Exhibit 10.5
LEASE AGREEMENT
DRAWN UP AND SIGNED ON THE 6TH DAY OF THE MONTH OF OCTOBER IN THE YEAR 1997
Between: XXXXX INDUSTRIAL BUILDINGS LTD.
Private company number 00-000000-0
(to be called hereinafter: "THE LESSOR")
OF THE FIRST PART;
and: SCOPE METAL TRADING AND TECHNICAL SERVICES LTD.
Public company number 00-000000-0
of the Industrial Zone, Mazkeret Batya, Israel
(to be called hereinafter: "THE LESSEE")
OF THE SECOND PART;
Whereas: The Lessor purchased a leasehold title for construction in the
Parcels as defined in this Agreement hereunder: A copy of the
extract of the registration of the aforesaid parcels is attached
herewith and marked as APPENDIX "A".
and whereas: the Lessee desires to lease the Leasehold, as this term is
defined hereunder in clause 1.3, and to operate thereon a
business, being a factory for the manufacture, marketing and
packaging of the Products, and the Lessor desires to let the said
area to the Lessee, which shall use it for the aforesaid purpose;
and whereas: the parties desire to specify the lease conditions in this
Agreement;
WHEREFORE, IT WAS DECLARED, STIPULATED AND AGREED BETWEEN
THE PARTIES AS FOLLOWS:
1. INTERPRETATION
1.1 The recitals to this Agreement and all appendices to the Agreement
constitute an integral part thereof.
1.2 The clause headings in this Agreement have been added solely for the
sake of convenience and shall not be used in the interpretation of the
Agreement.
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1.3 In this Agreement, the following expressions shall have the meanings
alongside them:
"THE LEASEHOLD" - An area which includes the entire Parcel
for Industry and 17,500 square meters in
the other Parcel, and this, in the area
marked in red in the schematic attached
herewith as an appendix and marked "B,"
as well as the Building.
"THE PARCELS" - Parcels 21 and 25 in block 2775 in Be'er
Tuvia.
"THE BUILDING" - Building on an area of approximately
2,317 square meters, which is intended
for offices, which is being built on the
Parcel for Industry, and roofed sheds on
an area of approximately 7,052 square
meters, which are being built on the
Parcel for Industry and on the Other
Parcel.
"THE PLANS" - The building plans, which are attached
as APPENDIX "C" to this Agreement.
"THE SPECIFICATIONS" - The technical specifications of the
Building, which is attached as APPENDIX
"D" to this Agreement.
"THE PARCEL FOR INDUSTRY" - A portion of Parcel 25 in the aforesaid
Block 2775, on an area of about 13,408
square meters, which is marked as Lot
212.
"THE OTHER PARCEL" - A portion of Parcel 21 in the aforesaid
Block 2775, on an area of about 36,960
square meters, which is marked as Lot
504.
"THE PRODUCTS" - Raw materials and products in the
stainless steel branch ("nerosta"),
floor gratings from galvanized steel,
alloys of nickel, titanium and alloys
and every similar product.
"THE URBAN BUILDING Urban Building Schematic 110/03/8.
SCHEMATIC"-
2. DELIVERY OF THE LEASEHOLD
2.1 The Lessor undertakes to deliver occupancy of the Leasehold to the
Lessee on October 14, 1997 or on the payment date of the lease payment
in its entirety, as stipulated hereunder in clause 8, whichever is
later.
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2.2 The Lessor undertakes to complete the construction of the Building by
February 28, 1998, with the Building being constructed as stipulated
in the plans and in the specifications, being fit and suitable for
use, with all systems thereof operating in good working order.
2.3 The Lessee shall enable the Lessor, either itself or by others on its
behalf, to inspect the Building before accepting it. At the time of
the delivery, delivery minutes shall be drawn up and signed by the
Lessee and the Lessor, which shall contain details of the deficiencies
and defects and inconsistencies between the condition of the Building
at the time of delivery and the plans and the specifications.
2.4 The Lessee shall be precluded from alleging any claim against the
Lessor in relation to deficiencies or defects that could have been
discovered during a reasonable inspection at the time of delivery, if
they were not noted in the delivery minutes, and the Lessee shall be
deemed as agreeing to accept the Building while it includes the
deficiencies and the defects that could have been discovered as
stated, and waiving them and any claim in respect thereof.
2.5 In the event that the inspection shall discover deficiencies or
defects which constitute a deviation from the plans and from the
specifications, the Lessor undertakes to repair them at its expense
within a reasonable period of time - but not exceeding 45 days - and
if at issue are deficiencies requiring urgent repair, without which
the Building cannot be used - within seven days.
2.6 The Building shall be deemed completed even if the development work
around it has not yet been completed, provided that the Building shall
be connected to the sewage system and connection to water and
electricity shall be possible.
3. REGISTRATION
3.1 The Lessee is aware that, at this stage, only a caveat in favor of the
Lessor is registered at the Land Registry Office in respect of the
Plots. The Lessee is also aware that the registration of the leasehold
title at the Land Registry Office and/or at the Administration can
only be done after the Urban Building Schematic (including the changes
that are to be entered into the Urban Building Schematic following the
change to the Urban Building Schematic) shall be approved, and only
after parcelization of the real estate shall be completed and the
Leasehold shall be registered as a separate registration entry, and
that it is not now possible to execute the registrations at the Land
Registry Office, and that these shall be executed only after it shall
become legally possible to do so. Therefore, the Lessee agrees that
registration of the Leasehold as a separate registration entry and the
registration of the title under the name of the Lessee at the Land
Registry Office shall be carried out as soon as it shall become
legally possible to do so.
3.2 Since the redivision plan of the real estate depends upon the approval
of the Urban Building Schematic, including the change to the Urban
Building Schematic, the redivision plan for the real estate shall be
implemented only after the Urban Building Schematic shall be approved.
As soon as it becomes possible, the Lessor shall ensure that the
appropriate plans shall be submitted
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to the planning authorities, so that the Parcels shall be split and
the Leasehold shall be registered as a separate registration entry.
The Lessor shall act diligently and with expertise and shall exert its
best efforts to expedite the Urban Building Schematic approval
proceedings and registration of the parcelization and the Lessee's
leasehold title to the Leasehold as stipulated in this Contract.
Should it become evident that the Urban Building Schematic was not
approved and/or should it become clear beyond any doubt that the Urban
Building Schematic shall not be approved, the Lessor shall exert its
best efforts so that a parcelization plan of the real estate and/or
the Parcels shall be performed, so that the Leasehold shall be
registered as a separate registration entry. It is agreed that if it
is possible to register the Leasehold as a separate registration entry
- despite the fact that the Leasehold is comprised of an agricultural
Lot and an industrial Lot - the Leasehold shall be registered as
stated. If it shall not be possible to register the Leasehold as a
separate registration entry - the Parcel for Industry and the Other
Parcel shall be registered as separate registration entries, albeit as
adjoining parcels - as they are in accordance with the schematic
attached to this Contract.
3.3 Registration of the leasehold title in the Leasehold under the name of
the Lessee, when the Leasehold shall be registered as a separate
registration entry, shall be carried out by way of registration of a
sublease on the Leasehold under the name of the Lessee.
Subject to the fulfillment of the Lessee's commitments as stipulated
in this Contract, the Lessor undertakes to register the lease of the
Leasehold under the name of the Lessee at the Land Registry Office
within 12 months of the date on which the parcelization plan for the
real estate was approved by the planning authorities and the Leasehold
was registered as a separate registration entry.
In any case, the Lessor shall not be held responsible for any delay in
the registration as a result of a delay that is not under its control,
or any other delay deriving from the Lessee.
3.4 The leasehold title in the Leasehold shall be registered under the
name of the Lessee (after the Leasehold is registered as a separate
registration entry at the Land Registry Office, as noted above), being
free of any mortgage, lien, attachment and/or third-party right
whatsoever or any debts whatsoever, with the exception of liens
created in favor of the Lessee, or, at its request or at its
instruction and/or in respect thereof.
3.5 The Lessee undertakes to appear at the Administration and/or at the
Land Registry Office and/or before an attorney to be designated by the
Lessor, on the date that shall be scheduled by the Lessor, via a
14-day prior notice, for the purpose of registering the leasehold
title under its name, as stipulated in this Contract.
The Lessee undertakes to submit to the Lessor, no later than within 14
days of receiving the request from the Lessor, all the certificates,
receipts and approvals that are required for executing the
registrations, and to sign all documents that shall be required by the
Lessor and/or the attorneys appointed by the Lessor to handle the
execution of the registration, for the purpose of
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registering the leasehold title under the name of the Lessee as
stipulated in this Contract.
The execution of the registration of the title under the name of the
Lessee as stipulated in this Contract is conditional upon the
submission of all the documents and/or the approvals that the Lessee
is obligated to obtain and/or to furnish and/or upon the rendering of
all the payments that are applicable to the Lessee pursuant to this
Contract and upon the fulfillment of all the Lessee's obligations
pursuant to this Contract.
If on the date as stated, all the approvals and/or documents that the
Lessee is obligated to obtain shall not be in the possession of the
Lessee and/or to furnish in order that the leasehold title in the
Leasehold shall be registered as stated in this Contract - the
registration date shall be postponed to another date that shall be
coordinated between the parties, at which time the Lessee shall
furnish all the requisite approvals, however, the Lessee is required
to bear all expenses that might be caused to the Lessor as a result of
the postponement of the execution of the registrations as stated.
4. IRREVOCABLE POWER-OF-ATTORNEY
4.1 The Lessee undertakes to sign an irrevocable power-of-attorney, using
the version attached to this Agreement as APPENDIX "E," in the
presence of Attorney Xxxxx X. Xxxxx, at the time this Agreement is
signed.
4.2 The power-of-attorney shall be used by the Lessor solely for the
purpose of executing the instructions of this Agreement and all that
derives therefrom, including, without prejudice to the general purport
of the aforesaid, the registration of the Parcels under the name of
the Lessor, and registration of the leasehold title to the Leasehold
at the Land Registry Office and at the Israel Lands Administration as
needed.
4.3 The granting of the power-of-attorney shall not release the Lessee
from its obligation to itself fulfill its undertakings in this
Agreement and to itself sign all documents pertaining thereto.
5. SIGNS
The Lessee shall be entitled to install signs on the facade of the
Building, on the external walls of the Building, in the location and per
the dimensions that shall be determined in coordination with the Lessor and
with its consent. The Lessee undertakes that the signs shall be at a high
level of quality and esthetics.
The signs shall be installed by the Lessee and at its own expense, and all
liability in respect thereof, including in respect of any damage to the
person or property of a third party, if caused, shall apply to the Lessee.
The Lessee shall be obligated to obtain all licenses and permits required
for installation of the signs, and shall bear any applicable tax, levy, or
fee in respect of the installation and use of the signs.
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6. THE LEASE AND THE PERIOD OF THE LEASE
6.1 The Lessor is hereby letting to the Lessee, and the Lessee is hereby
leasing the Leasehold from the Lessor for a period of fifteen (15)
years, commencing October 14, 1997 and ending on October 13, 2012.
6.2 It is hereby expressly agreed by the parties that the provisions of
the Tenants' Protection Law (Consolidated Version), 5732 - 1972 and/or
any law that shall replace it and/or be added thereto and/or any other
law enacted that shall limit the eviction right of landlords and/or
limit the highest amount of the lease payment shall not apply to the
lease that is the subject of this Agreement, to the rights associated
therewith and to the relations between the parties, and the Lessee
shall never be a protected tenant in the Leasehold.
The Lessee further acknowledges and confirms that the Leasehold is a
building whose construction shall be completed after 25 Adar 5728 -
(August 10, 1968), and shall be rented for the first time after this
date, that the Lessee did not pay any key money whatsoever for the
Leasehold and did not render any other payment that might be
interpreted as key money or as participation in key money, and that
all renovations, changes or additions that it made and/or shall make
in the Leasehold shall not be deemed in any way whatsoever as
participation in the construction investments and shall not confer
upon it in any way whatsoever any protected tenancy right whatsoever.
7. THE USE OF THE LEASEHOLD
7.1 The Lessee shall be permitted to use the Leasehold for the purpose of
conducting a business of manufacturing of the Products, the packaging
thereof and/or the marketing thereof, and shall be permitted to allow
others to use the Leasehold during the Period of the Lease for the
purpose of conducting a business of manufacturing of the Products, the
packaging thereof and/or the marketing thereof.
7.2 The Lessee hereby declares that it saw and inspected the Leasehold,
and itself inspected, under its own responsibility, the legal,
commercial and economic feasibility of utilizing the Leasehold, and
found it to be suitable for its requirements and purposes, and the
Lessee waives any claim in relation to the Leasehold, its location and
identification.
7.3 The Lessee undertakes to use the Building carefully and reasonably, to
maintain it in good working condition at all times, and to immediately
repair any damage, breakdown, breakage or defect in the Leasehold as
soon as it is discovered, with the exception of reasonable and
ordinary wear and tear, this with all due speed after they arose
and/or were caused. If the Lessee shall not fulfill any of the
conditions of this subclause, even after a warning and a seven-day
extension, the Lessor shall be permitted, but not obligated, to enter
the Leasehold and to perform the repairs at the Lessee's expense, and
the Lessee shall be obligated to reimburse the Lessor, immediately
upon its request, for the repair expenses, plus any expense caused to
the Lessor as a result. There is nothing in the above stated that
shall derogate from any other remedy conferred upon the Lessor
pursuant to this Agreement or pursuant to any law.
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7.4 The Lessee undertakes that it shall use the Leasehold in a manner that
shall not cause any nuisances and/or disturbance to the users in the
occupied section, or to passersby near the Building, including
prevention of the creation of smoke or unpleasant odors, and shall
maintain cleanliness in the Leasehold and in its vicinity.
7.5 The Lessor shall be permitted to enter the Leasehold by itself and/or
by representatives at any reasonable time in order to assess the
condition of the Leasehold and/or to perform repairs therein, in the
event that the Lessee did not perform them.
8. LEASE PAYMENT
The lease payment for the Leasehold shall be paid by the Lessee in advance
for the entire Period of the Lease in a one-time payment of USD 5,660,000
(in words: five million, six hundred sixty thousand U.S. dollars),
according to the representative rate of exchange that shall be published on
the actual payment date. The lease payment shall be paid by no later than
November 10, 1997.
Value added tax shall be added to the lease payment against the receipt of
a tax invoice as required by law.
9. SUNDRY PAYMENTS
9.1 The Lessee hereby undertakes that it shall asamounte and pay all
taxes, levies, municipal taxes and other compulsory payments that
shall be lawfully imposed in relation to the Leasehold and/or the use
thereof, and, without derogating from the general purport of that
stated above, municipal tax, business tax, business license fees, sign
tax.
The Lessee shall also bear payments such as: electricity, gas,
cleaning, telephone, etc., relating to the use and/or maintenance of
the Leasehold.
9.2 The Lessor shall pay the government property tax and other payments,
if any, which are applicable to ownership of the Leasehold, to
differentiate from occupancy and use thereof.
9.3
9.3.1 The betterment tax applicable in respect of the transaction
shall apply to the Lessor. The Lessor hereby declares that,
according to all the calculations that it made, there is no
liability for paying betterment tax in respect of the leasing
transaction.
Notwithstanding that stated above, and without derogating
therefrom, the amount of USD 50,000, out of the lease payment
stipulated above in clause 8, shall be transferred, at the time
the Agreement is signed _____, to a trust account that shall be
opened by the Lessee's representative, Attorney Xxxxx X. Xxxxx
(hereinafter: "THE TRUST ACCOUNT" and hereinafter: "THE BALANCE
OF THE REMUNERATION").
9.3.2 As of the signing date of the Agreement, Attorney Xxxxx shall
invest the Balance of the Remuneration, which is deposited in
the Trust Account, in an automatically renewing short-term
deposit. The profits
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from the investment are the property of the Lessor, and the
risks involved are its responsibility.
9.3.3 The Lessor shall report the transaction that is the subject of
this Agreement by way of a self-assessment, and on the dates
prescribed in the law in this regard, and shall deliver the
confirmation of the Land Betterment Tax Division, upon the
receipt thereof, to the Lessee. The Balance of the
Remuneration, inclusive of the profits thereof, if any, shall
be transferred to the Lessee against this confirmation.
9.3.4 In the event that a confirmation as stipulated above in clause
9.3.3 shall not be furnished to the Lessee by the end of three
months after the Agreement is signed, Attorney Xxxxx shall be
permitted to pay the tax out of the Trust Account, which the
Lessor shall be charged from the Land Betterment Tax Division.
The balance of the money, if any, shall be immediately
transferred to the Lessor.
9.4 Purchase tax in respect of the leasing pursuant to this Contract shall
apply to the Lessee and shall be paid by it.
9.5 Each party shall pay its own attorney's fee.
9.6 The Lessee undertakes to pay the payments applicable to it on time.
Any penalty, linkage differentials, interest and any expense or damage
that might be caused due to a payment in arrears, including expenses
or damages that might be caused following the disconnection of various
utilities to the Leasehold, shall apply to the Lessee.
10. BUILDING ALTERATIONS
10.1 The Lessee hereby undertakes that it shall not perform any changes or
additions whatsoever in the building, including in or to the exterior
walls, and shall not install any installation or system that cannot be
dismantled without causing damage to the structure of the building,
unless it received the Lessor's prior written consent (the changes,
additions and installations shall be called hereinafter: "THE
ALTERATIONS").
10.2 The Lessor hereby gives its consent in advance that the Lessee shall
be permitted at any time, should it so desire after delivery of the
occupancy, and solely at its own expense, to construct interior
partitions in the building and to change them and/or remove them, and
to replace all the lavatories and refrigeration rooms, and to perform
any other interior structural Alterations, provided that they do not
harm the construction of the building, the basic systems thereof and
the exterior walls.
The Lessee shall be required to obtain any permit and any license that
are required for this purpose, before effecting the Alterations, from
every competent authority. The Lessor hereby undertakes to sign any
application pertaining to the aforesaid, to the extent that submission
thereof to the competent authorities shall be required, provided that
the aforesaid application shall not undertake liabilities exceeding
those stipulated in this Agreement and provided that the Lessor shall
not be required to pay any payment whatsoever in respect of the
aforesaid.
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All expenses and liabilities pertaining to the Alterations shall apply
solely to the Lessee, and the Lessee shall compensate the Lessor in
respect of any expense or damage that shall be caused to it, if any,
relating to performance of the Alterations or due to any liability
that shall be imposed on the Lessor, if any, in connection with or as
a result of performance of the Alterations.
In order to dispel any doubt, it is hereby declared that the
Alterations that shall be performed by the Lessee, if any, may in no
way be deemed in any instance and manner "execution of other
investments" in the Building, as this term is defined in the tenant
protection laws, and the Lessee reiterates and declares that it shall
not be a protected tenant in the Leasehold.
10.3 In any instance whereby the Lessee shall perform Alterations other
than within the scope of that stated above in clause 10.2, and without
receiving the Lessor's prior written consent, the Lessor shall be
allowed to demand the immediate removal of the Alterations and the
repair of any xxxx or defect that shall be created in the Building due
to the performance of the Alterations or due to the removal thereof.
The Lessee shall be required to remove the Alterations within seven
days of receiving the Lessor's demand as stated. In the event that the
Lessee shall not remove the Alterations on time, the Lessor shall be
allowed to enter the Building, to remove the Alterations at the
Lessee's expense, and the Lessee shall reimburse the Lessor,
immediately upon its request, for all expenses incurred by the Lessor
in relation to removal of the Alterations. That stated above does not
derogate from any other remedy available to the Lessor pursuant to
this Agreement or pursuant to any law.
10.4 All Alterations that are not movable and/or that are permanently
affixed to the building shall become the property of the Lessor, and
the Lessee shall not be permitted to remove them, and shall not be
entitled to demand any payment or refund of an investment in
connection with the Alterations that it made in the Building. In the
event that the Lessor shall not be interested in the Alterations made
by the Lessee in the Building, even if done with the Lessor's consent,
the Lessee shall be required, at the demand of the Lessor, to remove
all the Alterations and to restore the Building to the status quo ante
those Alterations were made, and to repair any xxxx or defect that
shall be caused due to the restoration, all this by the date on which
the Building reverts to the Lessor.
11. TRANSFER OF RIGHTS
11.1 The Lessor shall be permitted to sell the Leasehold and/or to transfer
this Agreement and/or any of its rights pursuant thereto, in whole or
in part, to another party or other parties, as it shall deem fit, and
without necessitating the Lessee's consent, on the condition that the
recipient of the transfer of the rights shall take upon itself all the
Lessor's obligations vis-a-vis the Lessee pursuant to this Agreement.
11.2 Subject to clause 11.3 hereunder, the Lessee undertakes not to
transfer this Agreement and/or any of its rights pursuant thereto
and/or any portion thereof, in whole or in part, and not to share them
with any person, not to deliver or to give occupancy or allow use, or
to share the usage with any
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person, all whether for a remuneration or for no remuneration, without
receiving the Lessor's prior written consent thereto.
11.3 Notwithstanding that stated above in clause 11.2, it is hereby agreed
between the parties as follows:
11.3.1 In the context of this clause, the establishment of a
subsidiary, the transfer or allotment of shares and the
establishment of a partnership and any change in the
composition of the control therein shall not be deemed as a
transfer of rights pursuant to this clause, provided however,
that the new entity shall be the Lessee pursuant to this
Agreement, and all provisions of this Agreement shall apply
thereto, without exception, and no further formality shall be
necessary, provided that, ten days prior to the activation of
the Leasehold by the new entity, the Lessee shall furnish the
Lessor with a written undertaking by the new entity whereby the
new entity takes upon itself all the Lessee's obligations
pursuant to this Contract.
11.3.2 The Lessee shall be permitted to operate the building in its
entirety by another legal entity, provided that the said entity
shall be wholly controlled by the Lessee, and that that legal
entity, jointly with the Lessee, shall be responsible and
liable, jointly and severally, for all the Lessee's obligations
pursuant to this Contract. The Lessee undertakes to issue to
the Lessor, ten days prior to operation of the Leasehold by the
said legal entity, a written undertaking of the legal entity
whereby the entity takes upon itself, severally, all the
Lessee's obligations pursuant to this Contract.
12. LICENSES AND COMPLIANCE WITH LAWS
12.1 The Lessee undertakes to ensure the receipt of all licenses and
permits that are required to conduct its business in the Leasehold
from the competent authorities. The Lessee hereby undertakes to comply
with all laws, regulations, orders and directives from government,
municipal and other authorities pertaining to the occupancy and use of
the Leasehold. The Lessee alone shall be liable for any offense or
damage that might be caused or for any fine or compensation that shall
be imposed in relation to the use of the Leasehold. The Lessee
undertakes to indemnify the Lessor within seven days for any demand or
claim in connection with that stated above.
12.2 Should any competent authority demand any change and/or addition
whatsoever, as a condition to granting of licenses for the business
that the Lessee intends to conduct in the Leasehold pursuant to that
stipulated in this Agreement, the Lessee shall be obligated to make
the change and/or addition solely at its expense, and shall be
obligated to comply with all other requirements of the competent
authority that might be required as a condition to receiving the
licenses as stated.
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13. LIABILITY AND INSURANCE
13.1 The Lessor shall not bear any liability and any damages whatsoever to
the person and/or property of the Lessee, its employees, its
customers, its visitors, its guests and/or any other third party,
including tenants adjacent to the Leasehold, which might be caused due
to and/or in respect of the use of the Leasehold, and/or visiting
therein and/or due to the acts or omissions of the Lessee, its
employees, its managers, its guests and people on its behalf. The
entire liability in respect of the matters stipulated above, including
liability vis-a-vis the Lessor, shall apply solely to the Lessee. The
Lessee undertakes to compensate and indemnify the Lessor in respect of
any amount that the Lessor shall pay in respect of any claim that
shall be filed by a third party deriving from any one of the matters
enumerated above.
13.2 Without prejudice to the general purport of that stated above in
clause 13.1, the Lessee undertakes that it shall possess a valid
insurance policy at all times, which shall be issued by an insurance
company [__], whose wording and conditions shall be approved by the
Lessor and/or by its advisors. The policy shall insure the Leasehold
and the business being conducted therein in respect of liability
vis-a-vis the public, resulting and due to the use of the Leasehold,
and in respect of every liability and every damage stipulated above in
clause 13.1, at the limits of liability of USD 500,000 per claimant
and USD 500,000 per event. The policy shall be under the name of "the
Lessee and/or the Lessor," shall include a cross-liability clause, and
shall cancel at least the following exclusions: fire, explosion,
flood, panic.
13.3 The Lessor shall insure, at its own expense, the structure of the
Leasehold under comprehensive building insurance (linked or updated
annually), throughout the entire Period of the Lease, from an
insurance company to be approved by the Lessor, according to standard
policies, with the Lessor included in the aforesaid insurance policy
as an insured party, together with the Lessee.
The Lessee shall list itself as the beneficiary in the aforesaid
insurance policy for any event of damages to the building, with the
exception of "total loss," and provided that the remuneration that
shall be received from the insurance company shall be used by the
Lessee solely to repair all the damages in respect whereof it shall
receive the aforesaid payments, and the Lessee shall be obligated to
repair the damages in the structure of the Leasehold immediately upon
the receipt thereof.
The Lessee shall deliver to the Lessor photocopies of the aforesaid
insurance policy, as well as a written confirmation from the insurance
company that the aforesaid insurance policy is in effect.
13.4 The Lessee shall insure, at its own expense, the glass panes,
glass-fronted display cabinets, the air-conditioning installation and
the electrical control panels in the building, throughout the entire
Period of the Lease, under a linked policy from an insurance company
of its choice and at its discretion. The Lessor shall be included in
the aforesaid insurance policy as an insured party, together with the
Lessee. The value of the aforesaid glass, air-
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conditioning installation and electrical control panels, which shall
be included in the insurance policy, shall be at their full value on
the date the policies are drawn up.
It is stipulated that, in any case, except in the event of a general
fire and/or general explosion of the Building, the Lessee alone shall
be permitted to collect the damages of any type, however, the Lessee
shall be required to use them to repair the damages immediately upon
the receipt thereof.
The Lessee shall extend, at its own expense, the aforesaid insurance
policy periodically, until the end of the Lease pursuant to this
Contract.
The said insurance shall include insurance against reasonable and
accepted risks, fire, explosion and breakage insurance. Regarding air
conditioning and electrical control - insurance against fire,
explosion, and regarding air conditioning alone, mechanical breakdown
insurance as well.
13.5 All policies to be issued pursuant to this clause shall include a
clause updating the insurance amounts from time to time, in order to
prevent the occurrence of situations of underinsurance.
14. INDEMNIFICATION AND LATE CHARGES
14.1 Any payment or expense that is applicable to the Lessee pursuant to
this Agreement, that the Lessee did not pay on time, the Lessor shall
be permitted, but not obligated, to pay in its stead, and the Lessor
shall be entitled to immediate indemnification from the Lessee.
14.2 The Lessee shall indemnify the Lessor, immediately upon demand, for
any payment or expense that is applicable to the Lessee that the
Lessor was forced to pay, or which are applicable to the Lessor due to
a breach of law or agreement by the Lessee, including all expenses
that shall be caused to the Lessor as a result thereof.
14.3 In any instance of an arrears in any payment whatsoever that the
Lessee is required to pay (including reimbursement or indemnification
payments pursuant to clauses 14.1 and 14.2), the Lessor shall be
entitled, without derogating from any other remedy conferred upon it
pursuant to this Agreement or pursuant to any law, to receive from the
Lessee the higher of the following amounts:
14.3.1 The amount in arrears, being linked to the Consumer Price
Index, plus linked interest of 7.5% per annum from the payment
due date until the actual payment date.
14.3.2 The amount in arrears, plus interest at the maximum rate
customary at Bank Leumi Le-Israel Ltd. in relation to
exceptional overdrafts in a current drawing account, with the
interest accruing from the payment due date until the actual
payment date.
14.3.3 The amount in arrears, being linked to the rise in the exchange
rate of the US dollar, from the payment due date until the
actual payment date, plus interest at the maximum interest rate
and all levies that shall
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be customary at Bank Leumi Le-Israel Ltd. in relation to dollar
loans to customers.
15. EARLY TERMINATION
The Lessor shall be permitted to terminate the contract immediately, by
written notice, which shall take effect immediately upon the receipt
thereof by the Lessee, in any one of the following instances:
15.1 if the Lessee instituted liquidation proceedings or if a liquidation
order, receivership order were issued against the Lessee, or if a
receiver was appointed over its assets or a portion thereof, and the
receiver and the order or such appointment has not been cancelled
within 45 days;
15.2 if the Lessee arrived at a settlement with its creditors, or if it
submitted a request for a settlement with its creditors;
15.3 if the Lessee breached any of the provisions of this Agreement
constituting a fundamental breach, as this term is defined in the Law
of Contracts (Remedies for Breach of Contract), 5731 - 1970.
16. VACATING OF THE LEASEHOLD
16.1 At the end of the Period of the Lease or upon the lawful conclusion,
termination or expiry of the Agreement before then, for any reason
whatsoever, the Lessee shall immediately vacate the Leasehold and
shall revert possession to the Lessor, with the Leasehold being vacant
of every person and of every object, being in good condition and in
proper working order, but taking into account wear and tear that shall
be caused to the Leasehold due to ordinary and reasonable use thereof,
and after having fulfilled the obligation of restoring the condition
to the Leasehold to the status quo ante in relation to the Alterations
stipulated above in clause 10.2.
16.2 During the one-month period before the Lessee reverts the Leasehold to
the Lessor, an engineer shall conduct an inspection of the Leasehold,
whose identity shall be agreed upon between the parties, and, in the
absence of consent, the identity of the engineer shall be determined
by the chairman of the Association of Engineers and Architects in
Israel (hereinafter: "THE ENGINEER"), who shall draw up a list of
repairs that the Lessee is required to make pursuant to the provisions
of this Agreement, including repairs of damages and breakdowns. The
Engineer shall also determine the cost of the repairs.
16.2.1 At that same time, the Lessee shall be required to notify the
Lessor whether it wants to effect the repairs by itself, or
whether it wants the Lessor to effect the repairs at the
Lessee's expense.
16.2.2 If the Lessee chose for the Lessor to effect the repairs at the
Lessee's expense, the Lessee shall be required to so notify the
Lessor within ten days of the date that the list of repairs
prepared by the Engineer as stated was furnished to it, and to
pay to the Lessor within the said ten days the cost of the
repairs as determined by the Engineer. The Lessee shall enable
the Lessor to effect the repairs, shall give the Lessor,
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and/or to any party acting on its behalf, a free hand in the
Leasehold for a period that shall not diminish from the period
determined by the Engineer in this regard, and which shall be,
in its entirety, prior to the date for vacating, pursuant to
the provisions of the Agreement (hereinafter: "THE REPAIR
PERIOD").
16.2.3 If the Lessee chose to effect the repairs by itself, it shall
be required to complete the performance thereof to the
satisfaction of the Engineer, by the end of the Period of the
Lease. If the Lessee failed to meet the deadline for completing
the repairs as stated, the Lessee shall be deemed as not having
vacated the Leasehold on time, for the duration of the period
that the repairs are behind schedule, and for the duration of
the aforesaid deviation in the repair schedule, the provisions
of clause 16.3 hereunder shall apply.
16.2.4 If the Lessee chose to effect the repairs by itself and did not
effect them as stipulated above in subclause 16.2.3, and/or did
not enable the Lessor to effect the repairs by the date
stipulated above in subclause 16.2.2, the Lessor shall effect
them at the Lessee's expense, as stated, and shall commence
repairs on the date on which this shall become actually
possible, according to the occupancy situation in the Leasehold
(hereinafter: "START DATE OF THE REPAIRS"). In such instance,
the Period of the Repairs shall be deemed to have commenced as
of the Start Date of the Repairs, and, if this period shall
continue to extend beyond the end of the Period of the Lease
pursuant to the Agreement, the Lessee shall be deemed to have
not vacated the Leasehold on time, for the duration of the
deviation, and the provisions of clause 16.3 hereunder shall
apply to the duration of the aforesaid deviation.
16.2.5 To dispel any doubt, it is hereby clarified that a failure to
conduct an inspection of the Leasehold by an engineer shall not
constitute a waiver on the part of the Lessor of a demand for
repairs in the Leasehold and shall not release the Lessee from
any of its obligations regarding maintenance of the Leasehold
and its condition upon vacating.
16.3 In the event that the Lessee shall not vacate the Leasehold on time
and/or shall return it other than in the condition stated in clause
16.1, then the Lessee shall pay to the Lessor, for each month of
delay, an easement fee of USD 103,788 (or a relative proportion of
this amount in respect of a delay for part of a month), and this as
pre-assessed and pre-agreed compensation, which shall not require any
further proof. The compensation, as stated, shall not prejudice the
Lessor's rights to xxx the Lessee for any additional amount beyond the
aforesaid, if the actual damage shall indeed exceed the aforesaid
amount, and without prejudice to any other remedy available to the
Lessor pursuant to this Agreement and/or pursuant to any law,
including obtaining an eviction order against the Lessee.
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17. SUNDRY PROVISIONS
17.1 This Agreement encompasses and exhausts all that agreed upon between
the parties in its entirety, and no consideration shall be given to
any negotiations that preceded or took place concurrently with the
signing thereof, to any declarations, representations, undertakings or
agreements that preceded or that were a condition to the signing of
this Agreement, and all these are hereby null and void, unless they
were expressly included in this Agreement.
17.2 No waiver, discount or abstention from an action at its appointed
time, or extension that might be given, shall be deemed a waiver on
the part of any party to this Agreement of any of its rights pursuant
to this Agreement, and it shall be permitted to exercise its rights,
in whole or in part, at any time that it shall deem fit.
17.3 Any amendment, correction or addendum to this Agreement shall be drawn
up in writing, since otherwise, they shall be invalid.
17.4 The jurisdiction for the purpose of any litigation between the parties
in connection with any of the matters involved in this Agreement, the
signing, execution and completion thereof, shall be before the
competent courts in Tel-Aviv - Jaffa.
18. NOTICES
The addresses of the parties for the purpose of serving notices in this
regard shall be:
The Lessor: Mivtsa Industrial Zone, Bnei Ayish.
The Lessee: Industrial Zone, Mazkeret Batya.
Or any other address that one party shall notify the other party in the
manner stated in this clause.
19. The sending of a notice by registered mail or delivery thereof by messenger
shall constitute satisfactory modes for delivering notices. Any letter sent
by registered mail shall be deemed as if received seventy-two hours after
its delivery to the post office, and, if delivered by messenger, the moment
of its delivery.
IN WITNESS WHEREOF, THE PARTIES HAVE HEREUNTO SIGNED:
------------------------------------- ----------------------------------------
The Lessee The Lessor
[stamps and signatures on every page]
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Xxxxx Industrial Buildings Ltd.
Private company number 00-000000-0
Scope Metals Trading and Technical Services Ltd.
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