EXHIBIT 10.40
MANAGEMENT AGREEMENT
Made and Signed in Tel Aviv on May 6, 1999
BETWEEN: MALAL INDUSTRIES AREAS LTD. OR ANYONE ON ITS BEHALF
of 0 Xxxxxxx Xx., Xxxx-Xxxxx, Xxx Xxxx
(Hereinafter: the "COMPANY")
OF THE ONE PART
AND BETWEEN: DSPC TECHNOLOGIES LTD.
of 00 Xxx Xxxxxx Xx., Givat Xxxxxx
(Hereinafter: the "LESSEE")
OF THE OTHER PART
WHEREAS pursuant to Decision no. 717 of the Israel Lands
Council and in accordance with the Development
Agreement the Company constructs the Park, including
the Building, on the Land, as these terms are defined
in the Tenancy Agreement;
AND WHEREAS the Lessee has rented from the Company, pursuant to
the provisions set forth in the Tenancy Agreement of 6.5.99
(heretofore and hereinafter: the "TENANCY AGREEMENT"), the
Leasehold as defined in the Tenancy Agreement;
AND WHEREAS the Lessee agrees that the management,
maintenance and operation of the Park and of the
common property, including all the parts thereof,
shall be performed exclusively by the Company and/or
anyone on its behalf and it undertakes and agrees to
act in accordance with the terms of this Agreement
and to participate in the management costs as
provided herein;
AND WHEREAS at the Lessee's request and on the basis of
the Lessee's representations and obligations the
Company has agreed to leave the management of the
Building and the performance of all the works in
connection with the management of the Building in the
hands of the Lessee, the whole subject to compliance
with all the provisions of this Agreement;
AND WHEREAS this Agreement is intended to determine the mutual
obligations of the parties in connection with
the management and performance of the services in the
Building and in the Park;
NOW THEREFORE IT WAS AGREED, DECLARED AND STIPULATED BY THE PARTIES AS
FOLLOWS:
1. PREAMBLE
1.1 The preamble to this Agreement including the definitions and
declarations contained therein form an integral part hereof
and are binding on the parties in all respects.
1.2 The section numbers in this Agreement and their headings are
intended only for convenience, they do not form part of the
Agreement and no use should be made of them in construing this
Agreement.
1.3 The terms in this Agreement shall have the meanings accorded
to them in the Tenancy Agreement unless otherwise specifically
provided.
1.4 All the provisions of this Agreement are intended to
supplement the provisions of the Tenancy Agreement and they do
not derogate howsoever from the provisions of the Tenancy
Agreement. In any event of inconsistency between the
provisions of this Agreement and those of the Tenancy
Agreement, the provisions of the Tenancy Agreement shall
prevail and be binding on the parties.
2. DEFINITIONS
If no other intention appears from the contents hereof, the following
terms shall have the following meanings:
2.1 THE "OTHER PARK BUILDINGS" - structures in the Park which are
and/or will be built pursuant to the city development plan
which applies to the Land, except for building no. 2 in the
Park which is defined in the Tenancy Agreement as the
"Building".
2.2 THE "COMMON PROPERTY"
Any part of the Park which the Company has designated and/or
will designate, from time to time and at its sole and absolute
discretion and subject to the provisions of the INCIDENTAL
SERVICES AT THE PARK appendix which is attached to the Tenancy
Agreement as APPENDIX G, for the common use by any or all of
the residents of the Park including, without derogating from
the generality of the above:
(1) All the parts of the Park and the Other Park
Buildings including shelters, protected spaces,
machine rooms, electricity rooms, roofs, exterior
walls, the foundation, stairway halls, passages,
entrances, elevators, refuse rooms, electricity
rooms, yards, gardens, parking lots, facilities,
paths, ramps and sidewalks as well as the other areas
of the Park, except for the Building, and all the
areas of the Park, except for the parts which were
let or sold and/or which are intended for sale or
letting in the future and except for such parts of
the Park as the Company shall, at its discretion,
exclude from the Common Property.
(2) It is made clear that the Common Property shall not
include parking spaces in the parking lots of the
Building and of the Park which were let to residents
of the Building or of the Park and in respect of
which there are collected subscription charges.
2.3 THE "SERVICES" (whether to be performed hereunder by the
Company or by the Lessee in respect of the Building)
Provision of services of management, operation, repair,
maintenance, cleaning, removal of refuse, insurance,
inspection, lighting, electricity, telephone and gardening to
the Building and to the Other Park Buildings and to the
parking lots of the Park and to the Common Property as defined
above, including with respect to piping, water installations
and facilities and areas which serve and/or are used by the
Building and/or the Park and/or the Other Park Buildings
and/or performance of actions in the Building and/or supplies
which are used, or which are intended to be used by or to
serve the Leasehold or the Building or other areas of the
Park, administration of the collection of the maintenance
charges and maintaining contact with the local authorities in
connection with the operation of the aforesaid Services.
Without derogating from the generality of the above, the
Company alone shall be entitled, at its discretion and subject
to the provisions of the INCIDENTAL SERVICES AT THE PARK
appendix which is attached to the Tenancy Agreement as
APPENDIX G, to manage, perform, initiate and provide or cease
to provide or perform any and all of the aforesaid Services
and also any other service at its option.
Considering the unique nature and complexity of the Park, the
Services may also include special services which are not
common in ordinary buildings such as: payment of charges,
taxes and levies which apply and/or will apply to the Common
Property, advertising, signposting, public relations,
organizing of events and the like, the whole at the discretion
of the Company.
2.4 THE "EFFECTIVE DATE"
The date on which the Company and the Lessee shall begin to
manage and perform the Services, as provided in Section 7.1
below.
3. PERFORMANCE OF THE SERVICES IN THE BUILDING
3.1 The Lessee shall provide the Services, as defined in Section
2.3 above, to the Building alone by itself and/or through
anyone on its behalf as of the Delivery Date (as this term is
defined in the Tenancy Agreement).
3.2 It is made clear that the operation of the Services at the
main parking lot of the Park is not included in the provisions
of this Section 3.
3.3 The Lessee shall solely provide at its expense all the
Services as defined in Section 2 above to the extent same
pertain to the Building (hereinafter: the "LESSEE'S SERVICES
TO THE BUILDING"). It is made clear that the Lessee shall owe
the Company a duty of care and it undertakes to perform the
provision of the Lessee's Services to the Building only
through skilled craftsmen at the highest level while
maintaining the Building undamaged, in proper condition and
clean and ensuring the current and proper functioning of all
of its components, assemblies and systems, and the
responsibility in connection thereto shall be the Lessee's.
Included in the above, the Lessee undertakes to observe the
instructions of the manufacturers of the Building systems
and/or those of the providers of services to the Building and
also to comply with the maintenance instructions to be given
by the Company from time to time.
3.4 The Lessee shall be entitled to provide to the Building, as
part of the Lessee's Services to the Building, any service
which is not mentioned in this Agreement and/or to cease
providing to the Building any service it does not want, so
long as such action shall not prejudice the undertaking of the
Lessee as toward the Company as set forth in subsection 3.3
above. Notwithstanding the above, where the Company believes
that such provision of an additional service, or termination
of any service to the Building might harm the Leasehold and/or
the Building systems and/or the rights of the Company in the
Building and/or the Build's exterior appearance and/or the
Park, it shall be entitled to instruct the Lessee to cease
providing the additional service or to renew the provision of
the service which has been terminated, as relevant, and the
Lessee undertakes to comply with such instructions of the
Company.
3.5 It is agreed that to the extent that the provision of the
Lessee's Services to the Building requires making alterations
and/or any additions to the Leasehold and/or to any of its
components, parts or systems, or performing any works in
systems which serve also other residents in the Park, such
alterations and/or additions and/or works shall not be
performed without the prior written approval of the Company.
The Company shall be entitled to condition the granting of
such approval on such conditions as it shall deem appropriate
and to give the Lessee any instructions in connection with the
performance of such alterations and/or additions and/or works,
and the Lessee undertakes to strictly observe compliance with
such instructions in full.
3.6 The Lessee undertakes to allow the Company to enter into the
Leasehold as may be required for carrying out repairs and
providing Services in connection with the systems and
components located in the Leasehold and which serve any or all
of the other residents of the Park, so long as the Company has
coordinated this in advance with the Lessee. Notwithstanding
the above, it is made clear that in case of emergency the
Company shall be entitled to enter into the Leasehold even
without prior coordination with the Lessee.
3.7 To remove any doubt it is made clear that in any event, the
provision of the Lessee's Services to the Building pursuant to
this Section shall be restricted to providing services with
respect to the Building alone. The provision of services to
other areas of the Park which are outside the Building shall
only be made, in any event, by the Company and/or anyone on
its behalf and the Lessee is prohibited from performing any
works and/or providing any services in connection with such
areas of the Park which are outside the Building.
3.8 It is made clear that nothing provided in this Agreement
derogates from the right of the Company to charge callers at
the Park separately for use of parking spaces at the various
parking lots, as distinct from the parking spaces let to the
Lessee under the Tenancy Agreement.
3.9 The Company shall charge, separately and without any
connection to the payment of the management charges hereunder,
such amount as it shall set for the use of the recreation
facilities in the Park (to the extent same may be built), such
as fitness gym, swimming pool, sports fields, and the like.
4. TERMINATION OF THE LESSEE'S SERVICES TO THE BUILDING -
AT THE LESSEE'S REQUEST
Without it being deemed as breach of the Lessee's obligations
hereunder, the Lessee shall be entitled to notify the Company of its
wish to terminate its operation of the Services in the Building, as
same are defined in Section 2.3 above, by giving the Company written
notice which shall be delivered to the Company 90 days prior to the
requested date of termination of the operation of the Services by the
Lessee, as aforesaid. Where the Lessee has given notice as provided
above in this subsection, 90 days of the date of such notice the
Company shall begin to the manage and perform Services to the Building
as well, so long that at the time of giving such notice the parties
shall jointly and mutually agree on the terms of the provision of the
Services to the Building by the Company including, and without
derogating, as regards the extent of the Services and the management
charges. It is agreed that in any instance of inconsistency between the
provisions of this subsection and the other provisions of the
Management Agreement, the provisions of this Section shall prevail.
5. MANAGEMENT OF THE SERVICES IN THE PARK AND IN THE OTHER PARK BUILDINGS
5.1 The Company shall operate the Services outside the Building,
but not in the area of the Lessee's parking spaces at the main
parking lot of the Park, contemporaneously with the operation
by the Lessee of the Services to the Building.
5.2 a. The Company assumes the exclusive management and
performance of the Services in the Park during the
term of the Agreement as provided in Section 7 below,
and the Lessee agrees to this and delivers to the
Company the exclusive management and performance of
the Services during the term of the Agreement and
undertakes not to perform the Services by itself or
through others.
Two. The Company shall be entitled, from time to time and
at its discretion and subject to the provisions of
the INCIDENTAL SERVICES AT THE PARK appendix which is
attached to the Tenancy Agreement as APPENDIX G, to
determine the extent of the Services, their kind,
nature and the part thereof which is provided to the
Park and/or to the Other Park Buildings and/or to
certain parts thereof, if at all, the time and manner
of their provision and the duration thereof.
Three. The management and performance of the Services
shall be carried out by the Company itself and/or
through others and/or partly by itself and partly
through others in a reasonable and customary fashion,
the whole at the discretion of the Company. Without
derogating from the above, it is hereby agreed that
the Company shall be entitled to enter from time to
time into agreements with any other entity for the
provision of maintenance services to systems,
facilities and areas in the Park, the whole according
to the financial profitability to the Company, on the
one hand, and ensuring the quality of the service, on
the other.
5.3 The Lessee agrees in advance that the Company shall have the
right to establish from time to time procedures and directions
in connection with the management and performance of the
Services at it shall deem appropriate, and to modify same from
time to time. The Lessee undertakes to comply with such
directions so long as same are not explicitly inconsistent
with the provisions of this Agreement and/or the provisions of
the Tenancy Agreement and that same do not prejudice the
Lessee's reasonable use of the Leasehold.
5.4 For the purpose of the management and performance of the
Services as set forth herein, the Company shall be entitled to
keep an office at the Park and employ a system of technical,
professional, administrative and other employees to perform
the works involved in the management and performance of the
Services and it shall also be entitled to manage and perform
any and all of the Services through contractors,
subcontractors or in any other way it may decide, including
employment in full or part time positions, pursuant to a
special contract or on such terms of service providers as it
shall think fit, as may be needed, so long that the quality
and level of the Services shall not be prejudiced.
5.5 The Lessee hereby undertakes:
One. That it and those acting in its name and on its
behalf shall cooperate with the Company and assist it
whenever such cooperation or assistance is required,
the whole in order to allow the regular and good
management and performance of the Services.
Two. To allow the Company and those acting in its name to
enter into the Leasehold for the purpose of carrying
out the actions pertaining to the management and
performance of the Services, whether such works be
performed for the Lessee or for a resident of the
Park, or in order to carry out repairs which may be
needed in other areas of the Park and, INTER ALIA, to
open walls, floors, ceilings and other parts, to
replace and repair plumbing and pipes and to connect
to them and to carry out any action which the Company
may deem as necessary in order to fulfill its
obligations hereunder, and the Lessee shall have no
claim against the Company as regards any disturbance
which may be caused to it as a result thereof. In any
instance of such action, the Company shall coordinate
the performance thereof with the Lessee and shall
strive to minimize the disturbance to the Lessee and
to see that the previous condition of the Leasehold
be restored as soon as practicable.
Three. To notify the Company as soon as practicable of any
malfunctioning or fault which necessitates repair the
taking of any other action on the part of the
Company.
Four. The Lessee declares that it is aware that the Company
shall be entitled - but not obligated to register
this Agreement, when it becomes possible to do so, in
the Land Registration Office, whether by
incorporating same under the Park's condominium code
or by registering a notice concerning the existence
of this Agreement and its binding effect or
otherwise, the whole at the absolute discretion of
the Company.
6. MANAGEMENT COSTS AND PERFORMANCE OF THE SERVICES
6.1 The Lessee shall pay the Company a fixed monthly charge at the
rate of US$0.5 (half a US dollar) per month for each square
meter of the area of the Leasehold (as shall be at the time of
payment), with duly adding VAT at the applicable rate at the
time of payment, for the performance of the Services, as
defined in Section 2.3 above, outside the Building by the
Company (hereinafter: the "SERVICES CHARGES"). The Services
Charges shall be calculated and paid in accordance with the
provisions of the Tenancy Agreement which apply to the
calculation and payment of the rent and on the dates set
according to the Tenancy Agreement for payment of the rent. It
is made clear that the parking
spaces of the Lessee which are at the main parking lot of
the Park and the parking spaces underneath the Building shall
not be included in the area of the Leasehold for the
purpose of calculating the management charges pursuant to
this subsection. It is agreed that a condition for payment
by the Lessee of the Services Charges to the Company shall
be the completion of the development for the Building as
set forth in Appendix I of the Tenancy Agreement. Were such
development to be completed, the obligation to pay shall
apply. To the extent that the development has not been
completed on or before the Effective Date, the obligation
to pay the Services Charges shall automatically and
immediately apply upon its completion at a later date.
6.2 In addition to the Services Charges the Lessee shall pay
US$0.25 (a quarter of a US dollar) per month for each square
meter of the area of the Leasehold (excluding parking spaces)
which shall serve for the purposes of an amortization fund.
The amounts paid by the Lessee pursuant to this subsection
shall be used for replacing such systems in the Building which
the need to replace same stems from wear and tear due to
reasonable use.
6.3 The Lessee shall pay the Company value added tax in respect of
each payment it is obligated hereunder to effect, together
with such payment, at such rate as shall be applicable at the
time of actual payment, against a tax receipt duly issued by
the Company.
6.4 The Lessee declares that it is aware that residents of the
Park shall bear, in respect of the Services, all the costs of
the performance and management of same with adding management
charges at the rate of 15% on top of the costs.
6.5 It is agreed and made clear that to the extent that the Lessee
will hold areas in the Park in the Building together with
other resident/s, the arrangement provided in Section 6.4
above shall apply to said Building.
7. THE TERM OF THE AGREEMENT
7.1 The Company, with respect to the Park and the Lessee, with
respect to the Leasehold and the Building shall begin to
manage and perform the Services, whether by themselves or
through anyone on their behalf, as of the Delivery Date as
defined in the Tenancy Agreement (heretofore and hereinafter:
the "EFFECTIVE DATE"), however that in no event shall the
Company be obligated to begin to manage and perform the
Services before the date on which the Common Property of the
Park has been delivered to its possession by the contractor/s
performing the construction work of the Park, the whole as the
context requires.
As of the Effective Date the whole of the Lessee's obligations
hereunder shall apply to it without any exception.
7.2 Subject to the provisions of the INCIDENTAL SERVICES AT THE
PARK appendix which is attached to the Tenancy Agreement
as APPENDIX G, the Company shall be entitled - but not
obligated - to terminate the provision of the Services
and/or any of them and/or to terminate the management and
performance of the Services and/or any of them by giving
written notice to this effect to all the residents of the
Park, as relevant, at least 3 months in advance and in
writing. Should the Company give notice of the termination of
the management and performance of all the Services, the
Company shall determine the principles and means to be taken
in order to continue the management of the Park.
7.3 Without derogating from the provisions of Section 7.2 above,
the lessees and/or purchasers of 75% of all the areas of the
Park which are intended for letting and/or sale shall be
entitled, by an instrument signed by them, to inform the
Company that they are not interested in the existence of a
certain service of the Services then provided by the Company.
In such case, the Company shall cease to provide such service
after three months of the receipt of such notice, however
that should the Company be of the opinion that such service
is essential for the maintenance of the Park, it shall be
entitled to apply to the General Manager of the Company and
obtain his final ruling on this. To remove any doubt it is
hereby made clear that a service the provision of which has
been terminated pursuant to this Section above, the residents
of the Park shall not be allowed to offer or provide same
whether by themselves or through a corporation or any other
entity.
7.4 Lessees and/or purchasers of 75% of all the areas of the Park
which are intended for letting and/or sale shall be entitled,
by an instrument signed by them and submitted to the Company,
to request the provision of a service not then provided by
the Company. The Company shall inform such lessees and/or
purchasers, within 30 days of receiving such request, whether
it is able to provide the additional services and, if so, the
date on which such services will commence to be provided and
the estimated cost thereof. Where the Company decides that
certain service will not be provided by it, such lessees
and/or purchasers of at least 75% of all the areas of the
Park shall be entitled to engage any third party for the
provision of such service subject to obtaining the prior
written consent of the Company. The Company shall be entitled
to withhold such consent if it is of the opinion that such
engagement may prejudice the Company and/or the other lessees
and/or users of the Park and/or any of the areas and/or
systems of the Park.
7.5 To remove any doubt, as regards built areas in the Building
and/or Park that are intended for letting and/or sale and
that were not let or sold, the Company shall be considered,
for the purpose of the matters set forth in subsections 7.3
and 7.4 above, as lessee of such areas.
7.6 Any change to the costs, as may be required, which arises as
a result of the termination of the provision of any of the
Services or from the
provision of the additional services, as provided above,
shall be determined by the Company at its sole discretion
and the Lessee shall bear any increase in the costs
so determined as a result thereof.
7.7 It is agreed that the Company shall be entitled to round any
amount for the payment of which the Lessee is liable
hereunder to the nearest whole Shekel value.
8. VALUE ADDED TAX
Any amount for the payment of which the Lessee is liable hereunder
shall carry value added tax, which shall be paid to the Company
against a tax receipt at the time set for payment of any amount
hereunder, according to its legal rate on the date of payment to the
Company, by deferred checks the date of payment of which is one day
before the date of the VAT payment obligation of the Company and/or
the management company and against a tax receipt.
9. TRANSFERRING THE HANDLING OF THE MANAGEMENT OF THE SERVICES
Subject to the provisions of the Tenancy Agreement, should the Company
decide to transfer the handling of the management and performance of
the Services, with all that ensues therefrom including all of its
rights and obligations hereunder, to any third party, it shall have to
receive from said third party, prior to effesuch transfer of handling,
a letter of undertaking according to which the third party agrees to
assume the performance of all the obligations of the Company hereunder
and has experience in providing management services.
10. RELIEVES IN CASE OF BREACH OF THE AGREEMENT
10.1 In any instance where the Lessee fails to timely effect any
payment due or to be due from it to the Company hereunder
and/or in any instance where the Lessee breaches any of the
provisions hereof, the Company shall be entitled to all the
relieves accorded to it under the Tenancy Agreement in case
of a breach of the Tenancy Agreement by the Lessee, subject
to the Company giving the Lessee prior written notice of 30
days in advance. It is made clear that the breach of this
Agreement by the Lessee shall be deemed as breach of the
Tenancy Agreement.
10.2 Without derogating from the generality of the above and in
addition thereto, in the event of such breach the Company
shall also be entitled to take one or more of the following
actions:
One. Terminate the management and performance of any and
all of the Services provided to the Lessee
hereunder.
Two. Demand a prohibitory and/or mandatory injunction for
the performance of any actions or for refraining
from any such actions, for the purpose of enforcing
said payment and/or any other obligation of the
Lessee hereunder, as the Company may think fit.
Three. Act in any other way available to it under this
Agreement or the Tenancy Agreement or by any law,
including canceling this Agreement and canceling the
Tenancy Agreement with the Lessee and ejecting the
Lessee from the Leasehold.
Four. Where the Lessee has breached its obligations under
Section 3 above, the Company shall have the right
(but not the duty) to perform any or all of the
Services to the Building itself or through anyone on
its behalf at the expense of the Lessee.
10.3 It is agreed that in respect of any amount which the Lessee
is obligated hereunder to pay and which the Lessee fails to
timely pay (hereinafter: the "AMOUNT IN ARREARS") the Lessee
shall be obligated to pay to the Company, in addition to the
Amount in Arrears, linkage differences to the index, which
shall be calculated in the same manner as the linkage
differences in respect of the rent are calculated according
to the provisions of the Tenancy Agreement, as well as
arrears interest at the rate stated in Section 2 of the
Tenancy Agreement.
The Amount in Arrears together with the linkage differences
and the arrears interest shall be hereinafter referred to as:
the "DEBT IN ARREARS".
Any amount paid by the Lessee to the Company toward a Debt in
Arrears shall be split and appropriated pro rata against the
constituents of the Debt in Arrears according to the
following order: first toward the arrears interest, then
toward the linkage differences and finally toward the Amount
in Arrears.
11. THE LESSEE'S OBLIGATION TO EFFECT PAYMENTS
The Lessee's refusal or unwillingness to receive any service and/or
its wish to terminate the management and performance of the Services
with respect to the Leasehold, in whole or in part, and/or the
termination of the management and performance of the Services by the
Company shall not relieve the Lessee of the obligation to participate
in all the costs and management charges in accordance with the terms
of this Agreement.
12. NO SET-OFF OF AMOUNTS
The parties agree that the amounts they owe and/or will owe to each
other pursuant to the provisions of this Agreement shall not be
subject to set-off.
13. THE CONDOMINIUM'S REPRESENTATION
The Lessee hereby agrees that throughout the term of the Agreement the
Company or anyone appointed by it shall serve as the "condominium's
representation" pursuant to Section 65 of the Land Law, 5729-1969,
and, to the extent required, it shall support such appointment.
14. THE COSTS OF THE AGREEMENT
The parties shall bear the stamp duty costs in respect of this
Agreement in equal shares between them.
15. GIVING NOTICES
15.1 Any notice which the parties are required to give each other
shall be deemed to have been given 48 hours after the time it
was sent by registered post from a post office in Israel to
the addresses of the parties as set forth herein.
In addition to the above, the parties shall be entitled to
send notices to each other by courier and in such instance,
the time noted on the delivery form which is signed by the
courier shall be deemed as the time the notice was given.
As of the Delivery Date, the delivery of a notice at the
Leasehold to the Lessee or to its employee, or the fixing of
the notice on the Leasehold door shall be deemed as due
delivery to the Lessee.
15.2 The addresses of the parties under this Agreement shall be
as follows:
THE COMPANY: The address of the Company for the purposes
of this Agreement shall be as set forth in the
preamble to this Agreement.
THE LESSEE: The address of the Lessee for the purposes of
this Agreement shall be as set forth in the
preamble to this Agreement and as of the
Delivery Date, the Lessee's address for the
purposes hereof shall be at the Leasehold.
15.3 The addresses of the parties under this Agreement shall be
deemed also as their address for service of legal process.
IN WITNESS WHEREOF THE PARTIES HAVE SET THEIR HAND:
/s/ Xxxxx Xxxx /s/ Xxxxxx Xxxxx
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THE COMPANY, Azarei Xxxxxx Industries Ltd.
DSPC Technologies Ltd.
