Relating to purchase of: APARTMENTS 58, 60, 63 and 64. Vista Tower. St George s Way. Stevenage SG1 1HG. Prepared for: THE DIRECTORS OF

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1 Relating to purchase of: APARTMENTS 58, 60, 63 and 64 Vista Tower St George s Way Stevenage SG1 1HG Prepared for: THE DIRECTORS OF PPNL SPV B37-1 Limited [Redacted for identity of parties and insured risks that may invalidate insurances] 1

2 1. Purchase price and other contract terms The main terms of the contracts are set out below:- 1.1 You have agreed to purchase four flats (the 'Apartments') within the development known as Vista Tower, St George's Way, Stevenage, Hertfordshire, SG1 1HG (formerly known as Southgate House) (the 'Block'). The agreed purchase prices are: Apartment No. Purchase Price Deposit ,000 23, ,250 23, ,250 23, ,000 22,600 The sellers are the original developers and freehold owners of the Block. 1.2 The contract includes a provision that you will pay to the sellers a documentation fee in the sum of plus VAT in respect of the engrossment of the lease and counterpart and the sum of plus VAT in respect of the buyer's notice of charge per Apartment. 1.3 As mentioned in the schedule above, each contract also includes a provision that the deposit of 10% will be payable on exchange of contracts. 1.4 The Block is in the course of being converted from an office building into 73 Apartments over 14 floors. We have received evidence of planning for the conversion into 74 flats in total. 1.5 We have received confirmation (dated 6 June 2014) that Notification of Prior Approval is not required for the proposed development of 65 dwellings (utilising all floors except floor 7). 1.6 We have received copies of five Decision Notices related to the development. This includes a decision approving the change of use of the mezzanine floor to 2 x two beds and 2 x one bed flats and one approving the change of use from D1 to 5 flats making a total for 74 flats including the 65 flats referred to above. 1.7 The sellers agree to construct the Block including the Apartments in accordance with the Specification, the standards required by the CRL 10 year warranty provider and all planning permissions and building regulations approvals and other statutory requirements. The seller agrees to make available on or before the legal completion date, a Building Control Final Certificate for the Apartments. 1.8 The legal completion date will be 15 working days after the sellers have given written notice to the buyer that the Apartments will be ready for occupation and use. The Building Control Completion Certificate and CRL Certificate or cover note will be available on or before completion, confirming that the property is substantially completed i.e. the Apartments will be completed in all major respects and capable of occupation on completion. There may be 2 1LB

3 outstanding matters of a minor nature, not affecting the occupation of the Apartments, including but without limitation such matters as small items or parts of fittings which remain to be fitted or adjusted, paintwork or varnish which require touching up and common parts needing to be decorated and/or carpeted. The seller agrees they will complete or rectify such minor outstanding matters as soon as reasonably practicable following completion, provided the buyer agrees where necessary to allow access to the Apartment for that purpose. The buyer acknowledges that if such access is unreasonably refused then the company's obligations shall be deemed to have been fulfilled without further liability to the Seller or the right to claim compensation or loss. 1.9 In the event of delayed completion on the part of the buyer, the rent and all other monies payable under the lease will be payable with effect from the completion date together with interest at the contract rate, 4% above the base rate of National Westminster Bank Plc If the notice for the legal completion date has not been served by the 31 st July 2017 then the buyer may at any time thereafter (but not after notice for the legal completion date has been served) give notice in writing to the seller to rescind the agreement. Upon service of the notice, the seller will return all deposits held to the buyer without any costs, compensation or other payment within five working days The seller agrees to provide the home warranty for the benefit of the buyer and shall deliver to the buyer a CRL 10- year warranty in respect of the property on completion On completion a new lease will be granted to you in respect of each individual Apartment and you will receive vacant possession. The premiums to be inserted within the individual five leases are as set out in the schedule above The sellers are the registered proprietors of the freehold interest in the land registered at Land Registry You agree to pay an apportionment of the service charge and ground rent as defined within the lease from the completion date to the next due payment date You may not rely on any representation or warranty made by the seller unless it is contained in a written statement issued by the seller s solicitor. Please advise us immediately if the seller has advised you of any matter which has influenced your decision to enter into the transaction so that we may confirm the position with the seller s solicitor The contract provides that the buyer is not entitled to assign, mortgage, charge or enter into any lease or tenancy agreement or declaration of trust of the whole or any part of the property, nor assign, mortgage or charge the interest of the buyer hereunder or be entitled to possession or occupation of the same. Nor will the seller be required to procure the grant of any lease or other deed or document other than the lease hereinbefore referred to in favour of the buyer. There is therefore no provision for assignment of the contract and you will need to complete the grant of the lease in the name of the buyer The solicitors are entitled to make a charge of up to 50 to administer the stakeholder deposit, i.e. to be retained in the seller's solicitor's account The contract includes the provision that the seller may use alternative or substitute materials in the construction of the Block and to vary the construction or specification. The buyer will not be entitled to raise any objection, provided the buyer shall not as a result be required to 3

4 accept an Apartment substantially different from that specified, or for the value of that Apartment to be substantially affected by the alternative or substitute materials The contract provides that the seller reserves the right to vary the plan if a later survey shows the plan to be incorrect as to boundaries, location of buildings etc. It is important that you inspect the property and check any lease plans or plans available with the site on the ground and satisfy yourself that they are accurate at this stage. The contract also provides that the buyer has had the opportunity to inspect the Apartment and the boundary walls and fences prior to completion and no complaint can be made afterwards. 2. The Property 2.1 You are acquiring four leasehold interests and we will apply to register the four new leases following completion of your purchase, at Land Registry. New leasehold title numbers will be issued in respect of each of the Apartments. 2.2 The freehold title for the Block as a whole includes a right of access along the road known as Southgate Road. Such right of way ceases as soon as the road is adopted by the Local Authority. The local search received confirms that St George's Way and Six Hills Way, are all highways maintained at public expense by Hertfordshire Highways. Vista Tower/Southgate House is privately maintained as far as roadways and pathways are concerned. Southgate Road, Towers Road and Eastgate are maintained by Stevenage Borough Council. 2.3 The Official Copy Register of Title relating to the freehold contains covenants set out in the Charges Register. This also refers to a lease dated 30 June 1965 to Eastern Electricity Board for 99 years from 1 June This lease contains rights of way over the land tinted blue, tinted mauve and hatched blue on the filed plan over Southgate Road, and over all other private roads vested in the freehold to and from the nearest public highway. The lease also grants rights to lay and maintain, respect, renew, use, alter and remove electric cables and conduits or pipes under the land hatched brown on the filed plan. 2.4 The freehold land is also subject to a term of 25 years from 25 December 1989 to rights reserved by a lease dated 25 March 1990 including emergency access and rights of way without interference through the property in the event of fire or emergency and to carry out works or alterations to the title. 3. Search Results 3.1 Local Authority Search A search of the local land charges register shows matters such as compulsory purchase orders, tree preservation orders, planning enforcement notices and financial charges registered against a property. You should note that the search result provides a snapshot of the register on the date of the search. Local land charges registered after the date of the search will still bind a property We have received a local search in relation to the development as a whole and this confirms:- 4 1LB

5 St George's Way, Six Hills Way, Southgate Towers Road and Eastgate are all maintained by Hertfordshire Highways and Stevenage Borough Council. The accessways and roads within Vista Tower itself are private. The Land Charges Register refers to the various planning charges and permissions relating to the site. On 18 February 2015, the various conditions attached to the planning permission for the external alterations were lodged with approved plans. The planning permissions include the addition of balconies on the east and west elevations of floors 1 to 14. The planning permission registered on 22 April 2015 provides that prior to commencement of the development, a noise attenuation scheme to protect the new residential units from road traffic noise was to be submitted to and approved in writing by the local Planning Authority. Several other conditions were imposed and registered on the 11 August 2015 including approval of the cycle storage facilities to be submitted to and agreed in writing by the local Planning Authority, together with the refuse storage facilities to be approved and agreed before the flats are occupied. There is a Smoke Control Order in place in the borough providing that only smokeless fuel may be burnt at the premises. There is a Schedule of Building Regulations Approvals in relation to the development which includes the registration of the acceptances of the initial notices relating to floors 1 to 14. We understand the property is still in the course of construction/refurbishment. 3.2 Thames Water Residential Drainage and Water Search The replies to drainage and water enquiries show whether a property is connected to the mains water supply and mains drainage. The replies may also show the location of public sewers within the boundary of a property and other such matters that may restrict development As this is a new development the seller has confirmed that the building will be connected to the mains water supply and that foul water will run to a public sewer. 3.3 Environmental Search If a local authority determines that land is contaminated, and the party who caused or knowingly permitted the contamination cannot be found, the current owner or occupier of the land may be required to remedy the contamination. This can be an expensive process, so it is important to assess the risk of land being contaminated before committing to buy a property An environmental data search can be used to establish the risk of land being contaminated, by collating information from regulatory bodies, floodplain data and a review of current and historic land uses. This type of search is also known as a "desktop search". An environmental data search does not include a site visit or testing of soil or groundwater samples. 5

6 3.3.3 We have received a search result for Southgate House, Southgate (the previous name of the Block). The results of the search show that the property is unlikely to be classed as contaminated land. 4. Replies to Pre- Contract Enquiries 4.1 We have received copies of the Law Society Property Information form and Leasehold Information form completed by the sellers. We would highlight the following: The building is in the process of being converted from an office building into residential flats. The windows will all be replaced in the course of the conversion and Building Control completion documents will be provided on practical completion No damp proofing or timber treatment was necessary to the building. The final Certificates for electrical works and the replacement of any windows will follow in accordance with the Building Control Completion Certificate. The replies also indicated that the roof has not been renewed Energy Performance Certificates will follow for all of the flats Details of the utility supplies will follow A copy of the buildings insurance schedule for the block has been received. Details of the managing agents for the freeholder will follow. 5. Survey We have not received a copy of a survey. 6. Stamp Duty Land Tax The purchase of the property is subject to Stamp Duty Land Tax. 7. The Limitations of this Report 7.1 This report has been prepared exclusively for you and may not be relied on by any other party including shareholders. 7.2 In accordance with our normal practice when acting on purchases of property of a similar kind to the Property, we have not inspected the Property. 7.3 Accordingly, any statements made in this report in relation to matters concerning the physical aspects of the Property (such as, but not limited to, surveys and environmental reports) are made only on the basis of written information received from third parties and without liability attaching to us. 6 1LB

7 7.4 We have only made general statements as to the law concerning tax and planning matters. Should you require further clarification or specific advice in these areas, please let us know and we shall be happy to put you in touch with our relevant specialists in those areas. 7.5 In addition, we have made the following assumptions: that you are happy with the physical condition of the Property; that if you propose carrying out works to the Property you are aware of the potential requirements for planning permission and for various other consents that may be required in relation to those works; and that you have understood and are happy with the matters set out in this report. HOWARD KENNEDY LLP 7