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ETHEKWINI MUNICIPALITY
DRAFT LEASE CONTRACT
ADDINGTON BEACH RESTAURANT SPU2010/B01REVA
DRAFT LEASE AGREEMENT
between
THE ETHEKWINI MUNICIPALITY(the "Landlord")
and
------------------------------------------
(the "Tenant")
2
INDEX
LEASE AGREEMENT SCHEDULE1 Administrative Information...............................................................................................................5
1.1 Parties........................................................................................................................................ 5
1.1.1 Landlord Information..............................................................................................................5
1.1.2 Tenant Information................................................................................................................5
1.1.3 Sureties' Information..............................................................................................................6
1.2 Property Description................................................................................................................... 6
1.3 Premises.................................................................................................................................... 6
1.4 Lease Period ............................................................................................................................. 6
1.5 Renewal Period.......................................................................................................................... 6
1.6 Rental and Other Charges..........................................................................................................7
1.7 Basic Rental Schedule...............................................................................................................7
1.8 Annual Turnover Rental..............................................................................................................7
1.9 Turnover Warranties................................................................................................................... 7
1.10 Purpose For Which Premises Are Let........................................................................................7
1.11 Business Hours.......................................................................................................................... 7
2 Letting and Hiring............................................................................................................................ 8
3 BEE Status of Tenant...................................................................................................................... 8
4 Incorporation Of Schedule..............................................................................................................8
APPENDIX A : GENERAL TERMS AND CONDITIONS OF LEASE1 Definitions and Interpretation...........................................................................................................2
1.1 Definitions.............................................................................................................................. 2
1.2 Interpretation......................................................................................................................... 3
2 Preamble......................................................................................................................................... 4
3 Letting and Hiring............................................................................................................................ 4
4 Commencement and Duration.........................................................................................................4
5 Occupation...................................................................................................................................... 4
6 Lease Renewal................................................................................................................................ 5
6.1 Option.................................................................................................................................... 5
6.2 Temporary Lease After Expiration Date Where Tenant Remains In Occupation...................5
7 Deposit, Suretyship, Rental and Other Charges..............................................................................6
7.1 Deposit.................................................................................................................................. 6
7.2 Rent....................................................................................................................................... 6
7.3 Charges In Respect Of Electricity, Gas and Water Consumption..........................................7
7.4 Payment and Interest............................................................................................................7
8 The Tenant's General Obligations...................................................................................................7
8.1 Manner Of Using Premises...................................................................................................7
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8.2 Liquor License....................................................................................................................... 9
8.3 Litter and Refuse.................................................................................................................10
8.4 Business Hours................................................................................................................... 10
8.5 Licences and Permits..........................................................................................................10
8.6 Maintenance By The Tenant...............................................................................................11
8.7 Electrical Fittings.................................................................................................................11
8.8 Insurance............................................................................................................................. 12
8.9 Non-Exclusivity Of Facilities................................................................................................12
8.10 Advertising and Signs..........................................................................................................13
8.11 Use Of The Landlord's Intellectual Property........................................................................13
8.12 Sub-Letting, Cession and Transfer Of Ownership...............................................................13
9 Premises........................................................................................................................................ 15
9.1 Fitness of the Premises.......................................................................................................15
9.2 Measurement Of The Premises...........................................................................................15
9.3 Damage Or Destruction.......................................................................................................16
10 Fit-Out and Alterations...................................................................................................................16
10.1 Installation Specifications / Allowance ................................................................................16
10.2 Alterations By The Tenant...................................................................................................17
10.3 Alterations By The Landlord................................................................................................17
10.4 Re-Building.......................................................................................................................... 18
11 Landlord's Right To Inspect and Advertise The Premises.............................................................18
12 Landlord's Agent............................................................................................................................ 18
13 Exclusion Of Liability..................................................................................................................... 19
14 Breach........................................................................................................................................... 19
15 Resolution Of Disputes.................................................................................................................. 21
16 Notices and Domicilia....................................................................................................................22
17 Miscellaneous................................................................................................................................ 23
17.1 Determination By Architect..................................................................................................23
17.2 Signature By Landlord.........................................................................................................23
17.3 Auditors' Certificate.............................................................................................................23
17.4 Enforcement By Landlord....................................................................................................23
17.5 Company Or Close Corporation To Be Formed..................................................................24
17.6 Liabilities Of Partners..........................................................................................................25
17.7 Cession Of Lease By Landlord............................................................................................25
17.8 Warranty Of Authority..........................................................................................................25
17.9 Value-Added Tax.................................................................................................................25
17.10 Confidentiality...................................................................................................................... 25
17.10.1 Confidentiality Of Transaction...................................................................................25
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17.10.2 Confidentiality In Respect Of Information..................................................................26
17.11 Independent Advice.............................................................................................................26
17.12 Implementation and Good Faith .........................................................................................26
17.13 Further Assurances.............................................................................................................27
17.14 Whole Agreement................................................................................................................27
17.15 Variation.............................................................................................................................. 27
17.16 Relaxation........................................................................................................................... 27
17.17 Costs................................................................................................................................... 27
APPENDIX B: FLOOR PLANAPPENDIX C: PROPERTY LOCALITY PLANAPPENDIX D: DRAFT LANDLORD'S RESOLUTIONAPPENDIX E: DRAFT TENANT'S RESOLUTIONAPPENDIX F: SURETYSHIP................................................................................................................. 1-6
APPENDIX G: TURNOVER RENTAL SCHEDULE1 Definitions........................................................................................................................................ 2
2 Annual Turnover Rental................................................................................................................... 2
3 Statement Of Turnover.................................................................................................................... 2
4 Notification Of Monthly Turnover and Transactions.........................................................................3
5 Payment Of Turnover Rental...........................................................................................................3
6 Adjustment Of Additional Monies.....................................................................................................3
7 Broken Period On Termination........................................................................................................3
8 Inspection........................................................................................................................................ 3
9 Confidential Information................................................................................................................... 4
10 Minimum Turnover........................................................................................................................... 4
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LEASE AGREEMENT SCHEDULE
This Lease is made and entered into between -
(1) The eThekwini Municipality; and
(2) -------------------------------------
The Parties agree as follows:
1 ADMINISTRATIVE INFORMATION
1.1 Parties
1.1.1 Landlord Information
Landlord: The eThekwini MunicipalityDomicilium Address: Strategic Projects Unit
Loram House70 Masabalala Yengwa Avenue Durban4001
Postal Address: Strategic Projects UnitLoram House70 Masabalala Yengwa Avenue4001
Telephone Number: 031-311 4745Facsimile Number: 031-368 3150VAT Registration Number: 4880193505
1.1.2 Tenant Information
Tenant:
Registration Number:Domicilium Address:
Postal Address:
Telephone Number:Facsimile Number:Cell Number:E-mail Address: VAT Number:
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1.1.3 Sureties' Information
Surety:Identity / Registration Number:Domicilium Address:Postal Address:Telephone Number:Facsimile Number:Cell Number:
Surety:Identity / Registration Number:Domicilium Address:Postal Address:Telephone Number:Facsimile Number:Cell Number:
1.2 Property Description
The property, on which the Restaurant is located, is described as Erf 12281, Durban Township,
Registration Division FU, KwaZulu-Natal Province.
1.3 Premises
The subject matter of this Lease are the Premises described below:
Description of Restaurant Premises:
Upper and Lower Ground Floor restaurant levels, together with back-of-house facilities and outdoor seating areas, the extent and location of which are shown on Appendix B and C respectively.
Internal Floor Area Measuring:
375 m2
Outdoor Seating 240 m2
1.4 Lease Period
Commencement Date: 1 June 2011, or 1st day of trading, whichever is the earlier.Termination Date:Duration of Period: 5 (five) yearsBeneficial Occupation Date:
1.5 Renewal Period
Commencement Date of Renewal Period:Duration of Renewal Period: 3 (three) years
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Subject to the provisions of clause 6 of Appendix A.
1.6 Rental and other Charges
Deposit: R 50,000.00Tenant's Public Liability Insurance Cover: R 2,000,000.00VAT thereon:
1.7 Basic Rental Schedule
PERIOD FROM PERIOD TO MONTHLY RENTAL
VAT TOTAL RENTAL
Based on an escalation of 8% (eight per cent) per annum, compounded.
1.8 Annual Turnover Rental
.......... per cent) of the Turnover, payable, to the extent that it exceeds the basic rental for the
relevant year and for zero rental period within the first year, as provided for in Appendix G.
1.9 Turnover Warranties
Subject to the provisions of Appendix G
1.9.1 the minimum annual Turnover in the 1st Year of trading of the Tenant referred to in 10.1.1 of
Appendix G, shall be an amount of R________ (_________ rand); and
1.9.2 the escalation percentage referred to in 10.1.2 of Appendix G, shall be 8% (eight per cent).
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1.10 Purpose for which Premises are let
Restaurant, ..................................
1.11 Business Hours
Minimum trading hours: Opening within 1 (one) hour of sunrise and closing no earlier than 1
(one) hour after sunset.
2 LETTING AND HIRING
The Landlord lets to the Tenant which hires the Premises from the Landlord, on the terms and
conditions contained in this Lease.
3 BEE STATUS OF TENANT
The representations made by the Tenant, as part of its tender relating to this Lease, in respect of
its Black Economic Empowerment status shall be deemed to constitute a part of this Lease and
any “negative change” which, in the reasonable opinion of the Landlord, materially compromises
such status, shall constitute a material breach of this Agreement. The Tenant shall keep the
Landlord informed of any changes, from time to time, as contemplated herein.
4 INCORPORATION OF SCHEDULE
This Schedule and the Appendices referred to in 4.1 to 4.8 below shall together constitute the
Lease.
4.1 Appendix A - General Terms and Conditions of Lease
4.2 Appendix B - Floor Plans
4.3 Appendix C - Property Sketch Plan
4.4 Appendix D - Landlord's Resolution
4.5 Appendix E - Tenant's Resolution
4.6 Appendix F - Suretyship
4.7 Appendix G - Turnover Rental Schedule
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SIGNATURE BELOW CONSTITUTES SIGNATURE OF THE LEASE; WHICH IS COMPRISES OF THE SCHEDULE AND APPENDICES
Signed by the Landlord at.................on this the..........................day of .....................................2010
_________________________________________ For: THE ETHEKWINI MUNICIPALITYDuly Authorised
Name: ........................................................
Designation: ........................................................
Signed by the Tenant at ________ on this the ... day of __________ 2010
_________________________________________ For: TENANT
Duly Authorised
Name:
ID Number:
Designation:
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APPENDIX A
GENERAL TERMS AND CONDITIONS OF LEASE
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APPENDIX A
GENERAL TERMS AND CONDITIONS OF LEASE
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Lease, unless clearly inconsistent with or otherwise indicated by the context -
1.1.1 "Architect" means an independent architect of at least 15 (fifteen) years standing, agreed to by the Parties or, failing agreement between the Parties, appointed at the instance of either the Landlord or the Tenant by the President of the South African Institute of Architects (or its successors-in-title);
1.1.2 "Beneficial Occupation Date" means the date specified as such in 1.4 of the Schedule;
1.1.3 "Building" means the building or buildings erected on the Property of which the Premises form a portion, and which forms part of the Addington Beach Node Development;
1.1.4 "Business Day" means a day, other than a Saturday, a Sunday or a public holiday in the RSA, on which banks are open for business and in the event that a day referred to in terms of this Lease should fall on a day which is not a Business Day, then the relevant date shall be extended to the next succeeding Business Day;
1.1.5 "Commencement Date" means the commencement date of this Lease specified in 1.4 of the Schedule;
1.1.6 "Floor Plan" means the floor plan of the Premises, subject to variation as may be agreed between the Parties, which plan is attached as Appendix B to the Lease;
1.1.7 "General Terms and Conditions" means the general terms and conditions of lease applicable between the Parties, which General Terms and Conditions are attached as Appendix A to the Lease;
1.1.8 "Initial Period" means the period of this Lease specified in 1.4 of the Schedule;
1.1.9 "Lease" means the Schedule and the appendices referred to in 4.1 to 4.8 of the Schedule;
1.1.10 "Addington Beach Node Development” means the recreation hall, public ablutions, life saving and restaurant development project initiated by the Landlord in Durban, as reflected on the plan attached as Appendix C;
1.1.11 "Parties" means, collectively, the Landlord and the Tenant and "Party" shall mean either of them as the context may indicate;
1.1.12 "Permitted uses of Premises" means the purpose for which the Premises are let as set out in 1.11 of the Schedule;
1.1.13 "Premises" means the premises described in 1.3 of the Schedule and as indicated on the Floor Plan attached as Appendix B to this Lease;
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1.1.14 "Prime Rate" means the nominal, annual, rate of interest from time to time publicly quoted as such by The Standard Bank of South Africa Limited, on overdraft facility to its most favoured corporate customers, and generally known as Standard Bank’s prime rate, calculated on a 365 (three hundred and sixty five) day factor irrespective of whether or not the year is a leap year, as certified by any manager of that bank whose appointment as such it shall not be necessary to prove, the contents of which certificate shall be prima facie proof of the contents thereof;
1.1.15 "Property" means the property as described in 1.2 of the Schedule;
1.1.16 "RSA" means the Republic of South Africa;
1.1.17 "SAPOA Prime Grade" means Premises and Premises fit-out of the type and quality as specified by the South African Property Owners' Association as being of a prime grade;
1.1.18 "Schedule" means the schedule of information to which these terms and conditions are attached as Appendix A;
1.1.19 "Signature Date" means the date upon which this Lease is signed by the last of the Parties;
1.1.20 "Tenant Fit-Out Works" means the Tenant fit-out to be undertaken on the Premises by the Tenant in accordance with the Tenant's specifications and plans, but subject to -
1.1.20.1 the prior written consent of the Landlord being obtained, which consent shall not be unreasonably withheld; and
1.1.20.2 such Tenant fit-out being of no less quality than the SAPOA Prime Grade,
and to the provisions of this Appendix A;
1.1.21 "Termination Date" means the termination date of this Lease specified in 1.4 of the Schedule; and
1.1.22 "VAT" means value-added tax levied from time to time in terms of the Value-Added Tax Act, No. 89 of 1991, as amended.
1.2 Interpretation
1.2.1 In this Lease, unless clearly inconsistent with or otherwise indicated by the context -
1.2.1.1 any reference to the singular includes the plural and vice versa;
1.2.1.2 any reference to natural persons includes legal persons and vice versa;
1.2.1.3 any reference to a gender includes the other genders; and
1.2.1.4 references to any enactment shall include references to such enactment as it may, after the Signature Date, from time to time be amended, supplemented or re-enacted.
1.2.2 Where appropriate, meanings ascribed to defined words and expressions in 1.1, shall impose substantive obligations on the Parties.
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1.2.3 The clause headings in this Lease have been inserted for convenience only and shall not be taken into account in its interpretation.
1.2.4 In the interpretation of this Lease, the contra proferentum rule of interpretation shall not apply (this Lease being the product of negotiations between the Parties), nor shall this Lease be construed in favour of or against any Party by reason of the extent to which any Party or its professional advisors participated in the preparation of this Lease.
1.2.5 The use of the word "including" followed by a specific example or examples shall not be construed or interpreted as limiting the meaning of the general wording preceding it and the eiusdem generis rule shall not be applied in the interpretation of such general wording and/or such specific example or examples.
1.2.6 Any provision imposing a restraint, prohibition or restriction on the Tenant shall be so construed that the Tenant is not only bound to comply therewith but is also obliged, to the extent reasonably possible, to procure that the same restraint, prohibition or restriction is observed by everybody occupying or entering the Premises or any part thereof through, under, by arrangement with or at the invitation of, the Tenant, including its subsidiaries and the directors, member, officers, employees, agents, customers and invitees of the Tenant.
1.2.7 This Lease shall be governed by and construed and interpreted in accordance with the laws of the RSA.
2 PREAMBLE
2.1 The Landlord owns the Property, which the Tenant acknowledges to be subject to certain servitudes, conditions in the title deed of the Property and other limitations.
2.2 The Tenant wishes to hire the Premises from the Landlord on the terms and conditions contained in this Lease.
3 LETTING AND HIRING
The Landlord lets to the Tenant which hires the Premises subject to the terms and conditions of this Lease.
4 COMMENCEMENT AND DURATION
Notwithstanding the Signature Date, this Lease shall commence on the Commencement Date and endure for the Initial Period until the Termination Date, subject to the provisions of 6.
5 OCCUPATION
5.1 Subject to 5.5 below, occupation of the Premises for commercial purposes shall occur on the Commencement Date.
5.2 ............In the event of occupation of the Premises being given to the Tenant after the Commencement Date, the date on which occupation is given to the Tenant shall be deemed to be the Commencement Date and the Termination Date shall be extended accordingly. If the date on which occupation of the Premises is given to the Tenant does not coincide with the first day of a calendar month, then the rental and other amounts payable by the Tenant for the month during which occupation is given to the Tenant, shall be abated proportionately.
5.3 The Landlord shall not be obliged to give the Tenant occupancy of the Premises unless -
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5.3.1 all the obligations for occupancy provided for in this Lease, including in particular the receipt by the Landlord of the required rental deposit, guarantees and suretyships as specified in the Schedule, have been fulfilled; and
5.3.2 this Lease has been duly completed and signed by or on behalf of the Tenant and delivered to the Landlord.
5.4 The exercise by the Landlord of its rights in terms of 5.3 shall not constitute an extension of the Commencement Date, nor, in particular, relieve the Tenant from its obligations to commence paying the deposit, the monthly rent and other amounts payable by the Tenant under this Lease with effect from the Commencement Date.
5.5 Notwithstanding the Commencement Date referred to in 5.1, the Landlord shall provide the Tenant with access to the Premises, in order for the Tenant to undertake the Tenant Fit-Out Works, from the Beneficial Occupation Date. Access to the Premises for the purposes of the Tenant’s Fit-Out Works shall be given and taken at the Tenant’s own risk.
5.6 Immediately upon the Tenant taking occupation of the Premises for whatever purpose the Tenant shall permit the Landlord or its agents and/or the servants of the Landlord and their agents the right of access to the Premises in order to enable the completion of any work in the Premises which is the responsibility of the Landlord to undertake, subject to compliance with the Tenant's security arrangements.
6 LEASE RENEWAL6.1 Option
6.1.1 Subject to 6.3 and 6.5, the Tenant shall have an option (the "Option") to renew this
Lease for the further period referred to in 1.5 of the Schedule from the termination of
the Initial Period (the "Renewal Period") on the same terms and conditions as
contained in this Lease, save that -
6.1.1.1 there shall be no further Option to renew this Lease;
6.1.1.2 . the monthly rent and parking rental (collectively, the "Rent") and rate of
escalation payable in respect of the Renewal Period shall be a market Rent
and a market escalation rate prevailing at the time a determination is made in
terms of 6.2; and
6.1.1.3 notwithstanding anything to the contrary herein contained, the monthly Rent
payable in the first year of the Renewal Period shall not be less than
110% (one hundred and ten per cent) of the monthly Rent payable by the
Tenant in the last month of the last year of the Initial Period of this Lease.
6.1.2 The Tenant shall exercise the Option by giving written notice to the Landlord not less
than 6 (six) months and not more than 12 (twelve) months, prior to the termination of
the Initial Period of this Lease, failing which, the Option shall lapse.
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6.2 Market Rent and Escalation Rate Determination
6.2.1 By not later than 30 (thirty) days after the date on which the Tenant exercised the
Option in terms of 6.1.2, the Tenant shall be entitled to request a market Rent and
market escalation rate determination for the Renewal Period.
6.2.2 The Landlord and the Tenant shall, within 15 (fifteen) days of the Tenant having
requested a rent and escalation rate determination, use their best endeavours to
agree on the prevailing market Rent and the prevailing market escalation rate
applicable at that time.
6.2.3 Should the Landlord and Tenant fail to agree on the prevailing market Rent and/or the
prevailing market escalation rate within the 15 (fifteen) day period contemplated
in 6.2.2, then such determination shall be made by an independent expert appointed
by the Chief Executive Officer for the time being of the South African Property
Owners' Association (or its successor-in-title) (the "Expert"), acting as an expert,
whose decision shall be final and binding on the Parties. The Landlord and the
Tenant shall use their best endeavours to procure that the Expert furnishes his
determination within 15 (fifteen) days of the request for such determination.
6.2.4 The Expert shall, in determining the prevailing market Rent and the prevailing market
escalation rate, have regard to the prevailing market Rents and prevailing market
escalation rates payable in respect of similar premises and taking into account the
terms and period of this Lease.
6.3 Lapsing on Breach
Should the Tenant commit a breach of this Lease at any time during the last year of this Lease immediately preceding the Termination Date (even if such breach is remedied by the Tenant), then the Option shall automatically lapse and be of no further force and effect.
6.4 Temporary Lease after Expiration Date where Tenant remains in occupation
In the event of any occupation of the Premises by the Tenant after the Termination Date, without the Parties having properly renewed the terms of this Lease and without a formal agreement (signed by both the Tenant and the Landlord) having been concluded for any reason whatsoever and irrespective of any oral discussions, representations, negotiations and correspondence that may have been exchanged between the Parties -
6.4.1 the Tenant shall be deemed to lease the Premises on a temporary basis, subject to
all the terms and conditions contained in this Lease, provided that either Party will be
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entitled to terminate such lease by giving 1 (one) month’s written notice of termination
to the other Party; and
6.4.2 the Tenant further agrees that, in such circumstances, the rent and other charges
payable in respect of the first month after the Termination Date, shall not be less than
the rent and other charges payable by the Tenant during the month immediately
preceding the Termination Date, escalated by 10% (ten per cent) in respect of the
rent, assessment rates, service charges and other costs, with the exception of such
service charges that are based on the Tenant’s use as contemplated in 7.3.
6.5 The Tenant shall exercise the Option by giving written notice to the Landlord not less than
6 (six) months and not more than 12 (twelve) months, prior to the termination of the Initial
Period of this Lease, failing which, the Option shall lapse.
7 DEPOSIT, SURETYSHIP, RENTAL AND OTHER CHARGES
7.1 Deposit
7.1.1 The Tenant shall, on the Signature Date pay to the Landlord a deposit in the amount specified in 1.6 of the Schedule (the "Deposit").
7.1.2 The Landlord shall have the right to apply the whole or part of the Deposit towards -
7.1.2.1 payment of rent, VAT or any other liability or amount whatsoever due by the Tenant in terms of this Lease;
7.1.2.2 the recovery of expenses incurred by the Landlord in carrying out any of the Tenant's obligations in terms of this Lease; and/or
7.1.2.3 the reinstatement of the Premises by the Landlord or its agents in the event of the Tenant failing to procure such reinstatement of the Premises upon vacation of the Premises to the original state in which the Tenant received the Premises from the Landlord.
7.1.3 The Landlord shall -
7.1.3.1 subject to what is provided below, retain the Deposit until the Tenant has vacated the Premises and all the Tenant's obligations arising from this Lease have been fulfilled; and
7.1.3.2 repay to the Tenant any part of the Deposit not applied in terms of this 7.1.
7.1.4 The Tenant may not set-off against the Deposit any rent, VAT or other amount payable in terms of this Lease.
7.1.5 In the event of the whole or part of the Deposit being utilised by the Landlord for any purpose as contemplated in this Lease, the Tenant shall, within a period of 10 (ten) business days after receipt of notice from the Landlord calling for reinstatement and specifying the amount required for that purpose, reinstate the Deposit, as the case may be, to its original amount.
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7.1.6 Any part of the Deposit not applied in terms of this 7.1 will be refunded to the Tenant within 90 (ninety) days, of the Termination Date or vacation of the Premises by the Tenant (whichever shall be the later).
7.1.7 The Parties record that the suretyship attached as Appendix F hereto, shall be entered into by the Parties simultaneously with the signature of this Lease.
7.2 Rent
7.2.1 The monthly rent payable by the Tenant to the Landlord during the Initial Period shall be the greater of -
7.2.1.1 the amounts set out in 1.7 of the Schedule; and
7.2.1.2 the turnover rental as determined in accordance with the provisions of Appendix G,
and shall, in respect of payments made pursuant to 7.2.1.1, be paid by the Tenant to the Landlord, monthly in advance, on or before the first day of each and every month and in accordance with 7.4. Payments made pursuant to 7.2.1.2 shall be made in accordance with the provisions of Appendix G as read together with 7.4.
7.3 Charges in respect of Electricity, Gas and Water Consumption
7.3.1 The Tenant shall, on demand, pay to the Landlord or to the local authority, as the Landlord may require, the cost together with the attributable VAT thereon, of all electric current, water and gas consumed or used on the Premises.
7.3.2 Any payment due by the Tenant to the relevant supplier of the services referred to in 7.3.1 or the Landlord in terms of this 7.3 shall be payable by the Tenant immediately on demand by the supplier or the Landlord. Should the Tenant fail to pay such amount within 7 (seven) days of same being presented to the Tenant, then, without prejudice to its other rights in law, the Landlord shall be entitled to terminate the particular supply to the Tenant.
7.3.3 The Tenant shall, at the Landlord's discretion, on demand pay either to the relevant local authority or to the Landlord, any deposit, as required by the local authority and to the extent that same relates to the Premises, for electricity and water connections or consumption for the Premises.
7.4 Payment and Interest
7.4.1 All payments to be made by the Tenant in terms of this Lease shall be made on or before the due date thereof, free of exchange and of any deductions or set-off of any nature whatsoever, and shall be, unless clearly stated otherwise, paid -
7.4.1.1 during office hours at the Landlord's chosen domicilium (as specified in 1.1.1 of the Schedule); or
7.4.1.2 by way of direct deposit or electronic funds transfer to a bank account to be nominated in writing by the Landlord; for which it is a condition that a copy of the deposit slip or transfer information be forwarded to the Landlord within 7 (seven) days of the date of such deposit or transfer.
7.4.2 The Tenant shall not have the right to defer, adjust or withhold any payment due to the Landlord in terms of or arising out of this Lease or to obtain deferment of
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judgment for such amount or any execution of such judgment by reason of any set -off or counterclaim of whatsoever nature or howsoever arising.
7.4.3 Save to the extent otherwise provided all amounts due by the Tenant to the Landlord (including damages) in terms of or arising out of this Lease shall, unless paid on due date, bear interest from the due date to date of payment. Such interest shall be -
7.4.3.1 calculated at the Prime Rate; and
7.4.3.2 capitalised monthly in arrear on the balance due.
8 THE TENANT'S GENERAL OBLIGATIONS
8.1 Manner of using Premises
8.1.1 The Tenant shall be entitled to use the Premises solely for the purposes specified in 1.12 of the Schedule, and for no other purpose whatsoever without the prior written consent of the Landlord.
8.1.2 The Tenant acknowledges that it shall not have an exclusive right to any particular type of business being conducted on the Property.
8.1.3 The Tenant shall -
8.1.3.1 ensure that the Premises are both adequately stocked with merchandise (if applicable) and properly staffed with personnel;
8.1.3.2 procure that the shopfront of the Premises shall at all times be suitably lit up and comply with such standards of design and presentability as the Landlord may determine from time to time;
8.1.3.3 ensure that all installations, fittings and fixtures are of good quality and in keeping with the general lay-out and finish of the other Premises comprising the remainder of the Building;
8.1.3.4 keep the windows suitably dressed in accordance with the class of business for which the Premises are leased;
8.1.3.5 .be responsible for procuring suitable security arrangements in or on the Premises in accordance with the nature of the business for which the Premises are leased; and
8.1.3.6 procure and adhere to appropriate waste disposal and emission filtering measures in accordance with -
8.1.3.6.1 municipal by-laws;
8.1.3.6.2 directives by the Landlord; and
8.1.3.6.3 the nature of the business conducted on the Premises.
8.1.4 The Tenant shall not -
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8.1.4.1 permit or consent to any goods being stored or left outside the Premises, in the passage, lifts or on the landing of the Building adjacent to the Premises;
8.1.4.2 bring any unreasonably heavy article into the Building without the Landlord's prior consent;
8.1.4.3 permit the contravention of any laws or regulations relating to owners, tenants or occupiers of business premises or affecting the conduct of business in the Premises;
8.1.4.4 permit any contravention of the conditions of title whereunder the Property is held by the Landlord, which the Tenant declares itself to be fully acquainted with;
8.1.4.5 damage or permit any damage to any part of the Premises or Property;
8.1.4.6 do, or cause or permit to be done on or near the Property anything which may cause any nuisance, disturbance or danger;
8.1.4.7 .hold any auction, fire, closing down, insolvency or liquidation sale in the Premises or any portion thereof, unless the Premises are specifically let for such purposes;
8.1.4.8 permit delivery vehicles to unload anywhere other than from Erskine Terrace; or
8.1.4.9 without the Landlord's prior written consent, use or store or permit the storage of any corrosive chemicals on the Premises and if the Landlord consents, the Tenant shall -
8.1.4.9.1 ensure that the use or storage of such chemicals is done strictly in accordance with all applicable laws, by laws and regulations; and
8.1.4.9.2 take all reasonable precautions to ensure that such chemicals are used and stored in such a way that there is no spillage and no risk of any damage being caused.
8.2 Liquor License
8.2.1 Any liquor licence which the Tenant may obtain in respect of the Premises shall be deemed to attach to the Premises and shall not be transferable therefrom to other premises without the consent thereto in writing of the Landlord.
8.2.2 The Tenant warrants that in respect of any liquor licence which may be granted it shall:-
8.2.2.1 Carry on, maintain and keep open the licensed Business with all the rights to which it is at present entitled under the Liquor Act 1977, as amended, (hereinafter referred to as “the Act”);
8.2.2.2 At all times conduct the said Business in a lawful and orderly manner;
8.2.2.3 Preserve the character of the licensed Business;
8.2.2.4 Shall not do, omit or permit to be done anything by itself or its servants, employees or agents which may contravene any statute, law or by-law for the time being in force relating to the licensed Business or whereby the liquor
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licence appertaining to the Business may be or become liable to be forfeited or the renewal thereof with held or refused or whereby such liquor license is placed in jeopardy;
8.2.2.5 Not do or permit to be done any act in relation to the conduct or management of the Business which may be reasonably deemed to be an annoyance to the Landlord, Municipality or the occupiers of property in the neighbourhood;
8.2.2.6 Not commit any breach or the Liquor Laws or any rules or regulations promulgated in connection therewith or any special order of the Liquor Board and/or other liquor licensing authority.
8.2.2.7 At its expense, effect any structural alterations to the interior or exterior of the Premises which may be required by the Liquor Board or any other competent authority;
8.2.2.8 Forthwith advise the landlord of any obligations or condition imposed in respect of the Premises or licensed Business by The Liquor Board, the Hotel Board, the Police or any other competent authority, and any cost involved in complying with any such requirements shall be borne by the Lessee;
8.2.2.9 Forthwith furnish the landlord with a copy of any report or notice issued by any of the authorities mentioned above in respect of the Premises or licensed Business;
8.2.3 In the event of the Tenant failing to comply with any of the provisions of this clause, or in the event of the Tenant contravening any Statute Law or Bylaw relating to the sale or consumption if liquor on or from the licensed Business on the Premises such failure shall be a breach of this lease. Should the Tenant be in Continuous Breach of this provision, the landlord shall be entitled to cancel this lease without being required to give the Tenant further notice as is contemplated.
8.3 Litter and Refuse
8.3.1 The Tenant shall be responsible for and shall bear the cost of the daily collection and disposal of all litter, wheresoever situated, which is generated directly or indirectly by the carrying on of the Business or which is caused by the actions of persons who are employees or customers of the Tenant.
8.3.2 The failure of the Tenant to comply with the provisions of this clause shall entitle the Landlord, without prejudice to its rights in respect of such breach, to make arrangements for the removal of all such litter and any costs incurred by the Landlord in this regard shall be borne by the Tenant and shall be payable on demand.
8.3.3 Without derogating from the obligations of the Tenant to comply with all applicable laws, the Tenant shall not conduct any “ambush marketing” in terms of which it unlawfully seeks to derive a commercial advantage for itself on the back of an event taking place on the Beachfront and in respect of which the relevant commercial rights are held by a third party.
8.3.4 The Tenant shall, in respect of the business which it undertakes at the Premises, provide a first class service to its customers, the object being that such will enhance (and in no way undermine) the status of the Central Beachfront. Should the Tenant fail to deliver and maintain such standard of service as may be reasonably required by the Landlord, having regard to the above objectives, such shall constitute a material breach of this Agreement.
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8.4 Business Hours
8.4.1 Unless otherwise agreed by the Landlord, whose approval shall not be unreasonably withheld, the Tenant shall keep the Premises open for the conduct of business during the business hours stated in 1.12 of the Schedule (the "Business Hours"), for the duration of this Lease or any extension or renewal thereof.
8.4.2 The Tenant agrees that the Landlord, in its reasonable discretion, shall be entitled to extend the Business Hours upon reasonable written notice to the Tenant, during specific periods.
8.5 Licences and Permits
The Tenant shall obtain any licenses, permits and authorities required for the lawful conduct of its business in the Premises.
8.6 Maintenance by the Tenant
The Tenant shall -
8.6.1 advise the Landlord within 14 (fourteen) days after the Commencement Date of any structural defects in the Premises or of any keys, locks, windows, sewerage pans, basins and electrical installations and fittings which are in a defective state or are missing, and the absence of such notice shall constitute prima facie proof of the absence of any defects or missing articles, and of the good condition of the Premises. (The Landlord shall make good any defects as specified in the abovementioned “snag list”.);
8.6.2 at its own expense, keep and maintain the interior and exterior of the Premises (which shall include all windows, both internal and external) in good order and repair;
8.6.3 keep and maintain the interior of the Premises in a clean, tidy and sanitary condition;
8.6.4 make good or repair any loss, damage or defacement to any plate glass window or panel or shop front of the Premises, howsoever caused;
8.6.5 not cause or permit the obstruction or blockage of sewerage pipes, water pipes and drains in use in connection with the Premises, but shall throughout the currency of this Lease maintain such sewerage pipes, water pipes and drains free from any such obstruction or blockage;
8.6.6 ..replace any light bulbs, fluorescent tubes, starters, ballasts, choking coils, tap washers, cisterns, cistern washers and seals or other consumable items used in the Premises; and
8.6.7 on termination of this Lease, return the Premises to the Landlord in the same good condition as it was when the Tenant received it and deliver to the Landlord all keys, duplicate keys and access cards for the Premises, Property and the Building which are in the possession of the Tenant, its invitees or guests. If any key, lock or access card for which the Tenant, its invitees or guests were responsible is lost, damaged or destroyed, the Landlord may replace any or all the keys, locks or access cards for the Property or the Building at the Tenant's cost or require the Tenant to do so.
8.7 Electrical Fittings
8.7.1 The Tenant shall not interfere with or alter any electrical installations in the Premises without the prior consent of the Landlord.
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8.7.2 The Tenant shall not at any time during the currency of this Lease -
8.7.2.1 make any alterations or additions to the electrical installation of the Building or of the Premises without the consent of the Landlord;
8.7.2.2 connect any apparatus which might endanger or overload the existing electrical installation; or
8.7.2.3 install extra electrical or other installations or connections in or about the Premises, air conditioners or heaters (permanent or portable), or any computers or similar appliances in the Premises without ensuring that such installations shall be carried out by a competent electrical contractor approved of by the Landlord in writing. The cost thereof shall be borne and paid for by the Tenant.
8.8 Insurance
8.8.1 The Tenant shall -
8.8.1.1 not, save for its normal stock-in-trade, store or permit the storage of any article upon the Premises or on the Property which may result in the premiums with regard to any insurance held by the Landlord in respect of the Building, being increased;
8.8.1.2 at all times comply with the conditions of any fire or other insurance policy held from time to time by the Landlord in respect of the Premises and/or the Property; and
8.8.1.3 not permit anything to be done which may result in any insurance policy held by the Landlord for the time being in respect of the Premises, and/or the Property being rendered void or voidable.
8.8.2 If any such premium payable in respect of such policy(ies) is increased -
8.8.2.1 by reason of the nature or scope of the business which the Tenant carries out on/in the Premises in terms of the Lease; or
8.8.2.2 as a result of the Tenant not complying with any of the aforesaid provisions,
then without prejudice to any other rights which the Landlord may have as a result thereof, the Tenant shall on demand refund to the Landlord the amount of that additional premium.
8.8.3 The Tenant shall take out and maintain -
8.8.3.1 an insurance policy in respect of the plate glass windows, fixtures, fittings and the contents of the Premises with (an) insurer/s approved in writing by the Landlord; and
8.8.3.2 public liability insurance, in the amount set out in the Schedule, with (an) insurer/s approved in writing by the Landlord.
8.8.4 Whenever so required by the Landlord, the Tenant shall exhibit to the Landlord proof of such insurance and payment of the premiums that fall due in respect of such insurance and if the Tenant fails to do so, without prejudice to the Landlord's rights, the Landlord shall be entitled to pay such premiums and to recover them from the Tenant on demand.
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8.9 Non-exclusivity of facilities
8.9.1 The Tenant and its servants and agents shall not be entitled to the exclusive use at any time of the yard, public toilets, parking areas and other conveniences provided by the Landlord, but the Tenant shall have the right of reasonable use thereof having regard to the right of other tenants in this respect.
8.9.2 The Tenant undertakes that its employees and customers shall use the conveniences which may be allocated by the Landlord.
8.9.3 The Tenant, its employees and servants shall not pollute or encumber any passage, pavement, corridor, stairway, path, lane, yard or ground which is intended for the common use of the tenants of the Property.
8.10 Advertising and Signs
8.10.1 The Tenant shall not be entitled to affix, paint, erect, install or display any advertising or other signs (including neon signs), awning, canopy or any other thing of any kind (the "Signs") on the windows, doors, exterior or roof of the Premises or Property, without the Landlord's prior written consent. Should such consent be granted, then the Tenant shall -
8.10.1.1 keep and maintain any such signs in good, clean and proper working order and condition and comply with the requirements of any competent authority pertaining to such signs;
8.10.1.2 indemnify the Landlord against all claims of whatsoever nature made against the Landlord as a result of the installation, erection or operation of such signs; and
8.10.1.3 keep within the specification of the architect or the design criteria, if any, of the Property.
8.10.2 The Tenant shall, upon the expiration or earlier termination of this Lease, remove all signs affixed, painted, placed, displayed, erected or installed by it with or without the Landlord's written consent and make good at its own cost any damage caused as a result of such removal. Should the Tenant fail to so remove all signs or make good any such damage, the Landlord shall be entitled to recover from the Tenant an amount equal to the Landlord’s cost thereof and which amount shall be payable by the Tenant within 7 (seven) days of demand.
8.10.3 The Tenant shall not affix any posters, placards or notices to the external windows, doors or walls of the Premises.
8.10.4 Should the Tenant affix, paint, erect, install or display any signs referred to in 8.8.1 and/or 8.8.2 on the windows, doors, exterior roof of the Premises or Property, without the Landlord's prior written consent, then the Tenant shall be obliged to immediately remove such signs upon receipt of a written notice from the Landlord requiring it to do so, failing which the Landlord shall be entitled to do so and recover from the Tenant an amount equal to the Landlord’s cost thereof and which amount shall be payable by the Tenant within 7 (seven) days of demand. The aforegoing shall apply, mutatis mutandis, to such signs which were executed with the Landlord's prior written consent but which do not comply with such approval.
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8.11 Use of the Landlord's Intellectual Property
The Tenant shall not without the Landlord's prior written consent use any of the Landlord's intellectual property, including the Landlord's trademarks, service marks, trade names, domain names, patents, copyrights, inventions, processes and applications therefore, systems, methods, models, procedures, any and all written material and controls, as well as all rights to trade secrets, confidential information, know-how and all other rights of a similar character (regardless of whether such rights are registered and/or capable of registration) and all applications and rights to apply for protection of any of the same.
8.12 Sub-Letting, Cession and Transfer of Ownership
8.12.1 The Tenant shall not cede, assign, mortgage, pledge, transfer or in any other way deal with any of its rights under this Lease, nor sub-let the Premises or any part thereof, nor allow anyone else to occupy the Premises or any part thereof on any terms and conditions whatsoever or for any reason whatsoever, without the Landlord's prior written consent.
8.12.2 In respect of sub-letting referred to in 8.12.1 the Tenant shall not sub-let the Premises or any portion thereof at a greater rent than that payable to the Landlord for the Premises or for such portion (the rent payable by the Tenant to the Landlord for such portion to be deemed to be the same proportion of the total rent payable by the Tenant for the Premises as the square meterage of such portion bears to the total square meterage of the Premises).
8.12.3 Notwithstanding anything to the contrary, contained or implied herein, should the Tenant wish to sub-let the whole or any part of the Premises, then -
8.12.3.1 application for the consent of the Landlord shall be made to the Landlord -
8.12.3.1.1 in writing, setting out the name, address and business of the sub-Tenant as well as setting out all credit and trade references relating to the proposed sub-Tenant as may be necessary for the Landlord to make an informed decision; and
8.12.3.1.2 not less than 60 (sixty) days and not more than 90 (ninety) days prior to the date on which it is contemplated that the proposed sub-lease shall commence;
8.12.3.2 the Landlord shall on receipt of such an application, be entitled to give written notice to the Tenant of the Landlord's consent to the sub-lease, provided that the Landlord shall not be required to grant its consent to the sub-lease unless the sub-Tenant agrees in writing to make payments of the rent and all other amounts due in terms of this Lease direct to the Landlord on behalf of the Tenant, on the distinct understanding that such undertaking shall in no way affect the obligations imposed on the Tenant in terms hereof; and
8.12.3.3 the Landlord may charge a fee for the administration of such application for sub-lease, request a copy of such sub-lease and generally impose such terms and conditions as it deems fit.
8.12.4 Should the Tenant be a company, the transfer of any of its present issued shares, unissued share capital or any future increased share capital which results in a change in the effective control of the company or a disposal of its business, shall be deemed to be a cession in terms of the provisions of 8.12.1 above and the Tenant shall require the prior written consent of the Landlord. For the purpose of this 8.12.4,
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"effective control" shall, without limiting the generality of the meaning of the word, mean -
8.12.4.1 the beneficial ownership of the majority number of the Tenant’s entire issued ordinary shares (and/or such other classes of shares holding normal voting rights) directly or indirectly and whether in law or in effect;
8.12.4.2 the right or ability to control, whether directly or indirectly, the votes attaching to the majority of the Tenant’s issued ordinary shares (and/or such other classes of shares holding normal voting rights); and/or
8.12.4.3 the right or ability to control the decisions of the board of directors of the Tenant.
8.12.5 Should the Tenant be a close corporation, then any change in the present members' interests which results in a change in effective control of the close corporation or a disposal of its business, shall be deemed to be a cession in terms of the provisions of 8.12.1 above and the Tenant shall require the prior written consent of the Landlord.
8.12.6 Should the Tenant be a trust, then any change in the present trustees, which results in a change in effective control of the trust or a disposal of its business, shall be deemed to be a cession in terms of the provisions of 8.12.1 above and the Tenant shall require the prior written consent of the Landlord.
8.12.7 Should the Tenant be a partnership, then any change in the present partners or a disposal of the business being conducted by the partnership, shall be deemed to be a cession in terms of the provisions of 8.12.1 above and the Tenant shall require the prior written consent of the Landlord.
8.12.8 Should the Tenant be any other form of legal entity or legal and business enterprise, then any similar change in effective control of such entity on an ownership and/or management and decision-making level shall be deemed to be a cession in terms of the provisions of 8.12.1 above and the Tenant shall require the prior written consent of the Landlord.
9 PREMISES
9.1 Fitness of the Premises
9.1.1 The Premises are let to the Tenant in the condition they are on the Commencement Date. The Tenant agrees that the Landlord is not bound by any representations in respect of the condition of the Premises nor any promise to decorate, alter, repair or improve the Premises either before or after Signature Date, unless the same are contained in this Lease.
9.1.2 Save for obtaining an occupation certificate in respect of, or including, the Premises (as the case may be), the Landlord does not warrant that -
9.1.2.1 the Premises are fit for any purpose; or
9.1.2.2 the Tenant will be granted a licence in respect of the Premises for the conduct of the business of the Tenant or that any such licence will be renewed.
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9.1.3 .....The Landlord shall not be obliged to do anything in order to comply with the requirements of any licensing, fire, public health, factory or other authority; provided that the Landlord shall -
9.1.3.1 not unreasonably withhold its consent to the Tenant doing any work, repairs or alterations as may be necessary to comply with such requirements at the Tenant's own cost and expense; and
9.1.3.2 be entitled to require that such work, repairs or alterations be effected subject, mutatis mutandis, to the terms of 10.2.1 and 10.2.2.
9.2 Measurement of the Premises
9.2.1 .........As soon as reasonably possible after the Signature Date, but prior to the Commencement Date, the Landlord shall procure that an architect appointed by the Landlord measures the rentable area of the Premises in accordance with the standard method of measurement of floor areas for multi-tenanted buildings published by the South African Property Owners' Association at the time of measurement. The architect shall issue a certificate setting out the extent of the Premises (the "Landlord's Certificate").
9.2.2 It is recorded that the basic monthly rental payable in terms of this Lease has been determined on the assumption that the extent of the Premises is the extent reflected in Appendices B hereto. To the extent that the actual extent of the Premises, as measured, is either greater or less than the indicated extent by more than 3% (three percent), the rental shall be adjusted accordingly (that is, by the same percentage as the increase or reduction, as the case may be) and the parties shall, as soon as reasonably practicable after the issue has been determined, make the appropriate financial adjustments.
9.3 Damage or Destruction
9.3.1 Should the Premises be -
9.3.1.1 destroyed or damaged to such an extent as to render them substantially or wholly untenantable, then the Landlord shall be entitled to terminate this Lease with effect from the date of such destruction or damage;
9.3.1.2 damaged, but nevertheless remain substantially tenantable, then this Lease shall not terminate but the rental payable by the Tenant in respect of the Premises shall be abated pro rata, having regard to the extent to which the Tenant is able to enjoy beneficial occupation of the Premises; provided that in such event the Landlord shall restore the Premises with reasonable expedition;or
9.3.1.3 damaged or destroyed as a result of any act or omission attributable to the Tenant, its employees or agents, this Lease shall continue to be of full force and effect and the Tenant shall repair such damage and/or re-erect or restore the Premises to the condition it was in or was deemed to be in at the Commencement Date.
9.3.2 Should any dispute arise between the Landlord and the Tenant in regard to the provisions of this 9.3, such dispute shall be referred for determination by the Architect in accordance with the provisions of 17.1.
9.3.3 The Parties agree that pending determination of -
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9.3.3.1 the calculation of the pro rata reduction referred to in 9.3.1.2; or
9.3.3.2 any dispute contemplated in 9.3.2,
the Tenant shall continue to pay the full monthly rental, Operating Costs and other charges for the Premises as if they had not been damaged and as soon as the matter has been resolved, the Landlord shall make the appropriate repayment to the Tenant (if applicable).
10 FIT-OUT AND ALTERATIONS
10.1 Installation Specifications / Allowance
10.1.1 The Parties record that the Tenant shall undertake the Tenant installation. The Tenant shall use its best endeavours to procure that the Tenant installation is completed prior to the Commencement Date so that the Premises are open for business on the Commencement Date (it being acknowledged that the ability of the Tenant to comply with this requirement will be dependent, in part, on the Landlord providing the Tenant with a beneficial occupation period sufficient to facilitate the completion of the fit-out prior to the Commencement Date.)
10.2 Alterations by the Tenant
10.2.1 . .The Tenant shall not make any structural or other alteration or addition to the Premises or partitioning, or undertake any Tenant Fit-Out Works, without the prior written consent of the Landlord; provided that should the Landlord give such consent or should the Landlord effect such alterations or additions at the Tenants request -
10.2.1.1 such alteration or addition shall be effected at the Tenant's cost under the supervision and control of the Landlord or its nominee;
10.2.1.2 such alteration or addition, or any deviation from the original plans, shall be approved by the relevant local authority at the Tenant's cost and expense; and
10.2.1.3 the fees of any architect or other professional consultant employed by the Landlord for that purpose and the cost of all such alterations or additions shall be borne and paid by the Tenant.
10.2.2 The Landlord shall be entitled to approve contractors, plans and specifications, without thereby incurring any liability (contractually or otherwise) to the Tenant in respect of the alterations and additions.
10.2.3 The Tenant indemnifies the Landlord against any liability for any loss, damage or expense, including consequential damages, which the Tenant, its employees, invitees, third parties or customers may suffer or incur arising out of the alterations or additions.
10.2.4 Should the Landlord -
10.2.4.1 .so require, the Tenant shall, at the termination of this Lease, remove all alterations and/or additions and restore the Premises to the condition in which they were at the commencement of this Lease; or
10.2.4.2 not require such alterations or additions to be removed, all such alterations and additions shall be the Property of the Landlord, who shall not be obliged to compensate the Tenant in respect thereof.
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10.3 Alterations by the Landlord
10.3.1 The Landlord shall be entitled at all reasonable times during the term of this Lease -
10.3.1.1 to effect any repairs, alterations, improvements and/or additions to the Building; and
10.3.1.2 for any such purpose to -
10.3.1.2.1 erect, in such manner as may be reasonably necessary, scaffolding, hoardings and/or other building equipment in, at, near or in front of the Premises, and also such devices as may be required by law or which the Landlord's architect may certify to be reasonably necessary for the protection of any person against injury arising out of the building operations; and
10.3.1.2.2 have access to any portion of the Premises by itself or through its workmen or agents.
10.3.2 The Tenant shall not -
10.3.2.1 under any circumstances be entitled to cancel this Lease by reason of the carrying on of such works; and
10.3.2.2 be entitled to a deferment or remission of rental during the carrying on of such works by the Landlord.
10.4 Re-Building
10.4.1 The Landlord may terminate this Lease or any renewal thereof by giving the Tenant not less than 6 (six) months' prior written notice to such effect, should the Landlord wish to reconstruct and/or redevelop and/or renovate and/or make additions to the Building or the Premises, provided always that such reconstruction and/or redevelopment and/or renovation and/or additions are of a substantial and material nature.
10.4.2 ........The Landlord shall, however, have the right at any time to commence the reconstruction and/or redevelopment and/or renovation and/or additions of the Building other than the Premises, and these operations may proceed while the Tenant is in occupation of the Premises, provided, however, that the Landlord shall make provision for reasonable access to the Premises whilst such operations are in progress and use its reasonable endeavours to limit the inconvenience and disruption of business that will be caused by such operations.
10.4.3 Notwithstanding the above, the Tenant shall not have any -
10.4.3.1 claim for damages of whatsoever nature by reason of the early termination of this Lease as provided for in 10.4.1; or
10.4.3.2 right to object to any work contemplated in 10.4.2 or claim any remission of rental during the period in which such work may be in progress.
11 LANDLORD'S RIGHT TO INSPECT AND ADVERTISE THE PREMISES
The Landlord or its duly authorised agents shall be entitled -
11.1 to inspect the Premises at all reasonable times;
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11.2 to affix to and exhibit on the windows of the Premises a "To Let" notice during the period of 6 (six) months immediately prior to the termination of this Lease;
11.3 together with prospective Tenants and/or purchasers of the Property and/or Building (or any portion thereof), to view the interior of the Premises at all reasonable times; and
11.4 ...together with any incoming Tenant, to exhibit on the windows of the Premises at all reasonable times any notices that may be required in connection with any application for any business license for the Premises.
12 LANDLORD'S AGENT
The Landlord shall be entitled to appoint agents from time to time for the purposes, amongst others, of administering all of the “Commercial Leases” in respect of the Central Beachfront and to terminate the mandate of any agent, in which event the Landlord must notify the Tenant thereof in writing. Unless otherwise notified by the Landlord, the Tenant must deal exclusively with the Landlord’s agent in respect of all matters pertaining to or arising out of this Lease.
13 EXCLUSION OF LIABILITY
13.1 Neither the Landlord nor any of its directors, agents, employees or servants shall be liable for -
13.1.1 personal injury to or the death of any person or the loss of or damage to any property of whatever nature in the Premises, or the Building or on the Property, howsoever arising or caused, save by reason of the wilful default or gross negligence of the Landlord or of any of the said persons or otherwise;
13.1.2 any failure or suspension of, or any interruption in, the supply of water, electricity, gas, district cooling, air-conditioning, heating, telecommunication service or any other amenity or service to the Premises or any part of the Premises (including, any cleaning service), whatever the cause may be;
13.1.3 ......any breakdown of, or interruption in the operation of, any machinery, plant, equipment, installation, or system situated in or on, or serving the Premises or any part of the Premises, including any lift, escalator, geyser, boiler, burglar alarm, or security installation or system, whatever the cause may be;
13.1.4 any interruption of, or interference with, the enjoyment or beneficial occupation of the Premises or Property or any part thereof caused by any building operations or other works to the Building or elsewhere on or about the Property, whether by the Landlord or by anybody else; or
13.1.5 any loss which the Tenant may suffer as a result of the business activities of any other occupants of the Property.
13.2 . For the purposes of 13.1.1, "personal injury to or death of any person or of loss of or damage to any Property" shall include loss of profits, consequential damages or any damage to stock in trade, equipment, machines, raw materials, papers or other articles kept in the Premises or on the Property (whether the Property of the Tenant or that of anyone else) by rain, hail, lightning or fire or by reason of riots, strikes, state's enemies or as a result of theft or burglary, with or without forceful entry, or through any cause whatsoever.
13.3 The Tenant hereby indemnifies the Landlord and its directors, agents, employees and servants against any claim of whatever nature which may be made against any of them arising out of any of the aforegoing occurrences.
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14 BREACH
14.1 Should the Landlord breach any of its obligations under this Agreement and fail to remedy such breach within a period of 14 (fourteen) days (or such longer period as may be necessary to facilitate the remedying of the breach by diligent application thereto), the Tenant shall be entitled, without prejudice to any of its other rights under this Agreement, to claim specific performance, if such an appropriate remedy in the circumstances, or to cancel this Agreement by way of written notice to the Landlord and, in either event, to claim such damages as it may thereby have suffered.
14.2 Should the Tenant –
14.2.1 fail to pay any rent or other amount due by it to the Landlord in terms of this Lease on the due date therefor; or
14.2.2 commit any breach of the terms and conditions of this Lease which is incapable of being remedied and which goes to the root of the agreement; or
14.2.3 commit any breach of the terms of this Lease other than a breach referred to in 14.2.1 or 14.2.2 and fails to remedy such breach within 7 (seven) days (or such longer period as may be reasonably required should such breach not be capable of being remedied within 7 (seven) days) after written notice requiring that it be remedied; or
14.2.4 so consistently breaches the terms of this Lease (whether by non-payment of rent or any other amount due to the Landlord on the due date therefore or by non-compliance with its terms) as to justify the Landlord in holding that the Tenant's conduct is inconsistent with an intention or an ability to carry out these terms; or
14.2.5 breach its obligations with regard to the delivery or maintenance of service of the required standard as contemplated in clause 8.1.6 above, within 180 days of receipt of a written notice from the Landlord specifying those service levels of the Tenant which fall short of the required standard and calling upon it to bring its service levels up to the required standard; or
14.2.6 being a natural person dies during the currency of the Lease; or
14.2.7 being a natural person, partnership or trust, commit an act of insolvency within the meaning of section 8 of the Insolvency Act, No. 24 of 1936, as amended, or its successor in title; or
14.2.8 being a company or close corporation, is or is deemed in accordance with applicable legislation, to be unable to pay its debts; or
14.2.9 breach any of the provisions of clause 8.10 above; or
14.2.10 be a partnership, and admits any new partners or in any way changes the partners of the partnership, unless the new partner/s has first bound himself jointly and severally with the other partners as a tenant unto the Landlord; (and with application, mutatis mutandis, to an incorporated company with unlimited liability),
then and in any of such events, the Landlord shall have the right but not be obliged, without prejudice to and in addition to any other rights which it may have at law and in its sole discretion to the remedies set out in 14.3 below.
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14.3 Under the circumstances described in 14.2 above, the Landlord shall be entitled to -
14.3.1 cancel this Lease, claim damages and retake possession of the Premises without prejudice to any of its other rights under this Lease or at law. In so doing, the Landlord shall be entitled to remove from the Premises any goods situate therein, in which event, the Tenant shall have no claim whatsoever either for damages or otherwise against the Landlord. Any goods so removed from the Premises, shall be stored at the cost and risk of the Tenant; and/or
14.3.2 convert this Lease into one which the Landlord (but not the Tenant who shall continue to be bound for the full period of the Lease) shall be entitled to terminate by giving 1 (one) month’s written notice to the Tenant, the remaining terms and conditions being otherwise unaffected, without prejudice to the Landlord’s claim for arrear rent and/or damages which it may have suffered by reason of the Tenant’s breach or of the premature cancellation; and/or
14.3.3 claim specific performance and damages.
14.4 In the event of the Landlord cancelling this lease and the Tenant disputing its right to cancel and remaining in occupation of the Premises, the Tenant shall, pending the determination of such dispute, continue to pay to the Landlord an amount equivalent to the monthly rental and or other sums payable hereunder on the date or dates upon which such sum would have been due but for the cancellation, and the Landlord shall be entitled to accept and recover such payments. The acceptance thereof shall be without prejudice to and shall not in any way whatsoever affect the Landlord’s cancellation then in dispute. Should the dispute be determined in favour of the Landlord, the payments made and received in terms of this clause shall be deemed to be amounts paid by the Tenant on account of damages suffered by the Landlord by reason of the cancellation of the lease and/or the unlawful holding over by the Tenant.
14.5 In the event of the Landlord instructing its attorneys to take legal action or other measures for the enforcement of any of the Landlord's rights under this Lease, the Tenant shall pay to the Landlord such legal fees and collection charges on an attorney-and-own-client scale (alternatively the highest permissible scale of legal fees) together with collection commission, counsel’s fees, auditor’s fees, forensic auditor’s fees, valuator’s fees, architect’s fees, quantity surveyor’s fees, other consultants, professional or expert’s fees and all other reasonable costs incurred by the Landlord in having to take such legal steps as shall be lawfully charged by such persons to the Landlord, on demand made therefor by the Landlord.
14.6 Any payments made by the Tenant after legal action has been instituted, shall be appropriated first towards such legal costs as contemplated in 14.5 above.
15 RESOLUTION OF DISPUTES
15.1 Any dispute which the parties are unable to resolve by negotiation between them (and following reference of the dispute to the Chief Executive Officer or his designate of each of the parties), shall, at the instance of either party, be submitted to and decided by arbitration if it concerns:
15.1.1 any matter arising out of; or
15.1.2 the interpretation of; or
15.1.3 the termination of; or
15.1.4 any matter arising out of the termination of:
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this Agreement.
15.2 The arbitration referred to in clause 15.1 above shall be held:
15.2.1 at Durban;
15.2.2 in English and in accordance with the provisions of the Arbitration Act then in force in South Africa;
15.2.3 as soon as is reasonably practicable in the circumstances and with a view to it being completed expeditiously.
15.3 The arbitrator shall be a person agreed between the parties and, failing agreement, a person nominated for such purpose by the President (or failing him, the Secretary) for the time being of the KwaZulu-Natal Law Society (or, if applicable, the successor to the KwaZulu-Natal Law Society), subject to the following provisions –
15.3.1 if the question in issue is primarily a financial one, the arbitrator shall be an independent accountant of not less than 10 (TEN) years standing as such;
15.3.2 if the question in issue is primarily a legal matter or is not a matter which falls within the category contemplated in clause 15.3.1 above, the arbitrator shall be a practising Senior Counsel at the KwaZulu-Natal Bar.
15.4 The arbitrator shall determine, inter alia, which party shall pay the costs of and incidental to the arbitration or, if each is to contribute, the ratio of their respective contributions.
15.5 The parties irrevocably agree that the decision of the arbitrator shall, in the absence of manifest error :
15.5.1 be binding on them;
15.5.2 be carried into effect;
15.5.3 be capable of being made an Order of any Court of competent jurisdiction.
15.6 Notwithstanding the above, either party shall be entitled to apply to the High Court for an interdict or a mandamus where such is appropriate in the circumstances.
16 NOTICES AND DOMICILIA
16.1 Each Party chooses as its domicilium citandi et executandi its address set out in this 16 for all purposes arising out of or in connection with this Lease at which address all the processes and notices arising out of or in connection with this Lease, its breach or termination may validly be served upon or delivered to the Party.
16.2 For the purpose of the Lease, the Parties' respective addresses shall be –
16.2.1 as regards the Landlord at the domicilium address and facsimile number specified in 1.1.1 of the Schedule; and
16.2.2 as regards the Tenant at the domicilium address and facsimile number specified in 1.1.2 of the Schedule,
or at such other address in the RSA, not being a post office box or poste restante, of which the party concerned may notify the others in writing.
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16.3 Any notice given in terms of the Lease shall be in writing and shall –
16.3.1 if delivered by hand be deemed to have been duly received by the addressee on the date of delivery; and
16.3.2 if delivered by recognised courier service be deemed to have been received by the addressee on the first Business Day following the date of such delivery by the courier service concerned.
16.4 Notwithstanding anything to the contrary contained in this 16, a written notice or other communication actually received by a Party shall be adequate written notice or communication to it notwithstanding that the notice was not sent or delivered to its chosen address.
17 MISCELLANEOUS
17.1 Determination by Architect
When in terms of the Lease any matters are referred to the Architect for determination –
17.1.1 such Architect shall be appointed mutatis mutandis on the basis provided in 1.1.1;
17.1.2 the reference shall be to the Architect acting as an expert and not as an arbitrator or quasi arbitrator; with the view that the matter for determination be dealt with as expeditiously as possible;
17.1.3 each Party shall be entitled to submit written representations in respect of all relevant factors to the Architect for consideration within 10 (ten) Business Days of notice of a determination being given;
17.1.4 the Parties shall use their best endeavours to procure that the Architect's determination of the matter concerned is made within a period of 20 (twenty) Business Days from the expiry of the date within which the Parties are to submit written submissions to the Architect in terms of 17.1.3;
17.1.5 the Architect's determination shall be final and binding on the Parties to the dispute and carried into effect by the Parties. The Architect shall be obliged to give reasons, whether written or verbal, in respect of any determination; and
17.1.6 the cost of the Architect in making their determination shall be for the account of the Parties to the dispute in equal shares.
17.2 Signature by Landlord
This Lease shall only take effect and become binding upon the Landlord when signed by the Landlord, failing which the Tenant may not claim existence of a lease from negotiations having been conducted or concluded in regard thereto or by reason of this Lease having been drafted or signed by the Tenant. The execution by the Tenant of this document shall amount to an offer by the Tenant to enter into this Lease upon the terms and conditions set forth herein, which offer shall remain open for acceptance until signed by the Landlord. This offer shall not be affected in any way by subsequent negotiations which may be entered into by and between the Landlord and/or its agents with the Tenant, whether such negotiations amount to a counter-offer or not. If the Tenant takes occupation of the Premises before this Lease has been executed, the Landlord shall be entitled to require the Tenant to vacate the Premises by giving the Tenant 7 (seven) days written notice to that effect.
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17.3 Auditors' certificate
A certificate signed by the Landlord's auditors as to the existence of any amount of indebtedness of the Tenant to the Landlord at any time, as to the fact that such amount is due and payable, the amount of interest accrued thereon and as to any other fact, matter or thing relating to the indebtedness of the Tenant to the Landlord, shall be prima facie proof of the contents and correctness thereof.
17.4 Enforcement by Landlord
17.4.1 Should the Tenant fail to carry out any of its obligations under this Lease then, without prejudice to any of the Landlord's rights, the Landlord shall be entitled at its discretion to enforce or to carry out the same on behalf of the Tenant, both during and after the termination of this Lease, and to recover from the Tenant the cost and expense thereof.
17.4.2 The Tenant shall have no claim against the Landlord or any defence to any claim by the Landlord arising out of any act or omission on the part of the Landlord connected with, effecting or attempting such compliance or, even if the Landlord has undertaken to effect such compliance, the Landlord failing to do so properly or at all.
17.5 Company or Close Corporation to be formed
17.5.1 If the person who signs this Lease for the Tenant does so acting as a trustee or agent for a company or close corporation to be formed (the "Trustee") then the provisions of this 17.5 shall apply.
17.5.2 Such company or close corporation shall be incorporated by not later than 30 (thirty) days after the Signature Date.
17.5.3 Subject to 17.5.2, if a company is formed for the purpose of ratifying or adopting this Lease, then the Landlord shall not be bound by such ratification or adoption unless -
17.5.3.1 the company's memorandum on the date of the company's incorporation contains as one of its objects the ratification or adoption of this Lease;
17.5.3.2 the company in fact ratifies or adopts this Lease within 7 (seven) days after its incorporation; and
17.5.3.3 the Trustee delivers to the Landlord within 7 (seven) days of the ratification by the company of this Lease, a copy of the company's memorandum, articles of association and the company's resolution evidencing the ratification or adoption, all duly certified as true copies by a director.
17.5.4 If a close corporation is formed for the purpose of ratifying or adopting this Lease, then the Landlord shall not be bound by such ratification or adoption unless -
17.5.4.1 all the members of the corporation have given their written consent to such ratification or adoption within 7 (seven) days after the incorporation of such close corporation; and
17.5.4.2 .. . .the Trustee delivers, within 7 (seven) days after the ratification by the corporation of this Lease, to the Landlord a copy of the close corporation's founding statement together with a copy of the written consent of all its members to the ratification or adoption of this Lease, both duly certified as true copies by an authorised member of the corporation.
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17.5.5 . . .If neither the company nor the close corporation is incorporated, or once it is incorporated fails to ratify or adopt this Lease in the manner envisaged in 17.5.3 and 17.5.4, then the Trustee shall be personally bound by and liable for all the obligations and entitled to all the rights in terms of this Lease.
17.5.6 Until such time as the company or close corporation becomes the Tenant in terms hereof, the Landlord shall be entitled to regard the Trustee as the Tenant and shall be entitled to exercise all or any of the Landlord's rights against the Trustee personally.
17.5.7 If the company or close corporation is formed, incorporated or registered, obtains a certificate to commence business and ratifies and adopts this agreement within the time periods referred to in 17.5.3 and 17.5.4, the Trustee by his signature hereto binds himself in favour of the Landlord as surety and co-principal debtor with the company or the close corporation, as the case may be, under the renunciation of the benefits of excussion and division for the due and punctual performance by the company or the close corporation of all its obligations arising out of This Lease or any cancellation thereof.
17.6 Liabilities of Partners
If the Tenant is a partnership then by their signature of this Lease, the individual partners of the Tenant bind themselves, both as a partnership and jointly and severally as individuals, for the Tenant's obligations to the Landlord under and arising out of this Lease. Similarly, joint Tenants shall be jointly and severally liable for their obligations as Tenants under or arising from this Lease.
17.7 Cession of Lease by Landlord
The Landlord shall have the right at any time to cede, transfer and assign any or all of its rights and obligations in terms of this Lease to any company, close corporation or other person, juristic or otherwise, and the Tenant, upon being notified of such cession shall be bound to recognise the cessionary as the Landlord under this Lease.
17.8 Warranty of Authority
Each Party warrants to the other Party that it has power, authority and legal right to sign and perform the Lease and that this Lease has been duly authorised by all necessary actions of its directors and constitutes valid and binding obligations on it in accordance with the terms of this Lease.
17.9 Value-Added Tax
The Tenant acknowledges and agrees that -
17.9.1 it shall be liable to pay VAT on the rent and other amounts payable in terms of this Lease together with payment of such amounts payable to the Landlord; and
17.9.2 if this Lease is entered into prior to the imposition of any increase in the rate of VAT by the relevant authority, all amounts payable in terms of this Lease shall be subject to variation in accordance with the provisions of section 67 of the VAT Act, it being recorded and agreed that the Landlord shall receive the same rent, Operating Costs and any other amounts payable in terms of this Lease, after payment of VAT, regardless of the rate at which VAT is payable.
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17.10 Confidentiality
17.10.1 Confidentiality of Transaction
17.10.1.1 Subject to 17.10.1.2, a Party shall not, without the consent of the other Party, issue or make any public announcement or statement or release or make available any information regarding this Lease or its implementation. Once the other Party has approved any such announcement or statement or release of information, the approving Party shall automatically be entitled to issue or make the same announcement or statement or release the information in question in the same approved format.
17.10.1.2 The provisions of 17.10.1.1 shall not apply to a public announcement or release of information which any Party is required to make in order to comply with a statutory obligation or the requirements of a competent governmental authority or a recognised stock exchange or if such Party or one of its subsidiaries wishes to disclose any such information in its annual financial statements, in which event a copy of the announcement or statement shall, prior to publication or release, be furnished to the other Party for its approval which approval shall not unreasonably be withheld.
17.10.2 Confidentiality in respect of information
17.10.2.1 All intellectual property, technical, financial, marketing, personnel and similar information disclosed to either of the Parties either pursuant to this Lease or any related agreement or in connection with the Party’s ongoing business operations, shall be deemed to be confidential unless specifically designated as being non-confidential information.
17.10.2.2 Subject to applicable law, for a period of 1 (one) year from the date of any disclosure, the receiving Party covenants and agrees itself and on behalf of its directors, officers, employees and agents to use care and discretion to avoid disclosure, publication or dissemination of such confidentially information of the other Party by its employees with similar information of its own which it does not desire to publish, disclose or disseminate, provided that the above obligations will not apply to any such information if it -
17.10.2.2.1 is already known to the recipient without obligation of confidence;
17.10.2.2.2 is independently developed by the recipient;
17.10.2.2.3 is or becomes publicly available without breach of this Lease or any related agreement;
17.10.2.2.4 is rightfully received from a third party;
17.10.2.2.5 is released for disclosure by the disclosing party with its written consent; or
17.10.2.2.6 is required to be disclosed in a response to a valid order of court or other governmental agency or if disclosure is otherwise required by law.
17.11 Independent Advice
Each of the Parties acknowledges that it has been free to secure independent legal advice as to the nature and effect of all of the provisions of this Lease and that it has either taken such independent legal advice or dispensed with the necessity of doing so. Further, each of the Parties acknowledges that all of the provisions of this Lease and the restrictions herein
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contained are fair and reasonable in all the circumstances and are part of the overall intention of the Parties in connection with this Lease.
17.12 Implementation and Good Faith
17.12.1 The Parties undertake to do all such things, perform all such acts and take all steps to procure the doing of all such things and the performance of all such acts, as may be necessary or incidental to give or be conducive to the giving of effect to the terms, conditions and import of this Lease.
17.12.2 The Parties shall at all times during the continuance of this Lease observe the principles of good faith towards one another in the performance of their obligations in terms of this Lease. This implies, without limiting the generality of the aforegoing, that they will -
17.12.2.1 at all times during the term of this Lease act reasonably, honestly and in good faith;
17.12.2.2 perform their obligations arising from this Lease diligently and with reasonable care; and
17.12.2.3 make full disclosure to each other of any matter that may affect the execution of this Lease.
17.13 Further Assurances
The Parties agree to perform any further acts and to execute and deliver any further documents which may be necessary or appropriate to carry out the purposes and the implementation of this Lease.
17.14 Whole Agreement
This Lease constitutes the whole agreement between the Parties as to the subject matter hereof and no agreement, representations or warranties between the Parties other than those set out herein are binding on the Parties.
17.15 Variation
No addition to or variation, consensual cancellation or novation of this Lease (including a variation of cancellation of this clause) and no waiver of any right arising from this Lease or its breach or termination shall be of any force or effect unless reduced to writing and signed by all the Parties or their duly authorised representatives.
17.16 Relaxation
No latitude, extension of time or other indulgence which may be given or allowed by the Landlord to the Tenant in respect of the performance of any obligation hereunder or enforcement of any right arising from this Lease and no single or partial exercise of any right by the Landlord shall under any circumstances be construed to be an implied consent by the Landlord or operate as a waiver or a novation of, or otherwise affect any of the Landlord's rights in terms of or arising from this Lease or estop the Landlord from enforcing, at any time and without notice, strict and punctual compliance with each and every provision or term hereof.
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17.17 Costs
17.17.1 Save as otherwise expressly stated, each Party is responsible for its own costs incurred in the negotiation, drafting and settlement of this Lease.
17.17.2 All costs, including attorney and own client costs, incurred by one Party arising out of the breach of any provisions of this Lease by the other Party, shall be borne by the Party in breach.
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APPENDIX B
FLOOR PLAN
APPENDIX C
LOCALITY PLAN
APPENDIX D
LANDLORD'S RESOLUTION
APPENDIX D
LANDLORD'S RESOLUTION
EXTRACT FROM THE MINUTES OF A MEETING OF THE COUNCIL OF THE ETHEKWINI MUNICIPALITY HELD AT DURBAN ON THE 31st DAY OF AUGUST 2009
IT WAS RESOLVED:
That in terms of section 34(4) of the Asset Transfer Regulations, the Council delegates to the City manager the power to approve in principle the granting of the right to use, control or manage a capital asset.
_______________________________
Certified a True Copy
Date
APPENDIX E
TENANT'S RESOLUTION
APPENDIX E
TENANT’S RESOLUTION
EXTRACT FROM THE MINUTES OF A MEETING OF ____________(the "Company/Corporation") PASSED AT DURBAN ON ......................
RESOLVED THAT -
1 the Company enters into a lease agreement with eThekwini Municipality (the "Landlord") in terms of which the Landlord lets and the Company hires ........................ on the terms and conditions contained in the lease tabled at the meeting.
2 ............................................. (ID Number ....................) be and is hereby authorised to do all such things and sign all such documents to give effect to the transaction referred to in 1.
___________________________
Certified a true copy
Date
Shareholders
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APPENDIX F
SURETYSHIP
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APPENDIX F
SURETYSHIP
1 We, the undersigned, [....................] (Identity Number/Registration Number [.............]), and [..............] (Identity Number/ Registration Number [..............]) of [................], do each hereby bind ourselves, jointly and severally to the eThekwini Municipality (the "Creditor"), their successors-in-title and assigns, as sureties for and co-principal debtors in solidum with [.....................] (Identity Number/Registration Number [...................]) (the "Principal Debtor") for the due and punctual payment and performance by the Principal Debtor of all debts and obligations of whatever nature and howsoever arising which the Principal Debtor may now or in the future owe to the Creditor arising directly or indirectly out of and/or pursuant to -
1.1 the lease agreement (the "Lease Agreement") concluded between the Creditor and the Principal Debtor, during [............], to which this suretyship is Appendix F or any temporary leases contemplated in clause 6.4 of Appendix A of the Lease Agreement or any renewal or cancellation of the Lease Agreement; and/or
1.2 any breach by the Principal Debtor of any of the provisions of the Lease Agreement; and/or
1.3 any breach of any warranty given by the Principal Debtor to the Creditor in terms of the Lease Agreement,
(all of which debts and obligations are referred to as "the Obligations").
2 As part of our liability in terms hereof, we bind ourselves as aforesaid to pay the amount of all costs, charges and expenses of whatever nature including, but without derogating from the generality of the aforegoing, tracing costs, collection commission and legal costs as between attorney and own client incurred by the Creditor in securing or endeavouring to secure fulfilment of the Obligations as well as our Obligations hereunder.
3 The rights of the Creditor under this suretyship shall in no way be affected or diminished if the Creditor at any time obtains additional suretyships, guarantees, securities or indemnities in connection with the Obligations of the Principal Debtor.
4 Notwithstanding that this suretyship may -
4.1 for any reason whatever be held to be or become not binding in whole or in part upon any one or more of us; and
4.2 not be signed by any one or more of us,
it shall be and remain of full force and effect and binding upon the others of us.
5 This suretyship shall remain in full force and effect notwithstanding -
5.1 any fluctuation in or temporary extinction for any period whatever of the Obligations; or
5.2 the death or sequestration of any one or more of us or any one or more of us suffering legal disability;
5.3 any alteration to or amendment of the Lease Agreement,
until such time as the Obligations have been discharged in full.
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6 We shall be bound by all admissions and acknowledgements of indebtedness made or given at any time by the Principal Debtor to the Creditor now or in the future in regard to any of the Obligations.
7 No alteration, variation or novation of any present or future agreement between the Principal Debtor and the Creditor shall in any way release us from our liability hereunder.
8 The Creditor shall be entitled, whether before or after the due dates for payment or performance of the Obligations, without reference or notification to us, without affecting its rights hereunder and without releasing any surety hereunder, to -
8.1 release any other sureties and securities;
8.2 grant the Principal Debtor extensions of time for payment; and/or
8.3 compound or to make any other arrangements with the Principal Debtor for the discharge of the Principal Debtor's indebtedness.
9 The Creditor shall further be entitled, without reference or notification to us, to release any one or more of us from our Obligations hereunder in whole or in part, without affecting the rights of the Creditor against the others of us and without reducing the liability of the others of us in terms hereof.
10 Should the Principal Debtor be wound-up, placed in liquidation or under judicial management, or submit an offer of compromise or of composition, or a scheme of arrangement in terms of any company or insolvency law, or in terms of the common law the Creditor shall be entitled to accept any -
10.1 dividend in such event on account and in reduction of the Principal Debtor's indebtedness; and/or
10.2 other securities, guarantees or suretyships arising out of any such event.
11 No provision of any clause, nor any action taken by the Creditor, shall affect or diminish our liability in terms hereof, save to the extent of actual payment to the Creditor applied in reduction of the indebtedness of the Principal Debtor.
12 We hereby warrant to the Creditor that we have a material interest in binding ourselves in terms of this deed which is entered into for our benefit.
13 Should the Principal Debtor fail to discharge any of the Obligations on due date, the Creditor shall be entitled notwithstanding any contrary arrangement with the Principal Debtor, to demand from us immediate performance of all the Obligations then due and owing by the Principal Debtor to the Creditor.
14 We hereby renounce the benefits of the legal exceptions "non causa debiti", "errore calculi", "excussion", "division", "de duobus vel pluribus reis debendi", "no value received", "cession of action" and "revision of accounts", with the meaning and effect of all of which we declare ourselves to be fully acquainted.
15 We hereby agree and consent that the Creditor shall, at its option, be entitled to institute any legal proceedings which may arise out of or in connection with this deed of suretyship, at the election of the Creditor, in -
15.1 any magistrate’s court having jurisdiction, notwithstanding the fact that the claim or value of the matter in dispute might exceed the jurisdiction of such magistrate's court; or
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15.2 the KwaZulu-Natal High Court, Durban to which jurisdiction we hereby consent.
16 We hereby choose domicilium citandi et executandi at the address set out in 1 above at which address all notices and communications may be addressed to us and all notices addressed to us at the said address and dispatched by prepaid registered post shall be deemed to have reached us 7 (seven) days after the date of posting.
17 A certificate under the hand of the auditors of the Creditor as to the existence and amount of the indebtedness of the Principal Debtor and of ourselves to the Creditor at any time, as to the fact that such amount is due and payable, the amount of interest accrued due thereon and the rate of interest applicable thereto and as to any other fact, matter or thing relating to the indebtedness of the Principal Debtor and of ourselves to the Creditor shall be prima facie proof of the contents and correctness thereof and the amount of our indebtedness hereunder for the purpose of provisional sentence or summary judgment or any other proceedings against us in any competent court, and shall be valid as a liquid document for those purposes. It shall not be necessary to prove the appointment of the person signing any such certificate.
18 Each provision in this suretyship is severable the one from the other and if any provision is found by any competent court to be defective or unenforceable for any reason whatever, the remaining provisions shall be of full force and effect and continue to be of full force and effect.
19 In this suretyship, unless the context clearly indicates a contrary intention, an expression which denotes the singular includes the plural and vice versa.
20 In the event that provision is made for the signature hereof by more than one surety, the liability of the signatories in terms hereof shall in no way be effected, diminished or extinguished if any surety or sureties fail to sign this suretyship.
21 We acknowledge and confirm that this deed of suretyship was duly completed in all respects before it was executed by us.
Signed at _____________________________ on ___________________________ .
Witnesses
________________________
________________________ (Surety)
Signed at _____________________________ on ___________________________ .
Witnesses
________________________
________________________(Surety)
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APPENDIX G
TURNOVER RENTAL SCHEDULE
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APPENDIX G
TURNOVER RENTAL SCHEDULE
1 DEFINITIONS
For the purpose of this Appendix the definitions contained in the Lease to which this document is attached as Appendix G, shall have the same meanings herein and the following words and expressions shall have the meanings set opposite them below -
1.1 "Group" - the companies which from time to time being are the Tenant's holding and subsidiary companies and companies which are subsidiary companies of the Tenant's holding companies;
1.2 "Turnover" - the selling price of goods sold by the Tenant and the Group in the Premises, whether sold for cash, credit, on hire purchase or on other terms, minus –
1.2.1 discounts and credits: any discounts and credits allowed in respect of goods traded in and goods repossessed for any reason;
1.2.2 bad debts: any amounts reasonably written off during any Year as bad debts; provided that any bad debts which have been written off and are subsequently recovered shall be added to the Turnover in the Year during which they are recovered; and
1.2.3 interest and finance: interest, finance and any other charges and any tax or imposition levied in connection with the sale of goods from the Premises; and
1.2.4 the VAT portion of such Turnover.
1.3 "Year" – each of the 12 (twelve) month periods corresponding with a year of this Lease, the first such Year being the period commencing on the Commencement Date with the second Year commencing on the first anniversary of the Commencement Date, and so on.
2 ANNUAL TURNOVER RENTAL
The annual turnover rental payable by the Tenant to the Landlord for the Initial Period shall be the amount by which the percentage of the Turnover for the relevant Year, as specified in 1.8 of the Schedule, exceeds the aggregate basic rental referred to in 1.7 of the Schedule for the same Year.
3 STATEMENT OF TURNOVER
Within 3 (three) months after the end of each succeeding Year, the Tenant shall furnish a statement to the Landlord setting out the Turnover during that Year and the aggregate basic rental referred to in 1.7 of the Schedule for the same Year. The following provisions shall apply to each such statement -
3.1 auditors’ certificate - it shall be certified as correct by the Tenant's auditors for the time being;
3.2 reference to auditors - if the Landlord disputes the information contained in any such statement, then it shall be referred for determination to the respective auditors for the time being of the Landlord and the Tenant and if such auditors agree, their decision shall be final and binding upon the Parties save for patent errors or errors of omission. Each of the auditors shall make its working papers available for inspection and consideration by the other auditor and the Landlord or the Tenant (as the case may be);
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3.3 reference to umpire - if such auditors do not agree, they shall appoint a third practising auditor who shall be agreed upon between them and, failing agreement, shall be appointed by the chairman, and failing him the secretary, for the time being of the South African Institute of Chartered Accountants (Eastern Region), whose decision shall be final and binding upon the Parties, subject to patent errors or errors of omission. The third auditor shall make its working papers available for inspection and consideration by the Landlord or the Tenant and their respective auditors;
3.4 correction of patent errors - if either the Landlord or the Tenant allege that the inspection of the working papers in terms of 3.2 or 3.3 has disclosed a patent error or an error of omission, and the Parties are unable to agree within a reasonable time upon the steps to be taken to rectify such alleged error, then a dispute shall be deemed to have arisen in regard to such alleged error, which shall be referred to an independent auditor to be appointed by the Parties and failing agreement, to be appointed by the chairman, and failing him the secretary, for the time being of the South African Institute of Chartered Accountants, mutatis mutandis as set out in 3.3; and
3.5 costs - each of the parties shall bear the charges of the auditors appointed by it and they shall share equally the charges of any auditor referred to in 3.3 and 3.4.
4 NOTIFICATION OF MONTHLY TURNOVER AND TRANSACTIONS
Notwithstanding anything to the contrary contained or implied herein, the Tenant shall be obliged to notify the Landlord in a manner as requested by the Landlord, of its monthly Turnover and the number of transactions completed by the Tenant on the Premises, by no later than the 7th (seventh) day of each calendar month in respect of its Turnover in the previous calendar month.
5 PAYMENT OF TURNOVER RENTAL
The Tenant shall, within a period of 7 (seven) days after having furnished the statement referred to in 3 to the Landlord, pay, if applicable, to the Landlord the annual Turnover rental referred to in 2.
6 ADJUSTMENT OF ADDITIONAL MONIES
Any adjustment to be made to the amount paid by the Tenant in terms of 3 as a result of any dispute referred to in 3.2, 3.3 and/or 3.4 shall be paid in cash 7 (seven) days after the dispute has been resolved.
7 BROKEN PERIOD ON TERMINATION
If this Lease terminates for any reason before the end of any Year, then the aggregate basic rental referred to in 1.7 of the Schedule for the same Year shall be calculated for the period between the end of the previous Year and the date of termination. The Turnover rental for that period shall be the amount by which the percentage of the Turnover for the relevant Year as specified in 1.8 of the Schedule (for the period concerned), exceeds the aggregate basic rental referred to in 1.7 of the Schedule for the same Year (for the period concerned). Within 3 (three) months of the date of termination of the Lease, the statement referred to in 3 shall be delivered to the Landlord and the provisions of 3.2, 3.3 and 3.4 shall apply, mutatis mutandis.
8 INSPECTION
In order to satisfy itself as to the Turnover, the Landlord’s auditors shall be entitled, at the Landlord’s cost, at all reasonable times to inspect the Tenant’s and the Group’s books and records relating to the business conducted by them in the Premises.
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9 CONFIDENTIAL INFORMATION
No information which may come to the knowledge of the Landlord or its auditors for the time being as a result of the provisions of this Appendix shall be divulged by them to any person without the prior written consent of the Tenant. The Landlord undertakes to procure and deliver to the Tenant a written undertaking from its auditors for the time being in favour of the Tenant to be bound by the provisions of this . Such undertaking shall be delivered by the Landlord's auditors to the Tenant before delivery by the Tenant of its first statement of turnover in terms of 3.
10 MINIMUM TURNOVER
10.1 The Tenant warrants that the annual turnover of the Tenant shall not be less than -
10.1.1 the amount specified in 1.9.1 of the Schedule, during the first Year; and
10.1.2 an amount equal to the amount specified in 1.9.1 of the Schedule, escalated at the rate specified in 1.9.2 of the Schedule per annum compounded, in respect of each subsequent Year.
10.2 The Landlord reserves the right to cancel this Lease by written notice to that effect to the Tenant in the event of the actual annual Turnover being less than the warranted minimum turnover set forth in 10.1.
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