Document:

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  28840414.1  ---  ·-···  Director  Authorised Signatorya10113sunpointwestindust

126965.00088.126059897.11  INDUSTRIAL BUILDING LEASE  between  CHEYENNE CLAYTON DRI, LLC  as Landlord  and  PRIORITY FULFILLMENT SERVICES, INC.  as Tenant  __________________, 20__ 21December 13 

 

126965.00088.126059897.11  INDUSTRIAL BUILDING LEASE  THIS LEASE (the "Lease"), dated the _______ day of ____________, 20__ ("Date of Lease") is entered  into by and between PRIORITY FULFILLMENT SERVICES, INC., a Delaware corporation ("Tenant"), and  CHEYENNE CLAYTON DRI, LLC, a Delaware limited liability company ("Landlord").  I. BASIC LEASE PROVISIONS 1.1 Premises. Approximately 170,314 Rentable Square Feet of space to be known as Building  2 at SunPoint West, as outlined on Exhibit A attached hereto and made a part hereof and located at the  Building, including exclusive use of the parking area attributable to the Building (containing approximately  114 spaces in locations depicted on Exhibit A), which shall be reserved for Tenant’s use.  1.2 Building. The building, currently identified as Building 2, located at 2255 West Cheyenne  Avenue, North Las Vegas, Nevada 89032.   1.3 Land. The parcel of land upon which the Buildings are located and all rights, easements  and appurtenances thereunto belonging or pertaining.   1.4 Project. The development known as SunPoint West, consisting of the Land, the Building  and five (5) adjacent buildings (the "Buildings") and all other improvements built on the Land, containing an  aggregate total of approximately 730,771 Rentable Square Feet within the Buildings.  1.5 Rentable Square Feet (Foot) or Rentable Area. The rentable area within the Premises  and/or the Project are deemed to be the amounts set forth in this Article I. The measurement of the  Rentable Square Feet has been calculated by an architect engaged by Landlord using accepted BOMA  Standards based upon "drip line" methodology. The Rentable Square Feet in the Building and in the other  Buildings allocates the Common Area in each building to all tenant space therein on a prorata basis. Tenant  agrees that the rentable area of the Premises and Basic Rent may be recalculated by Landlord using the  standard set forth above in the event that Landlord elects, in its sole discretion, to re-measure the Premises  within the first six (6) months following the Commencement Date, and it is determined that the total number  of Rentable Square Feet of the Premises differs from that set forth herein. In the event Landlord elects to  so re-measure the Premises, Landlord shall deliver to Tenant a certification from Landlord's architect  engaged for such purpose describing the method used to measure the Premises and its calculations of  such re-measurement. If the re-measured Rentable Area of the Premises is more or less than the area set  forth in this Lease, the annual Basic Rent shall be recalculated by multiplying the then applicable annual  Basic Rent per Rentable Square Foot by the re-measured square footage of the Premises. However, in no  event, and notwithstanding any such re-measurement, shall the Basic Rent or Tenant's Proportionate Share  be increased by more than one percent (1.0%) over the amounts set forth in this Lease. The Basic Rent to  be paid monthly shall be then calculated by dividing the recalculated annual Basic Rent by twelve (12),  subject to such cap. In addition, Tenant's Proportionate Share of the Basic Costs (as hereinafter defined)  shall be recalculated by Landlord in the event the rentable area of the Premises and/or the rentable area  at the Project differ from those set forth herein, subject to such cap. At such time, the parties shall enter  into an amendment to this Lease setting forth the re-measured square footage in the Premises, the adjusted  annual and monthly Basic Rent under this Lease, and the adjusted Tenant's Proportionate Share of Basic  Costs. If Landlord does not elect to undertake any such re-measurement, the Rentable Area shall be  deemed to be as set forth herein.  1.6 Term. Sixty-Four (64) months, beginning on the Commencement Date and expiring on the  Expiration Date.  1.7 Commencement Date. The later of (a) April 1, 2022 or (b) thirty (30) days after receipt by  Tenant of Landlord’s written notice of the Substantial Completion of the Landlord Work (as hereinafter  defined). The Commencement Date is estimated to be April 1, 2022.  13th 21December 

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 3  126965.00088.126059897.11  1.8 Expiration Date. The Expiration Date is estimated to be July 31, 2027.  1.9 Lease Year. Each consecutive twelve-month period elapsing after: (i) the Commencement  Date if the Commencement Date occurs on the first day of a month; or (ii) the first day of the month following  the Commencement Date if the Commencement Date does not occur on the first day of a month.  Notwithstanding the foregoing, the first Lease Year shall include the additional days, if any, between the  Commencement Date and the first day of the month following the Commencement Date, in the event the  Commencement Date does not occur on the first day of a month.  1.10 Calendar Year. For the purpose of this Lease, Calendar Year shall be a period of twelve  (12) months commencing on each January 1 during the Term, except that the first Calendar Year shall be that period from and including the Commencement Date through December 31 of that same year, and the last Calendar Year shall be that period from and including the last January 1 of the Term through the earlier of the Expiration Date or date of Lease termination. 1.11 Basic Rent. The amount set forth in the following schedule, subject to adjustment as  specified in Article IV.   Period Approximate Annual   Basic Rent  Monthly Basic Rent  Months 1 - 4 (Abated)* $1,328,449.20 $110,704.10 Months 5 - 12 $1,328,449.20 $110,704.10  Months 13 - 24 $1,368,302.68 $114,025.22  Months 25 - 36 $1,409,351.76 $117,445.98  Months 37 - 48 $1,451,632.31 $120,969.36  Months 49 - 60 $1,495,181.28 $124,598.44  Months 61 - 64 $1,540,036.72 $128,336.39  *Provided that no Event of Default (as defined in Section 21.1 of this Lease) occurs under this Lease and extends beyond the applicable notice and cure period, Basic Rent shall be abated for a period of four (4) months from and after the Commencement Date (the "Abatement Period"). All other terms and conditions of this Lease, including, without limitation, the obligation to pay Additional Rent, shall remain in full force and effect during the Abatement Period. If any Event of Default (which extends beyond the applicable notice and cure period) occurs under this Lease, the Abatement Period shall immediately terminate, and all Basic Rent which has then previously been abated shall immediately become due and payable. 1.12 Security Deposit. $128,336.39  1.13 Interest Rate. The per annum interest rate listed as the base rate on corporate loans at  large U.S. money center commercial banks as published from time to time under "Money Rates" in the Wall  Street Journal plus 3%, but in no event greater than the maximum rate permitted by law. In the event the  Wall Street Journal ceases to publish such rates, Landlord shall choose, at Landlord's reasonable  discretion, a similarly published rate.  1.14 Tenant's Proportionate Share. Tenant's Proportionate Share of the Project is 23.31%  (determined by dividing the Rentable Square Feet of the Premises by the Rentable Square Feet of the  Project and multiplying the resulting quotient by one hundred and rounding to the second decimal place).  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 4  126965.00088.126059897.11  1.15 Broker(s). Landlord's Tenant's  Chris Lane Jason Simon, SIOR  Colliers International Jones Lang LaSalle  1.16 Guarantor. N/A  1.17 Landlord's Notice CHEYENNE CLAYTON DRI, LLC  Address. c/o SunCap Property Group  6101 Carnegie Boulevard, Suite 180  Charlotte, NC 28209  Attention: Jason Bria  1.18 Tenant's PRIORITY FULFILLMENT SERVICES, INC.  Notice Address.  505 Millennium Drive  Allen, Texas 75013  Attention: Contracts and Zach Thomann  1.19 Agents. Officers, partners, directors, employees, agents, licensees, contractors, customers  and invitees; to the extent customers and invitees are under the principal's control or direction.  1.20 Common Area. All areas from time to time designated by Landlord for the general and  nonexclusive common use or benefit of Tenant, other tenants of the Project, and Landlord, including,  without limitation, roadways, entrances and exits, loading areas, landscaped areas, open areas, park areas,  service drives, walkways, common mail areas, common trash areas, common pipes, conduits, wires and  appurtenant equipment within the Project, common maintenance and utility rooms and closets (if any),  exterior lighting not connected to any specific Building’s electrical system, exterior utility lines before  entering any Building, and non-exclusive parking facilities (as determined by Landlord from time to time in  accordance with the Lease or any other lease).  II. PREMISES AND TERM 2.1 Premises. Landlord hereby leases the Premises to Tenant, and Tenant hereby leases the  Premises from Landlord, upon and subject to the terms, covenants, provisions and conditions of this Lease.  2.2 Term. The Term shall commence on the Commencement Date and expire at midnight on  the Expiration Date, such dates being specified in the Basic Lease Provisions, as the same shall be  confirmed or revised pursuant to the Acceptance Letter and Commencement Date Agreement substantially  in the form of Exhibit F at the request of either party.    2.3 Early Possession. If Tenant takes possession of the Premises before the Commencement  Date for the purposes of commencing a substantial portion of its normal business operations therein, such  possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (as defined  in Article III) to Landlord for each day of possession before the Commencement Date (which shall not  affect the stated abatement under this Lease which commences from and after the Commencement Date.  Notwithstanding the foregoing and provided that Tenant has delivered to Landlord its insurance certificates  pursuant to Section 11.4, paid the Initial Payment (as set forth in Section 3.1, below, Landlord, in its sole  discretion, agrees to allow Tenant to enter the Premises thirty (30) days prior to the Commencement Date,  for the sole purposes of installing furniture, equipment or other personal property and for the receipt of  customer inventory (as permitted by applicable law), and except for the cost of services requested by  Tenant, Tenant shall not be required to pay Rent for any days of possession prior to the Commencement  Date during which Tenant is in possession of the Premises for such purposes; provided, however, that  during such period of early entry by Tenant, Landlord shall have no liability for any costs, damages or losses  suffered by Tenant, its members, managers, employees, agents or contractors. Tenant's occupancy of the  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 5  126965.00088.126059897.11  Premises prior to the Commencement Date for any purpose shall be subject to all other terms and  conditions of this Lease, including without limitation, Articles X, XI, XVIII and XXIV. During any period of  occupancy prior to the Commencement Date, Tenant and its Agents shall not unreasonably interfere with  Landlord's performance of the Landlord Work or any other work conducted by Landlord, if any, pursuant to  Article VI, and any delay caused by such interference shall be a Tenant delay as provided in Section 4(d)  of Exhibit C.   III. BASIC RENT AND SECURITY DEPOSIT 3.1 Types of Rental Payments. "Rent" shall be and consist of (a) Basic Rent payable in monthly  installments as set forth in Section 1.11, in advance, on the first day of each and every calendar month  during the Term of this Lease; and (b) Additional Rent as defined in Section 4.1. Rent shall be paid by  check or electronically via automatic debit, ACH credit, or wire transfer to such account as Landlord  designates in writing to Tenant or at an address designated by Landlord for payment in lawful U.S. Dollars.  Concurrent with the execution and delivery of this Lease, Tenant shall deliver to Landlord the “Initial  Payment”, which shall include the Additional Rent for the first full calendar month of the Term, plus  the Security Deposit (as set forth in Section 1.12) (collectively, the “Initial Payment”).  The Initial  Payment shall be calculated as follows:  Initial Payment  Security Deposit (as set forth in  Section 1.12) $128,336.39  Additional Rent (as set forth in Section  4.1)  $20,437.68  Total $148,774.07 Until Landlord provides further written notice to Tenant, all Rent shall be paid as follows:  If by check, to the following address:  6001 Carnegie Boulevard  Suite 180  Charlotte, NC 28209  Attn: Accounts Receivable – Sunpoint West  3.2 Covenants Concerning Rental Payments. Tenant shall pay the Basic Rent and the  Additional Rent promptly when due, without notice or demand therefor, and without any abatement,  deduction or setoff for any reason whatsoever, except as may be expressly provided in this Lease. No  payment by Tenant, or receipt or acceptance by Landlord, of a lesser amount than the correct Basic Rent  and/or Additional Rent shall be deemed to be other than a payment on account, nor shall any endorsement  or statement on any check or letter accompanying any payment be deemed an accord or satisfaction, and  Landlord may accept such payment without prejudice to its right to recover the balance due or to pursue  any other remedy in this Lease or at law. In addition, any such late Rent payment shall bear interest from  the date such Rent became due and payable to the date of payment thereof by Tenant at the Interest Rate.  Such interest shall be due and payable within ten (10) days after written demand from Landlord.   3.3 Triple Net Lease. It is intended that the Rent provided for in this Lease shall be an  absolutely net return to Landlord for the Term of this Lease and any renewals or extensions thereof, free of  any and all expenses or charges with respect to the Premises except for those obligations of Landlord  expressly set forth herein.   3.4 Security Deposit. Contemporaneously with the execution of this Lease, Tenant shall pay  to Landlord a Security Deposit in the amount set forth in Section 1.12, in immediately available funds,  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 6  126965.00088.126059897.11  which Security Deposit shall be held by Landlord without liability for interest and as security for the  performance by Tenant of its obligations under this Lease. The Security Deposit is not advance payment  of Basic Rent or Additional Rent or a measure or limit of Landlord's damages upon an uncured Event of  Default (as such term is defined in Section 21.1 of this Lease). Landlord shall be entitled to commingle the  Security Deposit with Landlord's other funds. Landlord may, from time to time and without prejudice to any  other remedy, use all or part of the Security Deposit to perform any obligation which Tenant was obligated,  but failed prior to the end of the applicable cure period, to perform hereunder, and Landlord shall upon  written request by Tenant notify Tenant, in writing, of any purpose for which the Security Deposit has been  used and the amounts withdrawn therefrom. Tenant waives the provisions of any law, now or hereafter  enforced, which provide that Landlord may claim from a security deposit only those sums  reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant  or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums  reasonably necessary to compensate Landlord for any other loss or damage caused by the acts or  omissions of Tenant or anyone acting by, through or under Tenant. Following any such application of  the Security Deposit, Tenant shall pay to Landlord within twenty (20) days of such application of the Security  Deposit on demand the amount so applied in order to restore the Security Deposit to its original amount.  Within thirty (30) days after the Term ends, provided Tenant has performed all of its obligations hereunder,  Landlord shall return to Tenant the balance of the Security Deposit not applied to satisfy Tenant's  obligations. If Landlord transfers its interest in the Premises, then Landlord shall assign that portion of the  Security Deposit not previously applied by Landlord and existing at the time of such transfer to the  transferee and Landlord thereafter shall have no further liability for the return of the Security Deposit;  provided, however, that any such transferee shall assume the obligations set forth in this Section 3.4.   IV. ADDITIONAL RENT 4.1 Additional Rent. In addition to paying the monthly Basic Rent, Tenant shall pay as  "Additional Rent" the amounts determined pursuant to this Article IV and all other amounts payable by  Tenant under this Lease. The first installment of Additional Rent for the first month after the Commencement  Date, which is due and payable upon execution of this Lease, is estimated to be $20,437.86.  Without  limitation on the other obligations of Tenant which shall survive the expiration or earlier termination of this  Lease, the obligations of Tenant to pay the Rent incurred during the Term of this Lease shall survive the  expiration or earlier termination of this Lease. For any partial Calendar Year, Tenant shall be obligated to  pay only a pro rata share of the Additional Rent, equal to Additional Rent for such entire Calendar Year  divided by 360, such quotient multiplied by the number of days of the Term falling within such Calendar  Year.   4.2 Definitions. As used herein, the following terms shall have the following meanings:  (a) "Basic Costs" shall mean all expenses, costs and disbursements which Landlord shall pay or become obligated to pay because of, or in connection with, the normal commercial  operation, maintenance and repair of the Project, including but not limited to (i) wages, salaries and  fees of all personnel directly engaged in operating, maintaining or securing the Project, including  taxes, insurance and benefits for all employees at or below the title of Property Manager relating  thereto; (ii) a management fee payable to Landlord or the company or companies managing the  Project not to exceed four percent (4%) of Landlord’s gross rental receipts; (iii) all supplies, tools,  equipment and materials used directly in the operation and maintenance of the Project, including  any lease payments therefor; (iv) cost of reasonable repairs and general maintenance, including  but not limited to the parking lot, roof repairs,fire sprinklers and fire protection systems, landscaping  and snow removal (excluding repairs and general maintenance paid by proceeds of insurance or  by Tenant or other parties, and alterations attributable solely to specific tenants of the Project based  on the percentage of actual RSF); (v) reasonable legal expenses and accounting expenses  incurred with respect to the Project; (vi) Taxes with the exception of Landlord’s income taxes; (vii)  cost of all maintenance and service agreements for the Project, and any equipment related thereto,  including window cleaning and snow removal; (viii) premiums and market-reasonable deductibles  paid for insurance relating to the Project, including, without limitation, fire and extended coverage,  boiler, earthquake, windstorm, rental loss, and commercial general liability insurance; (ix) costs  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 7  126965.00088.126059897.11  incurred to implement, monitor and enforce Conservation Standards; (x) including, without  limitation, all costs with respect to any Common Areas, such as the costs of the common  mechanical electric room and all utilities for the Common Areas and (xi) capital improvements,  except that Basic Costs for capital improvements shall be limited to the cost of any capital  improvement which is (A) reasonably intended to reduce any component cost included within Basic  Costs or to achieve energy conservation or environmental sustainability with respect to the Project,  (B) necessary to keep the Project or any part thereof in compliance with all governmental rules and regulations applicable thereto from time to time, or (C) intended to achieve energy conservation or environmental sustainability with respect to the Project. Any capital improvement costs shall be reasonably amortized with interest on the unamortized amount at the Interest Rate and shall only be included in Basic Costs to the extent such costs are attributable, on a straight-line amortization (based on the useful life of the improvement for federal tax purposes), to the remaining portion of the Term of this Lease and any renewal or extension thereof.  Notwithstanding anything contained herein to the contrary, Tenant’s Proportionate Share of the Basic Costs for items other than the Non-Controllable Costs (the “Controllable Costs”) shall be capped as provided in this Section (the “Cap”).  Such Cap on Controllable Costs shall, for each Calendar Year, increase by six percent (6%) on a cumulative and compounded basis over the Cap for the prior Calendar Year, commencing with the third (3rd) full Calendar Year following the Commencement Date.  For purposes of such calculation, the Cap for the year in which the Commencement Date occurs shall be deemed to be the actual Controllable Costs for said Calendar Year.  As used herein, the term “Non-Controllable Costs” shall mean all Basic Costs which are beyond the control of Landlord, as reasonably determined by Landlord, such as, but not limited to, Taxes, insurance costs, utilities costs, and security costs. (b) Exclusions from Basic Costs. The following items are specifically excluded from the definition of Basic Costs: (i) interest (except as otherwise allowed herein); (ii) depreciation; (iii)  penalties and fines; (iv) marketing expenses and commissions; (v) costs of services or labor  provided solely and directly to specific tenants at the Project, including, but not limited to tenant  improvement costs; (vi) organizational expenses associated with the creation and operation of the  entity which constitutes Landlord; (vii) general or special assessments levied against the owner of  the Project for public improvements which are not currently due; and (viii) capital improvements  except as set forth in subparagraph (a) above.   (c) "Taxes" shall be defined as (i) all real property taxes and assessments levied by any public authority against the Project; (ii) all personal property taxes levied by any public authority  on personal property of Landlord used in the management, operation, maintenance and repair of  the Project, such personal property being located at the Project, or if such personal property is used  at multiple properties, the prorata portion attributable to the Project (i.e. if the personal property is  used at four (4) properties, the prorata portion of the tax attributable to the Project shall be 25% of  the total tax assessed thereon); (iii) all taxes, assessments and reassessments of every kind and  nature whatsoever levied or assessed in lieu of or in substitution for existing or additional real or  personal property taxes and assessments on the Project, or (iv) amounts necessary to be  expended because of governmental orders, whether general or special, ordinary or extraordinary,  unforeseen as well as foreseen, of any kind and nature for public improvements, services, benefits  or any other purposes which are assessed, levied, confirmed, imposed or become a lien upon the  Premises or Project or become payable during the Term.  Further, for the purposes of this Article  IV, Taxes shall include the reasonable and actual expenses (including, without limitation,  reasonable attorneys' fees) incurred by Landlord in challenging or obtaining or attempting to obtain  a reduction of such Taxes, regardless of the outcome of such challenge, and any costs incurred by  Landlord for compliance, review and appeal of tax liabilities; provided, that Landlord shall document  such expenses, if any, and provide reasonable evidence of the same to Tenant as part of the annual  reconciliation and/or audit requested pursuant to Section 4.3 below. Notwithstanding the foregoing,  Landlord shall have no obligation to challenge Taxes. If as a result of any such challenge, a tax  refund is made to Landlord, then provided no Event of Default exists under this Lease, beyond  any/all applicable cure periods the amount of such refund less the expenses of the challenge shall  be deducted from Taxes due in the Calendar Year such refund is received. In the case of any Taxes  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 8  126965.00088.126059897.11  which may be evidenced by improvement or other bonds or which may be paid in annual or other  periodic installments, Landlord shall elect to cause such bonds to be issued or cause such  assessment to be paid in installments over the maximum period permitted by law. Nothing  contained in this Lease shall require Tenant to pay any gift, estate, inheritance, income, or  succession transfer tax of Landlord; provided, that no such tax is a substitution for, or  replacement of, the Taxes in effect on the Commencement Date. Tenant hereby knowingly,  voluntarily and intentionally waives any right, whether created by law or otherwise, to (a)  file or otherwise protest before any taxing authority any tax rate or value determination with  respect to the Premises, the Building or the Project, even though Landlord may elect not to  file any such protest, and (b) appeal any order of a taxing authority regarding the Project.  4.3 Expense Adjustment. Commencing on the Commencement Date and continuing  throughout the remainder of the Term, Tenant shall pay to Landlord as Additional Rent, on the first day of  each calendar month, an amount equal to one-twelfth (1/12) of Tenant's Proportionate Share of the total  amount of the Basic Costs incurred with respect to each Calendar Year in the Term of this Lease (the total  amount paid by the Tenant in each Calendar Year being referred to herein as the "Expense Adjustment  Amount"). The Expense Adjustment Amount for each Calendar Year shall be estimated from time to time  by Landlord and communicated by written notice to Tenant not more frequently than quarterly. Landlord  shall cause to be kept books and records showing Basic Costs in accordance with generally accepted  accounting principals and industry standard account practices consistently maintained. Following the close  of each Calendar Year, Landlord shall cause the amount of the Expense Adjustment Amount which should  have been paid by Tenant for such Calendar Year (the "Final Expense Amount") to be computed on the  basis of the actual Basic Costs for each Calendar Year, and Landlord shall deliver to Tenant a statement  of such Final Expense Amount. If the Final Expense Amount exceeds the Expense Adjustment Amount,  Tenant shall pay such deficiency within thirty (30) days after receipt of such Final Expense Statement. If  the Expense Adjustment Amount exceeds the Final Expense Amount, then at Landlord's option such  excess shall be either credited against payments of Additional Rent next due or refunded by Landlord,  provided no Tenant Event of Default exists hereunder which extends beyond the applicable notice and cure  period. Delay in computation of the Final Expense Amount or any Expense Adjustment Amount shall not  be deemed a default hereunder or a waiver of Landlord's right to collect the Final Expense Amount or  Expense Adjustment Amount, as the case may be.   4.4 Sales or Excise Taxes. Tenant shall pay to Landlord, as Additional Rent, concurrently with  payment of Basic Rent all taxes, including, but not limited to any and all sales, rent or excise taxes (but  specifically excluding income taxes calculated upon the net income of Landlord) on Basic Rent, Additional  Rent or other amounts otherwise benefiting Landlord, as levied or assessed by any governmental or political  body or subdivision thereof against Landlord on account of such Basic Rent, Additional Rent or other  amounts otherwise benefiting Landlord, or any portion thereof.  4.5 Tenant’s Right to Audit.  Tenant shall have a right, at Tenant’s sole cost and expense, to  audit Landlord's Final Expense Amount upon the following terms and conditions. Tenant’s right to conduct  an audit hereunder shall be expressly conditioned on (i) Tenant having paid in full the Final Expense Amount  for the Calendar Year which is the subject of the audit, as set forth in Landlord’s statement thereof, prior to  or simultaneously with Tenant’s delivery of the Audit Notice (as herein defined) and (ii) there being no Event  of Default existing under this Lease beyond the applicable notice and cure period. Tenant shall deliver  written notice to Landlord of its intent to audit (an “Audit Notice”) within ninety (90) days following receipt of  Landlord’s statement of the Final Expense Amount, such Audit Notice identifying the general scope of the  intended audit, inclusive of the Tenant determining the accuracy of its share of the Final Expenses Tenant  shall have no right to audit prior Calendar Years for which an Audit Notice was not timely given (in  accordance with the previous sentence) and Tenant shall have no right to audit a Calendar Year more than  once.  The audit shall take place at Landlord's regional offices or the Project or as mutually agreed between  the parties, at a time mutually convenient to Landlord and Tenant, but not later than sixty (60) days after  Landlord’s receipt of the Audit Notice.  At such audit, Landlord shall make all pertinent books and records  available for review that are necessary for Tenant (or its agent) to conduct its review of the varying costs  and expenses included in or  making up a porition of  the Final Expenses. Except as Landlord may consent  in writing, the audit shall be completed within forty-five (45) days after commencement. No copying of  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 9  126965.00088.126059897.11  Landlord’s books or records will be allowed without the express consent of the Landlord.  The audit may be  accomplished by either Tenant’s own employees with accounting experience reasonably sufficient to  conduct such review, or a nationally or regionally recognized public accounting firm mutually acceptable to  Landlord and Tenant that is engaged on either a fixed price or hourly basis.  The records reviewed by  Tenant shall be treated as confidential and prior to commencing the audit, Tenant and any other person  which may perform such audit for Tenant, shall execute a confidentiality agreement in a form reasonably  acceptable to Landlord.  A copy of the results of the audit shall be delivered to Landlord within thirty (30)  days after the completion of the audit.  If the results of the audit determine that the Final Expense Amount  for the Calendar Year is less than reported, Landlord shall give Tenant a credit in the amount of the  overpayment toward Tenant's next monthly payment of Basic Costs, or, in the event the Lease has expired  or terminated and no Event of Default exists beyond the applicable notice and cure period, Landlord shall  pay Tenant the total amount of such overpayment within thirty (30) days.  If Landlord and Tenant determine  that the Final Expense Amount for the Calendar Year is more than reported, Tenant shall pay Landlord the  amount of any underpayment within thirty (30) days.  Failure by Tenant to timely deliver an Audit Notice,  is  deemed a waiver of the applicable audit right and any right to contest the Final Expense Amount for the  applicable Calendar Year and is deemed acceptance of the Final Expense Amount for the applicable  Calendar Year.  Any audit review by Tenant shall not postpone or alter the liability and obligation of Tenant  to timely pay any Rent due under the terms of the Lease. No assignee or subtenant shall have any right to  conduct an audit except for a permitted assignee or sublessee under Article IX of the Lease occupying the  entire Premises and no assignee or sublessee shall conduct an audit for any period during which such  assignee or sublessee was not in possession of the Premises or for any period in which Tenant has  conducted an audit.  V. USE 5.1 Use of Premises. In accordance with the terms, covenants and conditions set forth in this  Lease, and applicable governmental regulations, restrictions and permitting (without the necessity of  obtaining any zoning changes, conditional use permits or other special use permits), Tenant shall use the  Premises solely for warehouse and general business office purposes and uses incidental thereto, but for  no other purpose.  Notwithstanding the foregoing, Tenant shall not use the Premises or any portion of the  Project for those Prohibited Uses identified on Exhibit F, which is attached hereto and incorporated herein  by this reference.  Tenant shall have the right to reasonably enforce its right to park in those spaces which  are dedicated for Tenant’s exclusive use pursuant to this Lease; provided, however, that (i) Tenant shall  have no right to gate, fence, or otherwise physically restrict access to any Common Areas (including, but,  not limited to, any interior drive aisles, roadways, sidewalks, etc.), (ii) any enforcement actions taken by  Tenant shall comply with the applicable state, federal, and local laws, and (iii) Tenant shall  indemnify,defend, and hold Landlord (and its Agents) harmless from any and all damages, claims,  demands,causes of action, fines, penalties, liabilities, judgments, and expenses, including, without  limitation, reasonable attorneys’ fees and court costs) arising as a result of Tenant’s (or its Agents’)  enforcement of its exclusive parking right,as set forth in this Section 5.1.  5.2 Operation of Tenant's Business. If any governmental license or permit, other than a  Certificate of Occupancy (if any is issued or required), shall be required for the proper and lawful conduct  of Tenant's business in the Premises or any part thereof, Tenant shall first provide Landlord with prior  written notice and obtain Landlord's consent thereto, which will not be unreasonably withheld or delayed.  Thereafter, at its expense, Tenant shall procure such license prior to the first day of the Term, and thereafter  maintain and renew such license or permit. Tenant shall, at all times, comply with the terms and conditions  of each such license or permit. Tenant shall not, at any time, use or occupy, or suffer or permit anyone to  use or occupy, the Premises, or do or permit anything to be done in the Premises, in any manner which  may (a) violate any Certificate of Occupancy for the Premises or for the Building; (b) cause, or be liable to  cause injury to the Building or any equipment, facilities or systems therein; (c) constitute a violation of the  laws and requirements of any federal, state or local public authority or the requirements of insurance bodies;  (d) impair or tend to impair the character, reputation or appearance of the Project or the Building; (e) impair or tend to impair the proper and economic maintenance, operation, and repair of the Project and the Building and/or its equipment, facilities or systems; and (f) annoy or inconvenience other tenants or users of the Building and the Project, if any. Tenant shall take all actions necessary to comply with all applicable federal, 

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 10  126965.00088.126059897.11  state or local statutes, ordinances, rules, regulations, orders and requirements regulating the use by Tenant  of the Premises, including without limitation, the Occupational Safety and Health Act, and regulating  Hazardous Materials (as such term is herein defined in Section 24.2). If the nature of Tenant's use or  occupancy of the Premises causes any increase in Landlord's insurance premiums over and above those  chargeable for the least hazardous type of occupancy legally permitted in the Premises, the Landlord will  promptly give written notice of such increase to Tenant (which such notice shall include supporting  documents evidencing such premium increase) and if Tenant fails to limit its use so as to negate such  premium increase within thirty (30) days from the date of such notice from Landlord, Tenant will thereafter  pay the resulting increase within ten (10) days after receipt of a statement from Landlord setting forth the  amount thereof.  5.3 Use of Common Areas. Tenant and its employees and visitors shall have the non-exclusive  right to use any Common Areas of the Project as constituted from time to time, subject to such reasonable  rules and regulations governing the use as Landlord from time to time may prescribe.  Notwithstanding  anything contained herein to the contrary, Landlord shall have the right to designate certain portions of the  Common Areas not including those parking areas which are reserved for Tenant’s use (including, but not  limited to, areas adjacent to a tenant's premises and/or trailer parking areas located throughout the Project)  for the exclusive use of one or more tenants, so long as, in Landlord's determination, such designation does  not materially adversely impact the rights of any other tenant within the Project.  VI. CONDITION AND DELIVERY OF PREMISES Tenant hereby covenants and agrees that Tenant is familiar with the condition of the Project and  the Premises and that, subject to the completion of the Landlord Work and the inspection and punch-list  provisions set forth in Section 4(b) of Exhibit C, Tenant is accepting the Premises on an "AS-IS," "WHERE- IS" basis, and that Landlord is making absolutely no repairs, replacements or improvements of any kind or  nature to the Premises or the Project in connection with, or in consideration of, this Lease, except as  provided under this Lease, including those forming part of the Basic Costs, and that Landlord shall (i) deliver  the Premises with the electrical, plumbing, fire, and mechanical systems in good working order for the  intended use and purpose of the Premises as of the Commencement Date and continuing for the first six  months of the Lease Term, and (ii) perform the "Landlord Work" pursuant to Exhibit C attached hereto.  Landlord agrees to enforce, upon Tenant's request, all manufacturer's or contractor's warranties given in  connection with Landlord Work.  VII. SUBORDINATION; NOTICE TO SUPERIOR LESSORS AND MORTGAGEES; ATTORNMENT This Lease is subject and subordinate to any and all ground or underlying leases and to any and  all mortgages, deeds of trust, security interests, or title retentions interest now or hereafter affecting the  Land, Building, or Project (the "Mortgage") and to all renewals, amendments, restatements, modifications,  consolidations, replacements and extensions thereof. This subordination shall be self-operative; however,  in confirmation thereof, Tenant shall, within ten (10) business days of receipt of the Landlord’s request,  execute a Subordination, Non-Disturbance and Attornment Agreement (SNDA) that Landlord or any holder  of any note or obligation secured by a Mortgage (the "Mortgagee") may request confirming such  subordination. So long as there exists no uncured Event of Default, such SNDA shall not interfere with,  hinder or reduce the right of Tenant to continue to occupy the Premises and to conduct its business therein  in accordance with the covenants, conditions, provisions, terms and agreements set forth in this Lease.  Notwithstanding the foregoing, before any foreclosure sale under a Mortgage, the Mortgagee shall have  the right to subordinate the Mortgage to this Lease, and, in the event of a foreclosure, at the Mortgagee's  option this Lease shall continue in full force and effect per the SNDA and Tenant shall attorn to and  recognize as its landlord the purchaser of Landlord's interest under this Lease. Tenant shall, upon the  request of a Mortgagee or purchaser at foreclosure, further execute, acknowledge and deliver any  instrument that has for its purpose and effect the subordination of the lien of any Mortgage to this Lease or  Tenant's attornment to such purchaser, subject to the SNDA for the benefit of Tenant. In the event of the  enforcement by the Mortgagee or beneficiary under any such Mortgage or deed of trust of the remedies  provided for by law or by such Mortgage or deed of trust, Tenant will, at the option of any person or party  succeeding to the interest of Landlord as a result of such enforcement, attorn to and automatically become  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 11  126965.00088.126059897.11  the Tenant of such Mortgagee, beneficiary or successor-in-interest without change in the terms or other  provisions of this Lease; provided, however, that such Mortgagee, beneficiary or successor in interest shall  not be bound by, liable for, or subject to (a) any payment of Basic Rent or Additional Rent for more than  one (1) month in advance, except advance rental payments expressly provided for in this Lease and the  Security Deposit; (b) any act or omission of Landlord; or (c) any offset or defense arising prior to the date  such successor-in interest acquired title to the Land, Building, or Project.  VIII. QUIET ENJOYMENT So long as Tenant pays all of the Rent and performs all of its other obligations hereunder, Tenant  shall peaceably and quietly have, hold and enjoy the Premises without hindrance, ejection or molestation  by Landlord, or any other person lawfully claiming through or under Landlord, subject, nevertheless, to the  provisions of this Lease and to those of a Mortgage and to all laws, ordinances, orders, rules and regulations  of any governmental authority. Landlord shall not be responsible for the acts or omissions of any other  persons or third parties (except any Agents of Landlord), that may interfere with Tenant's use and enjoyment  of the Premises.  IX. ASSIGNMENT, SUBLETTING AND MORTGAGING 9.1 Landlord's Consent.  (a) Except as provided herein, Tenant shall not assign, transfer, mortgage or otherwise encumber this Lease or sublet or rent (or permit a third party to occupy or use) the  Premises, or any part thereof, nor shall any assignment or transfer of this Lease or the right of  occupancy hereunder be effected by operation of law or otherwise, without the prior written consent  of Landlord, such consent not to be unreasonably withheld, delayed, or conditioned. A transfer at  any one time or from time to time of a majority interest in Tenant (whether stock, partnership interest  or other form of ownership or control) shall be deemed to be an assignment of this Lease, unless  at the time of such assignment and/or transfer Tenant is an entity whose outstanding stock is listed  on a recognized security exchange. If Tenant is listed on a recognized security exchange a sale  shall not require the consent of the Landlord. Within thirty (30) days following Landlord's receipt of  Tenant's request for Landlord's consent to a proposed assignment, sublease, or other  encumbrance, together with all information required to be delivered by Tenant pursuant to the  provisions of this Section 9.1, Landlord shall: (i) consent to such proposed transaction; (ii) refuse  such consent; or (iii) elect to terminate this Lease in the event of an assignment, or in the case of  a sublease, terminate this Lease as to the portion of the Premises proposed to be sublet in  accordance with the provisions of Section 9.2. Any assignment, sublease or other encumbrance  without Landlord's written consent as required under this Article 9 shall be voidable by Landlord  and, at Landlord's election, constitute an Event of Default hereunder. Landlord and Tenant  acknowledge that Landlord may withhold consent (a) if an Event of Default exists beyond the  applicable notice and cure period; or (b) if the proposed assignee or sublessee is: a governmental  entity; a person or entity with whom Landlord has negotiated for space in the Project during the  prior six (6) months and with whom Landlord has not ended such negotiations; a present tenant in  the Project; a person or entity whose tenancy in the Project would violate any exclusivity  arrangement which Landlord has with any other tenant (of which Landlord has previously informed  Tenant); an entity that does not have the same or better (x) credit rating than Tenant and (y) net  worth of Tenant as of the date of such assignment; or a person or entity of a character or reputation  or engaged in a business which is not consistent with the quality of the Project. If Tenant requests  Landlord's consent to a specific assignment or subletting, Tenant will submit in writing to Landlord:  (1) the name and address of the proposed assignee or subtenant; (2) a counterpart of the proposed agreement of assignment or sublease; (3) reasonably satisfactory information as to the nature and character of the business of the proposed assignee or subtenant, and as to the nature of its proposed use of the space; (4) banking, financial or other credit information reasonably sufficient to enable Landlord to determine the financial responsibility and character of the proposed assignee or subtenant; (5) executed estoppel certificates from Tenant containing such information as provided in Article XXIII; and (6) any other information reasonably requested by Landlord. 

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 12  126965.00088.126059897.11  (b) Notwithstanding that the prior express written permission of Landlord to any of the aforesaid transactions may have been obtained, the following shall apply:  (i) In the event of an assignment, contemporaneously with the granting of Landlord's aforesaid consent, Tenant shall cause the assignee to expressly assume in writing and agree to  perform all of the covenants, duties, and obligations of Tenant hereunder and such assignee shall be jointly  and severally liable therefore along with Tenant.  (ii) All terms and provisions of the Lease shall continue to apply after any such assignment or sublease in accordance with the terms of this Lease.  (iii) In any case where Landlord consents to an assignment, transfer, encumbrance or subletting, the undersigned Tenant and any guarantor shall nevertheless remain directly  and primarily liable for the performance of all of the covenants, duties, and obligations of Tenant hereunder  (including, without limitation, the obligation to pay all Rent and other sums herein provided to be paid), and  Landlord shall be permitted to enforce the provisions of this instrument against the undersigned Tenant,  any guarantor and/or any assignee without demand upon or proceeding in any way against any other  person. Neither the consent by Landlord to any assignment, transfer, encumbrance or subletting nor the  collection or acceptance by Landlord of rent from any assignee, subtenant or occupant shall be construed  as a waiver or release of the initial Tenant or any guarantor from the terms and conditions of this Lease or  relieve Tenant or any subtenant, assignee or other party from obtaining the consent in writing of Landlord  to any further assignment, transfer, encumbrance or subletting.  (iv) Subject to Section 9.3, Tenant hereby assigns to Landlord the rent and other sums due from any subtenant, assignee or other occupant of the Premises and hereby authorizes  and directs each such subtenant, assignee or other occupant to pay such rent or other sums directly to  Landlord; provided however, that until the occurrence of an Event of Default, Tenant shall have the license  to continue collecting such rent and other sums. Notwithstanding the foregoing, in the event that the rent  due and payable by a sublessee under any such permitted sublease (or a combination of the rent payable  under such sublease plus any bonus or other consideration therefor or incident thereto) exceeds the  hereinabove provided Rent payable under this Lease, or if with respect to a permitted assignment, permitted  license, or other transfer by Tenant permitted by Landlord, the consideration payable to Tenant by the  assignee, licensee, or other transferee exceeds the Rent payable under this Lease, then Tenant shall be  bound and obligated to pay Landlord such excess rent and other excess consideration in accordance with  Section 9.3 within ten (10) days following receipt thereof by Tenant from such sublessee, assignee,  licensee, or other transferee, as the case may be.  (v) Tenant shall pay Landlord a fee not to exceed $1,000.00 to reimburse Landlord for all its expenses under this Article IX, including, without limitation, reasonable attorneys' fees.   9.2 Landlord's Option to Recapture Premises. If Tenant proposes to assign this Lease,  Landlord may, at its option, upon written notice to Tenant given within fifteen (15) business days after its  receipt of Tenant's notice of proposed assignment, together with all other necessary information, elect to  recapture the Premises and terminate this Lease. If Tenant proposes to sublease all or part of the Premises,  Landlord may, at its option upon written notice to Tenant given within fifteen (15) business days after its  receipt of Tenant's notice of proposed subletting, together with all other necessary information, elect to  recapture such portion of the Premises as Tenant proposes to sublease and upon such election by  Landlord, this Lease shall terminate as to the portion of the Premises recaptured. If a portion of the Premises  is recaptured, the Rent payable under this Lease shall be proportionately reduced based on the square  footage of the Rentable Square Feet retained by Tenant and the square footage of the Rentable Square  Feet leased by Tenant immediately prior to such recapture and termination, and Landlord and Tenant shall  thereupon execute an amendment to this Lease in accordance therewith. Landlord may thereafter, without  limitation, lease the recaptured portion of the Premises to the proposed assignee or subtenant without  liability to Tenant. Upon any such termination, Landlord and Tenant shall have no further obligations or  liabilities to each other under this Lease with respect to the recaptured portion of the Premises, except with  respect to obligations or liabilities which accrue or have accrued hereunder as of the date of such  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 13  126965.00088.126059897.11  termination (in the same manner as if the date of such termination were the date originally fixed for the  expiration of the Term).  9.3 Distribution of Net Profits. In the event that Tenant assigns this Lease or sublets all or any  portion of the Premises during the Term to any entity, Landlord shall receive 50% of any "Net Profits" (as  hereinafter defined) and Tenant shall receive 50% of any Net Profits received by Tenant from any such  assignment or subletting. The term "Net Profits" as used herein shall mean such portion of the Rent payable  by such assignee or subtenant in excess of the Rent payable by Tenant under this Lease (or pro rata portion  thereof in the event of a subletting) for the corresponding period, after deducting from such excess Rent all  of Tenant's documented reasonable third party costs associated with such assignment or subletting,  including, without limitation, broker commissions, attorney fees and any costs incurred or market customary  third party costs, abatements, and concessions, granted by Tenant at no cost to Landlord, to prepare or  alter the Premises, or portion thereof, for the assignee or sublessee.   9.4 Transfers to Related Entities. Notwithstanding anything in this Article IX to the contrary,  provided no Event of Default exists under this Lease beyond the applicable notice and cure period, Tenant  may, without Landlord's consent, but after providing written notice to Landlord and subject to the provisions  of Section 9.1(b)(i-iii), assign this Lease or sublet all or any portion of the Premises to any Related Entity  (as hereinafter defined) provided that (i) such Related Entity is not a governmental entity or agency; and (ii)  such Related Entity's use of the Premises would not cause Landlord to be in violation of any exclusivity  agreement within the Project. "Related Entity" shall be defined as any parent company, subsidiary, affiliate  or related corporate entity of Tenant that controls, is controlled by, or is under common control with Tenant,  or any successor-in-interest resulting from a merger, acquisition, the sale of all, or substantially all, of  Tenant’s assets; provided that such successor-in-interest has a net worth equal to, or greater than, the  value of the Tenant on (a) the Date of Lease or (b) the date of such transfer, whichever is greater.   X. COMPLIANCE WITH LAWS 10.1 General Compliance. Tenant shall give prompt notice to Landlord of any notice it receives  of the violation of any law or requirement of any governmental or administrative authority with respect to  the Premises or the use or occupation thereof. Tenant shall, at Tenant's expense, comply with all laws and  requirements of any federal, state or local governmental or administrative authorities which shall impose  any violation, order or duty on Landlord or Tenant arising from (a) Tenant's particular use of the Premises;  (b) the manner or conduct of Tenant's business or operation of its installations, equipment or other property therein; (c) any cause or condition created by or caused by Tenant; (d) breach of any of Tenant's obligations under this Lease, whether or not such compliance requires work which is structural or non-structural, ordinary or extraordinary, foreseen or unforeseen; and Tenant shall pay all the costs, expenses, fines, penalties and damages which may be imposed upon Landlord by reason or arising out of Tenant's failure to fully and promptly comply with and observe the provisions of this Article X. Nothing in this Article X shall make Tenant responsible for any structural repairs or improvements that are not specifically necessitated solely by the causes set forth in Clauses (a), (b), (c) or (d) of the immediately preceding sentence. 10.2 ADA Compliance. Notwithstanding any other statement in this Lease, the following  provisions shall govern the parties' compliance with the Americans With Disabilities Act of 1990, as  amended from time to time, Public Law 101-336; 42 U.S.C. §§12101, et seq. (the foregoing, together with  any similar state statute governing access for the disabled or handicapped collectively referred to as the  "ADA"):  (a) To the extent governmentally required as of the Commencement Date of this Lease, Landlord shall be responsible for the cost of compliance with Title III of the ADA, and such  reasonable cost shall not be included in Basic Costs, with respect to any repairs, replacements or  alterations to the Common Areas. To the extent governmentally required subsequent to the  Commencement Date of this Lease as a result of an amendment to Title III of the ADA or any  regulation thereunder enacted subsequent to the Commencement Date of this Lease, Landlord  shall be responsible for compliance with Title III of the ADA with respect to any repairs,  replacements or alterations to the Common Areas, and such reasonable expense shall be included  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 14  126965.00088.126059897.11  in Basic Costs. Landlord shall indemnify, defend and hold harmless Tenant and its Agents  from all fines, suits, procedures, penalties, claims, liability, losses, expenses and actions of  every kind, and all costs associated therewith (including, without limitation, reasonable  attorneys' and consultants' fees) arising out of or in any way connected with Landlord's  failure to comply with Title III of the ADA as required above.  (b) To the extent governmentally required, Tenant shall be responsible for compliance, at its expense, with Titles I and III of the ADA with respect to the Premises. Tenant shall indemnify,  defend and hold harmless Landlord and its Agents from all fines, suits, procedures,  penalties, claims, liability, losses, expenses and actions of every kind, and all costs  associated therewith (including, without limitation, reasonable attorneys' and consultants'  fees) arising out of or in any way connected with Tenant's failure to comply with Titles I and  III of the ADA as required above.  10.3 Conservation Standards. If and to the extent required by federal, state, or local laws, Tenant shall implement commercially reasonable measures to regulate energy and water usage and reduce  the production of waste and carbon emissions at and from the Premises, and Tenant shall comply with  those written initiatives, practices and procedures for the Project implemented by Landlord (in response to  any applicable governmental requirement) from time to time for such purposes (collectively, the  "Conservation Standards"). To Landlord’s actual knowledge, as of the Date of Lease, there are no existing  Conservation Standards to which the Premises are subject.  Landlord shall have the right to condition its  approval of the scope of and/or plans for Alterations or other improvements to be made by or on behalf of  Tenant, including, without limitation, any improvements described on Exhibit C attached hereto, on  compliance with Landlord's then-current Conservation Standards. The Conservation Standards include, but  are not limited to, the following:  (a) Water Management. Tenant shall use commercially reasonable efforts to implement water reduction measures in its business activities conducted at the Project. Any  plumbing fixtures or accessories installed at the Premises by or on behalf of Tenant shall bear the  Environmental Protection Agency's WaterSense label. Landlord shall have the right to establish  water consumption reduction targets for the Project, and Tenant shall us its commercially  reasonable efforts to meet or exceed such targets as are provided to Tenant in writing.   (b) Waste Management. Tenant shall, at its sole cost and expense, (i) arrange for paper, glass, plastics, cardboard/OCC, metals, batteries, fluorescent light bulbs, bulk garbage and  electronic waste generated by Tenant and its Agents at the Project to be sorted, stored and  collected for recycling as and to the extent such services are provided by the municipality (or  otherwise for disposal in the manner prescribed by the municipality); and (ii) comply with any  recycling policy for the Project established as part of the Conservation Standards. Tenant shall  participate in any composting program provided by the municipality to the extent applicable to it  use of the Premises.  (c) Indoor Air Quality. Tenant shall use commercially reasonable efforts to minimize the generation and accumulation of indoor pollutants within the Premises and maximize indoor air  quality, including, without limitation, by adhering to proper maintenance of the HVAC system,  including filters and ductwork, and ensuring adequate air flow and ventilation within the Premises.   (d) Energy Efficiency. Tenant shall use commercially reasonable efforts to implement energy efficiency measures in its business activities conducted at the Project, including, without  limitation, energy-efficient bulbs for task lighting, lighting controls, daylighting, and turning off lights  and equipment when not in use. To the extent commercially reasonable and practicable, all  electrical equipment and appliances installed at the Premises by or on behalf of Tenant or used by  Tenant therein, including but not limited to lighting, office equipment, kitchen equipment, vending  machines, and ice machines, shall be ENERGY STAR® certified.  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 15  126965.00088.126059897.11  (e) Sustainability Certifications. Tenant shall cooperate in all respects with Landlord's efforts to achieve ENERGY STAR® Labels, LEED Certifications and other sustainability  certifications with respect to the Project although Tenant shall not be obligated to construct the  Premises to LEED standards. Without limitation of the foregoing, Tenant agrees to deliver to  Landlord, within fifteen (15) days after Landlord's request, such factual information and/or written  reports regarding Tenant's use and occupancy of the Premises as may be relevant to such  certifications.   (f) Utility Reporting. Tenant shall use commercially reasonable efforts to provide to Landlord, within ten (10) business days after Landlord's request therefor, such information as  Landlord may specify in its request as necessary to monitor and document the consumption and  usage of utilities within the Premises, including, without limitation, copies of utility bills for those  utilities that are separately metered or sub-metered to the Premises. Tenant hereby authorizes  Landlord and its property manager to contact Tenant's utility providers when and as needed to  obtain detailed current and historical usage data and billing information in connection with Tenant's  account and/or the applicable meter or sub-meter for the Premises, and Tenant shall cooperate  with Landlord in its efforts to obtain such information from the provider. Without limitation of the  foregoing, Tenant agrees to execute and deliver to Landlord, within ten (10) business days after  Landlord's request, such form of release or authorization as the particular utility provider may  require to authorize Landlord to obtain information regarding Tenant's utility usage from such  provider. Tenant consents to Landlord's disclosure of information concerning Tenant's utility usage  to third parties in connection with its implementation of the Conservation Standards and to  prospective purchasers and Mortgagees of the Project and acknowledges that Landlord shall not  be required to further notify Tenant of any such disclosure.  XI. INSURANCE 11.1 Certain Insurance Risks. Tenant will not do or permit to be done any act or thing upon the  Premises or the Project which would: (i) jeopardize or be in conflict with fire insurance policies covering the  Project, and fixtures and property in the Project; or (ii) increase the rate of fire insurance applicable to the  Project to an amount higher than it otherwise would be for general business office and warehouse use of  the Project; or (iii) subject Landlord to any liability or responsibility for injury to any person or persons or to  property by reason of any business or operation being conducted within the Project.   11.2 Landlord's Insurance. At all times during the Term, Landlord will carry and maintain:  (a) Property insurance coverage at least equal to ISO Special Form causes of loss with respect to the Project, its equipment and common area furnishings, and leasehold  improvements in the Premises to the extent of any initial build out of the Premises by the Landlord;  (b) Bodily injury and property damage insurance; and (c) Such other insurance that Landlord chooses and, provided, that such insurance is customary in form and amount, in the Las Vegas market area.  (d) The insurance coverages and amounts in this Section 11.2 will be determined by Landlord in an exercise of its reasonable discretion. Landlord shall provide Tenant  with a certificate  of insurance naming Tenant as an additional insured.  11.3 Tenant's Insurance. At all times during the Term, Tenant will carry and maintain, at Tenant's  expense, the following insurance for the Premises, in the amounts specified below on forms satisfactory to:  (a) Commercial general liability insurance written on an occurrence basis including without limitation personal injury, bodily injury, broad form property damage, operations hazard, ,  contractual liability, with a cross liability clause and a severability of interests clause to cover  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 16  126965.00088.126059897.11  Tenant's indemnity obligations in this Lease, and products and completed operations liability, in  limits not less than $1,000,000 inclusive per occurrence and $2,000,000 per location annual  aggregate;  (b) Insurance covering (1) Tenant’s interest in the Premises, including, all of Tenant’s furniture and fixtures, machinery, equipment, stock and any other personal property owned and  used in Tenant’s business and found in, on or about the Project, and any leasehold improvements  to the Premises in excess of any initial build-out of the Premises by the Landlord and Alterations,  in an amount not less than the applicable replacement cost, and (2) all work incorporated in the  Building and all materials and equipment in or about the Premises as a result of Tenant’s  performance of any repairs or Alterations at or to the Premises, it being understood that no lack or  inadequacy of insurance by Tenant shall in any event make Landlord subject to any claim by virtue  of any theft of or loss or damage to any uninsured or inadequately insured property. Insurance  forms will provide coverage on an open perils basis insuring against “all risks of direct physical  loss.” All policy proceeds will be used for the repair or replacement of the Premises, or the property  damaged or destroyed, however, if this Lease ceases under the provisions of Article XIX, Tenant  will be entitled to any proceeds resulting from damage to Tenant’s furniture and fixtures, machinery  and equipment, stock and any other personal property;  (c) Worker’s compensation insurance insuring against and satisfying Tenant’s obligations and liabilities under the worker’s compensation laws of the state in which the Premises are located,  including employer’s liability insurance in the limit of $1,000,000 each accident; $1,000,000 each  employee; $1,000,000 aggregate. Such insurance shall include waiver of subrogation rights in favor  of Landlord and Landlord’s management company;  (d) If Tenant operates owned, hired, or non-owned vehicles on the Project, commercial automobile liability will be carried at a limit of liability not less than $1,000,000 combined for bodily  injury and property damage;   (e) Umbrella liability insurance in excess of and not more restrictive than the underlying coverage listed in paragraphs (a), (c) and (d) above, with limits of not less than $5,000,000 per  occurrence/$5,000,000 aggregate;  (f) Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct or indirect loss of earning attributable to all perils insured against under the ISO Causes of  Loss – Special Form Coverage, or attributable to prevention of access to the Premises as a result  of such perils, providing for an extended period of indemnity to be not less than twelve (12) months;  (g) Any other form for forms of insurance or any changes or endorsements to the insurance required herein as Landlord, or any Mortgagee may reasonably require; provided, however, that  such additional insurance shall then be customary in the Las Vegas market area.  All insurance required under this Article XI shall be issued by such good and reputable insurance  companies qualified to do and doing business in the state in which the Premises are located and having a  rating not less than A:VIII as rated in the most current copy of Best's Insurance Report in the form customary  to this locality.  11.4 Forms of the Policies. Landlord, Landlord's management company and such other parties  as Landlord shall designate to Tenant who have an insurable interest in the Premises or Project shall be (i)  named as additional insured with respect to the coverages provided for under Section 11.3(a), 11.3(d) and  11.3(e), and (ii) as loss payees as their interest may appear with respect to the coverage provided under  Section 11.3(b), 11.3(f) and 11.3(g). Certificates of insurance together with copies of any endorsements  naming Landlord, Landlord's management company, and any others specified by Landlord as additional  insureds or loss payee (as the case may be) will be delivered to Landlord prior to Tenant's occupancy of  the Premisesand from time to time at least thirty (30) days prior to the expiration of the term or reduction in  coverage of each such policy. With respect to each insurance policy required hereunder Tenant will notify  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 17  126965.00088.126059897.11  Landlord and Landlord’s Mortgagee with at least thirty (30) days prior written notice of the termination of  any such insurance policy. All policies required to be maintained by Tenant will be written as primary  policies, not contributing with and not supplemental to the coverage that Landlord may carry. In the event  Tenant fails to purchase and maintain any of the insurance required hereunder, Landlord reserves the right,  but not the obligation, to purchase such insurance on behalf of Tenant, and at Tenant's expense, with any  expenses incurred by Landlord in connection therewith being reimbursed to Landlord by Tenant within thirty  (30) days of written demand thereof. 11.5 Waiver of Subrogation. Landlord and Tenant each waive and shall cause their  respective insurance carriers to waive any and all rights to recover against the other or against the  Agents of such other party for any loss or damage to such waiving party (including deductible  amounts) arising from any cause required to be insured by such party pursuant to this Article XI.  Tenant will cause its respective insurers to issue appropriate waiver of subrogation rights endorsements to  all of Tenant's insurance policies carried in connection with the Project or the Premises. Tenant agrees to  cause all other occupants of the Premises claiming by, under or through Tenant, to execute and deliver to  Landlord and Landlord's management company such a waiver of claims and to obtain such waiver of  subrogation rights endorsements.  11.6 Adequacy of Coverage. Landlord and its Agents make no representation that the limits of  liability specified to be carried by Tenant pursuant to this Article XI are adequate to protect Tenant. Landlord  shall not be required to carry insurance of any kind on Tenant's property or Tenant's interest in the  Premises, and Tenant agrees that Tenant shall have no right to receive any proceeds from any insurance  policies carried by Landlord. If Tenant believes that any of such insurance coverage is inadequate, Tenant  will obtain such additional insurance coverage as Tenant deems adequate, at Tenant's sole expense.  Furthermore, in no way does the insurance required herein limit the liability of Tenant assumed elsewhere  in the Lease.  XII. ALTERATIONS 12.1 Procedural Requirements. Tenant may, from time to time, at its expense, make such  alterations, additions, or improvements (hereinafter collectively referred to as "Alterations") in and to the  Premises as Tenant may reasonably consider necessary for the conduct of its business in the Premises;  provided, however, that the written consent of the Landlord is first obtained with respect to any Alteration,  the cost of which exceeds $50,000. Landlord's consent shall not be required for Alterations, the cost of  which are less than or equal to $50,000; provided that: (a) the exterior of the Building shall not be affected;  (b) the Alterations are non-structural and the structural integrity of the Building shall not be affected; (c) the Alterations are to the interior of the Premises and no part of the Building (including the roof) outside of the Premises shall be affected; (d) the proper functioning of the mechanical, electrical, sanitary and other service systems of the Building shall not be affected and the usage of such systems by Tenant shall not be increased; (e) the contractor performing the Alterations carries Commercial General Liability, Auto liability, Worker's Compensation and Employer's Liability insurance satisfying industry standardsand requirements for such contractor related to the nature of the services being provided, as evidenced by a certificate of insurance provided to Landlord; (f) the Alterations do not require the issuance of a building permit and (g) before proceeding with any Alterations, Tenant shall submit to Landlord for Landlord's approval, plans and specifications for the work to be done and Tenant shall not proceed with such work until Tenant has received said approval. Tenant shall obtain and deliver to Landlord (if so requested) either (i) a performance bond and a labor and materials payment bond (issued by a corporate surety licensed to do business in the state in which the Project is located) each in an amount equal to one hundred twenty-five percent (125%) of the estimated cost of the Alterations and in form satisfactory to Landlord, or (ii) such other security as shall be reasonably satisfactory to Landlord: provided, that Landlord shall consider Tenant’s reputation and financial capabilities in determining what is reasonable hereunder. 12.2 Performance of Alterations. Tenant, at its expense, shall obtain all necessary governmental  permits and certificates for the commencement and prosecution of Alterations and for the final approval  thereof upon completion, and shall cause the Alterations to be performed in compliance therewith and in  compliance with all applicable laws and requirements of public authorities, including without limitation, Titles  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 18  126965.00088.126059897.11  I and III of the ADA, the OSHA General Industry Standard (29 C.F.R. Section 1910.1001, et seq.) and the  OSHA Construction Standard (29 C.F.R. Section 1926.1001, et seq.), all entities holding Mortgages on the  Building and with Landlord's rules and regulations or any other reasonable restrictions Landlord may  impose on the Alterations. Tenant shall not commence any Alterations without having first demonstrated,  to Landlord's satisfaction, that all such permits and certificates have been obtained. The Alterations shall  be diligently performed in a good and workmanlike manner, using new materials and equipment at least  equal in quality and class to the standards for the Building established by Landlord. Alterations shall be  performed by contractors first approved by Landlord, which approval shall not be unreasonably withheld,  and Tenant's Agents shall work in harmony, and not interfere with, Landlord and its Agents or with any  other tenants or occupants of the Building. Tenant shall, and hereby does, to the fullest extent allowed  by law, indemnify, defend, and hold Landlord harmless from any and all third party claims, damages  or losses, of any nature (including reasonable fees of attorneys of Landlord's choosing), suffered  by Landlord, whether directly or indirectly, as a result of, or due to, or arising from, the performance  of any Alterations by, or on behalf of, Tenant. Alterations shall be performed in such manner so as to  not unreasonably interfere with or delay and so as not to impose any additional expense upon Landlord in  the construction, maintenance, repair or operation of the Building; and if any such expense is incurred by  Landlord, Tenant shall pay the same upon demand. Tenant acknowledges that if any Alterations  commenced or performed in violation of any provision of this Article XII shall cause Landlord irreparable  injury, Landlord shall have the right to enjoin any such violations by injunction or other equitable relief.  12.3 Lien Prohibition. Tenant shall not permit any mechanics' or materialmens' liens to attach to  the Premises, the Building, or the Project, Tenant's leasehold estate or any of them. Tenant shall and  hereby does defend, indemnify, and hold Landlord harmless from and against any and all  mechanics' and other liens and encumbrances filed in connection with Alterations or any other  work, labor, services, or materials done for or supplied to Tenant, or any person claiming through  or under Tenant, including, without limitation, security interests in any materials, fixtures or articles  installed in and constituting a part of the Premises and against all costs, expenses, and liabilities  (including reasonable fees of attorneys of Landlord's choosing) incurred in connection with any  such lien or encumbrance or any action or proceeding brought thereon. Tenant, at its expense, shall  procure the satisfaction or discharge of record of all such liens and encumbrances within thirty (30) days  after receipt of written notice of the filing thereof. In the event Tenant has not so performed, Landlord may,  at its option, pay and discharge such liens and Tenant shall be responsible to reimburse Landlord for all  costs and expenses incurred in connection therewith, together with interest thereon at the Interest Rate set  forth in Section 1.13 above, which expenses shall include reasonable fees of attorneys of Landlord's  choosing, and any costs in posting bond to effect discharge or release of the lien as an encumbrance  against the Premises, the Building, or the Project, Tenant's leasehold estate or any of them.  XIII. LANDLORD'S AND TENANT'S PROPERTY 13.1 Landlord's Property. All fixtures, machinery, equipment, improvements and appurtenances  affixed or attached to the Premises after the Commencement Date, whether or not placed there by, or at  the expense of, Tenant, and without the approval of Landlord, shall be and remain a part of the Premises  and shall be deemed the property of Landlord (the "Landlord's Property"), without compensation or credit  to Tenant.  Landlord’s Property shall not be removed by Tenant, unless otherwise agreed upon by the  parties prior to expiration of this Lease or pursuant to Article 12. Tenant shall, on or before the Expiration  Date or earlier termination of this Lease, remove any items designated for removal, if any, repair any  damage to the Premises or Building as a result of such installation or removal, and restore the Premises to  the condition existing as of the Commencement Date, normal wear and tear excepted. Further, any  personal property of Landlord in the Premises on the Commencement Date, unless installed and paid for  by Tenant, shall be and shall remain the property of the Landlord and shall not be removed by Tenant. Any  flooring in the Premises during the Term shall be and remain the property of Landlord and shall not be  removed or replaced without the prior written consent and approval by Landlord.  13.2 Tenant's Property. All business and trade fixtures, machinery and equipment,  communications equipment and office equipment, whether or not attached to, or built into, the Premises,  which are installed in the Premises by, or for the account of, Tenant without expense to Landlord and which  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 19  126965.00088.126059897.11  can be removed without structural damage to the Building, and all furniture, furnishings and other articles  of movable personal property owned by Tenant and located in the Premises shall be and shall remain the  property of Tenant (the "Tenant's Property") and may be removed by Tenant at any time during the Term,  provided no Tenant Event of Default exists hereunder beyond the applicable notice and cure period. In the  event Tenant's Property is so removed, Tenant shall repair or pay the cost of repairing any damage to the  Premises or to the Building resulting from the installation and/or removal thereof and restore the Premises  to the condition existing as of the Commencement Date, normal wear and tear expected. For the purpose  of this Lease and for clarity between the parties, Landlord shall not permit any liens or encumberances to  attach to the personal property, inventory or assets of the clients of Tenant which may be stored in or upon  the Premises, the Building, or the Project and Landlord shall have no right or interest therein.  13.3 Removal of Tenant's Property. At or before the Expiration Date, or the date of any earlier  termination hereof, Tenant, at its expense, shall remove from the Premises all of Tenant's Property, and  Tenant shall repair any damage to the Premises or the Building resulting from any installation and/or  removal of Tenant's Property and restore the Premises to the condition existing as of the Commencement  Date, normal wear and tear expected. Any items of Tenant's Property which shall remain in the Premises  after the Expiration Date, or following an earlier termination date, may, at the option of Landlord, be deemed  to have been abandoned, and in such case, such items may be retained by Landlord as its property or be  disposed of by Landlord, without accountability, in such manner as Landlord shall determine, at Tenant's  expense..   XIV. REPAIRS AND MAINTENANCE 14.1 Tenant Repairs and Maintenance. Except with respect to Landlord's obligations set forth  in Section 14.2 below, Tenant, at its sole cost and expense, throughout the Term of this Lease, shall take  good care of the Premises, including, without limitation, all areas, improvements and systems exclusively  serving the Premises, including, without limitation, dock and loading areas, truck doors, plumbing, water  and sewer lines up to points of common connection, entries, doors, ceilings, windows, interior walls, and  interior side of demising walls, and HVAC systems, and shall keep the same in good, working order as  received, condition and repair, and shall make and perform all routine maintenance thereof, including  janitorial maintenance, and all necessary repairs, ordinary and extraordinary, foreseen and unforeseen, of  every nature, kind and description. All repairs made by Tenant shall be at least the quality and cost of the  original work and shall be made by Tenant in accordance with all laws, ordinances and regulations whether  heretofore and hereafter enacted. The necessity for or adequacy of maintenance and repairs shall be  measured by the standards which are appropriate for improvements of similar construction and class as  the Premises, provided that Tenant shall in any event make all repairs necessary to avoid any damage or  injury to the improvements. Throughout the Term of this Lease, Tenant will maintain (a) a maintenance  contract for servicing of the HVAC system with a servicer reasonably acceptable to Landlord, and (b)  maintenance logs on site and will cause the maintenance contractor engaged in the maintenance of the  Premises (at the time maintenance contractor performs such maintenance) to make timely and detailed  entries in those logs so that the logs at all times accurately reflect the maintenance activity performed with  respect to the Premises and its Building systems. Landlord's representatives may inspect and copy those  logs at any reasonable time after reasonable notice has been given to Tenant. Landlord will have the right  to cause the maintenance of the Premises to be reviewed and the Premises inspected annually (or more  frequently if Landlord determines that it is prudent to do so) by a qualified engineer or property manager  consultant of Landlord's choosing, to determine whether Tenant is maintaining the Premises in accordance  with this Section 14.1 and, if it is determined that Tenant has not maintained the Premises as herein  required, Tenant will reimburse Landlord for the cost of repairing the Premises and for the fees and  expenses of such engineer or consultant within thirty (30) days after Landlord's demand. Tenant will  cooperate with the engineer or consultant in its performance of such review and inspection. Except with  respect to the maintenance contract for the servicing of the HVAC system, Tenant may fulfill its maintenance  and repair obligations under this Section 14.1 at its option either through the use of its employees or  through the use of Agents. Notwithstanding the above, Landlord may enter into a master service agreement  for HVAC maintenance with respect to the Project and Tenant shall pay its Proportionate Share of such  cost in accordance with the provisions of Article IV.   

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 20  126965.00088.126059897.11  14.2 Landlord Repairs. Landlord shall keep in good repair (i) the structural portions of the  foundation and exterior and load-bearing walls (exclusive of all glass and all exterior doors) of the Building;  (ii) the roof of the Building; and (iii) the Common Areas of the Project (including mechanical rooms), including the parking lots, landscaping and underground utility and sewer pipes outside the exterior walls of the Building, if any. All such repairs shall be at Landlord's sole cost and expense, except that the reasonable cost of such items shall be a Basic Cost to the extent permitted by the provisions of Article IV. Notwithstanding the foregoing, the cost of repairs referenced in this Section 14.2 rendered necessary by the negligence or willful misconduct of Tenant or Tenant's Agents or as a result of Tenant's failure to use the Premises in accordance with the terms of Article V of this Lease (which shall be reasonably evidenced and documented), shall be reimbursed by Tenant to Landlord within thirty (30) days of Landlord's written demand. resulting from such failure to repair or maintain as provided hereunder or due to a defect. Notwithstanding the foregoing, the reasonable cost of repairs referenced in this Section 14.2 and Section 14.1, which are paid by Tenant and are the result of the negligence or willful misconduct of Landlord or Landlord’s Agents, shall be reimbursed by Landlord to Tenant within thirty (30) days of Tenant’s written demand therefor (together with invoices or such other reasonable evidence of costs incurred). If Landlord fails to timely satisfy any obligation of Landlord under this Lease, to repair and maintain the  Property as required under this Lease, Tenant shall notify Landlord in writing thereof and Landlord shall  commence such repair and/or maintenance work within thirty (30) days after receipt of such written notice,  diligently pursue the same, and complete the same within sixty (60) days after receipt of such written notice,  except in cases where there is an immediate threat of material and substantial property damage or  immediate threat of bodily injury, in which case the notice and cure period of time shall be immediate or as  is reasonable under the circumstances. If Landlord fails to timely commence, diligently pursue, and  complete the same (as set forth in the prior sentence), subject to delays resulting from events of Force  Majeure, then Tenant, at its election, may undertake such repair or maintenance work on Landlord’s behalf  and is hereby granted such access rights as are reasonably necessary to conduct such work and in no  event shall Tenant be limited in taking all actions necessary in the event of an emergency which threatens  life or where there is imminent danger to any property whether that of the Premises, Landlord  Property,Tenant Property or client property of the Tenant.  In any such event, Landlord agrees to pay  Tenant, within thirty (30) days of receipt of Tenant’s invoice accompanied by copies of receipts or other  evidence of such costs, all reasonable, actual costs incurred by Tenant in performing such work on  Landlord’s behalf, including interest thereon at a rate equal to ten percent (10%) per annum (the “Lease  Interest Rate”). If Landlord does not timely and fully reimburse Tenant, then Tenant shall have the option,  at its sole discretion, of offsetting up to fifty percent (50%) of Tenant’s monthly Basic Rent, until such time  as Tenant has been completely reimbursed for the invoiced costs, plus interest thereon at the Lease Interest  Rate. If Landlord disputes any offsets reasonably asserted by Tenant, then Landlord shall have the right to  bring an equitable action enjoining such offset, requiring payment or otherwise, but the reasonable exercise  of such offset rights by Tenant shall not by itself, constitute a default. Tenant’s right to perform repair and  maintenance work pursuant to this Section 9.1.3 shall not be deemed to create any obligation on the part  of Tenant to do so, and shall not in any way limit Tenant’s remedies under this Lease. Tenant shall indemnify  and defend the Landlord from and against all claims in connection with or arising out of Tenant’s negligence  or wilful misconduct in the cure of or attempt to cure any failure of Landlord to repair or maintain the Property  as provided herein.  14.3 Tenant Equipment. Tenant shall not place a load upon any floor of the Premises which  exceeds four thousand pounds per square inch (4,000 lbs/sq.in.) or which is allowed by law.  Tenant will  use the Premises in a careful, safe and proper manner, in compliance with all laws and will not commit  waste, overload the floor or structure of the Premises beyond the capabilities and specifications existing for  the Building (including the Slab Specifications set forth in Exhibit C, Attachment 1), or subject the Premises  to use that damage the Premises, normal wear and tear, insured casualty and condemnation excepted.  Business machines and mechanical equipment belonging to Tenant which cause noise or vibrations that  may be transmitted to the structure of the Building or to the Premises to such a degree as to be  objectionable to Landlord shall, at the Tenant's expense, be placed and maintained by Tenant in settings  of cork, rubber or spring-type vibration eliminators sufficient to eliminate such noise or vibration.  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 21  126965.00088.126059897.11  XV. UTILITIES 15.1 Utilities. Tenant shall, as part of the Additional Rent, pay Tenant's Proportionate Share of  all utility charges including, but not limited to, gas, propane, electricity, and water and sewer used and  consumed by Tenant, its employees, agents, servants, customers, and other invitees in the Premises that  were not originally separately metered for the Premises or are not subsequently separately metered as  hereinafter provided. Landlord shall have the right to direct Tenant, at Tenant's sole and reasonable cost  and expense, to cause a meter or sub-meter to be installed with respect to any utility service provided to  the Premises upon a determination by Landlord that Tenant is using an extraordinary amount of such utility.  For any utility service provided to the Premises, which is separately metered or sub-metered, Tenant shall  pay all costs for such utility service directly from the utility or municipality providing such service and pay  for such service when payment therefor is due and Tenant shall be solely responsible for the repair and  maintenance of any such meters or sub-meters. Tenant shall also provide for cleaning and extermination  services, and shall pay for such services when payments therefor are due.  15.2 Use of Electrical Energy by Tenant. Tenant's use of electrical energy in the Premises shall  not, at any time, exceed the capacity of (i) any of the electrical conductors and equipment in or otherwise  serving the Premises; or (ii) the Building's HVAC system. In order to ensure that such capacity is not  exceeded and to avert possible adverse effects upon the Building's electric service, Tenant shall not,  without Landlord's prior written consent in each instance, make any material alteration or addition to the  electrical system of the Premises existing as of the Commencement Date.  XVI. INVOLUNTARY CESSATION OF SERVICES Landlord reserves the right, without any liability to Tenant and without affecting Tenant's covenants  and obligations hereunder, to stop service of the heating, air conditioning, electric, sanitary, elevator, or  other Building systems serving the Premises, or to stop any other services required by Landlord under this  Lease, whenever and for so long as may be necessary, by reason of (i) accidents, emergencies, strikes, or  the making of repairs or changes which Landlord in good faith deems necessary, or (ii) any other cause  beyond Landlord's reasonable control. Further, it is also understood and agreed that Landlord shall have  no liability or responsibility for a cessation of services to the Premises or in the Building which occurs as a  result of causes beyond Landlord's control. No such interruption of service shall be deemed an eviction or  disturbance of Tenant's use and possession of the Premises or any part thereof, or render Landlord liable  to Tenant for damages, or relieve Tenant from performance of Tenant's obligations under this Lease  including the obligation to pay Rent. Notwithstanding the foregoing, if Tenant is prevented from using, and  does not use, the Premises or a substantial portion thereof as a result of any negligent failure by Landlord  to provide utility services to the Premises which Landlord is obligated to provide pursuant to this Lease, and  such failure was not caused directly or indirectly by the negligence or willful misconduct of Tenant, its  employees, agents or visitors, guests, invitees or licensees (an “Abatement Event”), then Tenant shall give  written notice of sucy Abatement Event to Landlord. If the Abatement Event continues for five (5)  consecutive business days (the “Abatement Period”) after Landlord’s receipt of Tenant’s written notice of  the Abatement Event, then Basic Rent shall be abated on a day-for-day bases after expiration of the  Abatement Period, for such time following expiration of the Abatement Period that Tenant continues (as a  result of the Abatement Event) to be so prevented from using, and does not use, the Premises or a  substantial portion thereof, in the proportion that the rentable area of the portion of the Premises that Tenant  is prevented from using, and does not use, bears to the total rentable area of the Premises.  XVII. LANDLORD'S RIGHTS OF ACCESS Landlord and its Agents shall have the right to enter and/or pass through the Premises at any time  or times, upon no less than two (2) business days’ prior Notice in accordance with Section 26.2 (or without  notice in case of an emergency) and provided that Landlord shall use commercially reasonable efforts not  to materially adversely impact Tenant’s business and operation at the Premises or as otherwise set forth  herein: (a) to examine the Premises and to show them to actual and prospective Mortgagees, or prospective  purchasers or Mortgagees of the Building; and (b) to make such repairs, alterations, additions and  improvements in or to the Premises and/or in or to the Building or its facilities and equipment as Landlord  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 22  126965.00088.126059897.11  is required or desires to make. Landlord shall be allowed to take all materials into and upon the Premises  that may be required in connection therewith, without any reduction of Tenant's covenants and obligations  hereunder; provided, that Landlord (and its agents) shall use commercially reasonable efforts not to  materially adversely impact Tenant’s business and operation (and the parties shall cooperate in good faith  to identify, in advance, the time period during which Landlord will conduct such scheduled maintenance  and/or repairs. Landlord shall be liable for the acts or omission of its agents, including any damage caused  by such agents and/or any resulting personal injury thereof or therefrom. During the period of twelve (12)  months prior to the Expiration Date (or at any time, if Tenant has vacated or abandoned the Premises),  Landlord and its Agents may exhibit the Premises to prospective tenants upon not less than two (2)  business days prior notice.  Notwithstanding any provision set forth herein to the contrary, Landlord shall  have the right to provide notice pursuant to this Article XVII by email.  XVIII. LIABILITY AND INDEMNIFICATION OF LANDLORD 18.1 Indemnification. Except to the extent caused by the gross negligence or willful  misconduct of Landlord or its Agents, Tenant will neither hold nor attempt to hold Landlord, its  Agents or Mortgagee liable for, and Tenant will, to the fullest extent allowed by law, indemnify, hold  harmless and defend (with counsel reasonably acceptable to Landlord) Landlord, its Agents and  Mortgagee, from and against any damage to property and any injury to or death of persons (and  any and all resulting or related demands, claims, causes of action, fines, penalties, liabilities,  judgments, and expenses, including, without limitation, reasonable attorneys' fees and court costs)  occurring inside the Premises, or occurring in or about the Premises or Project in connection with  or arising from (i) the use or occupancy or manner of use or occupancy of the Premises by Tenant  or its Agents; (ii) any activity, work or thing done, permitted or suffered by Tenant or its Agents in  or about the Premises or the Project; (iii) any acts, omissions or negligence of Tenant or its Agents;  and (iv) any breach, violation or nonperformance by Tenant or its Agents of any term, covenant or  provision of this Lease or any law, ordinance or governmental requirement of any kind.   18.2 Waiver and Release. Except to the extent caused by the gross negligence or willful  misconduct of Landlord, Tenant, to the fullest extent allowed by law, covenants and agrees that  Landlord, its Agents and Mortgagee will not at any time or to any extent whatsoever be liable,  responsible or in any way accountable for any loss, injury, death or damage (including  consequential damages) to persons, property or Tenant's business occasioned by (i) any acts or  omissions, including theft, of or by any other tenant, occupant or visitor of the Project; or (iii) any  injury or damage to persons or property resulting from any casualty, unknown fire, explosion,  falling plaster or other masonry or glass, steam, gas, electricity, electrical or electronic emanations  or disturbance, water, snow or rain which may leak from any part of the Building or any other portion  of the Project or from the pipes, appliances or plumbing works therein or from the roof, street or  subsurface or from any other place, or resulting from dampness.  18.3 Survival. The covenants, agreements and indemnification obligations under this Article  XVIII will survive the expiration or earlier termination of this Lease until fully paid and/or performed by  Tenant.  Interest on surviving payment obligations will continue to accrue at the rates states herein until  fully paid. Tenant's covenants, agreements and indemnification obligations are not intended to and will not  relieve any insurance carrier of its obligations under policies required to be carried by Tenant pursuant to  the provisions of this Lease.  XIX. DAMAGE OR DESTRUCTION 19.1 Damage to the Premises. If the Premises or the Building shall be damaged by fire or other  insured cause, Landlord shall diligently and as soon as practicable after such damage occurs (taking into  account the time necessary to effect a satisfactory settlement with any insurance company involved) repair  such damage that is Landlord's responsibility to repair at the expense of Landlord; provided, however, that  Landlord's obligation to repair such damage shall not exceed the proceeds of insurance available to  Landlord (reduced by any proceeds retained pursuant to the rights of Mortgagee). Notwithstanding the  foregoing, if the Premises or the Building are damaged by fire or other insured cause to such an extent that,  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 23  126965.00088.126059897.11  in Landlord's experienced contractor’s reasonable judgment, the damage cannot be substantially repaired  within two hundred seventy (270) days after the date of such damage, or if the Premises are substantially  damaged during the last Lease Year, then: (i) Landlord may terminate this Lease as of the date of such  damage by written notice to Tenant; or (ii) Tenant may terminate this Lease as of the date of such damage  by written notice to Landlord within ten (10) days after (a) Landlord's delivery of a notice that the repairs  cannot be made within such 270-day period (Landlord shall use reasonable efforts to deliver to Tenant such  notice within sixty (60) days of the date of such damage or casualty); or (b) the date of damage, in the event  the damage occurs during the last year of the Lease. If Landlord commences repairs in accordance with  this Section 19.1 and, despite its commercially reasonable efforts, is unable to substantially complete such  repairs for any reason other than as a result of Tenant’s actions or other force majeure delays, within two  hundred seventy (270) days after commencement of such work, then either party shall have the right, upon  ten (10) days written notice to the other party, to terminate this Lease as of the date of such damage.  Rent  shall be apportioned and paid to the date of such damage. During the period that Tenant is deprived of the  use of the damaged portion of the Premises, Basic Rent and Tenant's Proportionate Share shall be reduced  by the ratio that the Rentable Square Footage of the Premises damaged bears to the total Rentable Square  Footage of the Premises before such damage. All injury or damage to the Premises or the Building resulting  from the gross negligence or willful misconduct of Tenant or its Agents shall be repaired by Landlord, at  Tenant's expense, and Rent shall not abate nor shall Tenant be entitled to terminate the Lease.  Notwithstanding anything herein to the contrary, Landlord shall not be required to rebuild, replace, or repair  any Alterations, Tenant's Property or other specialized Tenant improvements as reasonably determined by  Landlord.  19.2 Condemnation. If any of the Premises, 20% or more of the Building or 30% or more of the  Land shall be taken or condemned by any governmental or quasi-governmental authority for any public or  quasi-public use or purpose (including, without limitation, sale under threat of such a taking), then the Term  shall cease and terminate as of the date when title vests in such governmental or quasi-governmental  authority, and Rent shall be prorated to the date when title vests in such governmental or quasi- governmental authority. If less than (20%) of the Building (none of which is within the Premises) and less  than 30% of the Land is taken or condemned by any governmental or quasi-governmental authority for any  public or quasi-public use or purpose (including, without limitation, sale under threat of such a taking), this  Lease shall continue to the extent that such taking or quasi-taking does not materially adversely interfere  or impair Tenant’s use of the Premises, and subject to the Basic Rent and Tenant’s Proportionate Share of  the Additional Rent, payable hereunder during the remainder of the Term shall be proportionately reduced.  Tenant shall have no claim against Landlord (or otherwise) as a result of such taking, and Tenant hereby  agrees to make no claim against the condemning authority for any portion of the amount that may be  awarded as compensation or damages as a result of such taking; provided, however, that Tenant may, to  the extent allowed by law, claim an award for moving expenses and for the taking of any of Tenant's  Property (other than its leasehold interest in the Premises) which does not, under the terms of this Lease,  become the property of Landlord at the termination hereof, as long as such claim is separate and distinct  from any claim of Landlord and does not diminish Landlord's award. Tenant hereby assigns to Landlord  any right and interest it may have in any award for its leasehold interest in the Premises.    XX. SURRENDER AND HOLDOVER On the Expiration Date, or upon any earlier termination of this Lease, or upon any re-entry by  Landlord upon the Premises as allowed under the terms of the Lease, Tenant shall quit and surrender the  Premises to Landlord "broom-clean" and in good order, condition and repair, except for ordinary wear and  tear and such damage or destruction as Landlord is required to repair or restore under this Lease, and  Tenant shall remove all of the Tenant's Property therefrom, except as otherwise expressly provided in this  Lease. In the event that Tenant shall not immediately surrender the Premises to Landlord on the Expiration  Date or earlier termination of this Lease, Tenant shall be deemed to be a tenant-at-sufferance pursuant to  the terms and provisions of this Lease, except the daily Basic Rent shall be one hundred fifty percent  (150%) the daily Basic Rent in effect on the Expiration Date or earlier termination of this Lease (computed  on the basis of a thirty (30) day month). Notwithstanding the foregoing, if Tenant shall hold over after the  Expiration Date or earlier termination of this Lease, and Landlord shall desire to regain possession of the  Premises, then Landlord may forthwith re-enter and take possession of the Premises without process, or  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 24  126965.00088.126059897.11  by any legal process provided under applicable state law. If Landlord is unable to deliver possession of  the Premises to a new tenant, or to perform improvements for a new tenant, as a result of Tenant's  holdover, Tenant shall be liable to Landlord for all damages, including, without limitation, special  or consequential damages, that Landlord suffers from the holdover; provided, however, that, upon  request of Tenant, Landlord agrees to notify Tenant if Landlord is in negotiations with a new tenant  for all or a portion of the Premises.  XXI. DEFAULT OF TENANT 21.1 Events of Default. Each of the following shall constitute an Event of Default: (i) Tenant fails  to pay Rent within three (3) days after notice from Landlord; provided that no such notice shall be required  if at least two such notices shall have been given during the previous twelve (12) months; (ii) Tenant fails  to observe or perform any other term, condition or covenant herein binding upon or obligating Tenant within  ten (10) days after notice from Landlord; provided, however, that if such failure cannot reasonably be cured  within said ten (10)-day period, then the period to cure the default shall be extended for up to an additional  twenty (20) days; provided Tenant has commenced to cure the default within the ten (10)-day period and  diligently pursues such cure to completion (notwithstanding the foregoing, if Landlord provides Tenant with  notice of Tenant's failure to observe or perform any term, condition or covenant under this Subsection (ii)  on two (2) or more occasions during any twelve (12) month period, then Tenant's subsequent violation  shall, at Landlord's option, be deemed an Event of Default immediately upon the occurrence of such failure,  regardless of whether Landlord provides Tenant notice, or Tenant has commenced the cure of the same);  (iii) Tenant fails to execute and return a subordination and non-distrubance agreement or estoppel within the time periods provided for in Article VII or Article XXIII; (iv) Tenant or any Guarantor makes or consents to a general assignment for the benefit of creditors or a common law composition of creditors, or a receiver of the Premises for all or substantially all of Tenant's or Guarantor's assets is appointed, or Tenant or Guarantor hereafter files a voluntary petition in any bankruptcy or insolvency proceeding, or an involuntary petition in any bankruptcy or insolvency proceeding is filed against Tenant or Guarantor and is not discharged by Tenant or Guarantor within sixty (60) days; or (v) Tenant fails to immediately remedy or discontinue any hazardous conditions which Tenant has created or permitted in violation of law or of this Lease. Any notice periods provided for under this Section 21.1 shall run concurrently with any statutory notice periods and any notice given hereunder may be given simultaneously with or incorporated into any such statutory notice. 21.2 Landlord's Remedies. Subject to Section 21.3, upon the occurrence of an Event of Default  and expiration of the applicable notice and cure period, Landlord, at its option, without further notice or  demand to Tenant, may, in addition to all other rights and remedies provided in this Lease, at law or in  equity, elect one or more of the following remedies:  (a) Terminate this Lease, or terminate Tenant's right of possession to the Premises without terminating this Lease, and with or without reentering and repossessing the Premises. Upon  any termination of this Lease, or upon any termination of Tenant's right of possession without  termination of this Lease, Tenant shall surrender possession and vacate the Premises immediately,  and deliver possession thereof to Landlord. If Tenant fails to surrender possession and vacate the  Premises, Landlord and its Agents shall have full and free license to enter into and upon the  Premises with or without process of law for the purpose of repossessing the Premises, removing  Tenant and removing, storing or disposing of any and all Alterations, signs, personal property,  equipment and other property therefrom. Landlord may take these actions without (i) being deemed  guilty of trespass, eviction or forcible entry or detainer, (ii) incurring any liability for any damage  resulting therefrom, (iii) terminating this Lease (unless Landlord intends to do so), (iv) releasing  Tenant or any guarantor, in whole or in part, from any obligation under this Lease or any guaranty  thereof, including, without limitation, the obligation to pay Rent or Damages (as defined herein) or  (v) relinquishing any other right given to Landlord hereunder or by operation of law; (b) Recover unpaid Rent, whether accruing prior to, on or after the date of termination of this Lease or Tenant's right of possession and/or pursuant to the holdover provisions of Article  XX, Rental Deficiency (as defined herein) and/or any Damages (as defined herein). "Rental  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 25  126965.00088.126059897.11  Deficiency" is defined as a contractual measure of damages for Tenant's non-payment of Rent  measured by either the (i) "Actual Rental Deficiency", which means the difference (never less than  zero) between (A) the Basic Rent due for, and other Rent allocable under this Lease to, each  calendar month beginning with the first month with respect to which Landlord receives rent from  reletting the Premises and (B) the proceeds, if any, that Landlord actually collects from any  substitute tenant for any part of the Premises in each corresponding month in which the Term and  the term of the substitute tenant's lease overlap; or (ii) "Market Rental Deficiency", which is the  present value (determined using a discount rate of seven percent [7%] per annum) of the difference  (never less than zero) between (A) the total Rent which would have accrued to Landlord under this  Lease for the remainder of the Term of this Lease (or such portion of the Term in which Landlord  elects to recover this damage measure), if the terms of this Lease had been fully complied with by  Tenant, and (B) the total fair market rental value of the Premises for the remainder of the Term of  the Lease (or such portion of the Term in which Landlord elects to recover this damage measure).  In determining the Market Rental Deficiency, the total fair market rental value will be the prevailing  market rate for full service Basic Rent for tenants of comparable quality for leases in buildings of  comparable size, age, use location and quality in the marketplace in which the Project is located,  taking into consideration the extent of the availability of space as large or small as the Premises in  the marketplace. "Damages" shall mean all incurred actual, incidental, and consequential  damages, court costs, interest and reasonable attorneys' fees arising from Tenant's breach of the  Lease, including, without limitation, (i) reletting costs, including, without limitation, the cost of  restoring the Premises to the original condition at the time of lease , normal wear and tear excepted  (including, without limitation, cleaning, repair and remodeling costs), brokerage fees, reasonable  legal fees, advertising costs and the like); (ii) Landlord's cost of recovering possession of the  Premises; (iii) the cost of removing and, storing and disposing of any of Tenant's or other occupant's  property left on the Premises after reentry; (iv) any increase in insurance premiums caused by the  vacancy of the Premises (subject to reletting), (v) the amount of any unamortized improvements to  the Premises in connection with this Lease paid for by Landlord, (vi) the amount of any unamortized  brokerage commission paid by Landlord in connection with the leasing of the Premises to Tenant;  (vii) costs incurred in connection with collecting any money owed by Tenant or a substitute tenant, (viii) any other sum of money or damages owed by Tenant to Landlord or incurred by Landlord as a result of or arising from, Tenant's breach of the Lease or Landlord's exercise of its rights and remedies for such breach, (ix) any contractual or liquidated type or measures of damages specified in this Lease (if any) and (x) any other type of measure of damages recoverable for any particular breach under applicable law statute, ordinance or governmental rule or regulation. Landlord may file suit to recover any sums falling due under the terms of this Section 21.2(b) from time to time. Nothing contained in this Lease shall limit or prejudice the right of Landlord to prove for and obtain in proceedings for bankruptcy or insolvency by reason of the termination of this Lease, an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, the damages are to be proved, whether or not the amount be greater, equal to, or less than the amount of the loss or damages referred to above. (c) If Landlord elects to terminate Tenant's right to possession of the Premises without terminating this Lease, Tenant shall continue to be liable for all Rent and all other Damages, except  to the extent otherwise provided under Section 21.3, inclusive of the offset of any reletting of the  Premises or portion thereof by Landlord, and Landlord may relet the Premises, or any part thereof,  to a substitute tenant or tenants, for a period of time equal to or lesser or greater than the remainder  of the Term of this Lease on whatever reasonable terms and conditions Landlord, at Landlord's  sole discretion, deems advisable. Notwithstanding any provision in this Section 21.2(c) to the  contrary, Landlord may at (i) any time after reletting the Premises elect to exercise its rights under  Section 21.2(b) for such previous breach against the Tenant; and (ii) upon the default of any  substitute tenant or upon the expiration of the lease term of such substitute tenant before the  expiration of the Term of this Lease, either relet to still another substitute tenant or exercise its  rights under Section 21.2(b). For the purpose of such reletting Landlord is authorized to make any  repairs, changes, alterations or additions in or to the Premises that may be necessary.   

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 26  126965.00088.126059897.11  (d) Take any lawful self-help or judicial action, including using a master or duplicate key or changing or picking the locks and security devices, without having any civil or criminal liability  therefor to (i) reenter the Premises, repossess the Premises and permanently exclude Tenant and  other occupants from the Premises, and/or (ii) make such payment or do such act as Landlord  determines is necessary (without obligation to do so) to cure the Event of Default or otherwise  satisfy Tenant's obligations under the terms of this Lease. Tenant agrees to reimburse Landlord on  demand for any expenses which Landlord may incur in connection with the foregoing actions, which  expenses shall bear interest until paid at the Interest Rate, and that Landlord shall not be liable for  any damages resulting to Tenant from such actions.  (e) Withhold or suspend payment that this Lease would otherwise require Landlord to make.   (f) No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative  and in addition to any other right or remedy given hereunder or now or hereafter existing at law or  in equity or by statute. In addition to other remedies provided in this Lease, Landlord shall be  entitled, to the extent permitted by applicable law, to injunctive relief in case of the violation, or  attempted or threatened violation, of any of the covenants, agreements, conditions or provisions of  this Lease, or to a decree compelling performance of any of the covenants, agreements, conditions  or provisions of this Lease, or to any other remedy allowed to Landlord at law or in equity.  21.3 Mitigation of Damages. Tenant agrees that if Landlord markets the Premises in a manner  substantially similar to the manner in which Landlord markets other space in the Building, then Landlord  shall be deemed to have used commercially reasonable efforts to mitigate damages. Tenant shall continue  to be liable for all Rent (whether accruing prior to, on or after the date of termination of this Lease or Tenant's  right of possession and/or pursuant to the holdover provisions of Article XX above) and Damages, except  to the extent that Tenant receives any credit against unpaid Rent under Section 21.2(b) or pleads and  proves by clear and convincing evidence that Landlord fails to exercise commercially reasonable efforts to  mitigate damages to the extent required under this Section 21.3 and that Landlord's failure caused an  avoidable and quantifiable increase in Landlord's damages for unpaid Rent. Without limitation to the  foregoing, Landlord shall not be deemed to have failed to mitigate damages, or use efforts required by law  to do so, because: (i) Landlord leases other space in the Building which is vacant prior to re-letting the  Premises; (ii) Landlord refuses to relet the Premises to any Related Entity of Tenant, or any principal of  Tenant, or any Related Entity of such principal; (iii) Landlord refuses to relet the Premises to any person or  entity whose creditworthiness is not the same or better than Tenant; (iv) Landlord refuses to relet the  Premises to any person or entity because the use proposed to be made of the Premises by such prospective  tenant is not warehouse or general business office use of a type and nature consistent with that of the other  tenants in the portions of the Building leased or held for lease for warehouse and general business office  purposes as of the date Tenant defaults under this Lease (by way of illustration, but not limitation,  manufacturing facilities, government offices, consular offices, doctor's offices or medical or dental clinics or  laboratories, or schools would not be uses consistent with that of other tenants in the Building), or such use  would, in Landlord's reasonable judgment, impose unreasonable or excessive demands upon the Building  systems, equipment or facilities; (v) Landlord refuses to relet the Premises to any person or entity, or any  affiliate of such person or entity, who has been engaged in litigation with Landlord or any of its affiliates; (vi)  Landlord refuses to relet the Premises because the tenant or the terms and provisions of the proposed  lease are not approved by the holders of any liens or security interests in the Building, or would cause  Landlord to be in default of, or to be unable to perform any of its covenants or obligations under, any  agreements between Landlord and any third party; (vii) Landlord refuses to relet the Premises because the  proposed tenant is unwilling to execute and deliver Landlord's standard lease form with market customary  adjustments or such tenant requires improvements to the Premises to be paid at Landlord's cost and  expense; (viii) Landlord refuses to relet the Premises to a person or entity whose character or reputation,  or the nature of such prospective tenant's business, would not be acceptable to Landlord in its reasonable  discretion; or (ix) Landlord refuses to expend any material sums of money to market the Premises in excess  of the sums Landlord typically expends in connection with the marketing of other space in the Building.   

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 27  126965.00088.126059897.11  21.4 No Waiver. If Landlord shall institute proceedings against Tenant and a compromise or  settlement thereof shall be made, the same shall not constitute a waiver of any other covenant, condition  or agreement herein contained, nor of any of Landlord's rights hereunder unless expressly stated in such  settlement. No waiver by Landlord of any breach shall operate as a waiver of such covenant, condition or  agreement itself, or of any subsequent breach thereof. No payment of Rent by Tenant or acceptance of  Rent by Landlord shall operate as a waiver of any breach or default by Tenant under this Lease unless  otherwise agreed by both parties. No payment by Tenant or receipt by Landlord of a lesser amount than  the monthly installment of Rent herein stipulated shall be deemed to be other than a payment on account  of the earliest unpaid Rent, nor shall any endorsement or statement on any check or communication  accompanying a check for the payment of Rent be deemed an accord and satisfaction, and Landlord may  accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or  to pursue any other remedy provided in this Lease. No act, omission, reletting or re-entry by Landlord, and  no acceptance by Landlord of keys from Tenant, shall be considered an acceptance of a surrender of the  Lease, shall be construed as an actual or constructive eviction of Tenant, or an election on the part of  Landlord to terminate this Lease unless a written notice of such intention is given to Tenant by Landlord.  21.5 Late Payment. If Tenant fails to pay any Rent within five (5) days after such Rent becomes  due and payable more than twice in a given calendar year, Tenant shall pay to Landlord a late charge of  10% of the amount of such overdue Rent. Such late charge shall be deemed Rent and shall be due and  payable within two (2) days after written demand from Landlord. Tenant hereby acknowledges that late  payment by Tenant to Landlord of Rent or other sums due hereunder will cause Landlord to incur costs not  contemplated by this Lease, the exact amount of which is not readily ascertainable. Such costs include, but  are not limited to, processing and accounting charges, and late charges which may be imposed upon  Landlord by the terms of any mortgage or deed of trust covering the Premises and/or Project. Acceptance  of such late charges by Landlord shall in no event constitute a waiver of Tenant's default with respect to  such overdue amounts, nor prevent Landlord from exercising any of the other rights and remedies granted  hereunder.  21.6 Waiver of Redemption. Intentionally deleted.  21.7 Landlord's Lien. Intentionally deleted.  XXII. BROKER Landlord recognizes Broker(s) as the sole broker(s) procuring this Lease and shall pay Broker(s) a  commission therefor pursuant to a separate agreement between Broker(s) and Landlord. Landlord and  Tenant each represents and warrants to the other that it has dealt with no broker, agent, finder or other  person other than Broker(s) relating to this Lease.. Landlord shall indemnify and hold Tenant harmless,  and Tenant shall indemnify and hold Landlord harmless, from and against any and all loss, costs,  damages or expenses (including, without limitation, all attorneys' fees and disbursements) by  reason of any claim of liability to or from any broker or person arising from or out of any breach of  the indemnitor's representation and warranty.  XXIII. ESTOPPEL CERTIFICATES Tenant agrees, at any time and from time to time, as requested by Landlord, to execute and deliver to  Landlord (and to any existing or prospective mortgage lender, ground lessor, or purchaser designated by  Landlord), within ten (10) business days after the request therefor, a statement certifying that this Lease is  unmodified and in full force and effect (or if there have been modifications, that the same is in full force and  effect as modified and stating the modifications); certifying the dates to which the Rent has been paid;  stating whether or not Landlord is in default in performance of any of its obligations under this Lease, and,  if so, specifying each such default; and stating whether or not any event has occurred which, with the giving  of notice or passage of time, or both, would constitute such a default, and, if so, specifying each such event.  Any such statement delivered pursuant hereto shall be deemed a representation and warranty to be relied  upon by Landlord and by others with whom such party may be dealing, regardless of independent  investigation. Tenant also shall include in any such statements such other information concerning this  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 28  126965.00088.126059897.11  Lease as Landlord may reasonably request including, but not limited to, the amount of Basic Rent and  Additional Rent under this Lease, and whether Landlord has completed all improvements to the Premises  required under this Lease. If Tenant fails to execute, acknowledge or deliver any such statement within ten  (10) business days after request therefor, Tenant hereby irrevocably constitutes and appoints Landlord as its attorney-in-fact (which appointment is agreed to be coupled with an interest), to execute and deliver any such statements for and on behalf of Tenant. XXIV. ENVIRONMENTAL 24.1 Hazardous Material. Except for Hazardous Materials (i) in typical amounts necessary for  Tenant's ordinary business operations, and which are stored, maintained, and used in accordance with  manufacturer's instructions and all applicable Environmental Requirements, (ii) which are hazardous liquids  that do not exceed fifty-five (55) gallons at any given time, excluding petroleum products intended solely  for Tenant's consumptive use, or (iii) which are chlorinated solvents that do not exceed one (1) gallon in  aggregate quantity, Tenant shall not, nor shall it permit or cause its Agents or any other party to, bring any  Hazardous Materials upon the Project and/or Premises or transport, store, use, generate, manufacture,  dispose, or release any Hazardous Materials on or from the Project and/or Premises without Landlord's  prior written consent. Any Hazardous Material permitted on the Project and/or Premises as provided herein,  and all containers therefor, shall be used, kept, stored and disposed of in a manner that complies with all  Environmental Requirements. Title to Hazardous Materials will remain and be stored or disposed of solely  in Tenant's name. Tenant shall not release, discharge, leak or emit or permit to be released, discharged,  leaked or emitted, any material into the atmosphere, ground, ground water, surface water, storm or sanitary  sewer system or any body of water, any Hazardous Material or any other material (as is reasonably  determined by Landlord or any governmental authority) which may pollute or contaminate the same or may  adversely affect (a) the health, welfare or safety of persons, or (b) the condition, use or enjoyment of the  Project and/or Premises, or any other real or personal property. Tenant shall complete and certify in  disclosure statements as requested by Landlord from time to time relating to Tenant's transportation,  storage, use, generation, manufacture, or release of Hazardous Materials on the Project and/or Premises,  but no more than once per Lease Year, as required by law, or unless Landlord has reasonable grounds for  such request based on a legitimate concern.  Landlord hereby represents and warrants to Tenant that, as  of the Date of Lease, to Landlord’s knowledge there are no Hazardous Materials within the Premises and  Landlord has received no notices of any violations of the Environmental Requirements.  Simultaneously  with execution of this Lease, Tenant shall execute and deliver to Landlord the Hazardous Materials Survey  attached hereto as Exhibit G, which is attached hereto and incorporated herein by this reference.  24.2 Definition. As used herein, "Environmental Requirement" means all federal, state, and local  laws, ordinances, rules and regulations, court orders, governmental directives, governmental orders and all  interpretations of the foregoing, and all restrictive covenants affecting the Project and/or Premises  regulating or relating to health, safety, or environmental conditions at, on, in, under, or about the Project  and/or Premises or the environment or natural resources, including the following: the Comprehensive  Environmental Response, Compensation and Liability Act; the Resource Conservation and Recovery Act;  the Clean Air Act; the Clean Water Act; the Toxic Substances Control Act and all state and local  counterparts thereto, and any common or civil law obligations including nuisance or trespass. As used  herein, "Hazardous Material" means (a) any "hazardous waste" as defined by the Resource Conservation  and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder (or any  state counterpart to the foregoing statute); (b) any "hazardous substance" as defined by the Comprehensive  Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and  regulations promulgated thereunder (or any state counterpart to the foregoing statute); (c) any oil, petroleum  products and their by-products; (d) asbestos; (e) polychlorinated biphenyls ("PCBs"); and (f) any substance  that is or becomes regulated by any Environmental Requirement.   24.3 Tenant's Liability. Tenant hereby agrees that it shall be fully liable for all costs and expense  related to the use, storage and disposal of Hazardous Material kept on the Project and/or Premises, and  Tenant shall give immediate notice to Landlord of any violation or potential violation of the provisions of  Section 24.1 above. Tenant shall defend, indemnify and hold Landlord and its Agents harmless from  and against any third party claims, demands, penalties, fines, liabilities, settlements, damages,  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 29  126965.00088.126059897.11  costs or expenses incurred (including without limitation, reasonable attorneys' and consultants'  fees, court costs and litigation expense) of whatever kind or nature, known or unknown contingent  or otherwise, arising out of or in any way related to (a) the presence, disposal, release or threatened  release of any such Hazardous Material that is on, from or affecting the soil, water, vegetation,  buildings, personal property, persons, animals or otherwise located on or around the Premises; (b)  any personal injury (including wrongful death), property damage (real or personal) arising out of or  related to such Hazardous Material; (c) any lawsuit brought or threatened, settlement reached or  government order relating to such Hazardous Material; (d) any violation of any laws applicable  thereto; (e) a decrease in value of the Project and/or Premises, (f) damages caused by loss or  restriction of rentable or usable space; and (g) damages caused by adverse impact on marketing of  the space. Without limitation of the foregoing, if the Tenant causes or permits the presence of any  Hazardous Materials on the Project and/or Premises which results in contamination, Tenant shall promptly,  at its sole expense, take any and all necessary actions to return the Project and/or Premises to the condition  existing prior to the presence of any such Hazardous Material on the Project and/or Premises. Tenant shall  first obtain Landlord's approval for any such remedial action. If Tenant fails to perform such work within the  time period specified by Landlord or before Tenant's right to possession terminates or expires (whichever  is earlier), Landlord may at its discretion perform such work at Tenant's cost. Tenant shall pay all reasonable  costs incurred by Landlord in performing such work within ten (10) days after Landlord's request therefor.  Such work performed by Landlord is on behalf of Tenant and Tenant remains the owner, generator,  operator, transporter, and/or arranger of the Hazardous Materials under Environmental Requirements.  Tenant agrees not to enter into any agreement with any person, including any governmental authority,  regarding the removal of Hazardous Materials that have been disposed of or otherwise released onto or  from the Project and/or Premises without the written approval of the Landlord. The provisions of this  Section 24.3 shall be in addition to any other obligations and liabilities Tenant may have to Landlord under  this Lease or at law or in equity and shall survive the transactions contemplated herein and shall survive  the termination of this Lease.  24.4 Landlord's Liability. Landlord shall indemnify, defend and hold harmless Tenant from  and against any and all claims, damages, fines, judgments, penalties, costs, liabilities, losses and  reasonable attorney's fees to the extent caused by Landlord or its Agents and (i) arising out of or  in connection with the existence of Hazardous Materials on the Project or Premises; or (ii) relating  to any clean-up or remediation of the Project or Premises required under any applicable  environmental laws. The obligations of Landlord under this Section 24.4 shall survive the Term of this  Lease.  24.5 Inspections and Tests. Landlord shall have access to, and a right to perform inspections  and tests of, the Project and Premises to determine Tenant's compliance with Environmental Requirements,  its obligations under this Article XXIV, or the environmental condition of the Project and/or Premises.  Access shall be granted to Landlord upon Landlord's prior notice to Tenant and at such times so as to  minimize, so far as may be reasonable under the circumstances, any disturbance to Tenant's operations.  Such inspections and tests shall be conducted at Landlord's expense, unless such inspections or tests  reveal that Tenant has not complied with any Environmental Requirement, in which case Tenant shall  reimburse Landlord for the reasonable cost of such inspection and tests. Landlord's receipt of or satisfaction  with any environmental assessment in no way waives any rights that Landlord holds against Tenant. Tenant  shall promptly notify Landlord of any communication or report that Tenant makes to any governmental  authority regarding any possible violation of Environmental Requirement or release or threat of release of  any Hazardous Materials onto or from the Project and/or Premises. Tenant shall, within five (5) days of  receipt thereof, provide Landlord with a copy of any documents or correspondence received from any  governmental agency or other party relating to a possible violation of Environmental Requirements or claim  or liability associated with the release or threat of release of any Hazardous Materials onto or from the  Project and/or Premises. Upon request, Tenant shall provide Landlord with an inventory of Hazardous  Materials located at, on or in the Project and/or Premises and copies of any Material Safety Data Sheet in  Tenant's possession required by any Environmental Requirement or related to any Hazardous Material.  XXV. SIGNAGE 

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 30  126965.00088.126059897.11  Except as expressly provided for in this Article XXV, no sign, advertisement or notice shall be  inscribed, painted, affixed, placed or otherwise displayed by Tenant on any part of the Project or the outside  or the inside of the Building to the extent visible from the exterior of the Premises, Building or Project. If any  prohibited sign, advertisement or notice is nevertheless exhibited by Tenant, Landlord shall have the right  to remove the same, and Tenant shall pay upon demand any and all reasonable expenses incurred by  Landlord in such removal, together with interest thereon at the Interest Rate from the demand date. Subject  to applicable governmental regulations, restrictions and permitting, including applicable sign ordinances,  and recorded restrictions affecting the Project, Tenant shall have the right, at its sole cost and expense, to  install and maintain one (1) sign on the exterior of the Premises, consistent with the signage attached hereto  as Exhibit E, provided, however, that the specifications for such signage (including, without limitation, the  exact size and proposed location thereof) shall be submitted to Landlord for approval prior to the installation  thereof, which approval shall not be unreasonably withheld, delayed or conditioned. Landlord's approval of  Tenant's proposed signage shall not constitute a representation or warranty by Landlord that such signage  complies with applicable law or restrictions, and compliance therewith shall remain Tenant's sole  responsibility. At or before the Expiration Date, or the date of any earlier termination of this Lease, Tenant  shall remove such signage and repair any damage to the Building resulting from Tenant's installation or  removal thereof, restoring the exterior of the Building where the signage was located to the condition  existing as of the Commencement Date.  XXVI. MISCELLANEOUS 26.1 Merger. Each party hereby expressly acknowledges and agrees that it has not made and  is not making, and the other party, in executing and delivering this Lease, is not relying upon, any  warranties, representations, promises, or statements, except to the extent that the same are expressly set  forth in this Lease. All prior understandings and agreements between the parties are merged in this Lease  (which includes the Exhibits attached hereto and made a part hereof), which alone fully and completely  express the agreement of the parties. No agreement shall be effective to change, amend, modify, waive,  release, discharge, terminate or effect an abandonment of this Lease, in whole or in part, unless such  agreement is in writing, and is signed by the party against whom enforcement of said change or modification  is sought, and any Mortgagee (to the extent the Premises is then subject to a Mortgage).  26.2 Notices. Any notice required to be given by either party pursuant to this Lease, shall be in  writing and shall be deemed to have been properly given, rendered or made only if personally delivered, if  sent by Federal Express (with a copy provided by email) or other comparable delivery service, or if sent by  registered or certified mail, return receipt requested, postage prepaid, addressed to the other party at its  address set forth in Section 1.18 or 1.19 above, as applicable, or to such other address as Landlord or  Tenant may designate to each other from time to time by written notice, and shall be deemed to have been  received upon the earlier of receipt or, if mailed by certified mail, three (3) days after such mailing.  26.3 Non-Waiver. The failure of either party to insist, in any one or more instances, upon the  strict performance of any one or more of the obligations of this Lease, or to exercise any election herein  contained, shall not be construed as a waiver or relinquishment for the future of the performance of such  one or more obligations of this Lease or of the right to exercise such election, but the Lease shall continue  and remain in full force and effect with respect to any subsequent breach, act or omission. The receipt by  Landlord of Rent with knowledge of breach by Tenant of any obligation of this Lease shall not be deemed  a waiver of such breach.  26.4 Parties Bound. Except as otherwise expressly provided for in this Lease, this Lease shall  be binding upon, and inure to the benefit of, the successors and assignees of the parties hereto. However,  the obligations of Landlord shall not be binding upon Landlord herein named with respect to any period  subsequent to the conveyance and transfer of its entire interest in the Building, as owner thereof, and in  the event of such conveyance and transfer, said obligations shall thereafter be binding upon each  transferee, Tenant will look to such transferee so long and Landlord has turned over the Security Deposit,  or the remainder thereof, to such transferee, and Tenant waives all rights and causes of action Tenant  may then have, as against the Landlord herein named. Submission of this instrument by Landlord to  Tenant for examination shall not bind Landlord or Tenant in any manner, and no lease, option, agreement  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 31  126965.00088.126059897.11  to lease or other obligation of Landlord ot Tenant shall arise until the instrument is signed by, and delivered  to, both Landlord and Tenant. Notwithstanding anything to the contrary in this Lease, the liability of Landlord  hereunder and any recourse by Tenant against Landlord shall be limited solely and exclusively to an amount  equal to the interest of Landlord in the Project, and neither Landlord, nor any of its constituent partners,  shall have any personal liability therefor.  26.5 Recordation of Lease. Tenant shall not record or file this Lease in the public records of any  county or state.   26.6 Survival of Obligations. Upon the Expiration Date or other termination of this Lease, neither  party shall have any further obligation or liability to the other except as otherwise expressly provided in this  Lease and except for such obligations as, by their nature or under the circumstances, can only be, or by  the provisions of this Lease, may be, performed after such expiration or other termination; and, in any event,  unless otherwise expressly provided in this Lease, any liability for any payment hereunder which shall have  accrued to, or with respect to, any period ending at the time of expiration or other termination of this Lease  shall survive the Expiration Date or other termination of this Lease.  26.7 Prorations. Any apportionments or prorations of Rent to be made under this Lease shall be  computed on the basis of a year containing three hundred sixty (360) days, consisting of twelve (12) months  of thirty (30) days each.  26.8 Governing Law; Construction. This Lease shall be governed by and construed in  accordance with the laws of the state in which the Project is located. If any provision of this Lease or the  application thereof to any person or circumstance shall, for any reason and to any extent, be invalid or  unenforceable, the remainder of this Lease and the application of that provision to other persons or  circumstances shall not be affected but rather shall be enforced to the extent permitted by law. The captions,  headings and titles in this Lease are solely for convenience of reference and shall not affect its  interpretation. This Lease shall be construed without regard to any presumption or other rule requiring  construction against the party causing this Lease to be drafted. Each covenant, agreement, obligation, or  other provision of this Lease on Tenant's part to be performed, shall be deemed and construed as a  separate and independent covenant of Tenant, not dependent on any other provision of this Lease. All  terms and words used in this Lease, regardless of the number or gender in which they are used, shall be  deemed to include any other number and any other gender as the context may require.  26.9 Time. Time is of the essence of this Lease and in the performance of all obligations  hereunder. If the time for performance hereunder falls on a Saturday, Sunday or a day which is recognized  as a holiday in the state in which the Project is located, then such time shall be deemed extended to the  next day that is not a Saturday, Sunday or holiday in the state in which the Project is located.  26.10 Authority of Tenant.  (a) If Tenant signs as a corporation, the person executing this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and validly existing corporation, in  good standing, qualified to do business in the state in which the Project is located, that the  corporation has full power and authority to enter into this Lease and that he or she is authorized to  execute this Lease on behalf of the corporation.  (b) If Tenant signs as a partnership or limited liability company, the person executing this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed, validly  existing partnership or limited liability company, as applicable, qualified to do business in the  applicable state, that the partnership or limited liability company, as applicable, has full power and  authority to enter into this Lease, and that he or she is authorized to execute this Lease on behalf  of the partnership or limited liability company, as applicable. Tenant further agrees that it shall  provide Landlord with an authorization from the partnership or limited liability company, as  applicable, certifying as to the above in a form acceptable to Landlord.  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 32  126965.00088.126059897.11  26.11 Security. Landlord makes no representation or warranty regarding security at the  Building or the Project. If Tenant requests security services and Landlord approves such services, which  approval shall not be unreasonably withheld, Tenant shall pay the cost of all such security services.  26.12 Financial Reports. Prior to the execution of this Lease by Tenant and thereafter not to  exceed one submission within a given calendar year within fifteen (15) days after Landlord's request, Tenant  will furnish Tenant's most recent audited financial statements (including any notes to them) to Landlord, or,  if no such audited statements have been prepared, such other financial statements (and notes to them) as  may have been prepared by an independent certified public accountant, or, failing those, Tenant's internally  prepared financial statements, certified by Tenant; provided, however, that Tenant shall be deemed to have  satisfied the obligations contained in this Section 26.12, if Tenant is a publically traded company, and such  audited financial statements are publically available, at no cost to Landlord, through the U.S. Securities and  Exchange Commission.   26.13 Rules and Regulations. Tenant and its Agents shall at all times abide by and observe the  Rules and Regulations set forth in Exhibit B and any amendments thereto that may reasonably be  promulgated from time to time by Landlord for the operation and maintenance of the Project and the Rules  and Regulations shall be deemed to be covenants of the Lease to be performed and/or observed by Tenant.  Nothing contained in this Lease shall be construed to impose upon Landlord any duty or obligation to  enforce the Rules and Regulations, or the terms or provisions contained in any other lease, against any  other tenant of the Project, so long as such failure to enforce the Rules and Regulations does not materially  adversely affect Tenant. Landlord shall not be liable to Tenant for any violation by any party of the Rules  and Regulations or the terms of any other Project lease. If there is any inconsistency between this Lease  (other than Exhibit B) and the then current Rules and Regulations, this Lease shall govern.   26.14 Force Majeure. The obligations of Tenant hereunder shall not be affected, impaired or  excused, and Landlord shall have no liability whatsoever to Tenant, with respect to any act, event or  circumstances arising out of (a) Landlord failing to fulfill, or delaying in fulfilling any of its obligations under  this Lease by reason of fire; earthquake; explosion; flood; hurricane; the elements; acts of God or the public  enemy; actions, restrictions, governmental authorities (permitting or inspection), governmental regulation  of the sale of materials or supplies or the transportation thereof; war; invasion; insurrection; rebellion; riots;  strikes or lockouts, inability to obtain necessary materials, goods, equipment, services, utilities or labor; or  any other cause whether similar or dissimilar to the foregoing; or (b) any failure or defect in the supply,  quantity or character of electricity, gas, steam or water furnished to the Premises, or by reason of any  requirement, act or omission of any public utility or others serving the Project, beyond Landlord's reasonable  control. Tenant shall not hold Landlord liable for any latent defect in the Premises or the Building nor shall  Landlord be liable for injury or damage to person or property caused by fire, or theft, or resulting from the  operation of heating or air conditioning or lighting apparatus, or from falling plaster, or from steam, gas,  electricity, water, rain, snow, ice, or dampness, which may leak or flow from any part of the Building, or from  the pipes, appliances or plumbing work of the same. Tenant agrees that under no circumstances shall  Landlord be liable to Tenant or any third party for any loss of, destruction of, damage to or shortage of any  property; including, by way of illustration and not limitation, equipment, goods or merchandise, including  Tenant's Property placed on the Premises or suffered to be placed thereon by Tenant, it being the intention  of the parties hereto that the risk of any and all such loss, destruction, damage or shortage shall be borne  by Tenant.  26.15 Waiver of Jury Trial. Landlord and Tenant each waive trial by jury in connection with  proceedings or counterclaims brought by either of the parties against the other with respect to any  matter whatsoever arising out of or in any way connected with this Lease, the relationship of  Landlord and Tenant hereunder or Tenant's use or occupancy of the Premises.   26.16 Attorneys' Fees. If Tenant fails to pay any Rent or other sum due and owing under this  Lease, and such sum is thereafter collected by or through an attorney at law, then, in addition to such sums,  Tenant shall also pay Landlord's reasonable attorneys' fees incurred in such collection. If either Landlord  or Tenant commences or engages in any legal action or proceeding against the other party (including,  without limitation, litigation or arbitration) arising out of or in connection with the Lease, the Premises, or  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 33  126965.00088.126059897.11  the Project (including, without limitation (a) the enforcement or interpretation of either party's rights or  obligations under this Lease (whether in contract, tort, or both) or (b) the declaration of any rights or  obligations under this Lease), the prevailing party shall be entitled to recover from the losing party  reasonable attorneys' fees, together with any costs and expenses, incurred in any such action or  proceeding, including any reasonable attorneys' fees, costs, and expenses incurred on collection and on  appeal.  26.17 Landlord's Fees. Whenever Tenant requests Landlord to take any action or give any  consent required or permitted under this Lease, Tenant will reimburse Landlord for all of Landlord's  reasonable and actual costs incurred in reviewing the proposed action or consent, including, without  limitation, attorneys', engineers' or architects' fees, within ten (10) days after Landlord's delivery to Tenant  of a statement of such costs. Tenant will be obligated to make such reimbursement without regard to  whether Landlord consents to any such proposed action.  26.18 Light, Air or View Rights. Any diminution or shutting off of light, air or view by any structure  which may be erected on lands adjacent to or in the vicinity of the Building and Project shall not affect this  Lease, abate any payment owed by Tenant hereunder or otherwise impose any liability on Landlord.  26.19 Counterparts. This Lease may be executed in one or more counterparts, each of which  shall constitute an original and all of which shall be one and the same agreement.   26.20 Nondisclosure of Lease Terms. Except as required by applicable laws or regulations, and  only to the extent necessary to satisfy such requirement, Tenant acknowledges and agrees that the terms  of this Lease are confidential and constitute proprietary information of Landlord. Disclosure of the terms  could adversely affect the ability of Landlord to negotiate other leases and impair Landlord's relationship  with other tenants. Accordingly, Tenant agrees that it, and its Agents shall not intentionally or voluntarily  disclose the terms and conditions of this Lease to any newspaper or other publication or any other tenant  or apparent prospective tenant of the Building, the Premises or the Project, without the prior written consent  of Landlord, provided, however, that Tenant may disclose the terms to prospective subtenants or assignees  under this Lease.   26.21 Joint and Several Obligations. If more than one person or entity executes this Lease as  Tenant, their execution of this Lease will constitute their covenant and agreement that: (i) each of them is  jointly and severally liable for the keeping, observing and performing of all of the terms, covenants,  conditions, provisions and agreements of this Lease to be kept, observed and performed by Tenant; and  (ii) the term "Tenant" as used in this Lease means and includes each of them jointly and severally. The act of or notice from, or the signature of any one or more of them, with respect to the tenancy of this Lease, including, but not limited to the exercise of any options hereunder, will be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted. 26.22 Anti-Terrorism. Tenant represents and warrants to and covenants with Landlord that (i)  neither Tenant nor any of its owners or affiliates currently are, or shall be at any time during the term hereof,  in violation of any laws relating to terrorism or money laundering (collectively, the "Anti-Terrorism Laws"),  including without limitation Executive Order No. 13224 on Terrorist Financing, effective September 24,  2001, and regulations of the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) related  to Specially Designated Nationals and Blocked Persons (SDN's OFAC Regulations), and/or the Uniting and  Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of  2001 (Public Law 107-56) (the "USA Patriot Act"); (ii) neither Tenant nor any of its owners, affiliates,  investors, officers, directors, employees, vendors, subcontractors or agents is or shall be during the term  hereof a "Prohibited Person" which is defined as follows: (1) a person or entity owned or controlled by,  affiliated with, or acting for or on behalf of, any person or entity that is identified as an SDN on the then- most current list published by OFAC at its official website,  http://www.treas.gov/offices/eotffc/ofac/sdn/t11sdn.pdf, or at any replacement website or other  replacement official publication of such list, and (2) a person or entity who is identified as or affiliated with  a person or entity designated as a terrorist, or associated with terrorism or money laundering pursuant to  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 34  126965.00088.126059897.11  regulations promulgated in connection with the USA Patriot Act; and (iii) Tenant has taken appropriate steps  to understand its legal obligations under the Anti-Terrorism Laws and has implemented appropriate  procedures to assure its continued compliance with such laws. Tenant hereby agrees to defend, indemnify,  and hold harmless Landlord, its officers, directors, agents and employees, from and against any and all  claims, damages, losses, risks, liabilities and expenses (including attorney's fees and costs) arising from  or related to any breach of the foregoing representations, warranties and covenants. At any time and from  time-to-time during the term, Tenant shall deliver to Landlord within ten (10) days after receipt of a written  request therefor, a written certification or such other evidence reasonably acceptable to Landlord  evidencing and confirming Tenant's compliance with this paragraph.  XXVII. OPTION TO EXTEND 27.1 Grant of Option and General Terms. Provided that (i) no material adverse change has  occurred in Tenant's financial condition, (ii) this Lease is in full force and effect, and (iii) no Event of Default  shall exist under this Lease beyond the applicable notice and cure period, either on the date Tenant  exercises its Renewal Option (as hereinafter defined) or as of the effective date of the Renewal Term (as  hereinafter defined), or would exist but for the pendency of any cure periods provided under Section 21.1  herein, Tenant shall have the option to extend the term of this Lease with respect to the entire Premises for  one (1) additional period (the "Renewal Option") of five (5) years (the "Renewal Term"). The Renewal Option  shall be subject to all of the terms and conditions contained in this Lease except that (iv) Basic Rent payable  in the first Lease Year of the Renewal Term shall be at the Market Rate, as determined pursuant to the  provisions of this Article XXVII and shall increase by not less than 3% annually in each Lease Year of the  Renewal Term; (v) Landlord shall have no obligation to improve the Premises; and (vi) there shall be no  further option to extend the term of the Lease beyond the expiration of the Renewal Term.  27.2 Determination of Market Rate. Tenant shall send Landlord a preliminary expression of  Tenant's willingness to renew this Lease no earlier than three hundred sixty-five (365) days prior to the  Expiration Date of this Lease and no later than two hundred seventy (270) days prior to the Expiration Date  of this Lease (the "Renewal Notice").   (a) If Tenant timely delivers the Renewal Notice, Landlord and Tenant shall negotiate in good faith to determine and mutually agree upon the Market Rate for the first Lease Year of the  Renewal Term. If Landlord and Tenant are unable to agree upon the Market Rate within thirty (30)  days following Tenant's delivery of the Renewal Notice (the "Negotiation Period"), as evidenced by  an amendment to the Lease executed by both Landlord and Tenant, then within five (5) business  days after the last day of the Negotiation Period, Tenant may, by written notice to Landlord (the  "Notice of Exercise"), elect to exercise such Renewal Option by delivering the Notice of Exercise  to Landlord stating that Tenant is exercising its right to extend the Term pursuant hereto. If Tenant  shall fail to deliver the Notice of Exercise on or before five (5) business days after the last day of  the Negotiation Period, then Tenant shall have waived any right to exercise the Renewal Option  and the Lease shall expire upon the Expiration Date.   (b) If Tenant timely delivers the Notice of Exercise to Landlord, Landlord and Tenant shall each simultaneously present to the other party their final determinations of the Market Rate  for the Renewal Term (the "Final Offers") within ten (10) business days thereafter. If the Market  Rate stated in the lower of the two (2) proposed Final Offers is not more than ten percent (10%)  below the Market Rate stated in higher, then the Market Rate shall be determined by averaging the  two (2) Final Offers. If the difference between the lower of the two (2) proposed Final Offers is more  than ten percent (10%) below the higher, then the Market Rate shall be determined in accordance  with the procedure set forth below.  27.3 Within twenty (20) days after Landlord's receipt of Tenant's Notice of Exercise, Tenant and  Landlord shall each select a third party broker licensed in the State of Nevada with at least five (5) years of  experience with industrial leasing in the Las Vegas market area, and the brokers selected by Landlord and  Tenant shall mutually select a third broker, similarly qualified and who was not previously engaged by either  Landlord or Tenant in connection with this Lease or the negotiation of Market Rate for the Renewal Term,  

 

PRIORITY FULFILLMENT SERVICES, INC./2255 W. CHEYENNE AVE – Page 35  126965.00088.126059897.11  within five (5) days thereafter (the "Third Broker"). The Third Broker shall, after due consideration of the  factors to be taken into account under the definition of Market Rate set forth above and hearing whatever  evidence the Third Broker deems appropriate from Landlord and Tenant, and obtaining any other  information the Third Broker deems necessary, in good faith, make its own determination of the Market  Rate for the Premises as of the commencement of the Renewal Term (the "Broker's Determination") and  thereafter select either Landlord's Final Offer or the Tenant's Final Offer, but no other, whichever is closest  to the Broker's Determination (the "Final Determination"), such Final Determination to be made within fifteen  (15) days after the appointment of the Third Broker. The Broker's Determination, Final Determination and the market information upon which such determinations are based shall be in writing and counterparts thereof shall be delivered to Landlord and Tenant within said fifteen (15) day period. The Third Broker shall have no right or ability to determine the Market Rate in any other manner. The costs and fees of the Third Broker shall be paid by Landlord if the Final Determination shall be Tenant's Final Offer or by Tenant if the Final Determination shall be Landlord's Final Offer. Notwithstanding anything to the contrary contained herein, either Landlord or Tenant may, within ten (10) days after receipt of the Final Determination, elect to reject the Final Determination, in which case Tenant's exercise of the Renewal Option shall be deemed null and void and this Lease shall expire on the Expiration Date stated herein. If any date referenced in this Article XXVII falls on a day other than a business day, such date shall be deemed to be the next following business day. Notwithstanding anything contained herein to the contrary, the Final Offers, or the Broker's Determination, the Market Rate for the first Lease Year of the Renewal Term shall not be less than 103% of the Basic Rent in the last month of the initial term of this Lease. 27.4 Personal Option. This Renewal Option is personal with respect to the Tenant named in  this Lease and shall automatically terminate upon any assignment of this Lease or subletting of the  Premises, other than an assignment to a Related Entity made in accordance with Section 9.4.  Signature Page Immediately Follows.  

 

SIGNATURE PAGE  126965.00088.126059897.11  IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease as of the day and  year first above written.  LANDLORD: TENANT:  CHEYENNE CLAYTON DRI, LLC, PRIORITY FULFILLMENT SERVICES, INC.,  a Delaware limited liability company a Delaware corporation  By: By:  Name:   Name:    Title:   Title:   Authorized Signatory

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