Standard Lease of Internal Substation

15 April 2016 (internal)

DATED 201

[]

to

[] Power Networks plc

L E A S E

Of electricity substation chamber at

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LAND REGISTRY PRESCRIBED CLAUSES

THIS LEASEmade on the date and between the parties stated in the Land Registry prescribed clauses

1. DEFINITIONS AND INTERPRETATION

In this lease the following definitions shall apply:

1.1"Blue Land" "Brown Land" “Green Land” and "Yellow Land" mean the land so coloured on the Plan [together with the part also hatched black] which form part of the Landlord’s Property (if any such colours are shown on the Plan)

1.2"Demised Easements" means the rights set out in Part 2 of Schedule 1

1.3"Demised Premises" means part of the Landlord’s Building described in Part 1 of Schedule 1 shown coloured pink on the Plan

1.4"Electric Line" has the meaning given in Section 64(1) of the Electricity Act 1989 including all communication cables used in connection with the Undertaking

1.5"Electrical Plant" has the meaning given in Section 64(1) of the Electricity Act 1989)

1.6"Estate Roads and Footpaths" means the whole or any part of any of the following, irrespective of whether it is a thoroughfare:

(a)any highway, road, lane, footway, alley or passage;

(b)any square or court; and

(c)any land laid out as a way whether it is for the time being formed as a way or not,

(including verges) so far as they lie within the Landlord's Property

1.7“Group Company” means a company which is a member of the same group as the Tenant within the meaning of section 42 of the Landlord and Tenant Act 1954 and which also holds a licence granted under section 6(1)(c) of the Electricity Act 1989

1.8"Landlord" means the party named as Landlord in the Land Registry prescribed clauses and shall include any person or body for the time being entitled to the reversion immediately expectant on the determination of the Term

1.9"Landlord’s Building" means the building constructed or in the course of construction by or on behalf of the Landlord on the Landlord’s Property

1.10"Landlord’s Property" means the land contained within the Landlord’s title number referred to in LR2.1

1.11"Plan" means plan number [ ] annexed

1.12"Tenant" means the party named as Tenant in the Land Registry prescribed clauses and shall include its successors

1.13"Term" means the term of years created by this lease together with any statutory continuation of it

1.14“Undertaking" means an electricity distribution business licensed under section 6(1)(c) of the Electricity Act 1989 carried on by the Tenant or any Group Company

and the following rules of interpretation shall apply:

1.15A reference to a statute or statutory provision includes any amendment, extension or re-enactment of it and any subordinate legislationand all orders, notices, codes of practice and guidance for the time being in force made under it

1.16Any obligation on a party not to do something includes an obligation not to agree to or knowingly permit that thing to be done

1.17Unless the context otherwise requires, where the words "include(s)" or "including" are used in this lease, they are deemed to have the words "without limitation" following them

1. DEMISE

The Tenant has paid the Landlord ONE POUND (£1) on the date of this lease and agreed to enter into the covenants in this lease and in exchangefor such valuable consideration the Landlord hereby leases to the Tenant with full title guarantee all of the Demised Premises TOGETHER with the Demised Easements which are granted for the benefit of the Demised Premises and the Undertaking and which may be exercised by the Tenant and all those authorised by it for the Term of 99 years from today at an annual rent of [a peppercorn (if demanded)].

1. TENANT’S COVENANTS
2. The Tenant covenants with the Landlord that it will:

(a)pay the reserved rent (if demanded) without any deduction on [1 January] in every year and the first payment to be made on the date of this lease

(b)indemnify the Landlord against liability for any rates and taxes which may now or in the future be separately levied upon the Demised Premises provided that the Landlord gives the Tenant prompt notice in writing of

(i) the receipt of any demand for rates in respect of the Demised Premises; and

(ii) any proposal for the separate assessment of rates whether made by the Landlord or any third party

(c)not use the Demised Premises otherwise than for the purposes of an electrical transformer substation

(d)not assign underlet or part with or share the possession of the whole or any part of the Demised Premises except that the Tenant may without the consent of the Landlord:

(i)assign or underlet the whole of the Demised Premises to any company or body to which the operation of the Undertaking is transferred; and

(ii) share the occupation of the whole or any part of the Demised Premises with a company that is a Group Company for so long as it remains a Group Companyand there is no transfer or creation ofa legal estate

(e)make good all damage caused during the exercise of the Demised Easements to the Landlord’s Building to the reasonable satisfaction of the Landlord

(f)keep the Demised Premises in a clean and tidy condition and in tenantable repair

(g)comply with all relevant statutory requirements in relation to its occupation and use of the Demised Premises and the operation of the Electric Lines and the Electrical Plant

(h)give the Landlord reasonable prior notice of its intention to carry out works to the Landlord's Property pursuant to the Demised Easements except in the case of emergency when no notice is required

(i)at the end of the Term (however it expires) remove the Electrical Plant from the Demised Premises and decommission and make safe the Electric Lines and make good the Demised Premises (but without being obliged to replace interior surfaces of the Demised Premises)

(j)insure with a reputable insurer (or self-insure) against third party and public liability and produce to the Landlord on demand (but no more than once a year) evidence of such insurance

3.2

(a) The Tenant will indemnify the Landlord against all damage costs expenses proceedings and liabilities ("Claims") that at the date of this lease are the reasonably foreseeable consequence of any negligence or other wrongful act or omission that:

(i)is a breach of the terms of this lease; or

(ii) arises in the exercise of any of the Demised Easements

except such Claims which arise out of the negligence or wrongful act or omission of the Landlord its servants or agents

(b)The Landlord shall in relation to any Claims:

(i)give to the Tenant written notice as soon as practicable after the Landlord becomes aware of them;

(ii)not admit liability to any third party or make any offer to settle a Claim without the consent of the Tenant (such consent not to be unreasonably withheld or delayed);

(iii)allow the Tenant to conduct in the name of the Landlord any litigation or other dispute resolution process andgive the Tenant such assistance and co-operation as the Tenant may reasonably request,the Tenant paying the fair and reasonable costs of the Landlord of doing this; and

(iv)take all reasonable steps to mitigate any loss

(c)If the Landlord subsequently recovers(in whatever form) a sum that is directly referable to the event giving rise to the Claims the Landlord shall immediately pay to the Tenant the sum that is the lesser of:

(i)an amount equal to the sum recovered (less any out-of-pocket costs and expenses properly incurred by the Landlord in recovering the same); and

(ii)the amount paid by the Tenant under this indemnity

1. LANDLORD’S COVENANTS

The Landlord covenants with the Tenant that it will:

4.1Allow the Tenant topeacefully enjoy the Demised Premises and the Demised Easements throughout the Term without any interruption or disturbance by the Landlord or any person claiming by through under or in trust for the Landlord or by title paramount

4.2Keep the walls roof foundations and structure of those parts of the Landlord's Building on which the Demised Premises rely for support and protection and all cisterns water pipes and other apparatus within the Demised Premises in good repair and condition

4.3Keep those parts of the Landlord's Building adjoining and beside the Demised Premises which are not expressly referred to in sub-clause 4.2 above (including the means of support shelter and protection which benefit the Demised Premises) and all cisterns water or drain pipes and sewers and gutters and other conducting media in or under the Building in such a state of repair and condition as not to cause damage to the Demised Premises, the Electrical Plant and the Electric Lines or other works installed constructed or laid by the Tenant in or on the Demised Premises or in the ducts

4.4Not interfere with any Electrical Plant, Electric Lines or other works installed constructed or laid by the Tenant in on under over or about the Demised Premises or the Landlord’s Building or in the ducts nor interfere with or obstruct the free flow of air to from and through the louvred ventilators to the electrical transformer substation and in particular not place or stack anything whatsoever near the doors to the Demised Premises so as in any way to block obstruct or prevent the free opening of those doors

4.5Not remove alter or cut through the walls bounding or the ceiling over or the floor of the Demised Premises or any part thereof

4.6With the intention of binding all parts of the Brown Land and the Yellow Land in order to benefit and protect the Demised Easements:

(a)not do anything which would interfere with or damage any Electric Line (or its ducts ) retained or laid by the Tenant in the exercise of the Demised Easements and take all reasonable precautions to prevent such damage or injury;

(b)not either alter or cover the existing level or surface of the Brown Land and/or the Yellow Land in such a way as to make the laying of or access to any Electric Line or ducts impracticable or more difficult than it is at the date of this lease but the Landlord shall not be prevented from laying and/or re-laying appropriate surfaces on any part of the Brown Land and/or the Yellow Land which forms any intended or existing road or footpath or other access way after the initial laying of Electric Lines pursuant to the Demised Easements

4.7To observe and perform the covenants obligations and conditions set out in Part 2 of Schedule 2 when exercising its right to enter the Demised Premises

1. PROVISOS

The parties agree as follows:

5.1That if any material covenants on the part of the Tenant are not substantially performed or observed despite the Landlord giving the Tenant notice of the breach and a reasonable period of time in which to remedy the breach then the Landlord may re-enter all or part of the Demised Premises and with immediate effect this lease shall determine but without prejudice to

(a) any right of action of either party in respect of any antecedent breach of any covenant by the other party; or

(b) the right of the Tenant to enter the Demised Premises and to remove all apparatus equipment Electric Lines or other works and property of the Tenant

5.2All Electrical Plant Electric Lines and other equipment to be provided installed laid or fixed by the Tenant in on through under or over any part of the Demised Premises or in the ducts or under the Brown Land and the Yellow Land and the Estate Roads and Footpaths or any of them at any time shall be and remain the property of the Tenant who may exchange vary or remove them at its absolute discretion at any time and may remove them at the expiration or sooner determination of the Term making good any damage to the reasonable satisfaction of the Landlord

5.3

(a)Any notice served under or in connection with this lease is to be in writing and be treated as properly served if compliance is made with the provisions of Section 196 of the Law of Property Act 1925 (as amended by the Recorded Delivery Service Act 1962) unless inconsistent with the express provisions of this lease whereupon such express provisions shall prevail and in the case of the Tenant it is served on the company secretary at the Tenant’s then registered office

(b)A notice will not be deemedserved under this lease if it is left for the Tenant on or in the Demised Premises or if it is left for the Landlord on the Landlord’s Property

5.4The Tenant shall apply to the Land Registry to register this lease and bothparties shall deal promptly and properly with any requisitions raised by the Land Registry

5.5Nothing contained in this lease shall prejudice, restrict or otherwise affect the statutory rights, powers and duties of the Tenant as an electricity distribution network operator or the means by which it exercises those rights and powers or performs those duties pursuant to its Undertaking

5.6The Landlord will on the written request of the Tenant made not less than six months before the expiration of the Term grant to the Tenant, a lease of the Demised Premises for a further term of 60 years from the expiration of the Term at no premium and containing the same covenants and conditions as are contained in this lease with the exception of this option to renew and the Tenant will on the execution of such renewed Lease by the Landlord execute a counterpartit

5.7The Tenant may determine the Term at any time after the date on which the Tenant ceases permanently to require the Demised Premises for use as an electrical transformer substation by the Tenant giving to the Landlord not less than three months’ previous notice in writing to that effect and upon expiration of such notice the Term shall cease and determine but without prejudice to the rights and remedies of either party against the other in respect of any breach of the covenants and agreements in this lease but the Tenant shall be permitted access to the Demised Premises after the determination of the Term for a reasonable period of time to comply with its obligations in clause 3.1(i)

1. Contracts (Rights of Third Parties) Act 1999

Nothing in this lease creates any rights benefiting any person under the Contracts (Rights of Third Parties) Act 1999 other than a Group Company

This lease takes effect from the date stated in the Land Registry prescribed clauses

SCHEDULE 1

Part 1

The Demised Premises

The transformer chamber shown edged in pink on the Plan including:

(a)all additions alterations and improvements to the Demised Premises made at any time;

(b)the doors door frames equipment and fitments serving the Demised Premises;

(c)the internal plaster and other surfaces of load bearing walls and columns within the Demised Premises and of walls dividing the Demised Premises from other parts of the Landlord's Building or any adjoining property;

(d)the whole of all non-load bearing walls within the Demised Premises;

(e)the plaster or other surfaces of the ceilings within the Demised Premises;

(f)the floor screed

but excluding the structural floor slab and other structural parts supporting the flooring of the Demised Premises [and excluding the concrete plinth][1], structural parts load bearing framework roofs foundations joists and external walls and all Landlord's fixtures and fittings and plant equipment and machinery within but not exclusively serving the Demised Premises