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Exhibit 10.32
(Translation from Hebrew)
Lease Agreement
Entered into and signed in Jerusalem on June 13, 2000
Between: Har Hotzvim Properties Ltd. (51-168405-2) of 27, Hamered St., Tel Aviv
(hereinafter: the "Lessor")
And: VYYO Ltd. (51-086689-0) of Kiriat Hamada St., Building # 6,
Har Hotzvim P.O.B. 45017, Jerusalem (hereinafter: the "Lessee")
Whereas the Lessor owns the rights to the land known as parcel 110 in block
30241 on Kiriat Hamada St., Har Hotzvim, Jerusalem; and
Whereas there is an existing building on the said land, and other buildings
are in the stages of planning, construction and development; and
Whereas the Lessee is interested in leasing two units from the Lessor,
located in Building B on the land, as set forth herein; and
Whereas the Lessor agrees to lease two units in Building B on the land to the
Lessee, as set forth herein; and
Whereas the parties have agreed upon the principles for the adjustment
of the leased premises to the Lessee's requirements, and all
other terms and conditions of the transaction have been agreed
upon,
Therefore, it has been agreed, stipulated and declared as follows:
1. General
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1.1 The preamble to this agreement constitutes an integral part hereof.
1.2 Definitions
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In this agreement, the following terms shall have the meaning set forth
beside them:
1.2.1 "Land" - parcel 110 in block 30241 on Kiriat Hamada St., Har Hotzvim,
Jerusalem, including anything constructed thereon and anything to be
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constructed and developed thereon. The boundaries of the Land are
marked on the drawing attached to this agreement as Appendix A-1 and
constituting an integral part hereof.
1.2.2 "Project" - the Ramot Meir project located on the Land, that includes
and will include multi-functional buildings, parking lots and open
spaces.
The Project is due to include three main buildings in addition to a
high-rise building (Buildings A, B, C and D). The term "Project"
imports each of these buildings, and all other buildings, facilities,
areas, yards, roads and anything else located on the Land.
The Lessor intends to include within the Project catering services, a
post office and a bank.
The construction of the Project shall be carried out in stages, at the
Lessor's discretion.
1.2.3 "Building A" - an existing, multi-story building in the Project, the
boundaries of which are marked on the drawing attached as Appendix A-1.
"Building B" - a building in the stages of planning and construction,
the boundaries of which are marked on the drawing attached as Appendix
A-1, which will contain parking lot levels and multi-functional levels.
"Building C" - a planned building, the boundaries of which are marked
on the drawing attached as Appendix A-1, which will contain parking lot
levels and multi-functional levels.
"Building D" - a planned building, designed as a high-rise, which will
be constructed above part of Building C, if the construction thereof
will be approved.
1.2.4 "Leased Premises" - an area on the second floor (level 718) in
Building B and an area on the third floor (level 722) in Building B.
The boundaries of the part of the Leased Premises located on level 718
are marked in blue on the drawing attached to this agreement as an
integral part hereof and marked as "Appendix A-2-(1)" (this part of the
Leased Premises is marked as unit B/2/102 of the Project).
The boundaries of the part of the Leased Premises located on level 722
are marked in blue on the drawing attached to this agreement as an
integral part hereof and marked as "Appendix A-2-(2)" (this part of the
Leased Premises is marked as unit B/3/102 of the Project).
For the purposes of this agreement, it is agreed that the part of the
Leased Premises located on level 718 shall be deemed to include 2,076
m/2/ gross. It is
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further agreed that for the purposes of this agreement, the part of the
Leased Premises located on level 722 shall be deemed to include 1,930
m2 gross. Therefore, it is further agreed that for the purposes of this
agreement, the Leased Premises in their entirety shall be deemed to
include 4,006 m2 gross, subject to measurement as set forth in the
special appendix hereof.
The Leased Premises shall also include any and all work, systems and
supplies pursuant to Appendix B hereof (technical specification).
1.2.5 "Dining Room" - an area of approximately 150 m2 on the ____ floor
(level ____) in Building B, which the Lessor undertakes to make
available to the Lessee and to other lessees in the Building, for use
as a dining room, starting on the Date of Commencement of the Lease, as
defined hereunder, until the dining room/restaurant planned in Building
B or C, once built, shall be operated.
1.2.6 "Month" - a Gregorian month commencing on the first day of such month
and ending on the last day of such month, according to the number of
days in such month in such year, according to the Gregorian calendar.
1.2.7 "Management Company" - a company named by the Lessor to provide
management and maintenance services for the Project, whether a company
of the Lessor's or any other company to be chosen by the Lessor.
1.3 The Appendices attached to this agreement constitute an integral part
hereof. Following are the appendices of the agreement:
Appendix A-1: drawing of the Land.
Appendix A-2-(1): drawing of the part of the Land located on level 718.
Appendix A-2-(2): drawing of the part of the Land located on level 722.
Appendix B: technical specification.
Appendix C: interior work by the Lessee in the Leased Premises.
Appendix D: canceled.
Appendix E: insurance appendix (to which two sub-appendices are
attached).
Appendix F: bank guarantee sample.
1.4 The headings of the sections and provisions of this agreement are
inserted in order to facilitate the reading of the agreement and the
appendices hereof. They constitute no part of the agreement and the
agreement shall not be construed in accordance therewith.
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2. Undertaking to Lease
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The Lessee hereby undertakes to lease the Leased Premises from the
Lessor, and the Lessor hereby undertakes to lease the Leased Premises
to the Lessee, in accordance with all the terms and conditions of this
agreement.
The Lessee further undertakes hereby to enter into a management
contract with the Management Company named in this agreement, and to
fulfill all the terms and conditions of the management contract as part
of the undertakings thereof to the Lessor pursuant to this agreement.
3. Term of the Lease
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The duration of lease of the Leased Premises is hereby determined as
four years, commencing on January 1, 2001 (hereinafter: the "Date of
Commencement of the Lease") and ending on December 31, 2004 (this
period shall be referred to herein as the "Term of the Lease").
The Lessee shall be entitled to extend the Term of the Lease in
accordance with the provisions of Section 23 hereunder.
4. Surrender of possession of the Leased Premises
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4.1 The Lessee hereby undertakes to take possession of the Leased Premises
at the time of signing of this agreement.
4.2 By the date of surrender of possession of the Leased Premises to the
Lessee, the Lessor shall complete the work on the Leased Premises in
accordance with the "technical specification" attached to this
agreement as an integral part hereof and marked as "Appendix B".
For the sake of good order, it is hereby clarified that both the Lessor
and other lessees in the building and in the Project may continue
performing construction and finish on the Project (and on any part
thereof) in the building at which the Leased Premises are located, and
on other leased premises in such building, also after possession of the
Leased Premises is surrendered to the Lessee.
The aforesaid notwithstanding, it is clarified that the construction
work to be performed by the Lessor after surrender of possession of the
Leased Premises to the Lessee, shall be limited to performance of
adjustments in other units in the building, construction of the new
buildings (C and D) and land development work.
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The Lessor shall endeavor to ensure that the work mentioned in the two
foregoing paragraphs shall be performed with the least disturbance to
the Lessee; in any event, reasonable access to the Leased Premises will
be assured.
4.3 The Lessee confirms that it has perused the plans for the Leased
Premises and the technical specification and has closely examined the
same, and that subject to the performance thereof, the Leased Premises
are to its full satisfaction.
4.4 The provisions of Section 14 hereunder and the provisions of the
document entitled "interior work by the Lessee", attached to this
agreement as an integral part hereof and marked as "Appendix C" shall
apply in all matters pertaining to interior work to be performed by the
Lessee on the Leased Premises.
5. Rent payments
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5.1 The monthly rent for each Month during the Term of the Lease between
January 1, 2001 and December 31, 2004 is determined hereby in the
amount of NIS 164,406 (one hundred sixty four thousand, four hundred
and six New Israeli Shekels), in addition to indexation (hereinafter:
"Monthly Rent").
5.2 In the event that the Lessee shall exercise the right thereof to extend
the Term of the Lease, as set out in Section 23 hereunder, the rent to
be paid by the Lessee to the Lessor for each of the following periods
shall be as follows:
The monthly rent for each Month during the Term of the Lease between
January 1, 2005 and December 31, 2006 and in the Term of the Lease
between January 1, 2007 and December 31, 2008 shall be NIS 172,626 (one
hundred seventy two thousand, six hundred and twenty six New Israeli
Shekels) in addition to indexation (hereinafter: "Monthly Rent"). This
amount reflects a 5% increase from the Rent fixed for the period
between January 1, 2001 and December 31, 2004 as set out above.
The monthly rent for each Month during the Term of the Lease between
January 1, 2009 and December 31, 2010 and in the Term of the Lease
between January 1, 2011 and December 31, 2012 shall be NIS 181,258 (one
hundred eighty one thousand, two hundred and fifty eight New Israeli
Shekels) in addition to indexation (hereinafter: "Monthly Rent"). This
amount reflects a 5% increase from the Rent fixed for the period
between January 1, 2005 and December 31, 2008 as set out above.
The monthly rent for each Month during the Term of the Lease between
January 1, 2013 and December 31, 2014 and in the Term of the Lease
between January 1, 2015 and December 31, 2016 shall be NIS 190,321 (one
hundred ninety thousand, three hundred and twenty one New Israeli
Shekels) in addition to indexation (hereinafter: "Monthly Rent"). This
amount reflects a 5% increase from the Rent fixed for the period
between January 1, 2009 and December 31, 2012 as set out above.
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5.3 In addition to the Monthly Rent, the Lessee shall pay the Lessor V.A.T.
at the lawful rate thereof at the time of payment. Rent shall be no
less than the amounts set out in Section 5.1 above.
5.4 The Monthly Rent, as set out above, shall be linked to the index and
paid in addition to indexation differences, the bases for indexation
being as follows:
5.4.1 It is agreed that the "Basic Index" according to which the Monthly Rent
shall be calculated is the index for the month of April 2000, published
on May 15, 2000 (105.8 points).
5.4.2 It is agreed that the "Effective Index" shall be the index to be known
on the date of actual payment of the Monthly Rent.
5.4.3 The "Index" shall mean the index known as the "Consumer Price Index"
(including fruit and vegetables) published by the Central Statistics
and Economic Research Bureau; if publication of such index shall be
ceased, it shall be replaced by the index to be determined by the
Central Statistics Bureau as the index replacing it, and if none is
determined, then it shall be replaced by the index which the Bank of
Israel shall accept as the index replacing the same, regardless of
whether or not they shall be based on the same data on which the said
Index is based.
6. Payment of Rent
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6.1 The Lessee undertakes to pay the Monthly Rent to the Lessor as follows:
6.1.1 The Monthly Rent throughout the Term of the Lease, in addition to
V.A.T., shall be paid by the Lessee to the Lessor in quarterly
installments (each in the amount of Monthly Rent for three months in
addition to indexation and V.A.T.), payable for each three months in
advance, no later than the first day of the first Month of each three
months.
The payment of Rent pursuant to this subsection shall be made in each
year in which the lease shall be valid, on the first day of each of the
following months: January, April, July, October.
V.A.T. shall be paid by the Lessee to the Lessor in postdated checks,
dated one day prior to the date of payment of V.A.T. by the Lessor
to the V.A.T. authorities.
6.1.2 It is agreed that on the Date of Commencement of the Lease, the Lessee
shall pay the Lessor NIS 490,263 (four hundred ninety thousand, two
hundred and sixty three New Israeli Shekels), in addition to V.A.T., on
account of Monthly Rent for the period between January 1, 2001 and
March 31, 2001.
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It is agreed that all the remaining payments of Monthly Rent, from
April 1, 2001, shall be paid in the installments and on the dates set
out in Section 6.1.1 above.
6.1.3 Payment of Monthly Rent shall be made in addition to indexation, to be
calculated according to the ratio between the "Basic Index" and the
"Effective Index".
6.1.4 The Lessee may not make early payment of Monthly Rent without
the Lessor's consent, given in advance and in writing, if given.
6.2 The Lessee shall pay the Monthly Rent, in addition to V.A.T. and
indexation as set out in Section 5 above, to the Lessor in the form of
a bank transfer, by a standing order to be given to the branch of the
bank at which the Lessee maintains its account, to the Lessor's bank
account mentioned in Section 24 hereunder.
6.3 Each of the sub-provisions of this Section 6 constitutes a fundamental
term of this agreement, breach of which shall constitute a fundamental
breach of the agreement, subject also to the provisions of Section 18
hereunder.
7. Purpose of the lease
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7.1 The Lessee leases the Leased Premises and any part thereof for the
purpose of research, development, manufacture and marketing of
communications products only, and undertakes to make use of the Leased
Premises for this purpose only throughout the entire Term of the Lease.
7.2 The Lessee alone, at its expense, shall be liable for obtaining
business licenses for the use of the Leased Premises. At the Lessee's
request, the Lessor shall sign any document for which the signature of
the owner of the rights to the property shall be required, for receipt
of licenses and/or permits and/or approvals for the purpose of managing
the Lessee's business at the Leased Premises, provided that the
signature thereof shall impose thereon no responsibility and/or
liability and/or cost of any kind.
7.3 The Lessee confirms that the Leased Premises are due to be used thereby
for the performance of an "Approved Enterprise" and/or for the
execution of an "Approved Plan" (as these terms are defined in the
encouragement of capital investments laws), subject to the timetable of
the Lessee's Approved Plan.
7.4 The provisions of Section 7.1 constitute a fundamental term of the
agreement, breach of which shall constitute a fundamental breach of the
agreement, subject also to the provisions of Section 18 hereunder.
8. Identity of the users of the Leased Premises
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8.1 The Leased Premises are leased to the Lessee alone; the Lessee may not
transfer the Leased Premises or any part thereof to another, nor may
the Lessee award any right to the Leased Premises or any part thereof
to others, without the Lessor's prior written consent, with the
alternate lessee or the sub-lessee being to the Lessor's full
satisfaction.
8.2 The aforesaid notwithstanding, the Lessor may reject a sub-lessee or
an alternate lessee on reasonable grounds only.
8.3 The Lessee being a limited company, it is agreed that the Lessee shall
notify the Lessor of any change in control of the company shortly after
occurrence thereof.
The Lessee's subsidiaries, sister companies, affiliated companies and
parent company shall be entitled to make use of the Leased Premises,
provided that the Lessee shall remain liable for all the undertakings
thereof under this agreement. The Lessor's approval for use by such
companies shall not be required.
8.4 Each of the provisions of this Section 8 constitutes a fundamental term
of this agreement, breach of which shall constitute a fundamental
breach of the agreement, subject also to the provisions of Section 18
hereunder.
9. Taxes and other mandatory payments on the Leased Premises
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It is agreed by the parties that all taxes, levies, fees and other
mandatory payments imposed with respect to the Leased Premises and any
part thereof, without exception, shall be borne by the Lessee. Without
derogating from the generality of the aforesaid and from other sections
of this agreement, it is hereby clarified that the Lessee shall pay the
municipal taxes for the Leased Premises.
Property tax and other taxes imposed only on owners of property, and on
owners alone, shall be paid by the Lessor.
10. Costs of use and maintenance of the Leased Premises and liability
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for damages
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10.1 Expenses and payments of any kind required for the use of the Leased
Premises and as a result of the use of the Leased Premises, including
electricity, water, telephone, communications, heating, air-
conditioning, gas - pursuant to the provisions of the management
agreement - shall be borne by the Lessee alone.
10.2 If no water meter shall be installed at the Leased Premises, pursuant
to the Lessor's decision, then payment for use of water shall be made
by the Lessee to the Lessor (in addition to V.A.T.) directly or through
the Management Company. The calculation of the Lessee's share in the
costs of water usage
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shall be made by the Lessor according to the proportionate share of the
Leased Premises in the building at which the Leased Premises are
located. Payment for water shall be made within two weeks from the date
of delivery of an account by the Lessor to the Lessee on this matter.
If water usage in the building at which the Leased Premises are located
shall be marginal or negligible, then the Lessor may determine that the
overall use of water in the building shall be included within the
"actual expenses" of the Management Company, for which the Lessee shall
pay a "co-payment towards the company's expenses" as set out in the
management agreement.
The Lessor undertakes to install separate water meters for occupants of
the building consuming an extraordinary amount of water.
10.3 The Lessee alone shall be responsible for maintaining the Leased
Premises and the systems thereof in proper working order, and to repair
any damage or malfunction to be caused or to occur in the Leased
Premises throughout the Term of the Lease, due to a negligent and/or
malicious act and/or omission by the Lessee. The Lessee shall not be
responsible for repairing any damage or malfunction occurring outside
the external walls of the Leased Premises or in the structure of the
concrete ceiling of the Leased Premises or in the systems of the
building outside the Leased Premises which are not systems of the
Leased Premises, except for damages or malfunctions resulting from a
negligent and/or malicious act or omission by the Lessee. The Lessee
shall be responsible for any damage caused to the windowpanes of the
Leased Premises, provided that damage to the windowpanes of the Leased
Premises as aforesaid shall have been caused by a negligent and/or
malicious act or omission by the Lessee and/or by another acting on its
behalf.
The Lessor shall be responsible for repairing any damage or malfunction
resulting from construction defects and/or use of defective
construction materials and/or reasonable wear and tear, with respect to
the systems of the building or the building itself, unless such damages
shall result from a negligent and/or malicious act or omission by the
Lessee, in which case the Lessee shall be responsible for such damage.
It is agreed that the Lessor and/or others on its behalf shall be
entitled, upon prior coordination with the Lessee, to pass through the
Leased Premises for the purpose of servicing, repair and maintenance of
the pipes passing through the shaft located in the Leased Premises,
including the air-conditioning systems therein.
The Lessor undertakes to perform urgent repairs, to the extent that the
responsibility for performance of which is imposed thereon in this
agreement, within 48 hours from the time of notification thereof by the
Lessee. In the event that the Lessor shall have failed to repair the
same within 48 hours as aforesaid, the Lessee shall be entitled to
repair the same.
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10.4 The Lessee alone, at its expense, shall be liable for any damage caused
to the Leased Premises, to property and to any person therein caused
and/or to be caused due to a negligent and/or malicious act or omission
by the Lessee and/or by another on its behalf.
In addition to the aforesaid, it is agreed that the Lessee shall be
liable for damages of any kind to be caused due to a negligent and
malicious (sic) act or omission by the Lessee, to the Lessor and/or to
the Management Company and/or to any third party including, and without
derogating from the generality of the aforesaid, any bodily injury or
damage to property belonging to any person found at any time in the
area of the Project, and the Lessee hereby releases the Lessor and/or
the Management Company from any lawful obligation in connection with
any such damage, and it undertakes to indemnify and/or compensate them
for any amount of damages to be suffered by the Lessor and/or the
Management Company and for any amount charged to the Lessor and/or the
Management Company in connection with any damage and expense and/or
loss and/or fine to be incurred as aforesaid. The indemnification and
compensation shall also include legal fees which the Lessor and/or the
Management Company shall incur in connection with the aforesaid and
shall be paid to the Lessor and/or to the Management Company
immediately upon first demand.
It is hereby declared and agreed that the Lessee and anyone acting on
its behalf expressly waive any cause of action against the Lessor
and/or the Management Company and others acting on their behalf and
against other occupants of the Project, in whose lease and/or
management agreements a parallel provision has been included with
respect to the waiver of cause of action against the Lessee, for any
damage for which it is entitled to indemnification under the insurance
policies it shall have undertaken to take out in the management
contract, the lease agreement or any other appendix constituting part
thereof. The waiver of the right to claim shall extend also to damage
for which the occupant is entitled to no indemnification due to the co-
payment stated in the policy. The waiver of the right of
indemnification shall not apply to anyone having caused damage
maliciously.
11. Insurance policies
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The Lessee undertakes to take out the insurance policies specified in
Appendix E of the agreement, and undertakes to fulfill each of the
undertakings imposed on the Lessee in Appendix E of the agreement.
Each of the Lessee's undertakings in this Section 11 and in Appendix E
of the agreement (and in the sub-appendices thereof) is a fundamental
term of the agreement, breach of which constitutes a fundamental breach
of the agreement, subject to the provisions of Section 18 hereunder.
12. Inapplicability of tenants' protection
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The Lessee declares that it is aware of the following, and agrees
thereto:
12.1 The Lessee neither is nor will be a protected tenant pursuant to the
Tenants Protection Law (Consolidated Version), 5732-1972.
12.2 The lease is unprotected; neither the lease nor the parties to the
agreement shall be subject to the said tenants protection law, nor to
any other statute or law concerning the protection of tenants or the
limitation of rent payment, which shall replace or supplement the said
law.
12.3 The Lessee has not paid, and it is agreed that it shall not pay any
payment, nor award the Lessor any right constituting key money. It is
agreed that any payment, consideration, right or benefit which the
Lessor shall extract from the lease, the Leased Premises and the Lessee
shall too be deemed as part of the Rent for all intents and purposes,
in addition to the Rent set out in this agreement.
12.4 The Lessee declares that it is aware that the Leased Premises
constitute part of a building built after April 1, 1954 (in fact, after
August 20, 1968), and was first leased after March 31, 1955 (in fact,
after August 20, 1968), and that the Leased Premises are vacant of any
lessee on the date of signing of this agreement.
12.5 The Lessee declares that the Leased Premises are vacant of any lessee
and any person entitled to occupy the same (save the Lessor).
12.6 At the time of vacation of the Leased Premises by the Lessee, the
Lessee shall be entitled to no payment or right of any kind from the
Lessor and/or from any alternate lessee or from anyone else, including
due to improvements or installations performed in the Leased Premises.
13. Planning of and construction work on the Project
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13.1 The Lessee confirms that it is aware that the program, planning,
development, building and construction work of the Project (each,
"Project Construction Work") have not yet been completed, except for
the existing building (Building A), in which too modifications and
additions will be performed. The Project Construction Work (and any
part thereof) includes, inter alia, the construction of buildings,
development and finish, and interior work in finished parts of
buildings. The work will be carried out in stages and pursuant to time
tables, without limitation in time, according to existing plans or
plans to be prepared or modified in the future, and all according to
the Lessor's discretion.
The aforesaid notwithstanding, it is clarified that after surrender of
possession of the Leased Premises to the Lessee, the Lessor's work
shall be limited to performance of adjustments in other units in the
building, construction of the new buildings (C and D) and land
development work. The Lessor shall
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endeavor to ensure that the work, as set out above, shall be performed
with the least disturbance to the Lessee, and in any event, reasonable
access to the Leased Premises will be assured.
13.2 It is agreed that the Lessee shall entertain no claims and demands
against the Lessor and any third party due to any disturbance or damage
to be caused thereto, if any, due to the Project Construction Work (and
any part thereof) or due to incompletion thereof, subject to that the
Lessee's rights to reasonable use of the Leased Premises, including
reasonable access to the Leased Premises, shall not be prejudiced. It
is further agreed that the Lessee shall perform no act nor institute
any proceeding which would prejudice the Lessor's liberty to plan the
Project or the performance of Project Construction Work by the Lessor
or by another on its behalf, and any part thereof.
14. Interior work at the Leased Premises by the Lessee
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14.1 It is agreed that the Lessee shall receive possession of the Leased
Premises in its technical condition as is, with respect to which or
wherein all the installations and components specified in Appendix B
hereof (technical specification) shall have been installed.
14.2 It is agreed that the Lessee alone, at its expense, shall be liable and
responsible for any work for the adjustment of the Leased Premises for
the purpose of the lease and the Lessee's use, including any
construction, installation and assembly at the Leased Premises, and
various systems and supplies (each, "Interior Work").
No work in or supply to the Leased Premises, except as set forth in
Appendix B hereof (technical specification) is or will be imposed on
the Lessor.
14.3 It is hereby agreed that the Lessee may perform no Interior Work on the
Leased Premises, other than subject to and in accordance with the
provisions of Appendix C of the agreement, constituting an integral
part hereof. The Lessee shall be responsible for obtaining any permit
or license lawfully required in order to perform the Interior Work.
The Lessee shall commence the Interior Work on the Leased Premises no
later than September 15, 2000; provided, however, that the Lessee's
plans (including the plans for the systems) shall have been approved by
the Lessor in advance and in writing. The Lessee undertakes to complete
the Interior Work on the Leased Premises by June 1, 2001, and
undertakes to perform the same with the least disturbance to the other
occupants in the building.
14.4 Upon completion of the Interior Work performed on the Leased Premises
by the Lessee, the Lessee shall be prohibited from making any change to
the Leased Premises and the systems thereof, or any addition to the
Leased Premises (including any fixture or system) without the Lessor's
advance and
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written consent, to be examined by the Lessor in accordance with the
exclusive considerations thereof.
The aforesaid notwithstanding, the Lessee may erect interior partitions
and perform interior modifications at the Leased Premises which have no
bearing on the framework of the Leased Premises and/or of the building,
provided that it shall have notified the Lessor of its intention of so
doing at least seven days in advance and in writing, and the Lessor
shall have had no objection thereto. The Lessor may object to the
performance of interior changes by the Lessee as aforesaid on
reasonable grounds only.
14.5 For the removal of doubt, it is hereby clarified that if the method of
supply of water to the Leased Premises shall be directly from the local
authority, then the Lessee shall be required to enter into a water
supply contract for the Leased Premises with the Jerusalem municipality
by the Date of Commencement of the Lease and to arrange for a water
meter to be installed with respect to the Leased Premises at its
expense by such date. It is further agreed that the Lessee shall enter
into an electricity supply contract with the electricity company by the
Date of Commencement of the Lease and shall arrange for an electricity
meter to be installed at its expense with respect to the Leased
Premises by such date.
14.6 In no event will the Lessee be allowed to perform any work or
installation or use or modification requiring electricity or air-
conditioning in excess of the amounts and volumes set forth in Appendix
B (technical specification).
It is hereby clarified and agreed that the Lessee may perform
electrical, sanitary plumbing and air-conditioning work at the Leased
Premises through contractors to be chosen thereby, provided that it
shall have given the contractors performing work on the Project (for
the Lessor) the right of first refusal to perform such work, if their
prices shall be identical to the prices contained in proposals to be
received by the Lessee from contractors chosen thereby. The Lessee's
carrying out such work through contractors performing work on the
Project for the Lessor - Sharon Ltd. and Calorit Ltd. - shall impose no
liability on the Lessor.
14.7 It is hereby expressly stipulated that any covering, coating or
concealment of the "piping of the building", and any construction in
the vicinity of the "piping of the building", whether inside or outside
the Leased Premises, must be made in such a manner so as to allow the
Lessor (and others acting on its behalf) easy access to the pipes, in
order to perform repairs or additions to or replacements of pipes, and
so that any covering, coating, concealment or construction in the
vicinity of "piping of the building" must be made so as to be easily
removable without any difficulty for the performance of the aforesaid
throughout the Term of the Lease.
<PAGE>
The provisions of this Section 14.7 apply both with respect to Interior
Work performed by the Lessee and with respect to work on the Leased
Premises due to be performed, under this agreement, by the Lessor (if
any).
The provisions of this section with respect to facility of access to
the "piping of the building" and the servicing thereof apply also with
respect to the Lessee's interior design and to the placing of furniture
and cupboards, all in order to allow the Lessor (and others acting on
its behalf) easy access to the "piping of the building" for the
servicing thereof, or for the performance of additions thereto.
The term "piping of the building" shall mean any pipe (including
drainage, water, sewage and sanitary pipes, insertion pipes of other
systems such as electricity, communications etc.) serving the building
at which the Leased Premises or another unit in the building of the
Leased Premises are located.
The performance of servicing or additions at the locations of the
"piping of the building" as set out above shall be made by the Lessor
after prior coordination by the Lessor with the Lessee, if possible
(except for particularly urgent emergencies); if the Lessor shall cause
damage to the covering near the "piping of the building" serviced or
added to, then the Lessor shall be responsible for reinstating the
former condition thereof.
14.8 Each of the provisions of this Section 14 is a fundamental term of the
agreement, breach of which constitutes a fundamental breach of the
agreement, subject also to the provisions of Section 18 hereunder.
15. Return of the Leased Premises to the Lessor
-------------------------------------------
15.1 Upon expiration of the Term of the Lease and at any time prior thereto,
if the lease shall terminate or expire prior to the full term thereof,
the Lessee shall return the Leased Premises to the Lessor, vacant of
any person and object, the Leased Premises being in the condition set
forth in Section 15.2 hereunder.
15.2 The Lessee undertakes to return the Leased Premises to the Lessor in a
good and proper condition as received, except for fair wear and tear,
in addition to all Interior Work, including all improvements,
renovations, work, additions, modifications and systems to be performed
or erected at the Leased Premises, whether by the Lessor or by the
Lessee. The Lessor reserves the right to require the Lessee to remove
any addition or work or facility performed or erected by the Lessee,
provided that it shall notify the Lessee of its said demand at the time
of approval of the Lessee's plans, submitted to the Lessor for approval
pursuant to this agreement. In such a case, the Lessee shall be obliged
to remove the same as required by the Lessor and to reinstate the
former condition of the Leased Premises as surrendered to the Lessee,
by the date of return of the Leased Premises to the Lessor.
<PAGE>
If the Lessor shall not have required the Lessee to remove any work,
addition, facility or system (including according to Appendix C of the
agreement), then they shall all belong to the Lessor, and the Lessee
shall be entitled to no right for payment, indemnification or
consideration therefor from the Lessor.
15.3 Shortly prior to the expiration of the lease, the Lessor shall draw a
list of work, defects and repairs (each, the "Repairs"), which the
Lessee shall be required to perform by the date of return of the Leased
Premises to the Lessor. It is clarified that the said list of work,
defects and repairs shall not refer to any addition or work or facility
performed or erected by the Lessee at the Leased Premises, but the
Lessor shall be entitled to require the Lessee to remove the same, as
set out in subsection 15.2 above.
15.4 The list referred to in Section 15.3 shall also include prices for the
cost of the Repairs; in the event that the Lessee shall have failed to
perform the Repairs by the end of the lease, then the Lessor shall be
entitled to perform the same in lieu thereof, and the Lessee shall have
to pay the Lessor, by the end of the lease, the value of the cost of
the Repairs, also if the Lessor shall not have performed the same at
such time or will not perform the same. The provisions hereof shall not
derogate from any right of the Lessor's against the Lessee to receive
any compensation or remedy due to the Lessee's failure to timely
perform the Repairs, pursuant to the provisions of this agreement
(including compensation due to any delay in a lease to others).
Should the Lessee dispute the prices stated with respect to the cost of
the Repairs, an Engineer agreed upon by both parties shall resolve the
dispute no later than two weeks prior to the end of the lease. In the
event that the parties shall fail to agree on the identity of the
engineer, then such engineer shall be named by the secretary (or
chairman) of the A.A.A.I. Association in the District of Jerusalem
(pursuant to the request of either party), provided that the
appointment and decision thereof shall be made within two weeks from
the date of the Lessee's notice disputing the prices.
15.5 No later than two weeks prior to the end of the lease, the Lessee shall
deliver to the Lessor approvals from the municipality, the electricity
company and Bezeq whereby the Lessee shall have paid all payments
imposed thereon with respect to the period up to the end of the lease,
including water, electricity, municipal taxes and communication.
15.6 Each of the provisions of this Section 15 is a fundamental term of the
agreement, breach of which shall constitute a fundamental breach of the
agreement, subject also to the provisions of Section 18 hereunder.
16. Maintenance of the building and services and facilities in the building
-----------------------------------------------------------------------
serving the Leased Premises and the Lessee's guests
---------------------------------------------------
16.1 The Lessor undertakes to provide a Management Company, the duties of
which shall be to manage and operate the Project and to maintain the
Project,
<PAGE>
the entrances thereof (including paved areas, open areas and
squares on the Land of the Project) and the passages and stairs
therein, the systems of the Project and the external parts of each
building in the Project.
16.2 The Lessor undertakes to provide a Management Company, the duties of
which shall be to operate systems and facilities serving the Project,
and to maintain the cleanliness of the Project.
16.3 The services of the Management Company shall apply only to such parts
of the Project, surfacing of which has been completed.
16.4 The Lessor hereby notifies that it has named Park Meir Management
Company Ltd. as the Management Company, which shall serve as the
Management Company so long as the Lessor shall not determine otherwise.
16.5 The Lessee undertakes to enter into a contract with the Management
Company at the time of signing of this agreement. Any breach of the
contract with the Management Company shall be deemed as a breach of
this agreement. In addition, the Lessee's failure to enter into such
contract with the Management Company shall be deemed as a breach of a
fundamental term of this agreement.
16.6 The Management Company shall arrange to maintain various insurance
policies as set forth in the management contract, and it shall further
be entitled to add or remove various insurance policies. However, the
maintenance of insurance policies by the Management Company shall not
derogate from the Lessee's liability or derogate from the Lessee's
obligation to take out insurance.
16.7 The Lessee undertakes to pay the Management Company from the period
commencing on January 1, 2001 and ending upon expiration of the lease
and return of possession of the Leased Premises to the Lessor pursuant
to the provisions of this agreement.
16.8 The following modifications shall be made in the following provisions
of the management contract:
16.8.1 In Section 3.1, the word "undertakes" shall replace the word
"assumes".
16.8.2 Section 3.1.7 - cleaning of exterior windows of
units in the Project - shall be added. Section 3.2.5 shall be
removed.
16.8.3 Section 3.1.8 - guarding and supervision services for the
public areas, the Management Company's areas and the systems of
the Project - shall be added. Section 3.2.1 shall be removed.
<PAGE>
16.8.4 Section 3.1.9 - posting of signs, direction and central signs
directing to buildings and to the various parts of the Project,
and direction and identification signs in buildings of the
Project, posting of other signs, including determination of the
design, size and location of signs belonging to various tenants
of the Project, and maintenance and renewal of signs in the
Project - shall be added. Section 3.2.4 shall be removed.
16.8.5 The following words shall be added at the end of Section 3.2.6:
"in the event that the Lessee is included in such units".
16.8.6 Section 3.2.7 shall be removed.
16.8.7 The word "reasonable" shall replace the word "only" in
Section 3.2.9.
16.8.8 The following words shall be added at the beginning of Section
3.4: "Subject to fulfillment of the company's undertakings
pursuant to this contract,".
16.8.9 The following words shall be added at the end of Section 3.5:
"The aforesaid notwithstanding, the Management Company shall
not be responsible for the construction of the Project and/or
marketing of the same and/or any other issue not related to the
performance of mandatory or permitted services".
16.8.10 The following words shall be added at the end of Section 4.9:
"The air-conditioning shall be operable at the Leased Premises
at least on Sundays through Thursdays between 07:30 and 20:00.
It is clarified that the Management Company shall be entitled
to extend the hours of operation of the air-conditioning at the
discretion thereof, including on Fridays".
16.8.11 The following words shall be added at the end of Section 4.15:
"Elevators and central lighting shall be operable 24 hours a
day, 7 days a week. At the Lessee's request and subject to the
conditions stipulated in this management contract, the air-
conditioning shall be operated at the Leased Premises also
beyond the days and times set out in Section 4.9 above".
16.8.12 The following words: "unless caused due to an act and/or
omission of the company or on its behalf", shall be added after
the words "all of the aforesaid" on the fifth line in Section
4.16.
16.8.13 The following words shall be added at the end of Section 4.7:
"The foregoing bylaws shall not derogate from the rights of the
tenant pursuant to this agreement".
<PAGE>
16.8.14 The following words shall be added at the end of Section 4.15:
"In the event that the tenant shall have disputed the company's
charges for the operation of the air-conditioning systems
outside the ordinary hours of operation, such dispute shall be
resolved by an air-conditioning consultant of the company's
and/or of the owner's, and his decision shall be final".
16.8.15 The following words shall be added at the beginning of Section
5.1: "Subject to that the company shall fulfill the
undertakings thereof pursuant to this contract". The following
words shall be added at the end of the section: "It is
clarified that the aforesaid shall impose no obligation on the
Lessee to receive services from the company in the Leased
Premises which are not part of the mandatory services, as
defined in this contract".
16.8.16 The following words shall be added after the parentheses in
Section 5.2: "It is agreed that the provisions of the "Project
bylaws" shall not derogate from the Lessee's rights pursuant to
this contract".
16.8.17 The following words shall be added at the end of Section 5.3:
"Any entry to the Leased Premises (whether by virtue of this
contract or by virtue of the lease agreement) shall be made
only after prior coordination with the Lessee, except for
emergencies".
16.8.18 The following words shall be added after the word "utter" in
the second line of Section 5.4: "during the term of the lease,
unless use of the Leased Premises shall have been prevented due
to an act and/or omission of the company and/or of the Lessor
and/or due to force majeure".
16.8.19 Section 5.5 shall be removed.
16.8.20 A comma shall be added at the end of the first sentence in
Section 5.6, followed by the words "if the tenant shall request
such service from the company".
16.8.21 The following words shall be added after the definition of
"existing units" in Section 6.1: "It is hereby clarified that
municipal taxes for unleased units in the building shall be
paid by the owners".
16.8.22 The following words shall be added after the definition of
"actual expenses" in Section 6.1: "It is hereby clarified that
the actual expenses shall not include the cost of supply and
consumption of electricity, air-conditioning etc., with respect
to unoccupied units in the building during the period of
performance of adjustments and interior work by the tenants of
such units, and such period only".
<PAGE>
16.8.23 The following words shall be added at the end of Section 6.1:
"It is hereby clarified that the actual expenses shall not
include expenses unrelated to the management and maintenance of
the Project. Expenses involved in parking lot areas, with
respect to non-subscribers, will not be included in the
expenses of the company and shall be borne by the operator of
the parking lot alone".
16.8.24 The following paragraph shall be added at the end of Section
6.2: "The aforesaid notwithstanding, co-payment towards the
company's expenses, payable by the tenant shall not exceed,
during the first period of the lease and this period only, an
amount in NIS equal to NIS 14.4 per one m2 gross, linked to the
consumer price index and in addition to V.A.T. as set out in
the law. In the event that co-payment towards the company's
expenses shall exceed the said amount, the tenant shall be
exempt from paying any sum above the said amount, during the
first period of the lease and this period only".
16.8.25 Section 6.6 shall be removed.
16.8.26 The following words shall be added at the end of Section 6.7:
"It is clarified that the aforesaid shall apply only to the
extent that the expenses incurred for the purpose of gaining
such income, directly or indirectly, shall not be included as
part of the actual expenses (including expenses for materials,
work, administration, general etc.)".
16.8.27 A comma shall be added at the end of Section 6.8, followed by
the words "and all subject to the provisions of the second
paragraph of Section 6.2 above".
16.8.28 The following words shall be added to Section 7.2: "The Lessee
shall be entitled to peruse the company's books of account with
respect to the actual expenses, the services and actions
thereof in the Project, twice a year, after coordination with
the company".
16.8.29 The words "double the rate" shall be removed from the fifth
line of Section 8.1.
16.8.30 Section 8.4 shall be removed.
16.8.31 Section 9.3 shall be removed.
16.8.32 The following words shall be added at the end of Section 9.4:
"and without derogating from the owners' undertakings pursuant
to this agreement and/or the lease agreement; furthermore, the
performance of the Management Company's undertakings through
subcontractors shall not derogate from the undertakings thereof
pursuant to this
<PAGE>
agreement. It is hereby clarified that in the event that the
Company shall transfer the obligations and rights thereof under
this management contract to another, such transfer shall be
made on the condition that the transferee shall assume all the
undertakings of the Management Company under this management
contract towards the tenant".
16.8.33 The following words shall be added after the words "the
tenant's unit" in the second line of Section 9.6: "Provided,
however, that the tenant shall be responsible for such repairs
pursuant to the lease agreement".
16.8.34 Section 9.7 shall be removed.
16.8.35 The last sentence in Section 12 shall be removed. A comma shall
be added at the end of the first sentence, followed by the
following words: "provided that it shall have given the tenant
a warning of its intention of so doing at least 7 days prior to
the termination of services as aforesaid".
16.8.36 The second paragraph in Section 13 shall be removed.
17. Payments in arrears
-------------------
Without derogating from any right available to the Lessor pursuant to
the agreement and any law due to the breach of the agreement, it is
agreed that in any event in which the Lessee shall be late in paying
any amount owed thereby to the Lessor pursuant to this agreement, the
Lessee shall pay such amount to the Lessor with indexation, as set out
in this agreement (and in the lack of a Basic Index with respect to the
amount, then the "Basic Index" with respect to such amount shall be the
index known on the date on which the Lessee shall have had to pay such
amount), in addition to arrears interest double the interest rate
(including commissions and costs) charged by Bank Hapoalim Ltd. (Tel
Aviv main branch) in debit accounts of non-preferred clients; the
calculation of such arrears interest shall be made in the manner and
method as calculated by Bank Hapoalim Ltd. during the period of arrears
(including compound interest).
In the event that payment of Rent by the Lessee shall be no more than
seven days in arrears, the Lessee shall pay the Lessor arrears interest
at the rate of interest charged in debit accounts of Bank Hapoalim for
the amount in arrears.
18. Damages, restitution and remedies
---------------------------------
18.1 It is agreed that the payments and amounts owed by the Lessee, the
dates of payment thereof and the rendering of the guarantees in full
are fundamental terms of the agreement. This provision shall supplement
any other provision in
<PAGE>
this agreement and in the appendices thereof, in which various
provisions have been determined to be fundamental terms of the
agreement.
The aforesaid notwithstanding, a delay of no more than seven days in
the payment of Rent shall not be deemed as a breach of this agreement
by the Lessee, provided that the Lessee shall pay the Lessor arrears
interest at the rate of interest charged in debit accounts of Bank
Hapoalim for the amount in arrears (up to seven days as aforesaid).
18.2 In the event that the Lessee shall have breached a fundamental term of
the agreement, and in the event that the Lessee shall have breached any
other term and shall have failed to rectify such breach within 30 days
from the date of receipt of warning thereof, such failure shall be
deemed as a fundamental breach of the agreement and the Lessor shall be
entitled to terminate the agreement. Termination shall be made by
written notice to be delivered to the Lessee or sent thereto by
registered post.
18.3 In the event that the agreement shall have been lawfully terminated by
the Lessor, as aforesaid, the Lessee shall be obliged to vacate the
Leased Premises within two weeks from the date of termination, and the
vacation shall be subject to the provisions of Section 15 above.
18.4 In addition to any remedy to which the Lessor is entitled, pursuant to
the agreement or any law, due to the breach of the agreement by the
Lessee, the Lessor shall be entitled to compensation from the Lessee
for all damages, losses and diminution of revenue caused thereto as a
result of the breach by the Lessee or due to the exercise of any remedy
available to the Lessor.
Without derogating from any right, compensation and other remedy to
which the Lessor is entitled, it is agreed that the Lessee shall be
obliged to pay the Lessor a daily fee for each day of delay in
returning the Leased Premises to the Lessor pursuant to the provisions
of Section 15 above, the amount of which shall be equal to 1/15th of
the Monthly Rent. The Lessor's right to the fee and the Lessee's
obligation to pay the same shall confer no right on the Lessee.
It is agreed that the Lessor shall be entitled to liquidated damages in
the event of the breach of any fundamental term by the Lessee, in an
amount equal to the Rent due to the Lessor for 6 months of lease. The
scope of such compensation is determined by the parties, after having
been properly estimated by them while taking into consideration the
length of the lease period and the special terms of the Rent determined
by the Lessor in this agreement, and while taking into consideration
other special terms agreed upon by the Lessor. The Lessor shall be
entitled to the liquidated damages in addition to any damages, fees,
rights or remedies available to the Lessor pursuant to this agreement
and any law.
18.5 Any amount of any kind which a party to the agreement shall have paid
in lieu of the other party, shall be repaid by the other party to the
first party within
<PAGE>
one week from the date of the first party's demand, in addition to
indexation to be calculated from the date of payment until the end of
such week; however, it is hereby expressly agreed that the Lessee shall
not be entitled to offset any debt owed thereto by the Lessor pursuant
to this section, or at all, against any payment owned by the Lessee to
the Lessor.
18.6 The Lessor shall be entitled to foreclose guarantees and securities
provided by the Lessee pursuant to Section 19 hereunder, in addition to
any remedy and compensation to which the Lessor is entitled pursuant to
the agreement and any law.
19. Guarantees
----------
19.1 Revoked.
19.2 As security for the fulfillment of the undertakings thereof, the Lessee
hereby delivers to the Lessor an autonomous financial bank guarantee in
the amount of NIS 1,154,130 (one million, one hundred fifty four
thousand, one hundred and thirty New Israeli Shekels) (linked to the
index), in the form of the document attached to this agreement as an
integral part hereof and marked "Appendix F". The sum of the bank
guarantee as of the date of signing of the agreement is equal to
$240,360 in addition to V.A.T. (which are, at present, equal to six
months' Monthly Rent).
The Basic Index for the bank guarantee shall be 105.8 points (April
2000 index).
The bank guarantee shall be in favor of the Lessor, and shall be valid
for one year and three months from the date of signing of this
agreement; the Lessee undertakes to extend the validity thereof so long
as the Term of the Lease shall be in effect, for another year, in such
a manner that there will always be such bank guarantee in favor of the
Lessor, and that such bank guarantee shall be in effect for three
months after expiration of the Term of the Lease.
Extension of the bank guarantee must be carried out no later than two
weeks prior to the expiration thereof. In the event that the Lessee
shall fail to extend the validity thereof, the Lessor shall be entitled
to exercise the same.
19.3 It is agreed that the Lessor shall be entitled to exercise the bank
guarantee in the event that the Lessee shall fail to take possession of
the Leased Premises on the date fixed herein, or in the event that the
Lessee shall not have fulfilled any pecuniary obligation by such time,
and in order to cover any undertaking and debt owed by the Lessee (to
both the Lessor and the Management Company), and to cover any damage
caused thereto by the Lessee, and in any event of breach of a
fundamental term of the agreement by the Lessee (in addition to any
remedy to which the Lessor shall be entitled under any law and the
agreement); Provided, however, that it shall have given the Lessee - as
a courtesy only, and without derogating from the autonomy of the bank
<PAGE>
guarantee - notice of its intention of exercising the same at least
seven days in advance.
Exercise of the bank guarantee will not constitute, per se, revocation
of the agreement, and the Lessee shall be obliged, immediately after
exercise of the guarantee, to deliver a new bank guarantee to the
Lessor in the form of Appendix F hereof, in such amount and of such
effect as set out in Section 19.2 above.
19.4 The Lessor shall return the bank guarantee (or any amount remaining
therefrom after exercise thereof) to the Lessee no later than three
months after expiration of the lease, provided that the Lessee shall
owe the Lessor no debt or amount at such time.
19.5 For the purpose of collecting and repaying any debt of the Lessee's and
in order to ensure fulfillment of any obligation imposed on the Lessee
(including any debt or obligation of the Lessee to the Management
Company), the Lessor may exercise any security and any guarantee
individually, or all of them, or any part of them together, and neither
the Lessee nor any guarantor shall be entitled to prevent the Lessor
from so doing. Bank guarantees in this agreement are autonomous and are
not contingent on this agreement or otherwise, and neither the Lessee
nor anyone who shall have caused the issuance of the bank guarantee
shall be entitled to delay the exercise of the bank guarantee for any
reason.
19.6 Any delay in the delivery of the guarantees pursuant to Section 19
shall entitle the Lessor to postpone surrender of possession of the
Leased Premises to the Lessee, but the Term of the Lease shall be
calculated from the Date of Commencement of the Lease as determined by
the Lessor, and the Lessee shall be liable for payment of Rent (and
payment to the Management Company) and for any obligation imposed
thereon pursuant to this agreement as of the "Date of Commencement of
the Lease" or from the date set out herein, also if it shall have
failed to take possession of the Leased Premises as aforesaid.
19.7 Each of the provisions of this Section 19 constitutes a fundamental
term of this agreement, breach of which shall constitute a fundamental
breach of the agreement, subject also to the provisions of Section 18
hereunder.
20. Miscellaneous
-------------
20.1 The Lessee shall pay the Lessor, in connection and together with any
payment made to the Lessor, value added tax at the lawful rate thereof
at the time of payment. The Lessor shall deliver a tax invoice to the
Lessee after the payment, within the period of time fixed in the law.
20.2 The parties shall bear the costs of stamping this agreement in equal
shares.
<PAGE>
20.3 The Lessee shall be entitled to post an identifying signpost in the
building of the Leased Premises. The size, design outline and location
thereof must be approved in advance and in writing by the Lessor, in
addition to any permit required by law, all under the Lessee's
responsibility and at its expense.
20.4 The Lessee undertakes to properly comply with the provisions of any law
in effect during the lease with respect to the Leased Premises, the use
thereof, the business conducted therein and any act performed therein,
throughout the duration of the lease.
The Lessee shall be liable for any damage or cost incurred by the
Lessor due to the Lessee's failure to fulfill such undertakings, and
the Lessee shall be obliged to indemnify the Lessor, immediately upon
demand, for any damage, fine, loss or expense incurred by the Lessor.
20.5 It is agreed that only actual payment of any amount owed by the Lessee
to the Lessor, or the actual clearance of a promissory note, including
payment of Rent, shall be deemed as proper payment. The mere delivery
of promissory notes to the Lessor, pursuant to the provisions of this
agreement, or the endorsement thereof, shall not constitute payment.
20.6 The Lessee confirms that it has examined the plans applicable to the
Project and the Leased Premises at the planning and building
authorities, and its ability to operate the Leased Premises in
accordance with the purpose of the lease, and that it neither has nor
shall entertain claims of any kind in connection with its ability or
inability to lawfully obtain a business license.
The failure to lawfully obtain a license, or any revocation of such
license, shall not entitle the Lessee to terminate the lease. It is
hereby expressly agreed that the Lessor neither undertakes, nor is
liable to the Lessee or at all for any matter relating to the license
required by the Lessee and in connection with the Lessee's ability to
use the Leased Premises.
All expenses, taxes and mandatory payments required in order to receive
and maintain the license shall be borne by the Lessee alone. If the
Lessor shall incur any cost due to the need for a license, or due to
receipt or maintenance thereof, the Lessee shall repay the Lessor
therefor within one week from being required to do so by the Lessor.
The Lessee shall use the Leased Premises only in accordance with the
purpose of the lease and with the provisions of any law.
The provisions of this subsection notwithstanding, the Lessor
undertakes to employ its best efforts in order to obtain a Form 4 for
the Leased Premises by October 1, 2000. This date shall be postponed
for no more than three months if the Form 4 shall not have been
obtained by such time for reasons outside the Lessor's control. If the
Lessor shall not be in possession of the Form 4 by the date of
surrender of possession, the Lessor undertakes to provide the Lessee
<PAGE>
with written confirmation from the safety engineer that there is no
safety-related problem in taking possession of and occupying the Leased
Premises. The Lessor undertakes that in any case it shall have the Form
4 no later than three months from the said date. The Lessor undertakes
to indemnify the Lessee for any damage and/or expense incurred or
suffered thereby due to the fact that the Form 4 shall not have been
obtained with respect to the Leased Premises, including for damage
caused due to the non-receipt of insurance payments because of the
absence of the Form 4.
20.7 The parties agree that this agreement alone reflects all that is
stipulated, binding and agreed by and between the parties. No
information, document, consent or notice given to the Lessee by the
Lessor or on its behalf, if given, prior to the signing of this
agreement, is or shall be of any effect.
No obligation, stipulation, waiver or modification of the agreement
shall be of any effect unless made in advance and in writing. The
failure to exercise any remedy or guarantee shall not be deemed as a
waiver.
20.8 The Lessor shall be entitled to transfer or pledge the rights thereof
under this agreement to another or to others. The Lessor shall notify
the Lessee thereof.
20.9 It is agreed that the Lessee shall be entitled to operate the Leased
Premises also during the evening and night hours and on Saturday
nights, after the Sabbath is out, and the Lessor confirms that it has
no objection thereto; provided that the hours of operation shall comply
with the provisions of any law. With respect to the operation of the
systems of the Project during such hours or on Saturday nights, the
Lessee shall coordinate such matters with the Management Company, and
the operation of the systems and services of the Management Company
(including air-conditioning) shall be made against such payment and
under such terms and conditions as the Management Company shall
determine. The Lessee has noted that it shall be required to pay
special payments to the Management Company for the operation of the
Leased Premises and the operation of the systems and the rendering of
the services of the Management Company outside normal hours of
operation and on Saturday nights, according to terms to be determined
by the Management Company.
20.10 For the sake of good order, it is hereby emphasized that the Project
shall not be operated on Saturdays, holidays and days of rest under any
law. The Lessee has noted that the Project shall be closed at such
times, and that emergency entry thereto shall only be possible through
an entrance to be determined by the Management Company.
20.11 Since the Lessee is a limited company, it is agreed that the Lessor
shall be entitled to terminate this agreement if a receivership order
(including a temporary order) or a winding-up order (including a
temporary order) shall be issued against the Lessee, in the event that
such orders are not revoked within 30 days from the date of issuance
thereof.
<PAGE>
20.12 It is agreed that the only venue for any legal proceeding between the
parties shall be a court in Jerusalem.
21. Special provisions
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21.1 The Lessee undertakes that the appearance of the Leased Premises shall
be kept clean and tidy at all times, both in the interior parts of the
Leased Premises and in the exterior parts. The Lessee undertakes to
continuously maintain the cleanliness of the Leased Premises.
21.2 The Lessee shall leave no furniture, fittings, packages, boxes,
material, equipment, garbage or objects outside the Leased Premises.
The Lessee shall make no use of any part of the building and the
Project other than for passage to and from the Leased Premises.
21.3 The Lessee undertakes to receive no supplies at the Leased Premises at
times and routes other than those determined by the Management Company,
as set out in the contract with the Management Company.
21.4 The Lessee undertakes not to dispose of garbage, waste or packages from
the Leased Premises, other than at times and through routes to be
determined by the Management Company.
The Lessee undertakes to store all waste, garbage and packages at a
concealed place in the Leased Premises until it shall be entitled to
dispose of the same as aforesaid.
21.5 The Lessee undertakes to perform no act and to make no use of the
Leased Premises causing noise, odors, shock, smoke, dirt or a nuisance.
22. Notices
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Any notice from either party to the other, delivered at the following
address or sent thereto by registered post shall be deemed to have been
received within 72 hours from the time of dispatch thereof by
registered post (and in the event of delivery by hand - within 12 hours
from the time of delivery thereof).
The Lessee shall neither deliver nor send any notice, the day on which
such notice shall be deemed to have arrived or been delivered shall be
a Friday or the eve of a holiday or a Saturday or a holiday or the
intermediate days of Passover and Succoth.
The addresses of the parties for the purposes of this agreement shall
be:
The Lessor - 27, Hamered St., Tel Aviv (c/o "Isras") or any other
address in Tel Aviv of which the Lessor shall notify the
Lessee in writing.
<PAGE>
The Lessee - at the Leased Premises or at Building 6, Kiriat Hamada
St., Har Hotzvim, P.O.B. 45017, Jerusalem (each and either
one of these two addresses). The Lessee's address at the
Leased Premises shall not change.
23. Extension of the Term of the Lease
----------------------------------
23.1 It is agreed that the Lessee shall be entitled to extend the Term of
the Lease for six additional periods of two years each, from January 1,
2005 until December 31, 2016, provided that the conditions set forth in
this section below shall have been met.
23.2 In the event that the Lessee shall wish to extend the Term of the Lease
for an additional period of two years as aforesaid, the Lessee shall
notify the Lessor thereof by written notice to be delivered to the
Lessor no later than March 31 of each of the years 2004, 2006, 2008,
2010, 2012 and 2014.
23.3 In the event that the Lessee shall have notified the Lessor of the
extension of the Term of the Lease as aforesaid, the Term of the Lease
shall be extended for another two years, and all the provisions of this
agreement with the appendices thereof, the provisions of the management
contract and the provisions of the parking agreement shall apply
thereto, mutatis mutandis, and subject to the provisions of subsections
23.4 and 23.5 hereunder.
23.4 In the event that the Lessee shall have notified the Lessor of its
intention of extending the Term of the Lease as aforesaid, the Term of
the Lease shall be extended as aforesaid, provided that the Lessee's
notice of the extension of the Term of the Lease shall have been given
on one of the dates set out in subsection 23.2 above, and subject to
that the Lessee shall have fulfilled all the undertakings thereof in
this agreement.
23.5 In the event that the Term of the Lease shall have been extended as
aforesaid, the Rent to be paid by the Lessee to the Lessor in each of
the extended lease periods shall be as set out in Section 5.2 above.
24. Right of first refusal
----------------------
24.1 The parties agree that the Lessee shall have a right of first refusal
with respect to the lease of additional areas of approximately 1,000 m2
adjacent to the Leased Premises (level 718), demarcated in yellow on
the drawing of the Leased Premises (hereinafter: the "Additional
Areas"), pursuant to the terms and conditions set forth in this section
hereunder.
This right shall be available to the Lessee until December 31, 2001, at
which time it shall expire ipso facto.
24.2 In the event that the Lessor shall have received an offer to lease any
of the Additional Areas, the Lessor shall notify the Lessee thereof in
writing, stating
<PAGE>
the size of the area proposed to be leased, the location thereof, the
proposed duration of the lease and the rent proposed by the potential
lessee.
24.3 The Lessee shall be entitled to notify the Lessor in writing, within 15
business days, of its wish to exercise its right with respect to the
Additional Areas and to lease the same in lieu of the potential lessee.
24.4 In the event that the Lessee shall have notified the Lessor as
aforesaid, the Additional Areas shall, starting three months after
delivery of such notice by the Lessee, become part of the Leased
Premises, as defined in this agreement, and shall be subject to all the
provisions of the lease agreement, the appendices thereof, the
management contract and the parking agreement signed at the time of
signing of this lease agreement, mutatis mutandis and subject to the
provisions of Section 24.5 hereunder.
Without derogating from the aforesaid, the Lessor shall be entitled to
require the Lessee to sign an additional lease agreement - identical to
this lease agreement, mutatis mutandis - with respect to the Additional
Areas, and the Lessee shall do so within 15 days from the date of
receipt of the Lessor's demand as aforesaid; failure to do so shall
release the Lessor from any obligation to the Lessee with respect to
this right of first refusal.
24.5 If the Lessee shall exercise its said right, the Lessee shall pay the
Lessor, starting three months after the date of delivery of the
Lessee's notice as aforesaid, rent for the Additional Areas at the rate
set out in Section 5 hereof, as being on the date of commencement of
the lease of the Additional Areas.
24.6 In the event that the Lessee shall have given no notice of its wish to
exercise its right with respect to the Additional Areas within the time
frame set out in Section 24.3 above as aforesaid, the Lessor shall be
entitled to lease the same to the potential lessee.
24.7 It is agreed and clarified that the Lessee's right of first refusal as
set out in this section refers to the lease of all the Additional
Areas, i.e., approximately 1,000 m2. In the event that the Lessor shall
have notified the Lessee of an offer to lease an area contained in the
Additional Areas but not all of the Additional Areas, the Lessee shall
be entitled to exercise its right as aforesaid and to lease all of the
Additional Areas from the Lessor. In the event that the Lessee shall
refuse to lease all of the Additional Areas and shall wish to lease
only the area contained therein, to which the proposal of the potential
lessee shall refer, the Lessor shall not be obliged to lease the same
to the Lessee and shall be entitled to lease the same to the potential
lessee.
24.8 The provisions of Section 24.7 above notwithstanding, it is agreed that
in the event that the Lessee shall not have exercised the right of
first refusal conferred thereon pursuant to this section and the Lessor
shall have leased an area contained in the Additional Areas to the
potential lessee, the Lessee shall be entitled to lease the remaining
areas contained in the Additional Areas, after
<PAGE>
deduction of the area leased to the potential lessee from the Lessor,
provided that it shall have notified the Lessor of its wish to do so
within fifteen business days from the date of the Lessor's
communication thereto concerning the potential lessee's proposal, and
shall have fulfilled the Lessor's requirement to sign an additional
lease agreement as set out in Section 24.4 above.
25. Since the Lessor has pledged the rights thereof in the Project and the
Leased Premises for the construction of the Project and as part of the
financial support provided by Bank Hapoalim, it is therefore agreed
that the Lessor pledges and assigns by way of a pledge all of the
rights thereof against the Lessee to Bank Hapoalim, and hereby
irrevocably instructs the Lessee to pay the Rent and all other
payments, due and to be due thereto from the Lessee pursuant to this
lease agreement, to the Lessor's account #696653 at the Rabin Square
branch in Tel Aviv (#609) of Bank Hapoalim. The Lessee's signing of
this lease agreement constitutes an undertaking on its part to the bank
to act as aforesaid.
26. Permission to park at the parking lots of the Project
-----------------------------------------------------
The Lessor confirms that 20 parking spaces (numbers ___ to ___,
inclusive, in the parking lot of Building B) and 80 parking spaces
(numbers ___ to ___, inclusive, in the parking lot in Building C) - 100
parking spaces in total, shall be allotted to the Lessee in the parking
lots of the Project, for the duration of the Term of the Lease,
provided that the Lessee shall enter into a separate "parking
agreement" with the parking lot operator, shall pay the parking fee in
accordance with the "parking agreement" and shall fulfill all the other
terms and conditions of the "parking agreement".
It is agreed that the monthly parking fee for each parking space shall
be NIS 287 (two hundred eighty seven New Israeli Shekels) (in addition
to V.A.T.), linked to the index (Basic Index: 105.8 points).
At the time of signing of this agreement, the Lessee and the Lessor are
signing also a "parking agreement", but the Lessee confirms that the
"parking lot operator" pursuant to the "parking agreement" shall be
determined by the Lessor after the signing of the "parking agreement",
and that any right and obligation of the "parking lot operator" shall
belong to the said "parking lot operator" in lieu of the Lessor.
Once the "parking lot operator" shall replace the Lessor, the Lessor
shall have no obligation with respect to parking and to the parking
lot, except for the confirmation thereof that the Lessee is entitled
(under the foregoing conditions) to the said parking spaces, in
consideration for the said fee.
In all matters pertaining to parking, only the provisions of the
"parking agreement" shall apply.
In witness whereof, the parties have hereto set their hands,
<PAGE>
This day, _____________, in Jerusalem
/s/ Eli Kamar and Yair Verman /s/ Tal Mundlak-Avnon
------------------------------- -----------------------
Har Hotzvim Properties Ltd. Vyyo Ltd.
The Lessor The Lessee
I, the undersigned, Meir Tzeiger, Adv., do hereby confirm that the said Lessee
(VYYO Ltd., P.C. 51-086689-0), the details of which are as aforesaid, has signed
the said agreement and the appendices thereof before me, and I confirm that its
signature as aforesaid is binding upon it.
This day, ________________, in _______________.
/s/ Meir Tzeiger
----------------------
Meir Tzeiger, Adv.
