HEADS OF TERMS FOR SURRENDER OF
THE EXISTING LEASE AND GRANT OF A NEW LONG LEASE AT
LONGLEY
[DRAFT FOR DISCUSSION ONLY
– BHCC FULLY RESERVES ITS POSITION IN RELATION TO ANY
COMMERCIAL POINT SET OUT BELOW]
SECTION A – AGREEMENT FOR
SURRENDER AND LEASE
(a) Maplebright will assign the
existing lease to L&G after L&G has secured satisfactory
planning permission for the proposed development of the Property
and L&G will then immediately surrender the existing lease and
BHCC will accept the surrender.
(b)
BHCC will immediately
following the surrender grant a new lease to L&G on the
following heads of terms. These heads of terms are not intended to
create any legally binding obligations. They are subject to
contract.
(c)
The heads of terms are
confidential to the intended parties to the proposed sale and to
their professional advisors.
(d) The documentation for the proposed
sale may contain further terms as BHCC may require, including
additional terms on matters that are covered in this
document.
Agreed terms
1.
Seller: Brighton & Hove City Council of Hove Town Hall,
Norton Road, Hove BN3 3BQ
2.
Buyer: Cetza Trustees V3 Limited and
Cetza Trustees V4 Limited, each a company incorporated under the
laws of Jersey with registered numbers 118521 and 118522
respectively, and each of whose registered office is at 11-15
Seaton Place, St Helier JE4 0QH in their capacity as joint trustees
of the Longley House Unit Trust
3.1
The Property is the
land contained within title number ESX81326.
3.2
The Seller will grant
a new 250 year lease to the Buyer.
4.
Premium for the new
lease
4.1
The parties note that
the premium which the Buyer will pay to Maplebright for the
assignment of the lease is not covered by these HOT.
4.2
The premium which will
be paid by the Buyer to the Seller for the new lease will be
£[Redacted] , exclusive of any VAT (which is not due as the
Property is not elected for VAT) that may be payable on the
transaction, subject to any adjustment in accordance with paragraph
4.3, below.
4.3
[Redacted]
5.1
The parties will
endeavour to exchange contracts within 4 weeks of the Seller's
conveyancer having received the contract documentation from the
Buyer's conveyancer.
5.2
Completion will take
place on or before 15 working days after the satisfaction of the
Conditions Precedent (see below).
6.1
Completion will be
conditional upon the satisfaction of both of the following
conditions prior to a longstop date to be set out in the
contract:
(a)
the Buyer obtaining
Satisfactory Planning Permission for the permitted use which
remains in place after the expiry of the judicial review
period
(b)
the provision by the
Buyer to the Seller of evidence that the Buyer has internal or
third party funding available, which is of an amount which would
enable the development to be lawfully and fully constructed and
occupied, and which is satisfactory to the Seller (acting
reasonably)
Note, that there will be no
provision for the condition(s) precedent to be waived by the
Buyer.
6.2
If the Conditions
Precedent are not satisfied within 18 months from the date of
exchange, the Seller may terminate the agreement, save where the
judicial review period has not expired or where there is an appeal
that is in progress in which case the longstop date shall be
extended until the appeal is finally determined and/or the JR
period has expired and there have been no challenges or any
challenges have been finally dealt with.
7.1
On the Completion
Date:
(a)
the existing lease
will be assigned by Maplebright to the Buyer;
(b)
the existing lease
will immediately be surrendered by the Buyer and the Seller will
accept the Surrender
(c)
the Seller will grant
to the Buyer a new 250 year lease on the terms set out in Section B
(below).
8.
Planning
Provisions
8.1
Within 2 months of the
date of these Heads of Terms, the Buyer may submit the draft
Planning Application to the Seller for approval.
8.2
Where the Buyer has
submitted such draft Planning Application for approval, the Seller
shall respond within 20 Working Days to approve the Planning
Application (and if it doesn’t respond within such period of
time, it shall be deemed to have approved the Planning Application)
and shall only withhold or delay giving approval to any draft
planning application submitted to it if that draft planning
application does not satisfy the Agreed Requirements.
8.3
The Agreed
Requirements are that the scheme provides a minimum of 3000 sq m of
lettable B1 employment space and 200 residential units. In
all circumstances the draft Planning Application must clearly
specify the areas in square feet that are to be subject to
different use classes (B1, C3 etc).
8.4
Within 15 Working Days
after the Seller has approved in writing the draft Planning
Application, the Buyer shall submit the Planning Application to the
Planning Authority and shall use their reasonable endeavours to
obtain the grant of a Satisfactory Planning Permission as soon as
reasonably possible. Satisfactory Planning Permission will
have the same meaning as in the contract between the Buyer and
Maplebright – to be provided separately.
8.5
If it appears
necessary to obtain a Satisfactory Planning Permission, the Buyer
may amend the Planning Application or withdraw and submit in
substitution a revised Planning Application. Any such amendment,
withdrawal and substitution shall be approved in writing by the
Seller only where there is a change to any of the Agreed
Requirements (such approval not to be unreasonably withheld or
delayed and a response provided within 20 Working Days of a request
for approval and the Seller shall be deemed to have approved the
change if it does not respond within this period).
8.6
If requested by the
Buyer, the Seller shall enter into any Planning Agreement in its
capacity as landowner provided that the Planning Agreement does not
contain any obligation or restriction which has the effect that the
Development no longer meets the Agreed Requirements and any
liabilities of the Seller in the Planning
Agreement:
(a)
being expressed to be
dependent on the implementation of the Planning Permission;
and
(b)
ceasing on disposal of
the Seller's interest in the Property.
8.7
The Buyer shall keep
the Seller indemnified against all liabilities, proceedings, costs,
claims, demands and expenses incurred or arising as a result of a
Planning Agreement.
8.8
The Buyer shall have
discretion as to whether they wish to submit a planning appeal
following a refusal of the Planning Application, but the contract
shall expire if there is no appeal.
9.
Costs
Each party is responsible for its
own legal costs in connection with the transaction.
Section B – Long
Lease
Landlord: Brighton & Hove City
Council
Tenant: CETZA 3 and CETZA 4
Term: 250 years
Rent: Peppercorn
Alienation/Assignment:
the Tenant is not to
assign, underlet, transfer, charge, share or part with possession
of any part of the land, save that the Tenant shall be permitted to
enter into Authorised Disposals until the development has been
practically completed. After practical completion, the Tenant is
free to deal with the Property as it sees fit and to assign, charge
or underlet without the Council's consent provided that assignment
of part is not permitted.
Alterations:
the Tenant shall not
make any alterations to the building which increase the height of
the building by a further four storeys beyond the height of
the building at the commencement of the lease.
Authorised
Disposals: either the grant of an under lease
to the purchaser of an individual residential unit, or the charging
of the Property to a person, firm or company providing finance for
the acquisition of the land and the construction of the development
or the grant of commercial leases at open market rent and on
standard market terms.
Development
Requirements: any development must be carried
out in accordance with the Planning Permission and Section 106
Agreement, together with all other requisite consents.
Force
Majeure:
(a)
the discovery of fossils or antiquities on or in excavating the
Premises during the progress of the Development and any
instructions issued in relation to them by the Landlord or any
competent authority;
(b)
exceptionally adverse weather conditions (which shall mean weather
conditions that occur on average less frequently than once in ten
years at the Premises, assessed by reference to the Met
Office’s records);
(c)
fire, frost, explosion, lightning, storm, tempest, flood, bursting
or overflowing of water tanks, apparatus or pipes, ionising
radiation, earthquakes, epidemic, natural physical disaster,
aircraft and other aerial devices or articles dropped
therefrom;
(d)
physical obstructions in the ground at the Premises which would
have been unforeseeable by a contractor experienced in carrying out
works of a similar scope, complexity, value and nature to the
Development;
(e)
pressure waves caused by aircraft or other aerial devices
travelling at sonic or supersonic speeds;
(f)
the exercise by the United Kingdom Government of any statutory
power which directly affects the execution of the
Development;
(g)
except to the extent caused by the Tenant, any negligence, breach
of contract, breach of statutory duty, breach of this Lease or
other default by the Landlord or any person for whom it is
responsible in connection with this Lease;
(h)
any delay arising in relation to rights of light;
(i)
epidemic or pandemic, terrorist attack, civil war, civil commotion
or riots, war, threat of or preparation for war, armed conflict,
imposition of sanctions, embargo, or breaking off of diplomatic
relations, nuclear, chemical or biological contamination, damage or
destruction by an Insured Risk;
(j)
insolvency of the building contractor carrying out the
Development;
(k)
preparation and submission of a new planning application and
receiving planning permission for rebuilding following damage or
destruction of the Development prior to practical
completion;
(l)
except to the extent caused by the Tenant, any denial of use of,
failure or shortage of power, fuel or transport and/or
non-availability of labour, materials and/or plant and equipment to
complete the Development in accordance with the Planning Permission
which endures for a longer period than 4 hours in any 24 hour
period;
(m)
any delay caused by the carrying out of work by any statutory
undertaker, utility company, service provider or other entity
discharging the rights and obligations of a statutory undertaker or
utility company of work in pursuance of statutory obligations in
relation to the Development and/or the carrying out of any work by
any statutory undertaker or utility company or service provider or
other entity in relation to the Development, or the failure to
carry out such work or provide services.
Forfeiture:
the Landlord shall be
entitled to forfeit the lease if (1) there shall be a material
breach, non performance or non observance of the terms of the lease
which the Tenant shall fail to remedy within a reasonable period of
time from service of a written notice specifying the
same,
Longstop Date:
five (5) years from
the date of the Lease, extendable by Force Majeure and by agreement
between the parties.
Landlord's Options to
break:
Where the Tenant has not completed
the building works (and received a certificate of practical
completion in respect of the works) by the Longstop Date (subject
to Force Majeure) the Landlord may by written notice break the
lease.
In compensation for exercising
either option the landlord shall pay to the tenant a sum being the
lesser of: (1) the value of the site on the date on which the
Option to Break notice is served or (2) the Premium.
Permitted
Use: the
lease will include a covenant by the Tenant, which will restrict
the use of the property to a minimum of 3000 sq m of lettable B1
employment space and a minimum of 200 residential units and
ancillary amenity space.
Premium: [Redacted] – this will be
the premium (together with any adjustment) as calculated pursuant
to the agreement for lease.
Indemnity: the Tenant will indemnify the
Landlord against all claims, demands and liabilities arising from
the use or occupation of the land, or its condition, or any breach
by the Tenant of the provisions of the
lease.
Planning: the Tenant is responsible for the
discharge of all planning conditions and technical
consents.
Property: the land edged red on the plan
attached to the Agreement for Lease, with common rights of access
(where applicable) as hatched in blue on the plan attached to the
Agreement to Lease/Variation.
Rights Reserved and
Granted: A
right for the Tenant to carry out development works
Legal Costs:
the Tenant to pay all
of their own legal costs in connection with completing the Lease on completion
of the Lease.
Pre-Emption
Right: the
Tenant is granted a right of first refusal should the Landlord wish
to sell the freehold of the Property. The Landlord must first
offer to dispose of the Property to the Tenant at the price it
wishes to sell it for. If the Tenant fails to accept the offer
within 20 working days the Landlord may then dispose of it on the
open market at no less than 80% of the offered price provided that
completion of the sale takes place within 6 months of the expiry of
the 20 working day period.