EXHIBIT 10.19
MANAGEMENT AGREEMENT
Drawn and signed in __________ on December 2, 1996
Between:
Sha'arei Ha'ir Investments, Ltd.
Xxxx Xxxxxxxxxx 0, Xxx Xxxx
(Hereafter: "the company")
And:
1. Partec Ltd., Identification Number _______________
(Hereafter: "the holder")
Whereas The company is the owner of the real property known as lot 46 in bloc
30075 in Jerusalem (hereafter: "the lot"); and
Whereas The company is constructing a development project on the lot, either by
itself or through others, as described herein; and
Whereas The project is designed to be a modern combination development, which
includes areas for business, trade, offices, a parking lot, etc; and
Whereas The holder purchased ownership/lease rights in the property from the
company, and is therefore the holder of the property or is the future
holder of the property; and
Whereas The management and performance of services in the project require
professional management and performance, in order to preserve the high
level of maintenance in the project; and
Whereas The company has contracted with a management company (hereafter: "the
management company") to provide such management services in the
project; and
Whereas The holder agrees that the management and performance of services in
the project are to be handled by the management company on an exclusive
basis, and he promises to act in accordance with the terms of this
agreement and to share in the management expenses as detailed herein;
and
Whereas For the sake of convenience this agreement is being signed between the
company and the holder, the holder nevertheless agrees that the
company's rights and obligations as provided for by this contract may
be assigned to the management company or to any other party that may
replace the management company; and
Whereas It is the desire of parties to formalize their legal relationship
within the bounds of this agreement;
IT IS THEREFORE AGREED, STIPULATED AND DECLARED BY THE PARTIES AS FOLLOWS:
1. The introduction to this agreement, including the definitions and
declarations within it, constitutes an inseparable part of this agreement.
2. TERMS AND DEFINITIONS
"THE PROJECT": The "Sha'arei Ha'ir" building in Jerusalem, known as lot 46
in bloc 30075, which includes the building to be
constructed in the context of the project, including
commercial areas, office areas, public areas, a parking
garage and external areas.
"THE PROPERTY": An area that is sold or rented, including the gallery,
which is held by the holder as an owner and/or as a lessee
and/or as a renter and/or as having the right of possession
and/or any other right.
"THE SERVICES" Services include the following:
A Insurance on the structure and the equipment of the
public passages as well as third party insurance.
B Cleaning of the public passages, stairwells, elevators
and public bathrooms.
C Security, to the extent necessary.
D Maintenance, inspection and renovation as necessary in
the public passages and in the stairwells.
E Elevator service.
F Electricity for the public passages, stairwells and
elevators.
G Air conditioning for the public passages on the
commercial floor and ventilation on the office floors.
H Plumbing, water and sewage in the public bathrooms.
I Control systems and equipment for the public.
"PUBLIC AREAS": A. Elevators, air conditioning installations, containers,
piping of any type, and all other apparatuses in the
project, and/or serving the project and which the
company has designated an/or shall designate for
common use by all holders in the project or by the
majority of them, even if they are within the
boundaries of the properties themselves or the
adjacent properties.
B. All other areas of the project that have not been sold
and/or have not been designated to be sold, including
yards, passageways, gardens, parking lots, parking
garages, apparatuses, pathways, sidewalks, etc.,
except for those parts of the project that the company
removes from the common area, at the company's
discretion.
C. In any event, any areas attached by the company to any
property will not be included in the common areas.
"INDEX": The Consumer Price Index (cost of living index), which
includes and fruits and vegetables, and which is published
by the Central Agency of Statistics and General Research,
even if this index is published by some other agency or
official institution as well as any other official index it
may be replaced with, whether or not the new index is based
on the same data. In the event that another index is
published by another agency or institution to replace the
Consumer Price Index as described herein, and the
publishing body does not determine the relation of the new
index to the prior index, the relation shall be determined
by the Central Agency of Statistics and General Research,
and in the case that this relationship is not so
determined, the company shall calculate the change in index
for purposes of this section, while taking the
aforementioned changes into consideration.
3. A. The company takes upon itself the sole management and performance of
services for the project (hereafter: "management and performance of
services") for the duration of this agreement.
B. The holder agrees to this, and hands over to the company the
management and performance of services exclusively. The holder hereby
promises not to carry out services or any part of them himself or
through others, but only through the company or the company's
assignee, and promises to act in accordance with this agreement and
share in the expenses as provided herein.
4. Management and performance of services shall be carried out by the company
itself and/or by the company in part, and by others in part, at the
company's discretion. Notwithstanding the aforementioned, it is hereby
agreed that the management company shall be allowed to contract from time
to time with any other party for the purpose of obtaining maintenance
services for installed apparatuses and areas of the project, the company
shall employ a mechanism of technical staff, professional and
non-professional, administrative and others and shall also be permitted
allowed to manage and implement the services, in whole or in part, using
contractors, subcontractors, or in any other manner at its discretion,
including employment, full or partial, by special contract or according to
condition that it deems appropriate, of attorneys, accountants, advisors
and other people that the management company sees fit to employ.
5. A. The company shall be allowed, at its discretion, from time to time,
to determine the scope of the services, their type, nature, and which
part of them shall be provided to the project and the property and/or
to certain parts of them if at all and the time, duration and manner
of supplying them, subject to the services being provided in a
reasonable and regular manner.
B. The holder declares that he knows that the company shall provide the
various services to the project, including air conditioning etc.,
during accepted hours according to the company's decision.
6. A. The company shall be allowed to assign and transfer all its rights
and obligations under this agreement to another management company or
other legal entity (hereafter: "the transferee"). Concurrently with
such a transfer, the company shall receive from the transferee notice
that it is taking upon itself all the company's obligations under this
agreement.
B. Notice of transfer shall be given to holders as soon as possible after
such transfer takes place.
C. The results of such a transfer shall be that the company shall be
released ab initio from its obligations and rights under this
agreement, and these obligations and rights shall be considered ab
initio to belong to the transferee alone. The holder and transferee
only shall be party to this agreement, and anywhere in this agreement
where "the company" is referred to, shall be as if referring to the
transferee to begin with.
7. The holder hereby promises that:
A. He and his representatives shall be contractually bound to the
management company in all matters pertaining to management and
performance of services under this agreement, and shall take part in
the expenses involved in implementing the services and managing them
on the basis of a table to be determined by the company and approved
by the company's accountant.
B. Thatin the event that he shall transfer, sell, rent or grant in any
manner proprietary rights and/or use of the property to any other
person and/or corporation (hereafter: "the receiver of rights") for
any time period whatsoever (whether limited or unlimited, including
full transfer of rights in the property), the holder must, before
signing such an agreement between him and the receiver of rights,
cause the receiver of rights to sign with the company, at a date that
shall be determined by the company for this purpose, a management
agreement that shall be acceptable to the company at the given time.
The signing of a management agreement by the receiver of rights with
the company shall not release the holder from his obligations to the
company, and he shall be jointly and severally liable with the
receiver of rights for carrying out in full obligations under this
agreement, except if the holder transfers the totality of his rights
in the property to the receiver of rights, and the receiver of rights
has signed a management agreement, as previously described.
C. The holder and his representatives shall cooperate with the company in
any event that cooperation is required in order to facilitate the
ongoing and effective management and performance of services.
D. To enable the company and its representatives to enter the property in
order to carry out activities connected with the management and
performance of services, including but not limited to opening walls,
floorings, ceilings and other areas, to exchange and repair plumbing
and pipes and to carry out any work necessary in the opinion of the
company in order to fulfill its obligations under this agreement,
whether the work is done for the benefit of the holder or for the
benefit of others, and the holder shall have no claim whatsoever
against the company due to any disruptions caused by such work. In any
case of activity as described herein the company shall make efforts to
minimize the disturbance caused to the purchaser and that the work
shall be finished as soon as possible.
E. To notify the company of any problem requiring the company to take
action.
F. To carry out any internal changes or other exceptional activity by an
through the company exclusively, unless the company agrees that the
activity be carried out by someone else, all subject to the receipt of
the proper licenses and the authorizations by the appropriate
authorities.
G. To provide the company with a key to the property premises in order to
enable access to the property whenever necessary, and in the event the
lock is changed, to provide the company with a new key.
8. The holder hereby agrees that this agreement shall be filed in the Land
Registry Office by its inclusion in the articles or its being appended to
the condominium articles and/or by registering a comment that the agreement
is existent and binding upon the holder, and/or in any other manner, at the
company's discretion.
9. A. The holder promises to bear, together with all other holders in the
project, all expenses related to the management and performance of
services, including accompanying expenses for consulting and the
salary expenses of all those employed by the management company,
including financing expenses relating to the operations of the
company, which shall be linked to the Consumer Price Index, as defined
in section 2, herein (hereafter: "the expenses").
B. The basis for allocating the expenses shall be determined by the
company according to the relationship between the floor area of the
entire property (gross) and the floor area of each of the properties
in the project, according to the primary division and measurement of
the areas in the project. Nothing written in this section shall in any
way limit the company's right to change the table allocation the
expenses and the holder's share of the total expenses as provided in
section 8(A) above.
C. In order to ensure the possibility of replacing and renovating
apparatuses used by all the users in the building or to make basic
repairs, the company shall establish and maintain an amortization and
replacement fund, in which the money shall be accumulated from
payments made by holders in the project, and which shall be used for
additions, renovations and replacement of equipment, apparatuses, and
systems. The management company shall include in the expenses
payments, in amount to be determined by the company, which are
designated to cover the depreciation of apparatuses and common areas.
10. A. To the expenses aforementioned in section 9 will be added a sum
equal to 10% of said expenses (hereafter: "management fees"). The
management fees shall be an inseparable part of the expenses, shall be
paid by the holder and the rest of the holders in accordance with
section 9 herein, and shall constitute the wages of the company for
fulfillment of its obligations under this agreement.
B. In the event that it shall be determined by any judicial body that the
"cost plus" method of setting management fees, as provided for in this
agreement , is an unjust and/or void and/or unenforceable condition
for any reason whatsoever, the company shall charge management fees
that shall be added to the expenses as outlined above in the sum of
______________ NIS (_______________New Israeli Shekels), plus VAT, per
square meter of area of the property held by the holder. This sum
shall be linked to the Consumer Price Index. The baseline index shall
be the index published on _______________, which stands
at_______________ points, and the new index shall be the last know
index on the actual day each payment is made.
C. Anywhere in this agreement that the term "expenses" is used, the
meaning is expenses plus management fees (whether these are determined
on a "cost plus" basis or whether they are determined by the alternate
method described in subsection B of this section.
11. The holder promises to pay his share of the management fees for each
three-month period in advance. Payment shall be remitted up to 3 days
before the end of each period for the next three calendar months.
12. A. The holder promises to pay the company his estimated share of the
expenses, including the allocations for the amortization fund and
management fees, in accordance with written bills that shall be
presented to him by the company. Payment shall be made within seven
days of receipt of such a xxxx. The aforementioned bills shall be
presented to the holder every month or per any time period to be
determined by the company, and shall be based upon an assessment of
the expenses at the given time.
B. The holder hereby promises to pay the company his share of the
expenses and other payments incumbent upon him under this agreement,
whether he is holding the property himself, or whether he has
transferred use of the property to another party, or whether no person
or legal entity is in fact using the property.
C. All payments that holder is obligated to pay the company shall be paid
by the holder in the offices of the company, or in any other
reasonable manner that the company shall instruct the holder to make
payment.
D. In addition, and notwithstanding the above content of this section
(12), the holder shall deposit with the company a prepayment of his
share in the expenses, in a sum equal to his estimated share of the
expenses for a period of three months, as it is determined at the time
of payment by the management company. This sum shall be held by the
company as a refundable prepayment, and payment of this sum shall not
detract from the holder's obligation to pay the ongoing bills that are
presented to him by the company. The holder hereby promises to remit
the said prepayment to the company within 14 days of receiving the
company's claim for payment of this sum.
13. A. The management company hereby promises to keep precise and orderly
books and records of all expenses and revenues in managing and
implementing the services.
B. The companies books and records shall be held in trust for the holder,
and shall constitute proof at any time of payments made by the holder
to the company.
C. The holder shall be entitled to an explanation regarding expenses and
to examine the accounting records that the company keeps for the
project. The procedures for the manner and time such explanation shall
be given are to be determined by the company.
14. A. Within a time period not to exceed 6 months from the end of each
calendar year, the company shall perform a final accounting of the
expenses related to the management and performance of services
(including depreciation and management fees) for the said year
(hereafter: "annual accounting), and shall produce a cop of the annual
accounting to all the holders in the building. The annual accounting,
when it is audited and approved by the company's accountants, shall
serve as prima facie evidence of the amount of the expenses for
management and performance of services.
B. The holder hereby promises to pay the company any differences,
including index linking differentials should such occur, between the
estimated share of expenses paid by the holder and the actual expenses
as they are reflected in the annual accounting. This payment shall be
made within 7 days of the time the company produces the annual
accounting to the holder. Should any difference be to the benefit of
the holder, the holder's account shall be credited accordingly.
C. The holder shall pay the company value added tax on any and every
payment he is obligated to make under this agreement. The value added
tax shall be included in each such payment, at the rate in force at
the time the payment is made. For each payment, the holder shall
receive a receipt from the company, as required by law.
D. The company shall be allowed to invest any money balances left in it
possession, whether in funds or in deposit accounts or in any other
investment, in any manner the company sees fit.
15. A. In any event that the holder shall be later making a payment that
he is due or shall become due to pay the management company under this
agreement and/or if the holder shall breach any condition of this
agreement, the management company shall be entitled, without in any
way detracting from its rights to pursue other legal avenues of
relief, to pursue, at its discretion, one or more of the following
options:
(1) To cease management and performance services provided to the
holder, in whole or in part.
(2) To add Consumer Price Index linkage differentials as defined in
section 2 of this agreement to any payment or expense due to be
paid to the company by the holder and which was not paid in a
timely manner, plus interest at the rate current at the time of
payment in commercial banks, for exceptional overdrafts in debit
accounts, plus 2%.
(3) To use the security payment provided for in section 16 of this
agreement to cover the payment that is overdue.
(4) To demand and receive from the holder liquidated damages, paid in
NIS, in the amount equivalent to US $55,000 (Fifty five thousand
US dollars).
(5) To obtain an injunction.
(6) To cut off the supply of electricity and/or water and/or gas
until the Holder's debt is paid in full. The holder shall have no
claim against the company should it act according to the
provisions of this subsections.
(7) To act in any other legal manner.
B. The holder shall repay any and all expenses and payments paid by the
company due to the breach of this agreement by the holder and/or that
become necessary in order to pursue legal action or other remedies
against the holder, immediately upon the company's request for such
repayment.
C. The holder's refusal or unwillingness to accept any service by the
company and/or the holder's desire to cease the management and
performance of services for the property in whole or in part and/or
the cessation of management and performance of services by the company
in accordance with section 15 (A)(1) herein, shall not release the
holder from his obligation to share in the expenses related to the
management and performance of services in accordance with this
agreement.
D. It is hereby agreed by the parties that the holder shall not be
allowed to set off and/or withhold payment due to the company, in
spite of any claim he may have against the company.
16. A. Notwithstanding the provisions of sections 12 and 14 of this
agreement, it is hereby agreed by the parties that in order to ensure
the performance of the holder's obligations under this agreement, the
holder shall deposit a security payment at the time of the signing of
this agreement a sum equal to the holder's estimated share of the
expenses for each 6 month period, as shall be determined by the
company at the time the signed (hereafter: "the security deposit"), in
addition to the payment provided for in section 12 herein.
B The security deposit shall be returned to the holder at the end of the
agreement period, at a sum linked to the Consumer Price Index (the
base index shall be the last known index at the time the security
deposit is made and the new index shall be the last known index at the
time the security deposit is returned to the holder), as provided for
in the instructions that follow.
C. In the event that the holder fails to make any payment in a timely
manner, as provided for in this agreement, the company shall be
entitled, at its own discretion and without detracting from any other
available remedies, to use the security deposit to cover said late
payment. In such an event, the amount used to cover said late payment
shall be deducted from the repayment of the security deposit to the
holder as provided for in subsection B above. Said sum shall be linked
to the Consumer Price Index beginning on the date the holder was due
to make a payment and failed to do so, as provided for herein, until
the day the security deposit is refunded.
17. In addition, the holder hereby promises to provide to the company, as
security, a bank check and/or a promissory note signed by him and two
guarantors for a sum equal to the estimated payment for management and
performance of services for a 6 month period, that shall be linked to the
Consumer Price Index. It is hereby agreed that the promissory note is
provided as security only, and shall not constitute any due payment until
and unless executed. The promissory note shall constitute a security not
only for payments due, but also for the liquidated damages agreed to
herein, interest, and legal expenses, caused by lack of payment of
management fees.
18. A. The company shall be entitled, at its own discretion and at any
time, to cease management and performance of services and/or any part
of them by giving written notice of such cessation to the holder at
least 6 months in advance.
B. In the event that the holders and/or the owners should desire to
cancel and/or cease the management of services by the company in the
project, such cessation or cancellation shall occur only upon the
fulfillment of the following conditions, cumulatively:
(1) 80% of all the holders and/or the owners in the project arrive at
such a decision and express it in writing.
(2) All the holders and/or the owners in the project have paid off
all their debts to the company under the terms of this agreement
and have released the company from its obligations flowing from
its commitments as provided for in this agreement, pertaining to
the management and performance of services for any third party.
(3) The company is given 12 months advance notice.
(4) The company has been providing services for at least 10 years.
(5) All the holders and/or owners have entered a contractual
agreement with another corporation or any other entity that has
taken upon itself the management and performance of services
provided for in this agreement.
19. A breach of this agreement by the holder shall also be considered a breach
of obligations by purchaser/lessee against the seller in the sale/rental
contract, and the lack of timely payment of any payment due to the company
by the holder shall also be considered a lack of timely payment of
consideration/rent, without detracting from any other remedies the company
is due.
20. The holder hereby agrees to bear the expense of stamping this agreement.
21. The addresses of the parties to this agreement are as listed in the preface
of the agreement. Any notice that shall be sent by one party to the other
by registered mail at either of the aforementioned addresses shall be
considered to be received by the addressee within 3 business days of the
date such notice was posted. If notice is hand delivered, it is deemed
received at the time of delivery.
IN EVIDENCE OF WHICH THE PARTIES SIGN, AT THE TIME AND PLACEMENT AFOREMENTIONED,
