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Commercial Lease

Reference schedule

This is a retail shop lease. The disclosure statement given before it, the plan in schedule 1 and the approved fit out drawings in schedule 2 form part of it. The Lessee confirms it has been given the retail tenancy guide published by the state regulator.

1. Definitions

1.1 How this lease is read

• A reference to a party includes that party's successors and permitted assigns.
• The singular includes the plural, and a person includes a company.
• Headings are for convenience and do not affect meaning.
• Where two or more people are the Lessee, each of them is liable for the whole of the Lessee's obligations.
• Money amounts are Australian dollars and exclude GST unless the lease says otherwise.
• Where this lease and the disclosure statement disagree about a matter the retail leases legislation covers, the legislation decides which prevails, and nothing in this lease is intended to contract out of it.

1.2 Schedules

Schedule 1 is the plan of the premises. Schedule 2 is the approved fit out drawing set, dated 2 October 2026. Schedule 3 is the centre rules current at the commencing date. Each schedule forms part of this lease, and where a schedule and a clause disagree, the clause prevails.

2. Grant, term and option

2.1 Grant. The Lessor leases the premises to the Lessee for the term, subject to this lease and to the rights of the Lessor and others over the common areas. The Lessee takes the premises in the condition they are in at the commencing date, having inspected them.

2.2 Term. The term is five years from 1 December 2026 to 30 November 2031. Possession for fit out is given from 1 November 2026, and during that access period the Lessee is bound by every obligation in this lease except the obligation to pay base rent.

2.3 The option to renew

2.4 Holding over

If the Lessee stays in the premises after the term with the Lessor's consent and without a new lease, it holds over as a monthly tenant on the same terms, at the rent payable at the end of the term, and either party may end that monthly tenancy on one month's written notice expiring on any day.

2.5 Quiet enjoyment

While the Lessee pays the rent and performs its obligations, it may occupy the premises without interruption from the Lessor, except where this lease expressly allows the Lessor to enter or to carry out works.

2.6 Registration

The Lessee may register this lease at its own cost. The Lessor will do what is reasonably needed to allow registration, including obtaining any mortgagee's consent, and the Lessee pays the Lessor's reasonable costs of obtaining that consent.

3. Rent and money

3.1 Base rent. The Lessee pays base rent of $68,000 a year plus GST, by monthly instalments of $5,666.67 plus GST, in advance, on the first day of each month, by direct debit, without demand, deduction or set off. The first instalment is payable on 1 February 2027 because of the rent free period.

3.2 Rent free period. No base rent is payable for December 2026 and January 2027. Outgoings, services and every other obligation are payable from the commencing date. If this lease ends early because of the Lessee's default, the Lessee repays the rent free amount on a straight line basis over the term.

3.3 What is payable, and when

3.4 GST

Every amount in this lease is exclusive of GST. The Lessee pays GST on every taxable supply the Lessor makes under this lease at the same time as it pays the amount, and the Lessor gives a tax invoice.

3.5 Bank guarantee

The Lessee gives the Lessor an unconditional bank guarantee for $21,408.75 before the commencing date, with no expiry date, from a bank acceptable to the Lessor. The Lessor may call on it for any amount the Lessee owes and does not pay within 10 business days of written demand. If the Lessor calls on it, the Lessee tops it back up within 10 business days. It is returned within one month after the Lessee has handed back the premises and met clause 13.

3.6 Costs

Each party pays its own costs of negotiating and preparing this lease, as the retail leases legislation requires. The Lessee pays the Lessor's reasonable costs of any consent, variation, assignment or surrender it asks for, and any stamp duty and registration fees on this lease.

4. Rent review

Base rent is reviewed on each review date. Only one method applies on any review date, and the method is fixed by the table below rather than chosen later by either party.

4.1 No decrease and no cap

A CPI review never reduces the rent below the rent payable immediately before the review date. There is no maximum on a CPI review, because the index is what it is; the parties have deliberately not written a collar into this lease.

4.2 Late review

If a review is carried out late, the new rent applies from the review date and the difference is payable within 20 business days of the review being settled. A delay does not waive the review.

4.3 Market review

• The Lessor gives the Lessee written notice of the rent it proposes, at least three months before the review date.
• The Lessee has one month to accept or to say it disagrees. Silence is acceptance.
• If the Lessee disagrees, a specialist retail valuer agreed between the parties, or appointed by the regulator if they cannot agree within 14 days, determines the current market rent.
• The valuer acts as an expert, not as an arbitrator, gives a written determination with reasons within 45 days, and the parties share the cost equally.
• The determination is final and binding except for manifest error.
• The rent determined is never less than the rent payable immediately before the review date.

4.4 What the valuer takes into account

The valuer values the premises as they would be let on the open market between a willing lessor and a willing lessee, for the permitted use, on the terms of this lease, ignoring the value of the Lessee's own fit out, ignoring any goodwill the Lessee has built, and ignoring the fact that the Lessee is already in occupation.

5. Outgoings

5.1 The contribution. The Lessee pays 8.4 per cent of the centre's recoverable outgoings, that percentage being the lettable area of the premises as a proportion of the total lettable area of the centre. The contribution is paid monthly in advance against the Lessor's written estimate.

5.2 What is recoverable

5.3 Estimate, statement and reconciliation

• The Lessor gives a written estimate of outgoings for each accounting period at least one month before it starts.
• The Lessee is not liable to contribute to an outgoing that was not in an estimate given to it.
• Within three months of the end of each accounting period the Lessor gives an audited statement of actual outgoings.
• If the Lessee has paid more than its share, the excess is refunded or credited within one month of the statement.
• If it has paid less, the shortfall is payable within one month of the statement.

5.4 Promotion levy

The Lessee pays a promotion levy of $1,920 a year plus GST, spent by the Lessor on advertising and promoting the centre. The Lessor gives an annual audited statement of the promotion fund within three months of the end of the accounting period, and any unspent balance is carried forward into the next year's fund rather than kept.

6. Use of the premises

6.1 Permitted use. The premises are used only as a delicatessen selling cheese, cured meats, packaged groceries and takeaway coffee. The Lessee must not change the use without the Lessor's written consent, which is not unreasonably withheld for a use of a similar kind.

6.2 No warranty of suitability. The Lessor does not warrant that the premises are suitable for the permitted use or that any approval needed for it will be granted. The Lessee has made its own enquiries of the council and the food authority.

6.3 The Lessee's obligations about use

• Obtain and keep every licence, registration and approval the business needs, including food business registration.
• Keep the premises open for trading during core hours, staffed and stocked, with the shopfront lit.
• Not to use the premises for an auction, a clearance sale or a closing down sale without written consent.
• Not to do anything that makes the centre's insurance void or increases its premium.
• Not to cause noise, smell or waste that interferes with another occupant, and to run the extraction system the fit out drawings show whenever cooking equipment is in use.
• To keep the shopfront window display current and not to cover more than 20 per cent of the glazing.

6.4 Trading hours

The Lessor may extend core hours only with the agreement of occupants of at least three quarters of the lettable area, and must give three months' notice of any extension. The Lessee may trade outside core hours at its own cost where the centre is accessible.

6.5 Centre rules

The Lessee observes the centre rules in schedule 3. The Lessor may change them on 30 days' written notice, provided the change is reasonable and does not change the Lessee's rights under this lease.

7. Fit out

7.1 The Lessor's works. Before the commencing date the Lessor provides the premises with a concrete floor, painted walls, a suspended ceiling with lighting, a lockable glazed shopfront, one accessible toilet, a water point and waste, three phase power to the distribution board, and a capped connection to the centre's extraction riser.

7.2 The Lessee's works. The Lessee carries out the works shown in the approved drawings in schedule 2 at its own cost, using licensed contractors approved by the Lessor, and completes them by 30 November 2026. The Lessee may not start any work before the Lessor has approved the drawings and received the contractors' insurance certificates.

7.3 The contribution

Each payment is made against a tax invoice and the supporting contractor invoices. If this lease ends before the end of the third year because of the Lessee's default, the Lessee repays the contribution on a straight line basis.

7.4 Standards

• All work complies with the building code, the relevant Australian Standards and the food authority's requirements.
• Work that is noisy, dusty or blocks the common areas is done outside trading hours.
• The Lessee protects the common areas and makes good any damage its contractors cause, immediately.
• The Lessee gives the Lessor as built drawings, warranties and certificates within 20 business days of completion.
• The Lessee's plant and equipment stay the Lessee's property and may be removed at the end of the term under clause 13.

7.5 Signage

The Lessee may install one fascia sign and one entry in the centre directory, both to the Lessor's approved design and at the Lessee's cost. No other sign, poster or decal is fixed to the shopfront, the common areas or the car park without written consent.

8. Repair, maintenance and services

8.1 The Lessee's repair obligation. The Lessee keeps the premises clean and in good repair and condition, fair wear and tear excepted, and in no worse condition than at the commencing date as recorded in the condition report. It repairs damage it, its staff, its contractors or its customers cause, whether inside the premises or in the common areas.

8.2 The Lessor's repair obligation. The Lessor keeps the structure, the roof, the external walls, the common areas and the centre's plant in good repair and condition, and repairs any defect in the Lessor's works notified within twelve months of the commencing date.

8.3 Who maintains what

8.4 Entry by the Lessor

The Lessor may enter the premises on seven days' written notice to inspect, to carry out works, to show the premises to a prospective purchaser, or in the last six months of the term to show them to a prospective lessee. In an emergency the Lessor may enter at any time without notice. The Lessor causes as little disruption to the Lessee's business as it reasonably can.

8.5 Interruption of services

The Lessor is not liable for an interruption to services beyond its control, and rent is not abated for one, unless the interruption is caused by the Lessor's own act or neglect and lasts more than three consecutive trading days, in which case rent abates proportionally from the fourth day until the service is restored.

9. Insurance, risk and damage

9.1 The Lessee's insurance. The Lessee takes out and keeps the policies in the table below with an insurer authorised to carry on insurance business in Australia, notes the Lessor's interest where the table says so, and gives the Lessor a certificate of currency before the commencing date and then annually.

9.2 Risk and indemnity

The Lessee occupies the premises at its own risk. It indemnifies the Lessor against any claim, loss or cost arising from its use of the premises, from anything it brings into them, or from a breach of this lease, except to the extent the claim is caused by the Lessor's own negligence or wilful act. The indemnity is reduced proportionally where the Lessor has contributed to the loss.

9.3 Damage and destruction

The Lessor is not obliged to rebuild, and if it decides not to it must tell the Lessee in writing within 60 days of the damage, in which case the lease ends on the date of the notice and neither party has a claim against the other for anything after that date.

10. Assignment and subletting

10.1 Consent needed. The Lessee must not assign this lease, sublet the premises, part with possession or grant a licence over any part of them without the Lessor's written consent. The Lessor will not unreasonably withhold consent to an assignment of the whole lease where the conditions below are met.

10.2 What the Lessee must do first

• Ask in writing, giving the proposed assignee's name, business history, financial position and references.
• Give the proposed assignee a copy of this lease and the current disclosure statement.
• Give the Lessor an updated disclosure statement for the assignee, at least seven days before the assignment.
• Remedy any breach of this lease that is outstanding at the date of the request.
• Pay the Lessor's reasonable costs of considering and documenting the assignment.

10.3 When the Lessor may refuse

The Lessor answers a complete request within 28 days. If it does not answer within that time, consent is taken to have been given. A refusal is given in writing with reasons.

10.4 Release of the Lessee and the Guarantor

On an assignment carried out with consent and in accordance with clause 10.2, the Lessee and the Guarantor are released from liability for anything that happens after the assignment, to the extent the retail leases legislation provides. They remain liable for everything that arose before it.

10.5 Change of control

A change in the beneficial ownership of more than 50 per cent of the shares in the Lessee is treated as an assignment and needs consent under this clause. A transfer between the current shareholders, or to a family trust controlled by one of them, is not.

10.6 The Lessor's dealings

The Lessor may sell, mortgage or otherwise deal with the centre at any time. The Lessee will, at the Lessor's reasonable request and cost, sign a document acknowledging the terms of this lease to a purchaser or mortgagee.

11. Default and ending this lease

11.1 Events of default. The Lessee is in default if rent or outgoings stay unpaid for 14 days after the due date, if it breaches any other obligation and does not remedy the breach within a reasonable time after written notice, if it abandons the premises, or if it becomes insolvent, has a controller appointed or is wound up.

11.2 What the Lessor may do

11.3 The Lessor's duty to mitigate

If the Lessor re-enters, it will take reasonable steps to relet the premises for a similar use at a reasonable rent. It is not required to accept a lessee whose resources or retailing skills are materially weaker, or a use that would breach another occupant's exclusivity.

11.4 Essential terms

• Paying rent, outgoings and the promotion levy on time.
• Keeping the insurances in clause 9.1 current.
• Using the premises only for the permitted use.
• Not assigning or subletting without consent.
• Maintaining the bank guarantee at the required amount.

Breach of an essential term is a repudiation of this lease and entitles the Lessor to damages for the loss of the bargain, in addition to any other remedy.

11.5 Surrender by agreement

The Lessee may ask the Lessor to accept a surrender. The Lessor is not obliged to agree, and if it does it may set reasonable conditions, including payment of a surrender sum, a reversal of the unamortised fit out contribution and compliance with clause 13.

11.6 Dispute resolution

Before starting a proceeding about a retail tenancy dispute, either party must lodge the dispute with the state registrar of retail tenancy disputes and attend mediation. This clause does not prevent an application for urgent relief, or a claim for unpaid rent as a debt.

12. Guarantee and indemnity

12.1 The guarantee. In consideration of the Lessor granting this lease to the Lessee, the Guarantor guarantees to the Lessor that the Lessee will pay the rent, the outgoings and every other amount payable under this lease, and will perform every other obligation in it. If the Lessee does not, the Guarantor will pay the Lessor on demand, as if the Guarantor were the Lessee.

12.2 The indemnity. Separately, the Guarantor indemnifies the Lessor against every loss, cost and expense the Lessor suffers because the Lessee has not performed. The indemnity stands on its own and survives even if the guarantee is unenforceable for any reason.

12.3 How long the guarantee lasts

12.4 What the Guarantor accepts

• The Lessor may claim against the Guarantor without first claiming against the Lessee or calling on the bank guarantee.
• The guarantee is not discharged by the Lessee being wound up, or by the Lessor releasing any security.
• The Guarantor may not claim against the Lessee for anything paid under this clause until the Lessor has been paid in full.
• The Guarantor has been told to obtain independent legal advice and has either taken it or chosen not to.

12.5 Signed as a deed by the Guarantor

The Guarantor signs below and types their full name and residential address for service. This part of the lease is signed by the Guarantor alone; the Lessee and the Lessor sign the execution page that follows.

13. Make good

At the end of the term the Lessee removes its stock, plant, signage and fit out, repairs any damage the removal causes, and hands the premises back clean, with the shopfront glazing intact, the floor sealed, the walls painted in the Lessor's standard colour, and the services capped off by a licensed contractor. The Lessee gives the Lessor the grease trap and extraction service records for the whole term.

14. General

14.1 Notices. A notice is in writing and given by hand, by post to the address in the reference schedule, or by email to the address a party has notified. A notice by email takes effect on the next business day.

14.2 Whole agreement. This lease, its schedules and the disclosure statement are the whole agreement between the parties about the premises.

14.3 Governing law. This lease is governed by the law of New South Wales, and the parties submit to the courts of that state.

Execution

Signed in order: the Lessee, then the Guarantor on the previous page, then the Lessor. The lease takes effect on the date of the last signature, and the term still begins on 1 December 2026.