EXHIBIT 10.18
PHASECOM - HAR HOTZVIM
UNPROTECTED LEASE AGREEMENT
ENTERED INTO AND SIGNED IN TEL AVIV ON MARCH 7, 1999
BETWEEN
Ayalot Investments in Properties (Har Hotzvim) 1994 Ltd.
P.C. # ▇▇-▇▇▇▇▇▇-▇
of ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇
(hereinafter: the "Lessor")
OF THE FIRST PART;
AND
Phasecom (Israel) Ltd.
P.C. # ▇▇-▇▇▇▇▇▇-▇
whose address shall be at the Leased Premises
from the date of entry of the Lessee into the Leased Premises
(hereinafter: the "Lessee")
OF THE SECOND PART
Whereas the Lessor owns the leasing rights to the property located on
Har Hotzvim in Jerusalem and known as parcel 116 of block
30241 (hereinafter: the "Building"); the extract of
registration for the plot is attached to this agreement as
APPENDIX A and forms an integral part hereof; and
Whereas the Lessee is interested in leasing from the Lessor, and the
Lessor agrees to lease to the Lessee, part of the Building on
a gross area of 2,415 m2 (including an agreed portion of the
public areas) on the third and fourth office floors and a
warehouse on a gross area of 100 m2 on level -3.35 and parking
spaces as set forth in clause 11 (hereinafter: the "Leased
Premises"); the (net) Leased Premises are marked in red on the
drawings attached to this agreement as APPENDICES B-1 - B-4
and forming an integral part hereof; and
Whereas the Leased Premises are part of the Building being
constructed, and according to the pace of progress of the
construction, the Lessor anticipates that the Leased Premises
will be ready on the date of commencement of the lease, vacant
of any person or object and in the exclusive possession of the
Lessor; and
Whereas the Lessor has confirmed that the construction of the Building
is performed lawfully and in accordance with a lawfully issued
building permit and in accordance with the zoning plans, and
that there is no lawful or other impediment to using the
Leased Premises in accordance with the purpose of the lease;
and
Whereas a lease agreement dated July 28, 1994 exists between the
parties (hereinafter: the "Original Lease Agreement"), in
connection with a property located near the Leased Premises
(hereinafter: "Premises A"); and
Whereas the term of the lease under the Original Lease Agreement ends
on November 5, 1998 (hereinafter: the "End of the Original
Lease Period"); and
Whereas the Lessee has expressed its wish to lease the Leased Premises
from the Lessor as a replacement for Premises A, after the End
of the Original Lease Period, by unprotected tenancy and
without it acquiring any rights to the Leased Premises under
the Tenants Protection Law (Consolidated Version) 5732-1972
and all regulations enacted and/or to be enacted thereunder
(hereinafter: the "Law") and/or any other law replacing and/or
supplementing it, the subject-matter of which is tenants'
protection,
THEREFORE, IT WAS BEEN DECLARED, AGREED AND STIPULATED
BY AND BETWEEN THE PARTIES AS FOLLOWS:
1. INTERPRETATION
a. The preamble to this agreement and all the provisions thereof
and the appendices attached hereto constitute an integral part
hereof.
b. The headings of the clauses shall not be used for the
interpretation of the agreement.
2. THE ENGAGEMENT AND THE DURATION THEREOF
a. The Lessor hereby leases the Leased Premises to the Lessee and
the Lessee hereby leases the Leased Premises from the Lessor
for a period commencing on March 1, 1999 and ending on
December 31, 2003 (hereinafter: the "Term of the Lease").
The Lessee shall have the option to extend the Term of the
Lease under this agreement for an additional five year period,
provided that it shall give written notice thereof to the
Lessor no later than 150 days prior to
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the expiration of the Term of the Lease (hereinafter: the
"Extended Lease"). The Lessor shall inform the Lessee 180-210
days prior to the end of the Term of the Lease of its need to
notify of its exercise or non-exercise of the option, and the
Lessee shall reply thereto no later than 150 days prior to the
expiration of the Term of the Lease.
In the event that the Lessee shall not give notice as
aforesaid, the lease shall end on December 31, 2003. In the
event that the Lessee shall have notified of its exercise of
the option, the Term of the Lease shall be extended by five
years under the terms of the agreement, MUTATIS MUTANDIS, and
the Lessee shall not be entitled to terminate or cease the
lease prior to expiration of the term of the Extended Lease,
as aforesaid.
Notwithstanding the aforesaid, it is hereby agreed that for
the duration of the Extended Lease, the rent charged shall be
7.5% higher than that charged during the Term of the Lease.
b. It is hereby clarified that a delay in surrendering the Leased
Premises due to force majeure and/or due to reasons
uncontrolled by the Lessor, including due to any third party,
the contractor constructing the Building, Bezeq, the
electricity company etc., shall constitute no breach of the
Lessor's undertakings herein and shall entitle the Lessee to
no remedy, provided that the Lessor shall have taken
reasonable measures to prevent the delay.
It is hereby agreed that so long as actual possession shall
not have been surrendered to the Lessee due to circumstances
not under the Lessee's responsibility and/or so long as this
agreement shall not yet be in effect, the lease for Premises A
shall continue pursuant to the Original Lease Agreement and
the terms specified therein, with the modifications agreed
upon by the parties in writing.
c. Without derogating from the provisions of sub-clause (b)
above, it is hereby agreed by the parties that the Lessor
shall reserve the right to notify the Lessee of a postponement
in the commencement of the lease, provided that the
postponement shall not exceed ninety days and that the Lessee
shall be notified thereof twenty one days prior to the date of
commencement of the lease. A delay in surrendering the Leased
Premises, not exceeding ninety days, shall constitute no
breach of the Lessor's undertakings herein, and shall entitle
the Lessee to no remedy.
It is hereby agreed that in the event of postponement of the
commencement of the lease by the Lessor, as aforesaid, the
Lessee shall be entitled to further postpone the date of
acceptance of possession of the Leased Premises by no more
than two more weeks, by written notice to the Lessor.
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d. In the event that the date of commencement of the lease shall
have been postponed or brought forward as set out in
sub-clauses (b) and (c) above, the postponed date shall be
deemed as the date of commencement of the lease, but the date
of termination of the lease shall remain unchanged, and it
shall end on December 31, 2003.
It is agreed by the parties that in no case will the Leased
Premises be turned over to the Lessee between March 28, 1999
and April 16, 1999.
e. The parties agree that the date determined in the Lessor's
notice as the date of commencement of the lease shall be
deemed as such even if the Lessee shall not have come to take
possession of the Leased Premises, provided that the date of
commencement of the lease shall conform with the provisions
hereof.
f. The duration of the Term of the Lease is a fundamental
provision hereof, and neither party shall be entitled to
shorten the same (in the absence of mutual consent and subject
to the provisions hereof), in light of the parties'
expectations and intent at the time they had entered into this
agreement.
Notwithstanding the provisions of this clause, the Lessee
shall be entitled to transfer its right to the Leased Premises
prior to the end of the Term of the Lease to an alternative
lessee (hereinafter: the "Alternative Lessee"), the identity
of whom shall be approved in writing by the Lessor and subject
to that the Alternative Lessee shall provide the Lessor with a
bank guarantee in the amount of six months of rent and
adjusted management fees and additional securities in
accordance with the Lessor's policy and the Alternative
Lessee's financial stability at the time being.
For the removal of doubt, the Lessor shall only be entitled to
object to the Alternative Lessee on reasonable grounds.
g. The Lessee shall be liable for the payment of the full amount
of the rent and the management fees under the management
agreement (if any), for the entire Term of the Lease, also if
it shall not have actually used the Leased Premises, and also
if possession thereof shall have returned to the Lessor prior
to the end of the term without the Lessor's consent.
h. The Lessee shall have a right of first refusal to rent the
area marked in blue on APPENDIX B-1, under the following
conditions:
The right of first refusal shall be for a period of six months
from the date of signing of this contract. The Lessor shall
notify the Lessee in writing of any lease in which it intends
to engage for the said area during the said period. The Lessee
shall be entitled to give written
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notice within 7 days from the date of receipt of the Lessor's
notice that it shall lease the said area under the terms
hereof.
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3. SURRENDER OF THE LEASED PREMISES TO THE LESSEE
a. The parties agree that when the Leased Premises shall be
turned over to the Lessee, they will be constructed in
accordance with the internal division plans as marked on
Appendices B-1 and B-2 and in accordance with the technical
specification attached to this agreement as APPENDIX C and
constituting an integral part hereof, and subject to the
lessee's plans, as defined hereunder, as approved by the
Lessor.
The Lessor (sic) shall pay the fees of the architect and the
consultants, to the extent that their engagement shall have
been approved by the Lessor, for their work in preparing the
internal division plans (excluding work, modifications and
additions to be required by the Lessee after approval of the
plans by the Lessor).
b. The Lessee has submitted to the Lessor a set of layout plans
for the Leased Premises, as marked on Appendices B-1 and B-2.
c. The Lessor shall examine the Lessee's plans, in accordance
with the limitations imposed by the building permit and/or the
frame and/or the existing infrastructure and subject to the
approval of the Lessor's architect.
The Lessor shall notify the Lessee of its agreement or
disagreement to the Lessee's plans within 15 days from the
date of receipt thereof. The Lessor shall not decline its
agreement, but on reasonable grounds. The Lessor's failure to
approve the plans within 15 days as aforesaid shall be deemed
as the approval thereof by the Lessor. The layout plans shall
be transferred to the architect for the preparation of work
plans.
d. The Lessee shall approve the architect's work plans within 14
business days from the date submitted thereto by the Lessor.
e. The Lessor shall perform the division of the Leased Premises
and all the work involved therein in accordance with the
Lessee's plans, as approved by the Lessor, and in accordance
with a schedule to be determined by the Lessor.
f. The Lessee shall bear the cost of any change and/or addition
to be made by the Lessor in accordance with the Lessee's plans
beyond the technical specification, according to the "Dekel"
price list (in addition to V.A.T.) plus 8% and, with respect
to work or material not appearing in the "Dekel" price list,
as shall be determined by the Lessor's engineers (provided
that they shall not exceed reasonable market prices) plus 8%.
The cost of the changes shall be paid by the Lessee to the
Lessor within 30 days from the following schedule:
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25% from the date of receipt of the modification account
from the Lessor.
50% from the date of completion of construction of the
internal partitions in the Leased Premises.
25% from the date of surrender of possession of the
Leased Premises, subject to clause 2(f) above.
g. In the event that after approval of the Lessee's plans, the
Lessee shall wish to perform other changes and additions other
than in accordance with the Lessee's plans as submitted to the
Lessor, and the performance thereof shall be approved by the
Lessor, the cost thereof shall be paid in accordance with the
aforesaid, immediately upon receipt of the Lessor's demand.
The Lessee shall further pay for the architectural planning
and for the fees of the various consultants with respect to
the aforementioned work.
A request/s by the Lessee for modifications and additions,
after approval of the plans by the Lessor, resulting in a
delay in the completion of construction, shall not postpone
the date of commencement of the payment of rent as set forth
in clause 5 hereunder, for longer than 7 business days.
In the event that the delay shall exceed 7 days, the Lessee
shall be liable for the payment of rent from the eighth day
forth. For the removal of doubt, the overall delay shall mean
the delay resulting from any request submitted by the Lessee
for modifications and additions.
The cost of the changes shall be subject to indexation
differences, as defined herein, between the index known on the
date of preparation of the modification account by the Lessor
and the index known on the date of actual payment.
h. Notwithstanding the aforesaid, the Lessee shall be entitled,
at the discretion thereof, to pay for the modifications by way
of increasing the Rent by US $1.2 plus V.A.T. per m(2) for
each US $100 invested by the Lessor in each m(2), for the
entire Term of the Lease.
The parties agree that in the event that the Lessee shall
vacate the property prior to 10 full years of lease, i.e.,
prior to expiration of the term of the Extended Lease, the
Lessee shall repay the Lessor a proportionate part of the cost
of the modifications, including indexation differences as
aforesaid, for the period from the actual termination of the
lease until January 20, 2009.
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The Lessee may notify the Lessor, no later than 15 days from
the date of approval of any plan by the Lessor, of its waiver
of the performance of parts of the technical specification for
such plan.
In the event that such waiver is made by the Lessee, the
Lessee shall be entitled to a refund in accordance with the
"Dekel price list". The settlement of accounts shall be
performed by the parties' supervisors.
Plans submitted or to be submitted by the Lessee constitute a
notice on the part of the Lessee of a waiver or modification
of the technical specification, as aforesaid, to the extent
that they contain a waiver or modification.
i. The parties agree that in the event that delays shall occur in
the completion of the Leased Premises, for reasons under the
Lessee's control, including a delay in submitting the Lessee's
plans and/or amending the same, requests by the Lessee to
perform modifications of and/or additions to the Leased
Premises and/or of or to the Lessee's plans, in whole or in
part, after commencement of the internal division and so
forth, and in the event that the Lessee shall procrastinate
paying for the cost of the changes, the Lessee shall have to
pay rent to the Lessor and fulfill all the Lessee's
undertakings herein, from the date on which possession of the
Leased Premises could have been turned over to the Lessee but
for such delays and/or procrastination, although the surrender
of the Leased Premises shall be postponed until completion
thereof. For the removal of doubt, it is emphasized that the
Lessee shall not be entitled to postpone payment due to
changes in such case. The aforesaid shall not derogate from
the provisions of the latter part of sub-clause (g) above.
j. It is hereby agreed that no later than 14 days prior to the
date of surrender of the Leased Premises and after the main
systems (frame, air-conditioning, plumbing and electricity)
shall be operable and the lobby of the Building shall be fit
for use, the representatives of the parties shall inspect the
Leased Premises and prepare a protocol containing all defects
which may be discovered after reasonable examination.
Defects preventing reasonable use of the Leased Premises shall
be rectified prior to the date of surrender of possession. In
the event that such defects shall not have been fixed, the
date of surrender of possession shall be deferred pending the
repair thereof. Defects not preventing reasonable use of the
Leased Premises shall be fixed within 14 days from the date of
preparation of the protocol and the date of surrender of
possession shall not be deferred as a result thereof.
k. The delivery of the key to the Leased Premises to the Lessee
shall constitute confirmation on the part of the Lessee that
it had examined
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the Leased Premises and found them to be suitable to the needs
thereof and in accordance with the provisions of the
agreement, and that it entertains no claims with respect to
the Leased Premises, save for claims concerning concealed
defects and malfunctions and/or defects not preventing
reasonable use of the Leased Premises as set forth in the
protocol to be drawn by the parties, as set out above.
The protocol of surrender of possession shall not exempt the
Lessor from the obligations thereof under this agreement and
any law.
l. In the event that the Lessor shall have notified the Lessee
that the Leased Premises are completed and may be made
available to the Lessee, and the latter shall have failed to
arrive in order to take possession thereof, such designated
day shall be deemed as the date of commencement of the lease.
In the event that the Lessor shall have notified the Lessee
that the latter should arrive in order to take possession of
the Leased Premises and shall have retracted such notification
thereafter, the Lessor shall pay for the Lessee's direct
damages as follows: cancellation of the engagement of the
carrier, packing expenses and loss of work days.
4. PURPOSE OF THE LEASE, NATURE OF THE LEASED PREMISES AND THE SCOPE
THEREOF
a. The lease herein is entered into for the purposes of operating
the Lessee's business, i.e., a high-tech company in the field
of communications, and therefore, in the absence of the
Lessor's consent in advance and in writing, the Lessee shall
not be entitled to use the Leased Premises or any part thereof
for any purpose other than the aforesaid purpose.
The Lessee further undertakes not to transfer and/or endorse
and/or pledge any of its rights hereunder and not to sub-lease
the Leased Premises and/or part thereof and not to give a
right of use or any other right to the Leased Premises or any
part thereof to any third party, whether for or without
consideration, without the Lessor's consent in advance and in
writing. Any change in the composition or rate of holdings of
the shareholders exceeding 50%, whether at once or in stages,
shall be deemed as a transfer of rights as aforesaid,
requiring the Lessor's consent in advance and in writing, save
for public offerings. The Lessor shall decline its consent
only on reasonable grounds.
Notwithstanding the aforesaid, the Lessee shall be entitled to
transfer the rights thereof to the Leased Premises to an
affiliated company, provided that the Lessee shall remain
liable to the Lessor with the transferee, jointly and
severally, for the fulfillment of all undertakings herein.
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It is hereby agreed that the Lessor undertakes to endeavor to
market the Building to entities, the activity of whom shall
conform to the nature of the Building and to the terms of the
building permit.
b. Subject to the foregoing provisions hereof, the Lessee
confirms that it has seen and examined the Building and the
Leased Premises, the construction and development plans and
the specification, and that it has examined the designation of
the Leased Premises and the uses thereof permitted by the
zoning plans and the law, and has found them to be suitable to
the needs thereof, and that it neither has nor shall have any
claim of non-conformity or of choice or of defects in the
Leased Premises and other such claims against the Lessor, in
light of the aforesaid and of the other stipulations herein,
save for claims with respect to concealed defects and/or
non-conformity.
c. Subject to the foregoing provisions herein, the Lessee
undertakes that it shall obtain, at the expense and under the
responsibility thereof, all the licenses, permits and
approvals (hereinafter: the "Licenses") required and to be
required by any authority or under the law in order to conduct
the business thereof at the Leased Premises, and the Lessee
further undertakes to conduct the business thereof at the
Leased Premises in accordance with the Licenses, any law and
the requirements of the competent authorities, and, in the
event that the Lessee shall obtain the Lessor's consent to
perform changes in the Leased Premises, in accordance with
clause 8(d) hereunder, the Lessee undertakes to perform the
same only after receipt of the permits as set out in the law
and subject thereto.
For the removal of doubt, it is emphasized that the Lessor is
not responsible for obtaining and/or maintaining the Licenses.
Should the Lessor suffer any damage due to the non-fulfillment
of any undertaking by the Lessee pursuant to this sub-clause,
the Lessee shall compensate and indemnify the Lessor for any
such damage.
d. The Lessee's failure to obtain the Licenses and/or the
permits, and/or the revocation thereof at any time shall not
derogate from any of the Lessee's undertakings herein,
including the payment of Rent.
e. The Lessee confirms that it is aware that various work might
be performed at the Leased Premises, the Building and the
surroundings thereof, including further construction,
development, renovations and any other modifications, and that
it shall entertain no claim against the Lessor with respect
thereto. The Lessee undertakes not to disrupt or object to
such work, provided that the reasonable use of the Leased
Premises, for the purpose of the lease, is not compromised.
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Notwithstanding the provisions of clause 4.6 of the Management
Agreement, work performed at the Leased Premises, after
surrender thereof to the Lessee, shall be made on weekdays
after 17:00 and on Fridays, except for emergencies.
f. The Lessor undertakes to allocate an area in the Building,
including the basement, free of rent, for a dining hall for
the Lessee's caterer, in the event that no restaurant, capable
of catering for the Lessee's employees for prices acceptable
at Har Hotzvim for catering services for high-tech workers,
shall be operated in the Building (hereinafter: the "Temporary
Area"). The area shall be air-conditioned, floored, lit and
will contain sinks for washing dishes and hands and furnished
as shall be determined by the management company. It is hereby
clarified that the Lessee's status in the Temporary Area shall
be that of licensee only and that it shall be responsible for
preventing nuisances and damage to the Leased Premises, the
Building, the tenants, and the guests and visitors to the
Building.
It is hereby clarified that the Lessee shall be responsible
for arranging for insurance, in connection with the Temporary
Area, as set forth in clause 10 hereunder.
The Temporary Area shall have a capacity of 50 people.
The Lessee undertakes that the Temporary Area shall be
returned to the Lessor upon commencement of operation of a
restaurant in the Building and/or upon termination of the
lease under this contract, whichever is earlier.
The Lessee is liable to the Lessor for vacation of the caterer
and surrender of the Temporary Area to the Lessor, in a proper
and usable condition, free and vacant of any person and object
installed at such place by the Lessee.
The Temporary Area shall only be used in order to operate a
catering service for the Lessee's employees and guests. The
Lessee is responsible for any negligent act or omission and
for any damage caused to the Lessor and/or to a third party as
a result of the caterer's actions.
5. RENT, THE RATE AND DATES OF PAYMENT THEREOF
In consideration for the rights of lease which are the subject of this
agreement, the Lessee undertakes to pay the Lessor, during the Term of
the Lease, rent (hereinafter: "Rent") as follows:
a. The Lessee shall pay the Lessor monthly Rent in NIS in the
amount of NIS 126,448 in addition to V.A.T. at the lawful rate
thereof on the date
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of payment, linked to the consumer price index; the base index
is the index of October 1998, published on November 15, 1998,
i.e., 164.1 points.
b. On the date of commencement of the lease, the Lessee shall pay
Rent for the first 3 months of the lease.
The Rent shall be paid on a quarterly basis, for each quarter
in advance, on the first business day of the months of
January, April, July and October of each year.
For the removal of doubt, it is clarified that if the Term of
the Lease shall commence on a date other than one of the
aforementioned dates, an adjustment shall be made prior to the
beginning of the second quarter of the Term of the Lease so
that the Rent shall be paid at the beginning of each quarter
in advance, as aforesaid.
c. Until notified otherwise by the Lessor, and without derogating
from the Lessor's right to demand payment of the Rent in
another way, the Rent shall be paid directly into the Lessor's
account # 265219 at Bank Hapoalim Ltd., Hameasfim branch in
Tel Aviv, branch # 510. A tax invoice shall be duly issued
immediately after payment shall be made.
6. LINKAGE OF THE RENT TO THE CONSUMER PRICE INDEX
The Rent set forth in clause 5 above shall be calculated and paid
subject to indexation as follows:
a. In the event that the publication of the index shall indicate
that the new index is higher than the base index, the nominal
rate of each Rent payment made by the Lessee shall be
increased at a rate equal to the increase of the new index
proportionately to the base index.
However, should it transpire that the new index is equal to or
lower than the base index, the Lessee shall make the payment
at the nominal value thereof in the previous quarter.
b. For the purposes of such indexation, the following terms shall
be defined as set forth beside them:
The index - the consumer price index, including
fruit and vegetables, published by the
Central Bureau of Statistics and Economic
Research, or any other official index
replacing it, if published by any other
governmental institution, whether or note
based on the same data on which the current
index is based.
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In the event that another index shall be
introduced as aforesaid and the said Bureau
shall not determine the ratio between it and
the index replaced thereby, within six
months from the date of replacement, the
said ratio shall be determined in accordance
with the ratio named for index-linked loans
at Bank Hapoalim Ltd.
The base index - the index, as defined above, decided upon by
the parties and determined in clause 5(a)
herein.
The new index - the latest index published prior to the date
of actual payment.
7. ADDITIONAL PAYMENTS IMPOSED ON THE LESSEE
a. Throughout the Term of the Lease, the Lessee shall pay all
taxes, municipal taxes, levies, fees and other obligatory
payments of any kind, payable to the local authority and/or to
any governmental authority in connection with the Leased
Premises, the maintenance and use thereof, save for property
tax and/or other obligatory payments to be lawfully imposed on
property owners, which shall be paid by the Lessor.
The Lessee shall further pay, throughout the Term of the
Lease, all the payments and expenses involved in the
maintenance, care and operation of the Leased Premises in good
and proper condition, including payments to the co-op board
and/or to the management company, if any, including, but not
only, for the maintenance of gardens, yards and parking lots
included in the Leased Premises and the joint property etc.
The Lessee shall further pay for the consumption of water,
electricity and telephone. The Lessee shall also pay for the
air-conditioning system and for water consumption according to
the proportion between the area of the Leased Premises and the
leased areas of the Building, as set forth in the Management
Agreement attached hereto, and in accordance with the
provisions of clause 9 hereunder.
For the removal of doubt, it is emphasized that the Lessee
shall bear all such payments and expenses also for the period
in which the Lessee shall occupy the Leased Premises in the
event of failure to vacate the same.
b. The Lessee undertakes to sign contracts with the electricity
company and with the municipality of Jerusalem for the supply
of electricity and water to the Leased Premises. The Lessor
shall act in order to perform the aforesaid and the Lessee
shall assist the Lessor as required in order
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to perform the undertaking as aforesaid. Payment for the
electricity meter shall be borne by the Lessor.
The Lessor and/or the management company, as the case may be,
shall be responsible for placing the Leased Premises at the
Lessor's disposal with the Building and frame systems in
proper working order.
c. The Lessee shall timely pay all bills for the payments and
expenses imposed thereon as aforesaid, and in the event of
failure to do so, the Lessee shall further pay any additional
payment imposed due to such arrears. The Lessee shall provide
the Lessor with receipts for payments made thereby, pursuant
to the Lessor's demand.
In the event that the Lessor shall pay any amount on account
of expenses and payments imposed on the Lessee as set forth
herein, the Lessee undertakes to repay such amounts
immediately upon the Lessor's demand and in addition to
interest as set out in clause 16 hereunder.
d. In addition to Rent, indexation differences and payments under
this agreement, the Lessee shall pay value added tax one day
prior to the date of payment thereof to the authorities, at
the current rate from time to time on the date of making any
payment pursuant to the terms hereof. After the payment, the
Lessor shall provide the Lessee with a lawful tax invoice.
8. USE OF THE LEASED PREMISES AND THE MAINTENANCE THEREOF
a. The Lessee undertakes to leave no movables outside the Leased
Premises and to make no use of any part of the Building other
than the Leased Premises, including the public areas of the
Building, for any purpose, save for access to the Leased
Premises. The Lessee further undertakes to use the Leased
Premises so as to produce no nuisance, as defined under any
law, noise, odor, poisonous substance, smoke, shock or
inconvenience to others in the Building.
b. The Lessee undertakes to use the Leased Premises and the
surroundings thereof in a cautious manner, to maintain and
preserve the same in proper order and to immediately repair,
at its expense, any damage and/or breakage caused to the
Leased Premises, save for damage and/or breakage caused to the
Leased Premises due to construction defects and reasonable
wear and tear. For the purpose of performing the repairs, the
Lessee shall contact the management company, and if the latter
shall refuse to perform the repairs, the Lessee may resort to
other service providers.
It is hereby agreed that the Lessee's undertaking to use the
services of the management company for repairs in the Leased
Premises is subject
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to reasonable demands for payment on behalf of the management
company.
The Lessee may perform repairs unrelated to the systems of the
Building through the employees thereof, provided that they are
experts therefor.
The Lessor and/or the management company, as the case may be,
shall be responsible for placing the Leased Premises at the
Lessor's disposal with the Building and frame systems in
proper working order.
The provisions of this clause shall override those of clause
4.1 of the Management Agreement.
c. Whenever the Lessee shall fail to perform the undertakings
thereof under this clause, the Lessor shall be entitled, but
not obliged, to perform the same and to charge the Lessee with
the payment of the expenses, provided that it shall have given
the Lessee a 10 day prior notice in writing of its intention
to do so, unless the repair is required as a matter of
emergency.
The Lessor may demand and receive from the Lessee the cost of
repairs performed thereby, or the estimated cost of repairing
damages, in the event that the Lessee shall have left the
Leased Premises, regardless of whether or not the Lessor shall
have actually performed the repair. The aforesaid shall not
derogate from any other remedy to which the Lessor is entitled
under this agreement and/or any law.
d. The Lessee undertakes to perform no constructional changes in
the Leased Premises involving systems, without the prior
written consent of the Lessor to the Lessee's modification
request, to which detailed plans shall be attached.
The Lessor shall not deny its consent to the modifications but
on reasonable grounds.
The Lessor's failure to reply in writing within 15 days from
the date of the Lessee's request for modifications shall be
deemed and regarded as the Lessor's consent thereto.
In no case will the Lessee be entitled to make changes in the
frame and/or the internal and/or external systems of the
Building, without the Lessor's consent as aforesaid and
subject to fulfillment of the provisions of any law.
For the removal of doubt, it is emphasized that if the Lessor
shall condition its consent, INTER ALIA, on the receipt of
approvals from
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various consultants, such consultants' fees and expenses shall
be borne by the Lessee.
Shortly prior to the end of the Term of the Lease under this
agreement, the Lessee shall reinstate the former condition of
the Leased Premises, as at the beginning of the Term of the
Lease, at its expense and under its responsibility, in
accordance with modifications performed by the Lessee from
time to time subject to the Lessor's approval, and shall
dismantle any modification, addition and facility installed
thereby while preserving the frame and systems of the
Building. The Lessee shall further repair, at its expense, any
damage caused to the Leased Premises as a result of such
actions.
e. The Lessee undertakes to allow the Lessor and/or the
management company and/or their representatives to enter the
Leased Premises at any reasonable time, and, to the extent
possible, after prior coordination (except for urgent cases in
which prior coordination will not be possible) in order to
examine the condition of the Leased Premises and/or perform
repairs in the Leased Premises or of other parts of the
Building, and in order to show the Leased Premises to others.
For the removal of doubt, it is emphasized that nothing in
this clause shall impose any obligation on the Lessor.
f. The Lessee undertakes to post no signs on the external walls
of the Leased Premises or signposts exceeding the boundaries
of the Leased Premises or signposts located within the Leased
Premises but facing outwards, without the written approval of
the Lessor and/or of the management company and after receipt
of any permit required by law.
It is agreed that the Lessor may determine the location, shape
and character of signposts of any kind, at the sole discretion
thereof, in order to maintain a uniform appearance of the
Building. The signposts in the Building shall be similar to
the signposts of the other tenants in the Building.
The Lessor shall be entitled to oblige the Lessee to install
internal signposts according to the former's determination, at
the latter's expense.
For the removal of doubt, all rights to post signs on the
external walls of the Building belong to the Lessor.
g. In times of emergency, the other tenants shall be entitled to
pass through and to use the sheltered areas.
9. THE MANAGEMENT COMPANY
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a. The Lessee confirms that it has been informed that the Lessor
may, at the sole discretion thereof, turn the rendering of
management and maintenance services over to a management
company.
The Lessor shall be entitled to replace the management company
with another, or to decide not to turn the rendering of the
services over to a management company, or to perform them
itself all in accordance with the sole discretion thereof.
b. The terms of the management agreement between the Lessee and
the management company - if any shall be as set forth in the
management agreement attached to this agreement as APPENDIX D
and forming an integral part hereof (hereinafter: the
"Management Agreement"). The Lessee's signing of this
agreement shall be tantamount to signing the Management
Agreement.
The Lessee undertakes to fulfill the provisions of the
Management Agreement and it is agreed that the Lessee's breach
of the Management Agreement shall constitute a breach of this
agreement too, and a breach of this agreement shall also
constitute a breach of the Management Agreement.
c. Notwithstanding the provisions of clause 5 of the Management
Agreement, the management expenses and fees imposed on the
Lessee, including the air-conditioning expenses and an
insurance premium shall in no case exceed NIS 10 per m2 gross
plus V.A.T. in the first two years of the Term of the Lease,
and in the remaining Term of the Lease, the management
expenses and fees imposed on the Lessee, including
air-conditioning expenses and an insurance premium, shall not
exceed NIS 11 per m2 gross plus V.A.T. The said amounts shall
be linked to the base index set out in clause 5(a) above.
For the removal of doubt, the aforesaid does not refer to
special additional services to be required by the Lessee from
the management company as set forth in the latter part of
clause 3.2 of the Management Agreement.
10. LIABILITY AND INSURANCE
a. The Lessor and/or the management company shall insure the
building (without content) in an extended fire insurance at
the Lessee's expense, for the duration of the Term of the
Lease, against fire hazards, explosions, damage caused by
water, flooding, storms and tempests, earthquakes, loss of
Rent and any other hazard as the Lessor shall deem fit.
It is hereby agreed that the issuance of the said insurance
shall not exempt the Lessee from liability under this
agreement and/or any law.
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The said insurance shall contain a clause waiving the right of
subrogation against the Lessee on the part of the insurer,
except for damages caused to the building by the Lessee
intentionally. The amounts of the insurance and of the
co-payment shall be determined by the Lessor and/or the
management company and the Lessee agrees to such amounts and
shall pay them immediately upon demand.
The Lessor and/or the management company shall be entitled,
from time to time, to change and/or cancel and/or replace the
policies and/or to issue additional insurance, all at the sole
discretion thereof.
b. The Lessee shall be liable to the Lessor for any damage or
loss caused to the Leased Premises as a result of an act or
omission on the part of the Lessee, the invitees, licensees,
customers and suppliers thereof, which are not covered or
should not have been covered had the Lessor or the management
company issued the building insurance in accordance with
clause 10(a) above, and had the Lessor or the management
company fulfilled all the undertakings thereof in accordance
with such insurance, including its undertaking to pay the
premium. The Lessee shall be liable to the Lessor for any
damage or loss caused to the person or property of any third
party on the Leased Premises or within the boundaries thereof.
Without derogating from the Lessee's liability under this
agreement and/or any law, and in addition thereto, the Lessee
undertakes to take out the following insurance, with a
lawfully authorized and reputable insurance company, at its
expense, from the date of commencement of the lease until the
end of the Term of the Lease:
1. The Lessee undertakes to insure the content of the
Leased Premises, including the furniture, equipment,
facilities and stock thereof, and any modification,
improvement, renovation and addition of any kind
performed and/or to be performed at or to the Leased
Premises, and to update the amount of the insurance
from time to time, so as to always reflect the full
value of the insured property.
2. The Lessee undertakes to insure its use of the Leased
Premises and any activity thereof at the Leased
Premises and in the Temporary Area, in employers'
liability insurance with a limit of liability no less
than that acceptable in the insurance market at the
time of issuance of the policy, and in insurance
against liability to third parties, including the
Lessor, the management company and any third party,
for an amount no less than $750,000 per incident and
$1,500,000 per period. The policy shall include a
"cross liability" clause.
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c. The Lessee undertakes to arrange for the content insurance to
be extended so as to include a clause of waiver of subrogation
against the Lessor, the management company and others on their
behalf, except for damage caused maliciously. With respect to
the employers' liability policy, it shall be extended so as to
cover the lawful liability of the Lessor and of the management
company in the event that they shall be deemed as employers of
the Lessee's employees. With respect to the third party
liability insurance, it shall be extended so as to cover the
liability of the Lessor and of the management company due to
an act or omission on the part of the Lessee.
d. The Lessee shall present the insurance policy to the Lessor
upon commencement of the lease and upon any renewal or
amendment of the policy at the Lessor's demand and shall
provide an insurance confirmation from the insurance company,
in the form attached hereto and constituting an integral part
hereof.
The Lessee undertakes to add to and/or update and/or amend the
insurance policies to the Lessor's satisfaction. The Lessor's
failure to demand the policies shall not be deemed as a waiver
of the Lessee's undertakings.
e. Insurance payments received shall be applied first and
foremost to repairing the damage.
f. The Lessee undertakes that the policies to be issued thereby
shall contain an explicit condition whereby the insurer
explicitly waives any right of subrogation against the Lessor
and/or anyone on its behalf, including the co-op board and/or
the management company.
g. In the event that the Lessee shall fail to fulfill the
undertaking thereof to issue insurance as set out in this
clause, the Lessor and/or the management company shall be
entitled to issue such insurance at the Lessee's expense, and
the Lessee shall be obliged to repay the Lessor, immediately
upon the demand thereof, any amount expended by the Lessor
and/or by the management company for this purpose, but the
aforesaid in this clause shall impose no obligation on the
Lessor and/or the management company to act as aforesaid.
h. During the Term of the Lease, no insurance policy shall be
revoked, for whatever cause or reason, without notice to the
Lessor at least 30 days in advance. The Lessee undertakes to
provide the Lessor with confirmations of the renewal of the
policies, 30 days prior to the date of renewal thereof, by way
of a temporary confirmation from the insurer, and after
renewal the Lessee shall provide copies of the policies.
All such insurance policies shall be valid throughout the Term
of the Lease.
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i. The Lessee undertakes to notify the insurance company and the
Lessor of any damage caused to the Leased Premises and/or to a
person and/or his property. Notice under this clause shall be
made by registered post and shall contain the details of the
incident and the estimated amount of the damage.
The Lessee shall further notify the Lessor of any damage which
may affect the Lessor's rights, decrease the value of the
Leased Premises or expose the Lessor to any claim.
j. The Lessee undertakes to indemnify the Lessor and/or
compensate the latter for any damage caused thereto and/or
imposed thereon due to the breach by the Lessee of the
provisions of this clause including all sub-clauses thereof
and/or due to the breach of the terms of the policies.
For the purposes of this clause, the word "damage" shall also
mean the insurance payments which the Lessor could have
received but for the circumstances causing such payments not
to be made, and any liability imposed on the Lessor including
principal, interest and indexation differences, expenses and
legal fees due to the claim of any injured party, and if the
Lessor shall have paid such liability, the Lessee undertakes
to repay the Lessor any amount paid immediately upon the
Lessor's first demand, provided that the Lessor shall have
notified the Lessee of the claim and the Lessee shall have
been given the opportunity to defend itself against it.
k. For the removal of doubt, it is clarified that the Lessee
shall bear the amounts of the co-payment.
l. The Lessee undertakes to provide to the Lessor, prior to the
commencement of the lease, the insurance annex attached to
this agreement as APPENDIX D and constituting an integral part
hereof, signed by the insurance company.
The Lessee undertakes to fill all conditions precedent to the
coverage under the insurance policies issued thereby.
11. RIGHT OF USE OF PARKING SPACES
a. Throughout the entire Term of the Lease, the Lessee shall be
entitled to use 6 fixed and marked parking spaces in the
parking lot of the Building (hereinafter: "Right of Use").
b. The Lessee shall pay a fee to the Lessor and/or the operator
of the parking lot and/or whomever shall be directed by the
Lessor for the Right of Use of such parking spaces, in the
amount of NIS 2,160 plus
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V.A.T. at the lawful rate thereof on the date of payment, per
month (hereinafter: the "Fee").
The Fee shall be linked to the consumer price index and shall
be paid together with the Rent under this agreement, and the
provisions of this agreement referring to the lease of the
Leased Premises and to the payment of Rent (including the base
index) shall be applicable thereto, MUTATIS MUTANDIS and
subject to the following provisions.
c. The Lessee confirms that it has been informed that the parking
lot will be operated by either the Lessor or another entity
who can operate the parking lot, INTER ALIA, as a commercial
parking lot, according to arrangements to be determined by the
Lessor at the sole discretion thereof, provided that the
Lessor's right to use the parking lot under this agreement
shall not be compromised.
The Lessee undertakes to comply with all provisions and
directives, as being from time to time, with respect to the
parking lot, in all matters concerning entry, parking, exit,
security, operation, order in the parking lot, hours of
operation etc.
d. For the removal of doubt, it is emphasized that the aforesaid
shall be regarded as the rendering of permission to park only,
and that no safekeeping relationship and/or contract either
exists or shall exist between the Lessor and/or the operator
of the parking lot and the Lessee with respect to the
rendering of the parking permission, and in no case will the
Lessor and/or the operator of the parking lot be deemed, for
this matter, as a "guard" under the Guards Law.
12. ASSIGNMENT OF THE LESSOR'S RIGHTS
The Lessor may at any time assign its rights and undertakings with
respect to the Leased Premises, in whole or in part, or its rights
under this agreement - in whole or in part - to whomever it shall deem
fit, provided that the assignee shall undertake to assume the Lessor's
undertakings to the Lessee under this agreement.
13. NON-APPLICABILITY OF TENANT PROTECTION LAWS
The Lessee declares that it is aware that no protection by the Tenant
Protection Law (Consolidated Version), 5732-1972 and the regulations
thereunder shall apply to the lease under this agreement, and that the
lease under this agreement is not protected under the said law. The
Lessee further declares that it has paid no key money, nor undertaken
to pay key money, and that no limitations on lease payments and/or Rent
shall apply to the lease under this agreement, and that this agreement
is unprotected under the law.
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For the removal of doubt it is emphasized that all investments to be
made by the Lessee in the Leased Premises, if any, shall be made for
the needs thereof only, and shall constitute no payment of key money or
payment under Article 82 of the Tenant Protection Law (Consolidated
Version), 5732-1972.
14. OBSERVANCE OF THE PROVISIONS OF LAWS AND AGREEMENTS
a. The Lessee shall abide by any provision in effect from time to
time, in any law or legislation, including municipal
regulations, orders and regulations, to the extent applicable
to the Leased Premises and to the business conducted thereon.
The Lessee shall refrain from any act or omission which may
violate the said provisions or constitute an offense
thereunder, and from any act or omission, the result of which
may compromise the Lessor, the reputation thereof or the
engagement under this agreement or the Lessor's engagement
with other lessees in the Building.
b. The Lessee shall ensure that the said provisions are observed
by any other user of the Leased Premises in accordance with
the terms of this agreement.
c. The Lessee undertakes to indemnify the Lessor for any damage
caused thereto and/or imposed thereon and for any liability
and/or payment it shall undertake including principal,
interest and indexation differences, and including any
liability pursuant to a judgment, expenses and legal fees due
to the breach of the provisions of this clause by the Lessee
and any user of the Leased Premises, whether the Lessor is
sued alone and/or jointly with others, within 7 days from the
day it shall be required by the Lessor to do so.
Notice of damage as set out in this clause shall be given by
the Lessor to the Lessee upon learning thereof.
15. SURRENDER AND RETURN OF POSSESSION
a. Upon expiration of the Term of the Lease under this agreement
and/or upon lawful shortening or revocation thereof by the
Lessor, the Lessee undertakes to vacate the Leased Premises
forthwith and to surrender possession thereof to the Lessor,
as per clause 8(d) above, the Leased Premises being vacant of
any person and object and in good and proper condition as
received thereby.
At the time of surrender of possession of the Leased Premises
to the Lessor, the representatives of the Lessor and of the
Lessee shall prepare a protocol recording the repairs
necessary in order to bring the Leased Premises to the
condition in which the Lessee needs to return the same to the
Lessor.
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The Lessee undertakes to perform all the repairs recorded in
the protocol, at its expense, within 30 days from the date of
preparation thereof.
In the event that the Lessee shall have failed to perform the
said repairs, in whole or in part, the Lessee shall be
required to pay to the Lessor the cost and/or the estimated
cost of the repairs, regardless of whether or not the Lessor
shall have actually performed the repairs.
In the event that performance of the said repairs shall extend
no later than 30 additional days beyond the Term of the Lease,
it shall not be deemed as a delay in the vacation of the
Leased Premises and such period shall be subject to the
provisions of this agreement. In the event that the
performance of the repairs shall extend beyond the said 30 day
period, it shall be deemed as a delay in vacation of the
Leased Premises and the provisions of sub-clause (b) hereunder
shall apply, MUTATIS MUTANDIS.
The aforesaid shall not derogate from any other remedy to
which the Lessor shall be entitled under this agreement and/or
any law.
b. In the event that the Lessee shall fail to vacate the Leased
Premises upon expiration of the Term of the Lease and/or upon
the lawful shortening and/or revocation of this agreement, as
aforesaid, then in addition to all remedies available to the
Lessor by law and/or under this agreement, the Lessee shall
pay the Lessor liquidated damages for each day of delay in
vacating the Leased Premises, at a rate equal to three times
the proportionate Rent due for the Leased Premises for the
period of delay, in addition to indexation differences.
The liquidated damages shall be paid to the Lessor on the
dates to be determined thereby.
16. PAYMENT IN ARREARS
Any payment or pecuniary obligation imposed on a party under this
agreement, not paid on the due date, and any payment which the Lessor
shall pay, the duty of payment of which is imposed on the Lessee, who
shall have failed to pay the same, shall be returned and repaid in
full, and until actual repayment thereof shall bear interest at the
rate of debit interest charged from time to time by Bank Hapoalim Ltd.
on the date of actual payment with respect to irregular interest
charged in debit accounts.
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17. SECURITIES
In order to secure all the Lessee's undertakings and various
obligations under this agreement and the Management Agreement, the
Lessee shall provide the Lessor with the following securities:
a. An autonomous, unconditioned bank guarantee by an Israeli
bank, linked to the index, in the amount of NIS 386,000 and
valid for twelve months. The guarantee shall be renewed prior
to the expiration thereof, year by year, and shall remain in
effect throughout the Term of the Lease and for 3 months after
expiration thereof (hereinafter: the "Guarantee").
The Guarantee shall be split up and delivered to the Lessor as
follows:
1. On the date of signing of this contract, the Lessee
shall provide a bank guarantee in the amount of NIS
200,000.
2. Immediately prior to the day of receipt of possession
of the Leased Premises, the Lessee shall submit the
remaining bank guarantee in the amount of NIS 186,000.
b. At the time of signing of this agreement, the Lessee shall
further provide a guarantee by the parent company, Phasecom
Inc., which shall sign on the margins of this agreement and
the form of guarantee attached to this agreement as APPENDIX F
and constituting an integral part hereof, as guarantor for all
the Lessee's undertakings herein.
c. The provision of the bank guarantee and the guarantor's
signature as aforesaid shall constitute a condition precedent
for the commencement of the lease on the date of commencement
thereof and/or for the continuation of the Term of the Lease.
The Guarantee shall be returned to the Lessee after expiration
of the Term of the Lease and after the Lessee shall have
provided the Lessor with receipts indicating its fulfillment
of all the undertakings thereof under the agreement.
18. STAMPING EXPENSES
Stamp duty due on this agreement shall be paid by the Lessee.
19. BREACHES AND REMEDIES
a. In the event that the Lessee shall breach or shall fail to
fulfill a material provision or condition listed hereunder or
shall do so through any other user - the Lessor shall be
entitled, in addition to any other remedy, to demand that the
Lessee vacate the Leased Premises forthwith and the
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Lessee shall be obliged to vacate the same as early as
possible, and no later than 30 (thirty) days after the date
of receipt of the demand.
b. The provisions of clauses 2, 5, 7, 10, 15 and 17 are
fundamental conditions of this agreement, as are the dates
stated therein.
c. The provisions of this clause shall not derogate from any
remedy or relief set out in other clauses of this agreement.
d. All remedies available to the Lessor under the terms of this
agreement are separate and independent and/or supplementary
and do not derogate from any remedy and/or relief, whether
lawful or contractual.
e. In addition to, and without derogating from the provisions of
this agreement, each of the following events shall also be
deemed as a fundamental breach of this agreement:
1. The passing of a resolution of voluntary dissolution
by the Lessee and/or the filing of an application for
dissolution, whether by the Lessee or by a creditor
and/or the appointment of a temporary liquidator for
the Lessee and/or the filing of an application for
receivership and/or an application to declare the
Lessee bankrupt, as the case may be.
2. The attachment of a material asset of the Lessee's by
a court or an execution office, which is not revoked
within 30 days from the date of placement thereof.
3. The foreclosure of a material asset of the Lessee's
and/or the institution of proceedings for the
foreclosure of an asset as aforesaid, by a creditor of
the Lessee's.
4. A change in the composition or rate of holdings of the
Lessee's shareholders exceeding 50%, whether at once
or in stages, save for public offerings.
The Lessee hereby undertakes to inform the Lessor immediately
upon any demand and/or application and/or upon the occurrence
of any of the events listed in clauses 1-4 above.
Notwithstanding the provisions of sub-clauses 1-4 above, the
Lessor shall take no action for 180 days from the date of
occurrence of any event under these clauses if it shall
receive a declaration from a lawyer or CPA of the Lessee
whereby the event shall not compromise the Lessee's ability to
fulfill the undertakings thereof under this agreement.
The declaration of the lawyer or the CPA shall be given, in
this case, within 7 days from the date of the Lessor's demand
from the Lessee.
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f. The Lessee hereby waives his right to setoff under any law.
20. The parties hereby determine that the court in Tel Aviv Jaffa shall be
the only venue in all matters relating to this agreement or resulting
therefrom.
21. ADDRESSES
The parties' addresses for the purposes of this agreement shall be as
stated in the preamble to the agreement and, from the date of
commencement of the Term of the Lease, the Lessee's address shall be at
the Leased Premises. Any notice sent by registered post to either party
at the address thereof shall be deemed to have been received 3 days
after dispatch thereof at a postal branch, and if delivered in person,
at the time of delivery thereof, and if transmitted by fax, at the time
of transmission thereof.
IN WITNESS WHEREOF, THE PARTIES HAVE HERETO SET THEIR HANDS,
/s/ /s/
------------------------- ---------------------------
The Lessor The Lessee
CONFIRMATION
I, the undersigned, ______________, Adv., of _______________, hereby confirm
that on ____________, appeared before me the managers of Phasecom (Israel) Ltd.
and signed this agreement in my presence, that the signature was duly made in
accordance with the company's by-laws and with the resolutions thereof and that
the signature of the said managers binds the company.
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