintained and including the cost of replacement of any machinery, articles and materials for (for example) refuse collection and fire fighting that may become beyond reasonable economic repair. 4. The placing and running of maintenance contracts for the Estate. 5- The collection, packaging, treatment and disposal of refuse from the Estate (but excluding trade waste arising from any occupier's particular trade or business). 6- The supply, maintenance, servicing, renewal and replacement of all fixtures fittings, bins, receptacles, tools, appliances, equipment and other things the Landlord may reasonably consider desirable for performing the Services or for the appearance and upkeep of the Common Parts. 7. The provision, maintenance, replacement and renewal of any notice boards, notices, directional or other signs on the Estate as the Landlord acting reasonably from time to time considers appropriate. 8. The payment of all Outgoings in respect of the Common Parts including those for water, electricity, fuel, telephone and public and other statutory utilities consumed on the Common Parts and the payment of all Outgoings in connection with the provision of any of the Services. 28617812.2 41


 
• • • • • • • • • • 9- 10 . 11. 12, 13. 14. 15- 16. The provision and maintenance (at the Landlord's absolute discretion) of plants, shrubs and landscaped areas on the Estate and keeping the same properly maintained and cultivated. The payment of any sums which the Landlord may be liable to pay as a contribution towards the expense of making, repairing, maintaining, rebuilding and cleaning any roads, pavements, Conducting Media, party walls, party structures or other things appurtenant to the Estate or used for the Estate in common with any adjoining property. (Save insofar as insured under other provisions of this Lease) the insurance of the Plant and the insurance of the Landlord against property owners liability in respect of the Estate and such other risks as the Landlord in its absolute discretion shall from time to time deem necessary or expedient. The taking of any steps as the Landlord acting reasonably from time to time considers appropriate for complying with making representations against or otherwise contesting or dealing with any legislation, order, regulation, notice or statutory requirement relating to or affecting the whole or any part of the Estate compliance with which is not the direct liability of the Tenant or any tenant of any part of the Estate. The cost of pursuing and enforcing any claim and taking or defending any proceedings which the Landlord may reasonably make take or defend for the purpose of establishing . preserving or defending any rights, amenities or facilities used or enjoyed by the tenants and occupiers of the Estate or any part of it or to which they may be entitled. The employment of such persons as the Landlord acting reasonably considers necessary or desirable from time to time in connection with providing any of the Services and all incidental expenditure including remuneration, payment of statutory contributions and such other health, pension, welfare, redundancy and similar or ancillary payments and any other payments which the Landlord acting reasonably considers desirable or necessary and the provision of uniforms, work or protective clothing. The reasonable cost of employing managing agents for the administration and management of the Estate and the carrying out and provision of the Services or if the Landlord does not employ managing agents a reasonable management fee for itself PROVIDED that any cost under this paragraph shall not in any year exceed 10% of the costs arising under paragraph 1 of this part of this schedule . The reasonable cost of employing accountants surveyors or other professional advisers for certifying any matter or thing requiring to be certified for the purpose of any of the provisions of this schedule. 17- The provision of all additional and substitute services that the Landlord provides pursuant to paragraph 10 of Part 1 of this schedule. 18- The policing of the Estate the controlling of the traffic and pedestrians and the provision of such security staff as the Landlord acting reasonably from time to time considers fit and proper and the provision, maintenance, replacement and renewal of security equipment on the Estate. 19. The payment of interest on any loan or overdraft obtained by the Landlord acting reasonably on normal commercial terms from a United Kingdom clearing bank for the purpose of defraying the Service Costs . 28617812.2 42


 
• • • • • • • • • • 28617812.2 SCHEDULE 6 Encumbrances 1. Deed dated 8 May 2018 between (1} Inchcape Estates Limited and (2} Mountpark Logistics EU 2014 05 SARL. 2. Transfer dated 18 May 2018 between (1} Mountpark Logistics EU 2014 05 S.A.R.L. and (2} Mountpark Logistics EU 2017 23 S.A.R.L. 3. Transfer dated 18 August 2017 between (1} Balmoral Land Limited and (2} Ford Motor Company Limited. 4. Lease dated 21 September 2018 between (1} Mountpark Logistics EU 2017 23 S.A.R.L- and (2} Energetics Electricity Limited . 43


 
EXECUTED and DELIVERED as a DEED by MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L a company incorporated in Luxembourg by ] Manager and ] Manager being persons who, in accordance with the laws of that territory, are acting under the authority of the company EXECUTED and DELIVERED as a DEED ) by CONEXUS LIMITED acting by a director ) in the presence of: ) Witness Signature Witness Name Address Occupation EXECUTED and DELIVERED as a DEED by PFSWEB, INC. acting by an authorised signatory in the presence of: Witness Signature Witness Name Address Occupation 28617812.2 Director Authorised Signatory 44


 
Ref: CS\125230.002 28840414.1 • Gateley Plc DATED q (\Jov trobif (1) MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L (2) CONEXUS LIMITED (3) PFSWEB, INC. LICENCE TO CARRY OUT WORKS relating to 2018 Unit 7, Mountpark Southampton, Wide Lane, Southampton S018 2NQ


 
DATE PARTIES 9 fUovtmbif 2018 (1) MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L. a Luxembourg private limited liability company (societe a responsabilite limitee) with its registered office at 18, rue Robert Stumper, L-2557 Luxembourg, being registered with the Luxembourg Register of Commerce and Companies (Registre de commerce et des societes) under number 021893 and with a share capital of EUR 12,500 (the Landlord); and (2) CONEXUS LIMITED incorporated and registered in England and Wales with company number 03616118 with its registered office at Eastlands One, London Road, Basingstoke, Hampshire RG21 4FB (the Tenant); and (3) PFSWEB, INC. incorporated and registered in the State of Delaware in the United States of America with file number 3062550, whose registered office in Delaware is 251 Little Falls Drive, Wilmington, DE 19808 and whose address is at 505 Millennium Drive, Allen, TX75013 USA (the Guarantor). IT IS AGREED 1. DEFINITIONS AND INTERPRETATION 1.1 In this licence the following definitions shall apply unless the context otherwise requires: Base Specification the specification and plans set out in Appendix 2; COM Regulations the Construction (Design and Management) Regulations 2015; Ground Floor Office Works the fitting out and other works to the ground floor of the office area of the Property forming part of the Works; Lease a lease of the Property dated 9 fvO\..(UY)btf 2018 between (1) Landlord and (2) Tenant and all documents supplemental or collateral to that lease; Property Unit 7, Mountpark Southampton, Wide Lane, Southampton SO18 2NQ as more particularly described in and demised by the Lease; Works the Tenant's fitting out works as shown on the plans and specification attached to this licence in the Appendix 1. 1.2 References to the Landlord include a reference to the person entitled for the time being to the immediate reversion to the Lease. References to the Tenant include a reference to its successors in title and assigns. 1.3 References to the end of the Term are to the end of the Term however it ends. 1.4 The expression tenant covenants has the meaning given to it by the Landlord and Tenant (Covenants) Act 1995. 1.5 Clause headings shall not affect the interpretation of this licence. 1.6 A person includes a natural person, corporate or unincorporated body (whether or not having separate legal personality). 1. 7 Words in the singular shall include the plural and vice versa. 1.8 A reference to one gender shall include a reference to the other genders. 1.9 Unless otherwise specified, a reference to a statute, statutory provision or subordinate legislation is a reference to it as it is in force from time to time, taking account of any 28840414.1


 
amendment or re-enactment and includes any statute, statutory provision or subordinate legislation which it amends or re-enacts. 1.10 A reference to a statute or statutory provision shall include any subordinate legislation made from time to time under that statute or statutory provision. 1.11 A reference to writing or written includes faxes but not e-mail. 1.12 A reference to a document is a reference to that document as varied or novated (in each case, other than in breach of the provisions of this licence) at any time. 1.13 Except where a contrary intention appears, references to clauses are to the clauses of this licence. 1.14 Any phrase introduced by the terms including, include, in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms. 2. CONSENT TO CARRY OUT THE WORKS 2.1 In consideration of the obligations on the Tenant in this licence, the Landlord consents to the Tenant carrying out the Works on the terms set out in this licence. 2.2 This consent will cease to be valid if the Works have not been started (in accordance with the terms of this licence) within three months from (and including) the date of this licence. If the consent ceases to be valid, all the terms of this licence other than clause 2.1 will remain in force. 2.3 Nothing in this licence will place the Tenant under an obligation to the Landlord to carry out the Works, but if it does carry them out, it must do so on the terms of this licence. 2.4 This consent does not obviate the need for the consent or licence of any person other than the Landlord that may be required to carry out the Works. 2.5 The Works are not improvements for the purposes of Part I Landlord and Tenant Act 1927. 3. CARRYING OUT AND COMPLETING THE WORKS 3.1 The Tenant shall not start the Works until it has obtained all other licences and consents that may be required to carry them out. 3.2 The Tenant must carry out the Works: 3.2.1 using good quality, new materials which are fit for the purpose for which they will be used; 3.2.2 in a good and workmanlike manner and in accordance with good building and other relevant practices, codes and guidance; and 3.2.3 to the reasonable satisfaction of the Landlord. 3.3 In carrying out the Works the Tenant must comply with all laws and the terms of all other licences and consents and must cause as little disturbance as reasonably possible to the Landlord and the owners and occupiers of the estate of which the Property forms part and of any neighbouring land. 3.4 The Tenant must immediately make good, to the reasonable satisfaction of the Landlord, any damage (including decorative damage) to any land or building, plant or machinery (other than the Property) which is caused by carrying out the Works. 3.5 Once commenced, the Tenant must complete the Works, and any works required by clause 3.4, within one year after the date of this licence. 3.6 The Tenant must notify the Landlord as soon as the Works have been completed, and send the Landlord three copies of plans showing the Property as altered by the Works. 3.7 If required, the Tenant must produce to the Landlord on demand copies of all letters, notices, applications, consents or other documents sent, served, received or made by or granted to the Tenant in connection with any works permitted or required under this licence and must supply to the Landlord on demand any information or evidence the Landlord 28840414.1 2


 
reasonably requires in order to satisfy itself that the provisions of this licence have been complied with. 4. THE CDM REGULATIONS 4.1 The Tenant shall comply with its obligations under the COM Regulations, including (without limitation) all requirements in relation to the provision and maintenance of a health and safety file. 4.2 The Tenant shall supply all information to the Landlord that the Landlord reasonably requires from time to time to comply with the Landlord's obligations under the COM Regulations. 5. FURTHER PROVISIONS RELATING TO THE WORKS 5. 1 The Landlord will only be obliged to insure the Works if they form part of the Property and only after they have been completed in accordance with this licence and for the amount for which the Tenant has notified the Landlord that they should be insured and otherwise in accordance with the terms of the Lease. 5.2 Before the end of the term of the Lease (however it may end) the Tenant must, if the Landlord reasonably so requires and gives the Tenant reasonable prior notice of not less than 6 months of that requirement, remove the Works and reinstate the Property in order that it accords with the Base Specification and make good any damage (induding decorative damage) caused to the Property or any land or building, plant or machinery other than the Property by such removal and reinstatement PROVIDED that the Tenant shall not in any circumstances be required under this subclause or any provision of the Lease to remove the Ground Floor Office Works or any part thereof. 5.3 Any effect on the rental value of the Property arising in connection with the Works will be disregarded on any rent review under the Lease. 5.4 The tenant covenants in the Lease will extend to the Works and apply to the Property as altered by the Works. 6. NO WARRANTY BY THE LANDLORD 6.1 No representation or warranty is given or is to be implied by the Landlord entering into this licence or by any step taken by or on behalf of the Landlord in connection with it as to: 6.1.1 the suitability of the Property or the estate of which it forms part for the Works; or 6.1.2 whether the Works or any removal or reinstatement of them may be lawfully carried out. 6.2 The Tenant acknowledges that it is not relying on, and will have no remedy in respect of, any representation that may have been made by or on behalf of the Landlord before the date of this licence as to any of the matters mentioned in clause 6.1. 6.3 Nothing in this clause shall, however, operate to limit or exclude any liability for fraud. 7. COSTS The Tenant must pay on demand any properly incurred reasonable costs (plus value added tax) and proper disbursements of the Landlord, its solicitors, surveyors and managing agents incurred in connection with any removal of the Works and reinstatement of the Property or in making good any damage to any land or building, plant or machinery (other than the Property) which is caused by the carrying out of the Works or by the removal of them or the reinstatement of the Property. 8. THE RIGHT OF RE-ENTRY IN THE LEASE 28840414.1 The right of re-entry in the Lease will be exercisable if any covenant or condition of this licence is breached, as well as if any of the events stated in the provision for re-entry in the Lease occurs. 3


 
9. INDEMNITY The Tenant must indemnify the Landlord against all costs and claims arising from any breach of the terms of this licence. 10. NOTICES The provisions as to notices in the Lease shall apply to this Licence 11. LIABILITY 11.1 The obligations of the Tenant in this licence are owed to the Landlord and are made in consideration of the consent granted by clause 2.1. 11.2 At any time when the Tenant is more than one person, then those persons will be jointly and severally liable for the Tenant's obligations arising by virtue of this licence. The Landlord may take action against, or release or compromise the liability of any one of those persons, or grant any time, or concession or other indulgence without affecting the liability of any other of those persons. 12. THIRD PARTY RIGHTS A person who is not a party to this licence shall not have any rights under or in connection with it. 13. JURISDICTION 13.1 This licence shall be governed by and construed in all respects in accordance with the laws of England and Wales to the exclusive jurisdiction of whose courts the parties shall be deemed (to the extent necessary) irrevocably to have submitted. 13.2 The Guarantor irrevocably authorises and appoints the Tenant to accept service of all legal process arising out of or connected with this licence and service on the Tenant shall be treated as service on the Guarantor provided that a copy of the notice shall also have been sent to the Guarantor at its registered office set out at the beginning of this licence. THE PARTIES have executed this licence as a deed and delivered it on the date first set out above 28840414.1 4


 
EXECUTED and DELIVERED as a DEED on behalf of MOUNTPARK LOGISTICS EU 2017 23 S.A.R.L a company incorporated in Luxembourg by and ] Manager being persons who, in accordance with the laws of that territory, are acting under the authority of the company EXECUTED and DELIVERED as a DEED by CONEXUS LIMITED acting by a director in the presence of: Witness Signature Witness Name Address Occupation EXECUTED and DELIVERED as a DEED ) by PFSWEB, INC. acting by an authorised ) signatory in the presence of: ) Witness Signature Witness Name Address Occupation