Exhibit 10(12)
Lease Agreement
---------------
Signed and entered into in Jerusalem on December 29th, 1998
between: Allied Investments Ltd. Pu.C. ▇▇-▇▇▇▇▇▇-▇
of Eshdar Center, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. (▇▇▇▇▇▇▇▇ ▇)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter - the "Lessor")
on the one hand;
---------------
and Virtual Jerusalem Ltd. Pr.C. ▇▇-▇▇▇▇▇▇-▇
▇ ▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter - the "Lessee")
on the other hand;
-----------------
Whereas the Lessor declares that it is the lessee under an agreement with the
Israel Land Administration and the holder of rights to the land and
structure located on ▇ ▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, and known as Parcels 20 and 21 in Block 30187 (hereinafter -
the "Building"); and
Whereas in the Building there is an office of a gross area of 354 sq.m. located
on the first floor of the Champion Building and marked as units 102, 103
and 104 and marked by a red line in the sketch attached hereto as
Exhibit A (hereinafter - the "Premises"); and
Whereas the Lessor wishes to lease the Premises to the Lessee as an unprotected
tenancy and the Lessee wishes to rent the Premises from the Lessor as an
unprotected tenancy, for a period and under terms as provided herein;
and
Whereas the Lessor declares that it is entitled to lease the Premises and that a
Certificate of Completion and Occupancy has been issued for the Building
by the local authority and that there is no cause preventing the use of
the Building or the connecting thereof to the electricity, water and
telephone networks;
Now, therefore, it has been agreed and stipulated between the parties as
------------------------------------------------------------------------
follows:
--------
1. Preamble, Exhibits and Headings
-------------------------------
1.1 The preamble hereto and the parties' declarations therein constitute an
integral part hereof.
1.2 The Exhibits attached hereto constitute an integral part hereof.
1.3 The Section headings herein contained are presented for convenience of
reference only; they do not constitute a part hereof nor shall be used for
the purpose of the interpretation hereof.
2. Definitions
-----------
Each of the terms listed below shall herein have the meaning appearing beside
it, unless another meaning is implied:
"The Agreement" - this Agreement, including all of its Exhibits;
"The Premises" - an office of a gross area of approximately 354 sq.m. known as
unit no. 102, 103, 104 marked in a red line on the sketch
attached as Exhibit A hereto;
"The Initial Term of Lease" - the initial term of lease, as provided for in
Section 4.1 hereto;
"The Additional Term of Lease" - the additional term of lease, as provided for
in Section 4.1 hereto;
"The Overall Term of Lease" - the overall term of lease, as provided for in
Section 4.1 hereto;
"Term of Lease Termination" - the date of termination of the Initial Term of
Lease or the Additional Term of Lease or any earlier date on
which the lease shall be terminated in accordance herewith;
"The Rental Fees" - the consideration for the lease of the Premises, as provided
for in Section 7 hereto;
"Purpose of Lease" - the occupation and purpose described in Section 5 hereto.
3. The Agreement
-------------
3.1 The Lessor hereby leases to the Lessee and the Lessee hereby rents from the
Lessor the Premises for the Term of Lease, for the consideration and under
the terms as provided herein.
3.2 The Lessee hereby declares that it has seen and examined the Building and
the Premises and has found them to be suitable for its purposes, and it
waives all claims regarding unsuitability of any kind whatsoever in
connection with the Building and/or the Premises and/or the possibilities of
using the Premises, provided that the Lessor carry out such works in the
Premises as it is so obligated hereunder.
4. The Term of Lease
-----------------
4.1 In this Agreement -
"The Initial Term of Lease" - The period commencing upon 1.1.1999 and ending
on 31.12.1999 (totaling 3 years).
Notwithstanding the foregoing, it is hereby agreed that the commencement
date of the Term of Lease is contingent upon the completion of the
adaptation works to be carried out by the Lessor for the Lessee, as detailed
in Exhibit C.
In the event that such adaptation works shall extend beyond the
aforementioned date, the commencement date of the Term of Lease shall be
postponed accordingly.
"The Additional Term of Lease" - A 3-year term of lease, commencing on the
termination of the Initial Term of Lease or the termination of any
Additional Term of Lease which shall follow same.
"The Overall Term of Lease" - The term of lease encompassing the Initial
Term of Lease and Additional Terms of Lease which shall follow it, if any,
provided that the Initial and Additional Terms of Lease shall not
aggregately exceed 9 years.
4.2 Upon the termination of the Initial Term of Lease, and the termination of
any Additional Term of Lease, the Lessee shall have the option to extend the
Term of Lease by an Additional Term of Lease, provided that the Overall Term
of Lease does not exceed 9 years.
In the event that the Lessee shall not notify the Lessor in writing, at
least 90 days prior to the termination of the Initial Term of Lease and/or
any Additional Term of Lease as defined above, of its wish to exercise the
option to extend the Term of Lease by the Additional Term of Lease, such
option shall be cancelled and this Agreement shall be terminated at the end
of such Term of Lease. In the event that the option was exercised by the
Lessee by a written notice to the Lessor, at least 90 days before the end of
the Initial or Additional Term of Lease,
as applicable, the provisions hereof shall apply, mutatis mutandis, to the
Additional Term of Lease.
4.3 The Lessee shall not be entitled to terminate the lease hereunder prior to
the end of the Initial Term of Lease or an Additional Term of Lease, if
exercised, without the Lessor's prior written consent.
4.4 In any event of the Lessee's vacating or deserting the Premises of its own
accord for any reason whatsoever within the Initial and/or Additional Term
of Lease, as applicable, without obtaining the Lessor written consent
thereto, the Lessee shall be obligated to pay the Lessor the Rental Fees and
all other payments due from the Lessee hereunder until the end of the
Initial and/or Additional Term of Lease, as applicable, in accordance with
the terms hereof.
5. The Purpose of the Lease
------------------------
5.1 The Lessee rents the Premises for the purpose of running an office for
producing computer and multimedia programs and providing services in the
fields of the Internet, communications and computers and for no other
purpose whatsoever.
5.2 The Lessee undertakes not to use the Premises or any part thereof for any
purpose whatsoever other than that provided for in Section 5.1 above, unless
with the Lessor's prior written consent.
5.3 The Lessee's undertakings under Section 5.1 and 5.2 above are among the
fundamental principles hereof and the breach thereof shall be deemed a
fundamental breach hereof.
6. Inapplicability of the Tenant's Protection
------------------------------------------
6.1 The Lessee hereby declares, undertakes and confirms that it is aware that
the Premises are a property in a new building and are vacant, that the
Lessee has not been requested to pay and has not paid key money or payments
which might be construed as key money, and that all of the works,
modifications, improvements and innovations which shall be performed in the
Premises, if any, are not and shall not be fundamental modifications and
that the provisions of Part C of the Tenant's Protection Law (Consolidated
Version), 5732-1972, dealing with key money, shall not apply to the Lessee,
the Lessor, the Premises and this Agreement.
6.2 The Lease, the Lessee and the Premises are not protected by the provisions
of the Tenant's Protection Law (Consolidated Version), 5732-1972, nor by the
provisions of any other law protecting a lessee or
a tenant in any manner whatsoever, and such laws and their amendments shall
not apply to the Lease, the Lessee, the Premises and this Agreement.
6.3 Upon vacating the Premises, the Lessee shall not be entitled to any payment,
neither as key money nor in any other capacity.
6.4 The provisions of Section 6.1-6.3 above are among the fundamental principles
of this Agreement.
7. The Rental Fees
---------------
7.1 The Rental Fees throughout the Initial Term of Lease (as defined above)
shall be an amount in Shekels equaling U.S. $4,602 (four thousand six
hundred and two U.S. Dollars) per each month of rent (hereinafter - the
"Rental Fees"), and they shall be paid in advance for each 3 months of rent,
as follows:
7.1.1 In respect of the first three months of rent the Rental Fees shall be
paid upon the signing hereof, according to the representative rate of
the U.S. Dollar, as known at the time of signing hereof.
7.1.2 In respect of each period of 3 months of rent for the rest of the
Overall Term of Lease, the Rental Fees shall be paid in advance on the
first day of each such 3-month period of rent, whereby the Rental Fees
shall be linked to the representative rate of the U.S. Dollar as known
at the time of payment.
7.2 It is agreed between the parties that the Lessor shall ensure the carrying
out of adaptation works in the Premises, at the Lessor's expense, in
accordance with the plan attached as Exhibit B hereto and with the technical
specifications attached as Exhibit C hereto.
7.3 It is agreed between the parties that the Lessor shall allot the Lessee for
the duration of the Overall Term of Lease the use of 2 parking spaces in the
parking lot located on the basement level, which is owned by the Lessor, in
consideration for an amount in Shekels equaling U.S. $80.00 per each parking
space per month. Such sum shall be linked to the representative rate of the
U.S. Dollar as known at the time of actual payment, and shall be remitted by
the Lessee on the dates of the Rental Fees' payment in accordance with
Section 7.1.2 above. In the event that an additional parking space in the
parking lot shall become available, the Lessee shall be entitled to rent an
additional parking space under identical terms.
Notwithstanding the foregoing, in the event that an additional parking
space in the parking lot shall become available, the Lessor shall consent
to allot the Lessee an additional parking space under identical terms.
7.4 The Rental Fees, parking fees and maintenance fees referred to below, in
respect of the first three months of rent in respect of which Rental Fees
are payable by the Lessee, shall be paid upon the signing hereof.
7.5 The remittance of the Rental Fees, the parking fees and the maintenance
fees shall be effected by a deposit and/or bank transfer to the Lessor's
bank account in Iggud Bank, Main Tel Aviv Branch (branch no. 063), account
number 834000/18.
It is hereby clarified that the Rental Fees, the parking fees and the
maintenance fees shall be deemed paid only after such bank account is
actually credited.
The provisions of this Subsection shall not apply to the payment of the
Rental Fees, the parking fees and the maintenance fees which are paid by
the Lessee upon the signing hereof.
7.6 In the event that the date of payment of the Rental Fees, parking fees and
maintenance fees as provided for in this Section shall fall on a day which
is not a business day, the date of such payment of Rental Fees (and any
thing or debit in connection therewith, including updating the dollar
rate) shall be postponed to the first business day following such date.
7.7 In the event that the Lessee shall exercise the option as provided for in
Section 4.2 above, the Rental Fees shall be increased at the commencement
of each Additional Term of Lease by a rate of 15% compared with the Rental
Fees paid for the last month prior to the updating of the Rental Fees, as
aforesaid.
7.8 V.A.T., to the extent applicable at the time of payment, at the legal rate
then valid, shall be added to any payment of Rental Fees, parking fees and
maintenance fees, and it shall be imposed upon the Lessee and shall be
payable by it on the date of remittance of each and every payment, against
a tax invoice issued by the Lessor.
7.9 The Rental Fees, parking fees and maintenance fees shall be paid against a
tax invoice legally issued by the Lessor or the services company, which
are licensed dealers.
7.10 Income tax shall be deducted at the source as required by any relevant law
from any payment remitted by the Lessee to the Lessor.
7.11 The Lessee's undertakings under Section 7.1-7.8 above are among the
fundamental principles hereof and the breach of any of such undertakings
shall constitute a fundamental breach of this Agreement.
8. Other Payments Payable by the Lessee
------------------------------------
8.1 All taxes, fees, land taxes and compulsory levies, whether municipal or
governmental which shall be imposed on the Premises and/or the use of the
Premises and/or the lessees of leased premises, directly or indirectly, in
respect of the Term of Lease and the Additional Terms of Lease, if any,
shall be imposed on and paid by the Lessee. Such payments shall be paid on
the date when legally due for payment to the authorities.
It is hereby clarified that the Lessor shall bear the property tax and/or
improvement levy payments, if applicable and/or the payment of a tax or
levy which shall be imposed upon the owners of the Premises, excluding
improvement levy, construction levies, etc., which shall be imposed, if at
all, as a result of an action or request of the Lessee's in connection
with the Premises.
Without derogating from the foregoing, to the extent that any part of the
sums payable by the Lessee as aforesaid shall be based on a ▇▇▇▇ relating
to the Building, in whole or in part, the Lessee shall pay a proportionate
part of the total sum of such ▇▇▇▇, in the same ratio as that of the floor
area of the Premises which shall be included in such ▇▇▇▇ compared with
the floor area contained in such ▇▇▇▇. Such sum shall be paid to the
Lessor three days prior to the date such payment becomes due for payment
to the authority, but not less than 7 days from the date the Lessee first
receives a demand for payment of same.
8.2 The Lessee undertakes to bear all payments and expenses in respect of the
supply of electricity, water and telephone to the Premises throughout the
Term of Lease.
8.3 All taxes and payments due to the Municipality and/or the government
and/or any other entity in respect of the running of the Lessee's business
in the Premises, including business tax, sign tax, value added tax, fees
and licenses - shall be imposed upon and paid by the Lessee.
8.4 In the event that either of the parties shall, for any reason whatsoever,
make a payment which according to the provisions hereof is payable by the
other party, then such other party shall be obligated to repay the paying
party any sum so paid by it, immediately upon the paying party's first
demand to do so, provided that the paying party shall only
make a payment payable by the other party after giving the other party a 7
days prior written notice of its intention to do so.
8.5 The Lessee shall bear maintenance and expenses fees in respect of the joint
areas in an amount in Shekels equaling U.S. $ 2.30 per each sq.m. (gross),
totaling U.S. $814.20 per month, according to the representative rate known
on the day of actual payment, plus VAT as required by law, which shall be
paid on the date of payment of the Rental Fees as provided for in Section
7.1.2 above.
At the end of each year of lease, an accounting shall be made between the
Lessee and the Lessor regarding the maintenance and expenses fees paid,
compared to the expenses actually incurred according to separate and audited
books which shall be kept for the maintenance of the Building in which the
Premises are located.
It is hereby clarified that the maintenance services shall include costs
involved in management, cleaning public areas, maintaining elevators,
operating central air conditioning (excluding the Premises' internal
system), cleaning public toilets and kitchenette, clearing rubbish, etc.
Besides the foregoing, expenses in respect of the joint areas, including
central electricity, water, municipal taxes, etc., shall be paid together
out of such sum.
The maintenance and expenses fees in respect of the joint areas shall be
updated each calendar year according to the actual expenses on the last
month of the preceding year.
At the Lessee's request, it shall receive a copy of the books so kept.
For the purpose of accounting, the Lessee's share of the maintenance fees
shall be determined according to the ratio between the floor area of the
Premises and the floor area of the whole Building, excluding such areas as
are held by Champion Motors (Israel) Ltd.
8.6 It is hereby clarified that the Lessor shall be entitled to assign the
management and maintenance of the Building, including the Premises, to a
maintenance and management company. In such event, the Lessee shall pay,
without derogating from the provisions of Section 8.5 above, if so demanded,
its proportionate share of the management fees which the Lessor shall pay
the maintenance and management company, in accordance with the provisions of
Section 8.5 above.
8.7 The maintenance fees shall be paid on the dates of payment of Rental Fees
hereunder.
8.8 The Lessee shall present to the Lessor, at the Lessor's request,
confirmations and receipts regarding any payment payable by the Lessee in
accordance with the provisions hereof.
8.9 The full and timely remittance of the payments provided for in Section 8.1-
8.7 above are among the fundamental principles hereof and their breach
shall be deemed a fundamental breach hereof.
9. No Assigning of Lessee's Rights
-------------------------------
9.1 The Lessee hereby undertakes not to assign its rights hereunder, in whole
or in part, to another or to others, in any manner whatsoever, and not to
lease the Premises or any part thereof, for any period and in any manner,
to another or to others, and not to share possession of the Premises or any
part thereof with another or with others, whether such possession as
defined or not, and not to encumber and/or mortgage its rights hereunder,
in whole or in part, and not to grant another a right to the Premises as a
permitted tenant, all of the foregoing whether for consideration or with no
consideration, without obtaining the Lessor's prior written consent. The
Lessor undertakes not to refuse except for reasons of the nature of the
use, compared to the accepted uses of the Building.
9.2 The Lessee' undertaking under Section 9.1 above is among the fundamental
principles hereof, and the breach of such shall be deemed a fundamental
breach hereof.
10. Maintenance of the Premises during the Term of Lease
----------------------------------------------------
10.1 The Lessee undertakes to maintain the Premises and the public areas,
throughout the Term of Lease, in good, working and clean condition, to
refrain from causing damages and to prevent any damage thereto or
malfunction therein or to or in any of the installations therein, and to be
responsible for and to repair, immediately and at its own expense, any
damage caused to the Premises and/or the public areas by the Lessee and/or
its visitors and/or clients and/or workers and/or any person who shall
enter the Building and/or the Premises.
10.2 The Lessee undertakes not to effect any external change to the Premises and
not to add any addition or to demolish any part of the Premises and/or any
of its installations without obtaining the Lessor's prior written consent.
10.3 Passing of electric and communications cables through the Premises and/or
to the Premises and from them through walls and/or beams and/or in any
other way, are contingent upon obtaining the Lessor's
prior written consent, and according to the Lessors' instructions. The
Lessee shall install a separate air-conditioning system for the computer
room at its own expense, and shall pass the duct system through the public
areas in coordination with the Lessor.
10.4 The Lessor and/or whomsoever on its behalf shall be entitled to enter the
Premises at any reasonable time, to check on the Premises' condition, as
well as for carrying out repairs, works, technical or other arrangements
for other parts of the Building.
10.5 The Lessee undertakes not to store any materials, tools, equipment or
other movable objects at the entrance to or out of the Premises, and it
shall not be entitled to use any other part of the Building therefor.
The Lessee further undertakes to strictly maintain the Premises'
cleanliness, to clear rubbish from the Premises only to the garbage
container located in the service courtyard on the ground level of the
Building, to run its business solely within the bounds of the Premises,
and not to cause any nuisance, noises, odors, shocks, filth, smoke or
inconvenience to persons in or visiting the Building. To eliminate doubt,
the Lessee hereby undertakes not to bring any dangerous materials of any
kind into the Premises and/or the Building.
10.6 It is agreed between the parties that the Lessee shall be entitled to hang
signs in the Building's corridor and on a plaque on the Building's
entrance floor, at a place designated therefor by the Lessor, and
according to the uniform type and size of signs used in the Building.
To eliminate doubt, it is hereby clarified that the Lessee shall not be
entitled to hang signs and/or posters and/or notices of any kind
whatsoever on the external walls of the Building and/or on the Building's
windows and/or in the Building's corridor and/or in any other location in
the Building, excluding the signs provided for in the first paragraph of
this Section.
10.7 The Lessee undertakes to fulfill and comply with every provision of law,
regulation, order and by-law in connection with the Premises or the
possession or use thereof, and not to do or allow to be done in the
Premises or in connection therewith or with the Building anything which
might constitute a nuisance.
The Lessee shall make sure to receive all permits from the authorized
authorities required for running the businesses which shall be run in the
Premises.
10.8 The Lessee shall be responsible towards the governmental and municipal
institutes and authorities also as regards paying any fines imposed due to
failure to comply with the foregoing provisions.
10.9 1. The Lessee shall be obligated to sign and maintain, at its own
expense, a service agreement regarding the Premises' air-conditioning
systems with Electra Ltd. or any other company approved by the Lessor
in writing and in advance, and ensure the maintenance thereof
throughout the Overall Term of Lease.
2. The Lessee shall be obligated to submit to the Lessor a signed copy of
such service agreement.
3. In the event that the Lessee shall fail to fulfill the provisions of
Subsection 1-3 above, the Lessor shall be entitled, but not obligated,
to do same in the Lessee's place and at the Lessee's expense.
10.10 Each party undertakes to compensate the injured party and indemnify same
for any damage or expense caused thereto due to a lawsuit, whether
criminal or civil, filed against same and due to the need to defend
against such suit- insofar as such suit shall arise from the failure to
fulfill or from a breach of the other party's undertakings hereunder
and/or by law.
10.11 The Lessee undertakes to compensate the Lessor, immediately upon its
first written demand, for any injury, loss or damage caused to the
Premises and/or the Lessor as a result of an action and/or omission for
which the Lessee is responsible, whether by direct or imputed
responsibility, by law and/or under an agreement, and to repay the
Lessor, immediately upon receiving the Lessor's first written demand, any
sum paid by the Lessor to any person and/or entity as compensation for
such an injury, loss or damage, with the addition of expenses incurred by
the Lessor in connection with defending such a suit for compensation.
11. Lessor's Undertakings
---------------------
11.1 The Lessor undertakes to repair any defect and/or malfunction which may
be discovered in the Building's and Premises' systems, excluding a defect
and/or malfunction in the Premises caused as a result of a use thereof
deviating from the terms hereof.
11.2 In the event that the Lessor shall not fulfill its undertakings as
provided for in Section 11.1 above, the Lessee shall be entitled to do
same in the Lessor's place, after having given the Lessor a written
notice thereof a reasonable time (which shall not be less than 7 days,
according to the nature of the defect and/or malfunction) in advance. The
Lessor shall refund the cost of the repairs to the Lessee within 14 days
of the day such sum was demanded by the Lessee, subject to receiving
receipts of
repairs carried out from the workers. In the event of a malfunction in
vital systems, e.g., water, sewage, electricity and air conditioning, the
repairs shall be carried out within 24 hours of receipt of the complaint.
11.3 The Lessor undertakes, in the event so requested, to submit to the Lessee
a copy of the Building's or the Premises' plans, if and to the extent
required for obtaining a business license for the Premises, and to the
extent that such plans are in the possession of the Lessor or whomsoever
on its behalf.
It is hereby clarified that the Lessee shall bear the costs of submitting
such plans.
11.4 The Lessor undertakes that the continuation of the completion work and/or
renovations work in the Building shall be carried out, to the extent
possible, in a manner which shall not disturb the operation and/or
management of the Lessee's business in the Premises and the general
cleanliness and aesthetic look of the Building.
12. Lessee's Responsibility
-----------------------
12.1 The Lessee shall be responsible for all damages of any kind whatsoever
(including loss of profits) caused to the Premises and/or the Building
and/or the Lessor and/or any third party, which arise from the Lessee's
actions and/or omissions, including the action and/or omissions of its
employees, invitees, clients and whomsoever on its behalf and/or due to
the running of its business in the Premises.
12.2 The Lessor shall not bear any responsibility or liability whatsoever in
respect of any personal and/or pecuniary damage and/or loss of any kind
whatsoever caused to the Lessee and/or its employees and/or its clients
and/or its visitors and/or any other person present in the Premises, and
the Lessee assumes upon itself all responsibility towards the Lessor for
any such damage and undertakes to compensate and indemnify the Lessor for
all such damage and against any expense incurred by the Lessor in
connection with any such damage, unless such damage was caused by the
Lessor or its agent and/or on its behalf and/or due to its liability
under law.
12.3 The Lessor shall not bear any responsibility for the personal and/or
pecuniary damages caused to the Lessee, its employees, clients, visitors,
invitees or any other third party, caused in the Premises during the
Initial Term of Lease and the Additional Term of Lease or so long as the
Lessee refrains from vacating the Premises, whichever is the later,
unless such damage was caused by the Lessor or its agent and/or on its
behalf or due to its liability under law.
13. Insurance
---------
13.1 Without derogating from the Lessee's undertakings hereunder and/or by
law, the Lessee undertakes to purchase at its expense and to keep,
commencing upon the date of receiving possession of the Lessee and until
the end of the Overall Term of Lease, the following valid insurance
policies:
13.1.1 Employers' Liability Insurance - insurance of the liability of the
Lessee towards its employees under the Torts Ordinance (New Version)
and/or under the Responsibility for Faulty Products Law, 5740-1980 in
respect of death and/or personal damage caused to any employee as a
result of accident or disease during and subsequent to its employment,
at a liability limit not to be less than $5,000,000.- (five million
U.S. Dollars) per case and overall for the insurance period. Such
insurance shall not be subject to any limitation regarding working
hours, working at a height or depth, contractors, subcontractors and
their employees, and regarding employing youths.
13.1.2 Third Party Liability Insurance - insurance of the Lessee's liability
towards the Lessor, the management party and any third party, under
the laws of the state of Israel, in an amount not to be less than an
amount in Shekels equaling $500,000 (five hundred thousand U.S.
Dollars) per case and overall for the insurance period. Such insurance
shall not be subject to any limitation regarding liability arising
from fire, panic, explosion, lifting, unloading and loading machinery,
poisoning, any harmful substance in food or drink, faulty sanitary
installations, strikes and lockouts as well as subrogation claims on
the part of the National Insurance Institute. Such insurance shall
expressly note that as regards any damage caused within the Premises
such insurance is first and foremost an insurance drawn by the Lessor
and/or the management company.
13.1.3 Property Insurance - insurance of the contents of the Premises, the
equipment used for the Lessee's work and the equipment serving the
Premises and located outside same, including any repair, modification,
improvement, renovation, addition to the Premises done and/or which
shall be done by and/or for the Lessee of any kind whatsoever, in
their full value to the Lessee, against the following risks: fire,
smoke, lightning, explosion, earthquake, storm, flood, fluid damages,
damage by aircraft, accidental damage, riots, willful damages and
breaking and entering.
13.1.4 Lessee's Loss of Income Insurance - (excluding Rental Fees and
management fees) following damages caused to the Building and/or
the Premises and/or the contents thereof due to the risks insured
under Section 13.1.3 above (excluding breaking and entering for a
reimbursement period not to be less than 3 months).
13.2 The following provisions shall apply to the policies provided for in
Section 13.1 above:
13.2.1 The Lessee shall draw the policies with a renowned insurance company
legally licensed to issue insurance in Israel, shall update the
insurance amounts, and shall pay the premiums when due.
13.2.2 The Lessee undertakes that in the policies drawn as provided for in
Subsections 13.1.3, 13.1.4 and 13.1.5 above, an express clause will be
added, according to which the insurer waives regarding whomsoever on
behalf of such persons, and towards all lessees and/or tenants of the
Building.
Such waiver of the subrogation right shall not apply for the benefit
of a person who willfully caused damage. Such waiver of the
subrogation right shall not apply regarding lessees and/or tenants in
whose equivalent insurance no clause was added regarding waiver of
subrogation towards lessees and/or tenants of the Building.
13.2.3 The Lessee further undertakes to broaden the insurance provided for in
Subsection 13.1.2 above whereby same shall include provisions
regarding the indemnification of the Lessor and/or the management
company in respect of their responsibility as owners and/or managers
of the Premises and in respect of their responsibility for the actions
and/or omissions of the Lessee.
The Lessee further undertakes that any third party insurance drawn by
it hereunder shall be subject to a "cross liability" clause.
13.2.4 The insurance provided for in Subsection 13.1.1 shall be broadened so
as to indemnify the Lessor and/or the management company in the event
that same shall be deemed to be the employers of the Lessee's
employees and/or any one thereof.
13.2.5 The policies shall include a provision whereby their cancellation
and/or the worsening of their terms as regards the Premises shall be
contingent upon a written notice to be delivered to the Lessor by the
insurer at least 60 (sixty) days prior to the date of such
cancellation or worsening of terms.
13.2.6 The Lessee shall submit to the Lessor, no later than 30 (thirty) days
prior to the day the Lessee receives the Lessor's permission to carry
out the Lessee's work in the Premises, the insurance company's
confirmation in the form attached hereto as Exhibit,
which confirms that the Lessee has been issued the policies the Lessee
is obligated to purchase as provided for in Section 13.1.1 above, and
that the policies contain everything set forth in the confirmation's
wording as in such Exhibit H.
The Lessee shall effect such modifications and amendments in the
policies as demanded by the Lessor whereby the policies shall comply
with the provisions of this Section. The policies in which all such
modifications demanded by the Lessor, if any are demanded, are
included shall enter into force on the day the Lessee receives the
Lessor's permission to carry out the Lessee's work in the Premises.
13.2.7.1 The Lessee undertakes to use the moneys received from the insurance
company under the policy as provided for in Section 13.1.3 and for
13.1.4 above, or in respect of which it had been entitled to
indemnification if it were not for the self participation provided for
in such policies and/or if it were not for the "deficient insurance"
clause contained in such policies. The exemptions as provided for in
such Section above shall not apply to the benefit of a person who
willfully caused damage.
13.2.8 Subject to the provisions of Section 13.2 (final part) below, 3 below,
and Section 5.3 of the Management Agreement, it is hereby agreed that
drawing such insurance by the Lessee shall not in any way limit or
derogate from the Lessee's undertakings hereunder, nor shall it
release it from its obligation to compensate the Lessor and any other
person in respect of any damage for which the Lessee is responsible
hereunder and/or by law.
It is further agreed that subject to the provisions of the final part
of Section 13.2.7 above, and notwithstanding any other provision
contained herein and/or in the Management Agreement, drawing the
insurance provided for in Section 13.1 of the Management Agreement, by
the Lessor and/or the management company shall not in any way limit or
derogate from the Lessee's undertakings hereunder, nor shall it
release it from its obligation to compensate the Lessor and any other
person in respect of any damage for which the Lessee is responsible
hereunder and/or by law.
The Lessor and the management company hereby expressly exempt the
Lessee from any responsibility for damage in respect of which they are
entitled to indemnification under the policy issued under the
provisions of Section 13.1.1 of the Management Agreement. Such
exemption shall not apply to the benefit of a person who willfully
caused damage.
13.2.9 To eliminate doubt, the Lessee hereby declares that it has been
notified by the Lessor that the Lessor or the management company have
purchased or shall purchase third party liability insurance (as
detailed in Section 1.2 of the management agreement) insuring
liability in respect of injury or damage to the person and/or property
of any person and/or entity whatsoever in the public areas which do
not constitute a part of the leased areas and that in such insurance
the Lessee is included as an insured party.
14. Vacating the Premises
---------------------
14.1 At the end of the Initial Term of Lease and/or at the end of the
Additional Term of Lease and/or upon termination hereof for any reason
whatsoever, the Lessee undertakes to vacate the Premises and deliver
possession thereof to the Lessor, empty of any person or object belonging
to the Lessee, clean and in order, in the same condition as the Premises
had been a the commencement of the Term of Lease, excluding reasonable
and usual wear and tear.
It is hereby agreed that the Lessee is obligated to leave improvements
and/or additions carried out in the Premises during the Addition Term of
Lease and which are connected to the Premises, for no consideration.
At the Lessor's written demand, the Lessee shall dismantle improvements
and/or additions carried out in the Premises during the Overall Term of
Lease and shall restore the Premises, at its expense, to the condition in
which they had been upon delivery of possession at the commencement of
the Initial Term of Lease, including any repairs required.
To eliminate doubt, it is hereby clarified that when vacating the
Premises the Lessee shall not be entitled to remove the air conditioning
systems installed by it in the Premises and which are connected to the
Building's central air conditioning system, as provided for in Section
10.9 above, if any were installed.
To eliminate doubt, it is hereby declared by the Lessee that in the event
that the Lessor shall decide to keep the improvements and/or additions to
the Premises, as provided above, such shall not be construed as payment
of key money and/or any participation in the Premises' price.
14.2 In the event that the Lessee shall not vacate the Premises on time as
provided for in Section 14.1 above, then in addition to the Lessor's
right to ▇▇▇ for evacuation of the Premises, and in addition to any other
right granted to the Lessor by any law and/or hereunder, the Lessee shall
pay the Lessor an amount equaling US $440 (four hundred U.S.
Dollars) at the representative rate on the date of payment per each day
of delay in vacating the Premises.
14.3 In the event that the Lessee shall fail to vacate the Premises on time as
provided for in Section 14.1 above, the Lessor shall be entitled to claim
from the Lessee all sums, taxes, payments, obligations, Rental Fees,
repair costs, damage costs, liquidated damages, losses and all other
payments with no exception, in respect of the period commencing on the
date on which the Lessee had been obligated to vacate the Premises, as if
the Initial Term of Lease or the Additional Term of Lease had been
continued, without derogating from the Lessee's obligation to vacate the
Premises and without derogating from any other relief available to the
Lessor hereunder and/or by law.
14.4 The Lessee's undertakings under Section 14.1-14.3 above are among the
fundamental principles hereof and the breach of any of such undertakings
shall constitute a fundamental breach of this Agreement.
15. Securities
----------
15.1 To secure all of the Lessee's undertakings hereunder, the Lessee shall
deposit with the Lessor a bank guarantee in a form acceptable to the
Lessor, in an amount in Shekels equaling $15,000 (fifteen thousand U.S.
Dollars), such sum being linked to the representative rate of the U.S.
Dollar, for the Overall Term of Lease and 90 additional days.
15.2 The Lessee hereby gives the Lessor an irrevocable direction not subject
to the Lessee's cancellation or any modification, that in any event of a
failure to pay Rental Fees or any other payment payable by the Lessee, in
full and in a timely fashion, and/or in any event of failure to vacate
the Premises and return possession thereof to the Lessor, in accordance
herewith and/or in any event of a failure to fulfill any of the Lessee's
undertakings, the Lessor shall be entitled to cash the notes provided for
in Section 15.1 above or realize the bank guarantee provided for in
Section 15.2 above.
15.3 The Lessee's undertakings as provided for in Sections 15.1-15.3 above are
among the fundamental principles hereof and the breach of any of such
undertakings shall constitute a fundamental breach of this Agreement.
16. Violations and Remedies
-----------------------
16.1 The provisions of the Contracts (Remedies for Breach of Contract) Law,
5731-1970, shall apply to the parties and hereto.
16.2 In the event that either of the parties shall pay any amount which the
other party was obligated to pay by law or hereunder, such other party
shall be obligated to repay the paying party the paid amount, with the
addition of dollar linkage differentials and interest for delay as
provided for in Section 16.3 below.
16.3 It is hereby expressly agreed that in the event that the Lessee shall
delay payment of any payment whatsoever which its shall be obligated to
pay the Lessor hereunder, the Lessee shall pay the Lessor for each day of
delay interest for delay on the amount delayed at the maximum rate
charged in Bank Leumi of Israel Ltd. for excess overdrafts in current
loan accounts.
The interest shall be calculated for the period starting on the date the
delayed payment was due until the date of actual payment. In the event
that the Lessor shall pay interest and/or a fine for delay due to the
Lessee's delayed payment, such interest and fine for delay shall be
calculated as part of the principal debt the Lessee must repay the
Lessor.
In the event that the delayed amount shall be an amount quoted in
dollars, then the dollar sum shall be converted to Shekels at the
representative rate of the dollar known at the date the delayed payment
was due, and the aforesaid interest for delay shall apply to the Shekel
amount; or, alternatively, at the Lessor's discretion, the delayed amount
shall remain linked to the dollar for the period of delay until the
actual payment of such sum, and in such event instead of the previously
described interest, the delayed dollar sum shall bear interest at the
annual rate of twenty percent (20%).
16.4 In each of the following cases the Lessor shall be entitled, without
derogating from its rights hereunder, to terminate the Lease Agreement
and demand the immediate vacating of the Premises:
16.4.1 In the event that the Lessee shall delay the payment of Rental Fees
and/or maintenance fees and/or parking fees and/or any other payment
payable by the Lessee hereunder for more than fourteen (14) days,
provided that the Lessor shall send the Lessee a notice of its
intention to terminate the Agreement by registered mail and such sum
shall not have been paid by the Lessee within seven (7) days of
receipt of Lessor's aforesaid warning; and/or
16.4.2 In the event that a temporary and/or permanent receiving order shall
be issued over the Lessee's assets; and/or
16.4.3 In the event that a receiving or liquidation order and/or an order in
bankruptcy, as applicable, is issued against the Lessee and/or
whomsoever of the persons comprising the Lessee; and/or
16.4.4 In the event that execution proceedings shall be commenced against the
Lessee and/or the guarantors hereunder which in the Lessor's opinion
have an effect of all or part of the fulfillment of the Lessee's
undertakings hereunder, and such proceedings shall not be canceled
within 34 days.
16.4.5 In the event that the Lessee shall grant a usage right and/or any
other right to the Premises and/or any part thereof; and/or
16.4.6 In the event that the Lessee shall use the Premises not in accordance
with the Purpose of Lease.
16.5 It is hereby expressly clarified that nothing aforesaid in the Section
shall derogate from any other relief available to the Lessor by law or
hereunder.
17. Jurisdiction
------------
It is agreed and declared that the exclusive local jurisdiction over any
matter concerning this Agreement shall be to the courts in Tel-Aviv-Jaffa.
18. General
-------
18.1 The parties shall bear the stamp duty in respect hereof in equal shares.
18.2 Any modification or amendment of this Agreement or any of its terms shall
not be valid unless done in writing and signed by all parties.
18.3 No waiver, discount or failure to act on time or granting of an extension
shall not be deemed as a waiver by any side of any of its right hereunder
and shall not prevent same from suing.
18.4 The Lessor shall be entitled, at any time, to transfer and/or assign its
rights and/or obligations in connection with the Lessor and/or hereunder to
any third party it shall so see fit, and/or encumber its rights hereunder,
in whole or in part, under terms as it shall so see fit, provided that the
Lessee's rights hereunder shall not be harmed.
18.5 Written notices in connection herewith shall be hand-delivered or sent by
registered mail to the parties' addresses as provided for in the Preamble
hereto.
18.6 Any notice delivered or sent as aforesaid shall be deemed received by its
addressee at the earlier of the following dates: upon its actual delivery -
if such notice was hand delivered; or within four business days of its
being deposited for mailing - if such notice was sent by registered mail.
In witness whereof the parties have hereby set their hands
at the place and on the date stated in the Preamble hereto
Allied Investments Ltd. Virtual Jerusalem Ltd.
S/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ s/Avi ▇▇▇▇▇▇▇▇▇
________________________ ______________________
Exhibit C
---------
Technical Specifications
------------------------
These specifications constitutes an integral part of the
Lease Agreement signed in Jerusalem on December 29th, 1998
between: Allied Investments Ltd. - hereinafter - the "Lessor"
and: Virtual Jerusalem Ltd. - hereinafter - the "Lessee"
for the purpose of leasing the office on the first floor, marked as units no.
102, 103, 104 with a gross area of approximately 354 sq.m., in the ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ - hereinafter - the "Premises".
In any case of discrepancy between these specifications
-------------------------------------------------------
and the Lease Agreement, these specifications shall prevail
-----------------------------------------------------------
a. Floor Covering:
--------------
Description: 1. 25x25 cm high grade Terzo tiles - as is on site.
Quantity: the whole area of the Premises according to the sketch.
Description: 2. Standard fireproof carpet at a total cost of no more than
$15 per sq.m..
Quantity: the whole area of the Premises according to the sketch.
b. Partitions:
----------
1. Between Premises and Corridors - As is.
------------------------------
2. Between Premises and Adjacent Premises - As is.
--------------------------------------
3. Partitions within Premises - As is.
--------------------------
c. Ceiling - As is.
-------
d. Doors:
-----
1. Between Premises and Corridors - As is.
------------------------------
2. For Partitions within Premises - As is.
------------------------------
e. Windows - As is.
-------
f. Telephone - As is.
---------
g. Electricity - As is.
-----------
h. Air Conditioning - As is.
----------------
i. Sanitary Plumbing - None.
-----------------
j. Wall Paint - Description: white.
----------
k. Additional Work at Lessor's Expense:
-----------------------------------
1. New carpet (see Section a above).
2. Division using low partitions according the Lessee's plan.
3. Electricity and communications outlets for same (up to 23 outlets).
4. New paint.
l. Additional Work at Lessee's Expense:
-----------------------------------
Any other work as requested by the Lessor shall be carried out at cost with
the addition of 15% markup (Cost + 15%).
Payment for such work shall be remitted within 15 days of submission of ▇▇▇▇
to the Lessor.
Date: 12/29/98 Lessee's Signature:s/Avi ▇▇▇▇▇▇▇▇▇
Date: 12/29/98 Lessor'sSignature:s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇