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Exhibit 10.36    
    


Ref. GLUSMAN/MATAM/SM/07/03/98

[TRANSLATED FROM THE HEBREW] 


 
 

AGREEMENT    
    


Made
and signed in Haifa this                             day
of                                         
                 1997
 



	

Between:	
 	
Matam—Science Industries Centre Haifa Ltd

Pc 51-068740-3

(hereinafter referred to as "the Company")
	

 	
 	
of the one part
	

And:	
 	
Zoran Micro-Electronics Ltd

PC 51-094944-9

(hereinafter referred to as "the Tenant")
	

 	
 	
of the other part
	

Whereas	
 	

the Company is the exclusive possessor of and owner of the rights in land situated in the Haifa Science Industries Centre (hereinafter referred to as "the Centre") which constitutes part of parcels 7 and 8 in block 10730 (hereinafter referred to as
"the plot");
	

And Whereas	
 	

the Company has erected a building on the plot which is known as building 30 (hereinafter referred to as "the building");
	

And Whereas	
 	

the building's construction was completed after 20th August 1968 and the tenants' protection laws, including the Tenant's Protection Law (Consolidated Version), 1932-1972 does not apply to the premises;
	

And Whereas	
 	

the Tenant warrants that it is an "approved enterprise" within the meaning thereof in the law and that it wishes to rent the premises as defined below in order to establish its plant as defined below;
	

And Whereas	
 	

the Company wishes to let to the Tenant and the Tenant wishes to rent from the Company on an unprotected tenancy an area in the building as specified in the technical specification and plans annexed hereto as appendices "A" and "B" respectively and
constituting an integral part hereof;





Accordingly, it is warranted and agreed between the parties as follows:


	1.
	Recitals and Appendices



	(a)
	The
recitals and appendices hereto constitute an integral part hereof.



	(b)
	The
clause headings have been introduced for reading convenience only, they do not constitute a part of this agreement and should not be used for the purposes of interpretation.


 



	2.
	Interpretation



	

	Without
derogating from the other definitions appearing herein, the following expressions shall be interpreted as follows:



	

	"The building"—the building known as building 30 in which the premises are situated; 


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	"The premises"—an area of approx. 1,646 square metres comprising an area of approx. 1,342 square
metres on the fifth floor of the building and an area of approx. 304 square metres on the ground floor of the building, all as marked in the colour red on the drawing annexed hereto as appendix "B/1"
and constituting an integral part hereof.



	

	It
is hereby expressed that the aforementioned area includes the Tenant's proportional part of the building's common area as marked with diagonal lines in
the colour blue on the drawing appendix "B/1", and that this area is not included in the area in which the Tenant is being granted, during the tenancy term as defined below, a right of possession, but
only a use right [sic];



	

	"The tenancy term"—the terms defined in clause 5 below, including a tenancy term that has been
curtailed (if curtailed) as a result of any provision hereof and/or as a result of the provision of any law, and any additional tenancy term (if the tenancy term is extended);



	

	"The plant"—the Tenant's business, which is the planning, development and manufacture of
electronic components and products;



	

	"Delivery"—placing the premises at the Tenant's disposal for the purpose of commencing the
tenancy term;



	

	"Common area" means as defined in the Land Law, 5729-1969, including the roof, the entrance area and its
surroundings, the staircases and lobby elevators, the corridors, piping shafts, machine rooms and various conveniences, as marked in the colour blue on the drawing annexed hereto as appendix "B/2".



	3.
	The Nature of The Transaction



	

	The
Company is hereby letting the premises to the Tenant and the Tenant is hereby renting the premises from the Company, for the consideration and on the
terms and conditions specified hereinbelow.



	4.
	The Construction and Acceptance of The Premises



	(a)
	The
premises are being constructed in a size and form pursuant to the annexed technical specification and plans and the finish plan which shall be annexed hereto (appendices "A", "B",
"C" and "C/1" hereto), and all on the terms and conditions and in the manner described herein.



	(b)
	The
Tenant hereby confirms that the technical specification and plans of building no. 30 have been furnished to it and that they are suitable and appropriate for its needs and the
object of the tenancy pursuant hereto.



	(c)
	Without
prejudice to the provisions of sub-clauses (a) and (b) above, it is agreed and warranted between the parties that the interior finish works on the area of the premises
situated on the fifth floor of the building were planned and executed by the Company in accordance with a principal plan which was submitted to the Company by Powerspectrum Technology Ltd and IBM
Israel Science & Technology Ltd. The interior finish plan relating to the area of the premises situated on the fifth floor of the building is annexed hereto as appendix "C".



	

	It
is hereby agreed that the Tenant may, from 15th May 1996 and thenceforth, execute at its expense alterations and/or additions in the area of the
premises situated on the fifth floor of the building, provided that it has received the Company's prior written approval for any addition and/or alteration as aforesaid.



	

	It
is further agreed and warranted by the parties that the interior finish works on the area of the premises situated on the ground floor of the building
shall be planned and executed by 





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the
Company in accordance with an interior finish plan that shall be submitted by the Tenant and approved by Powerspectrum Technology Ltd (hereinafter referred to as "PST"). 



	

	It
is hereby expressed that PST's approval of the aforementioned interior finish plan is one of the terms and conditions for obtaining the Company's
approval of the interior finish plan. The interior finish plan approved by PST shall be submitted by the Tenant for the Company's approval within ten days of the execution hereof.



	

	The
Company warrants that pursuant to an agreement executed between it and PST, it has been agreed that in the absence of a written response to the interior
finish plan from PST within 14 days of the date on which it is conveyed to it, the plan shall be deemed to have been approved by PST.



	

	After
its approval by the Company, the finish plan in respect of the area of the premises situated on the ground floor of the building shall be annexed
hereto as appendix "C/1" and shall constitute an integral part hereof. The Company shall convey the approved finish plan to the Tenant together with an engineering appraisal of the cost of executing
the final works pursuant to the finish plan, which shall be annexed hereto as appendix "C/2". If after the execution of the final works it emerges that there was a quantitative or qualitative
deviation in comparison with the technical specification (appendix "A"), the Tenant shall pay the Company the actual cost of the deviation as provided in clause 7(e) below, provided that in the
event of a deviation from the engineering appraisal of more than 5%, the Tenant's prior written approval of such deviation is obtained (in respect of the part exceeding a 5% deviation). For the
avoidance of doubt, the Tenant's prior consent is not required for a deviation of up to 5% inclusive, and such shall be paid by the Tenant at the Company's request.






	(d)
	


	(1)
	Prior
to the delivery date, as defined in clause 5(a) below, of the area of the premises situated on the fifth floor of the building and the area of the premises situated on
the ground floor of the building, as the case may be, an inspection of the premises shall be carried out by representatives of the Company and the Tenant who shall inspect the premises and confirm to
the parties that they are ready for delivery in accordance with appendices "A", "B", "C" and "C/1".



	

	If
repairs are necessary in order to adapt the premises to the aforegoing, and such repairs are not such as to prevent the Tenant from making reasonable use
of the premises, the Company shall execute them within 60 days, without such derogating from any liability of the Tenant pursuant hereto. In the event that the aforementioned repairs prevent the
possibility of reasonable use of the premises, the delivery date shall be postponed until execution of the repairs preventing reasonable use as aforesaid has been completed.



	(2)
	On
the delivery date of the area of the premises situated on the fifth floor of the building and on the delivery date of the area of the premises situated on the ground floor of the
building, as the case may be, representatives of the Company and the Tenant shall draw up delivery minutes which shall be annexed hereto as appendices "D/1" and "D/2" and constitute an integral part
hereof. Signature of the minutes shall constitute the Tenant's confirmation that the Company has completed all its obligations in respect of the premises pursuant to appendices "A", "B", "C" and
"C/1", and that it does not and shall not have any complaints in respect of the premises, save for complaints specified by the Tenant in the body of the minutes (hereinafter referred to as "the
delivery minutes"). The abstention of either of the parties from participating in the drawing up of the minutes shall not constitute a cause for non-acceptance of the premises and/or any part thereof
and/or for non-performance of the obligations of either of the parties pursuant hereto. 





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	(e)
	It
is agreed and warranted that all the above provisions of this clause regarding delivery dates shall not apply in the case of force majeure, such as war, calamity, general strikes
and lock-outs in Israel in the building industry, a closure of the territories—if and for so long as such a closure is recognised by the Government of Israel in its contracts with the
Israeli Association of Contractors and Builders as force majeure, a natural disaster which cannot be anticipated, acts and/or instructions and/or orders and/or a postponement in respect of omissions
on the part of competent authorities and the like. It is hereby expressed that the duration of the postponement of the delivery date as a result of an incident of force majeure shall be equal to the
period of time during which such incident actually prevents the Company from performing its obligations pursuant hereto.



	5.
	Delivery of Possession of the Premises and the Tenancy Term



	(a)
	The
planned delivery date of the area of the premises situated on the fifth floor of the building is 31st May 1996; however, it is hereby expressed and the parties agree that
the tenancy term for the area of the premises situated on the fifth floor of the building shall commence on the actual delivery date of the area, written notice whereof shall be sent to the Tenant
seven days in advance (hereinafter referred to as "the delivery date of the area of the premises situated on the fifth floor") and shall end on 15th May 1999 or on the date of delivering
alternative premises in a new building that shall be constructed in Matam, whichever is the later, but in any event no later than 15th May 2003 (hereinafter referred to as "the tenancy term for
the area of the premises situated on the fifth floor").



	

	The
tenancy term for the area of the premises situated on the ground floor of the building shall commence within three months of receipt of the interior
finish plans approved by the Company (as provided in clause 4(c) above) and shall terminate at the end of the tenancy term for the area of the premises situated on the fifth floor of the
building.



	

	Written
notice of the actual delivery date of the area of the premises situated on the ground floor of the building shall be sent to the Tenant seven days
in advance (hereinafter referred to as "the delivery date of the area of the premises situated on the ground floor").



	(b)
	Notwithstanding
the provisions of sub-clause (a) above, it is hereby agreed between the parties that the Company may postpone the delivery date of the area of the premises
situated on the fifth floor and/or the ground floor for a further 30 days, and such being on 30 days' prior notice to the Tenant.



	(c)
	Commencing
from the delivery date of the area of the premises situated on the fifth floor of the building or the area of the premises situated on the ground floor of the building, as
the case may be, the Tenant shall bear all the liabilities and obligations deriving herefrom, including its liability for any damage occasioned by an act of the Tenant or anyone acting on its behalf,
and the tenancy term shall commence on the aforementioned date for all intents and purposes, whether or not the Tenant appears on such date to accept possession of the premises.



	

	It
is hereby expressed that the delivery date of the premises or any part thereof pursuant to this clause and the commencement of the tenancy term shall not
be altered or affected by any postponement in the premises' actual delivery deriving from the execution of additions and alterations to the area of the premises situated on the fifth floor at the
Tenant's request as provided in clause 4(c) above.


 



	6.
	Parking Areas



	(a)
	The
Tenant and/or its employees and/or invitees may randomly use, without payment, the parking places at the Centre, so long as and to the degree that such have not been and are 





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not
in future designated by the Company in its exclusive consideration for the sole use of any third party. 



	(b)
	The
provisions of sub-clause (a) above shall not be considered as imposing any obligation on the Company to make any parking places available to the Tenant and/or its employees
and/or invitees in addition to the Tenant's parking places, and the Tenant shall not have any claims vis-a-vis the Company in the event that it is not possible for it to use any parking places over
and beyond the Tenant's quota of parking places.



	(c)
	The
Company undertakes to prepare one parking place in addition to the parking places presently existing at Matam for every 80 square metres of the premises. Of the parking places
prepared as aforesaid, the Company shall allot the Tenant 10 designated parking places at a range of 150 metres from the building. The Company shall be entitled to alter the location of the
aforementioned parking places and to allot the Tenant other parking places, on the same terms and conditions, in its discretion.


 



	7.
	The Rent



	(a)
	Without
derogating from the provisions of clause 5 above regarding the premises' delivery date, it is hereby agreed that in consideration for the premises' rental the Tenant shall,
commencing from 1st July 1996 and thenceforth, pay the Company monthly rent in respect of the premises in an amount in shekels equal to US$12.74 (twelve US dollars and seventy four cents) per
each square metre of the premises (hereinafter referred to as "the rent"), together with due VAT.



	

	Without
derogating from the provisions hereof and for the clarification of matters, the parties hereby warrant that in accordance with the agreement
executed between them regarding the rental of an area in the building known as building 8/1 in the Centre, the Tenant shall pay the Company rent and the other payments (as prescribed in the agreement
executed between the parties regarding the premises in building 8/1) in respect of the premises in building 8/1, and such being until 30th June 1996 inclusive.



	(b)
	The
rent vests with the Tenant with the right to make reasonable use of the Centre's existing infrastructure, including: roads, pavements, gardening, lighting, signposting, parking
(subject to the provisions of clause 6 above), fences, sewerage lines and water lines. The Tenant's employees and all its successors and assigns shall be entitled to enter the area of the Centre
and/or the premises without payment.



	(c)
	The
rent shall be paid on the 1st of every month for the current month, against a due tax invoice which the Company shall furnish to the Tenant. The said rent shall be linked as
follows:



	(1)
	until
the end of the tenancy term, the monthly rent for the rental of the first 1,330 square metres of the area of the premises shall be linked to the representative rate of the
dollar known on the date of payment, together with linkage to the CPI index;



	(2)
	the
monthly rent for the balance of the area of the premises, i.e. 316 square metres, shall, for the duration of the tenancy term, be linked to the Consumer Price Index in Israel,
with the base rate of exchange of the dollar being NIS 3.11 per US$1.






	(d)
	The
index linkage shall be computed as follows:



	(1)
	If
on any date on which the rent (or any part thereof) is actually paid it transpires that the new index (as defined below) on the date of effecting the said payment is different from
the base index (as defined below), the Tenant shall effect the said payment to the 








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Company
with it being altered pro rata to the rate of the change in the new index vis-a-vis the base index, i.e. multiplied by the new index and divided by the base index. 



	(2)
	"The
base index" means the American CPI index for February 1996 as published on 15th March 1996 or the Consumer Price Index for February 1996 (131.7 points, as
the case may be, in accordance with the provisions of sub-clauses (c)(1) and (c)(2).



	(3)
	"The
new index" means the American CPI index or the Consumer Price Index, as the case may be, last known at the time of actually effecting any payment of the rent or part thereof.






	(e)
	It
is hereby agreed between the parties that:



	(1)
	in
the period between 1st July 1996 and 31st December 1996 (i.e. a period of six calendar months), and in this period alone, the Tenant shall be given a discount on the rent
prescribed in clause 7(a) in an amount of US$1.41 (one dollar and forty one cents) for each square metre of the premises.



	

	In
addition to the discount mentioned in this sub-clause (e), the Tenant shall be given an additional monthly discount on the rent in an amount in shekels
equal to US$7,500 (seven thousand five hundred US dollars) for each month, and such being in the period between 1st July 1996 and until the end of December 1996, and in this period
alone.



	

	The
value of the discount in shekels shall be computed pursuant to the representative rate of the dollar on the date of setting off the discount from the
rent.



	

	The
said discounts shall be given by setting off the amount of the discount from the rent which the Tenant is liable to pay the Company in respect of the
period mentioned in this clause (e).



	(2)
	On
1st April 1997 the Tenant shall pay the Company a supplement to the monthly rent which it is liable to pay the Company in respect of April in an amount in shekels
equal to US$19,000 (nineteen thousand US dollars) in accordance with the representative rate of the US dollar on the actual payment date.



	

	It
is further hereby agreed that in the period between 1st January 1997 and 15th May 1999, the monthly rent which the Tenant is liable to pay
the Company as prescribed in clause 7(a) above shall be raised by 63.95 cents for each square metre of the premises.






	(f)
	Any
amount which the Tenant is liable to pay the Company pursuant hereto which the Tenant does not pay on time shall, commencing from the date prescribed for the payment thereof
pursuant hereto and until its actual payment, bear interest at a rate equal to that customary at Bank Leumi Le-Israel Ltd in respect of unauthorised overdrafts.



	(g)
	Payment
of the rent and of any payment and/or obligation of the Tenant to the Company pursuant hereto shall be effected by cheque or by way of bank transfer to the Company's account,
the details whereof are as follows:



	

	account
no. 9666 at Bank Hapoalim, Hatishbi Branch (709).


 



	8.
	Provision of Services



	(a)
	The
Tenant's signature hereof shall constitute and be deemed its signature on the agreement between the Company and the Centre's tenants regarding the Centre's services
company—Shatam Haifa Ltd (hereinafter referred to as "Shatam") also in respect of the premises the subject hereof. This clause shall also be deemed an agreement in favour of a third party. 





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	(b)
	In
addition to the rent, the Tenant shall, commencing from the delivery date, pay Shatam, subject to the performance of Shatam's material obligations towards it by virtue of the
agreement mentioned in sub-clause (a) above, its part of the payments as in force from time to time and applying to the Centre's tenants, including the participation fees towards the Centre's
services charged by Shatam and/or any of its successors and assigns, as determined from time to time by the Company and at the times prescribed by it from time to time.



	(c)
	The
Tenant warrants that the liability to provide the services at the Centre rests with the services company, i.e. Shatam, and/or any of its successors and assigns, and that the
Company and/or the Haifa Economic Co. Ltd and/or Matam shall not bear any liability and the Tenant shall not have any complaint and/or claim against the Company in respect of any malfunction,
disturbance, inconvenience, damage or expense occasioned to the Tenant as a result of the non-provision and/or in respect of the defective provision of the said services and/or any of them.



	(d)
	The
Company warrants that a clause similar to this clause 8 exists in all the tenancy agreements executed between the Company and the companies renting areas in the Centre.


 



	9.
	Taxes, Levies and Compulsory Payments



	(a)
	In
respect of the tenancy term, the Tenant shall bear and pay the business tax if existing in respect of the plant that shall be managed in the premises, and it shall pay and/or
reimburse the Company, if the Company pays in its stead, save for property tax and/or taxes and/or levies and/or official fees obligation for the payment whereof is imposed on the owners of the land
pursuant to law, all the other taxes, levies and compulsory payments whatsoever applicable and/or which shall be applicable to the plant and/or the premises in respect of the proportional part of the
Centre and/or the Tenant (including the Tenant's parking places) and/or in connection therewith, including, but not only, the payment of rates, official fees and routine charges for sewerage, water,
electricity, telephone and the like, and it shall furnish the Company with appropriate certificates in respect of the said payments immediately upon first being requested to do so or reimburse the
Company as aforesaid the payments which the Company has paid in its stead within seven days of the request, against the Company furnishing payment references to the Tenant and provided that prior
notice is sent to the Tenant of the Company's intention to effect payment/s as aforesaid in the Tenant's stead. 





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	(b)
	Value
added tax and/or any other tax applicable to possessors in accordance with the law, as shall be from time to time, is not included in the rent, and it shall be borne and paid by
the Tenant together with any payment in respect whereof it is applicable, against the production of an appropriate tax invoice.



	(c)
	For
the avoidance of doubt, the Tenant hereby confirms that any depreciation deductions in respect of the building and/or the premises, as shall be from time to time, shall be to the
credit of the Company alone, save for improvements in the premises effected by the Tenant and at its expense, the Tenant's equipment and the chattels belonging to it.



	(d)
	In
addition to the rent and the other payments which the Tenant is liable to pay the Company as provided herein, the Tenant hereby undertakes to pay the Company the payments specified
below:



	(1)
	An
amount in shekels equal to US$30,000 (thirty thousand US dollars) was paid by the Tenant to the Company in two equal payments (i.e. an amount of US$ 15,000 in each payment), the
first on 4th April 1996 and the other within 30 days of the delivery date of the premises situated on the fifth floor of the building (15th July 1996).



	

	The
aforementioned payment is in respect of the Tenant's share of the expenses of executing the finish works on the area of the premises, and it was paid
against the production of an invoice. The amount which the Tenant paid the Company was computed pursuant to the representative rate of the dollar on the date of actually effecting each payment.



	(2)
	An
amount in shekels equal to US$31,666 (thirty one thousand six hundred and sixty six US dollars) was paid by the Tenant to the Company by 23rd May 1996, and such being as the
Tenant's participation towards the expenses of planning the area of the premises. The payment was effected against the production of receipts and/or invoices attesting to the aforementioned expenses.






	(e)
	On
4th June 1997 the Tenant gave the Company a deposit in an amount in shekels equal to US$49,000 (forty nine thousand US dollars) pursuant to the representative rate of the US
dollar known on the date of giving the deposit (hereinafter referred to as "the deposit").



	

	It
is hereby expressly agreed that the Tenant may instruct the Company in writing to set off from the deposit monies payment of the rent supplement in an
amount of US$19,000 (nineteen thousand US dollars) which the Tenant is liable to pay the Company on 1st April 1997 (as prescribed in clause 7(e)(2) above) as well as the monthly rent which the
Tenant is liable to pay the Company commencing from 1st April 1998 and thenceforth.


 



	10.
	Collaterals



	

	To
secure the performance of all its obligations the subject hereof, the Tenant shall, upon the execution hereof, give the Company the following
collaterals:



	(a)
	A
promissory note in an amount of $40,000 (forty thousand US dollars) made out in blank to the order of the Company, payable upon demand, signed by the Company (hereinafter referred
to as "the note"), guaranteed by the Tenant's parent company Zoran Corporation. The amount fixed in the note shall be linked to the index in the manner provided in clause 7(d) above and the following
provisions shall apply in respect thereof:



	(1)
	the
Company may present the note for payment, in whole or in part, for the purpose of performing any of the Tenant's obligations pursuant hereto, and such being after seven days'
prior written warning; 








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	(2)
	for
the purpose of presenting the note, the Company may fill in and complete the missing details and/or add any detail necessary for the purpose of presenting them
[sic] for payment;



	(3)
	the
Tenant hereby warrants and confirms that it agrees to the note's presentation for payment as provided and that it shall not have any claim and/or complaint regarding the validity
of the note and/or the manner of filling in the note's missing and/or additional details and/or in respect and/or in consequence of their [sic] presentation for payment;



	(4)
	if
the note is presented for payment, in whole or in part, the Tenant undertakes to deposit with the Company, within seven days of its payment date, a new note in the amount paid up
as aforesaid;



	(5)
	the
Tenant undertakes to advise the note's guarantors of the provisions of this clause prior to their signing the note.



	

	If
one of the note's guarantors becomes bankrupt and/or goes into receivership and/or is wound up, the Tenant shall furnish an alternative guarantor to the
Company's satisfaction within seven days of the aforementioned incident;



	(6)
	if
the tenancy comes to an end and the note has not been presented for payment, it shall be returned to the Tenant within 90 days, provided that it has complied with all its
obligations pursuant hereto.






	(b)
	The
guarantee of the parent company Zoran Corporation for the performance of all the Tenant's obligations pursuant hereto and for the indemnification of the Company in respect of any
expenses and damages occasioned to it in consequence of a breach hereof by the Tenant in the form of wording acceptable to the Company and annexed as appendix "F/1" hereto, and such being immediately
upon receipt of the Company's written request.



	(c)
	It
is expressly agreed that the delivery of the aforementioned guarantees and/or note to the Company and/or their presentation for payment by the Company shall not prejudice the
Company's right to collect from the Tenant in any other manner possible any debt and/or full compensation in respect of the damages occasioned to it in consequence of a breach of any of the Tenant's
obligations pursuant hereto and/or grant the Tenant any right and/or deprive the Company of any additional or other remedy to which it is entitled pursuant to any law and/or agreement.


 



	11.
	Liability



	(a)
	The
Tenant alone shall be liable vis-a-vis Matam and/or any third party, as the case may be, for any injury, loss or damage to person or property (and without derogating from the
generality of the aforegoing, including the property of the Tenant, its employees and guests) occurring or occasioned in the area of the premises and/or the Centre in consequence of an act and/or
omission of the Tenant and/or anyone acting on its behalf and/or Matam and/or anyone acting on its behalf, and such liability shall not be borne by Matam, subject to the following provisions.



	

	For
the avoidance of doubt, it is hereby expressed that the Tenant's liability as provided above in this clause, insofar as it relates to any act or
omission of Matam and/or those acting on its behalf, is limited to an act or omission of Matam and/or those acting on its behalf in the premises (save for damage occasioned by Matam and/or those
acting on its behalf maliciously) and shall be in accordance with that defined under the third party liability insurance policy as provided in clause 12(c)(3) below, with it being limited to an
amount of up to one million US dollars per event and in total for the entire insurance term. 





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	(b)
	Notwithstanding
the provisions of sub-clause (a) above, the Tenant alone shall be liable for any damage whatsoever that shall be occasioned:



	(1)
	to
contents of the premises brought onto the premises by the Tenant and/or anyone acting on its behalf;



	(2)
	to
the premises' structure, with the exception of those risks in connection with the premises' structure which may not be insured on the Israeli insurance market, save for reasonable
wear and tear and save for damage in consequence of acts of terror and/or war.






	(c)
	If
a third party claim is filed against Matam in respect of damage for which the Tenant is liable pursuant to this clause 11, the Tenant shall be liable to indemnify Matam, within
seven days of the date on which the Company is requested to pay the said amount, in respect of any amount which Matam is held liable to pay a third party in consequence of a final court judgment,
together with all Matam's expenses in respect of conducting the trial with the third party, and without prejudice to the generality of the aforegoing the principal, interest, linkage, advocates'
professional fees, official fees, trial costs, VAT and any other expenses deriving from the claim.



	

	Indemnity
of the Company by the Tenant shall be conditional upon the Tenant being sent notice regarding the existence of the proceedings against the Company
and upon the Tenant being given the opportunity to defend itself against the claims raised within the framework of the aforementioned proceedings.



	(d)
	The
provisions of this clause 11 do not refer to damage occasioned as a result of a latent defect in the premises which could not be detected in inspections carried out by the Tenant
and/or anyone acting on its behalf and/or on reasonable inspection.



	(e)
	The
sub-clauses of this clause supplement and do not derogate from each other.



	(f)
	It
is not the intention of this clause, with all its sub-clauses, to create rights in favour of any third party, save for Matam as defined in clause 12(n) below.


 



	12.
	Insurance



	(a)
	Without
derogating from the Tenant's obligations pursuant hereto and pursuant to law, prior to the date of commencement of the Tenant's business in the premises or prior to the date
of placing any assets in the premises—whichever is the earlier—the Tenant undertakes to take out and maintain, at its expense and liability, so long as this agreement is in
force, the insurances detailed below in this clause (which shall hereinafter be called "the premises' insurance") with a duly authorised insurance company.



	(1)
	Insurance
of the premises' contents, the equipment serving the premises which the Tenant owns and/or for which it is responsible and which is situated outside the premises in the area
of the plot, and any repair, alteration, improvement, renovation and addition to the premises effected and/or that shall be effected by the Tenant and/or for it, and any furniture, equipment,
installations and inventories, against loss or damage in consequence of fire, smoke, lightning, explosion, earthquake, riots, strikes, malicious damage, flood, storm and tempest, damage by a vehicle,
damage by an aircraft, water damages, electrical damages and break-in.



	(2)
	Insurance
against loss of profits and consequential damage to the Tenant, in appropriate amounts and for an appropriate indemnity period, as a result of loss or damage to the Tenant's
property and/or the premises' contents and/or the premises' structure. 








3







 


	

	It
is hereby agreed that the Tenant may refrain from taking out loss of profits insurance as aforesaid, but in such case Matam shall not bear any liability,
and the Tenant does and shall not have any complaint and/or demand and/or claim against it, as if the insurance had been taken out as aforesaid.



	

	The
Tenant undertakes to procure that the policy mentioned in sub-clauses 12(a)(1) and (2) includes an express condition pursuant whereto the
insurer waives any right of subrogation vis-a-vis Matam and all those acting on its behalf, vis-a-vis the other tenants and residents of the building (if there is a parallel condition in their
policies of the insurer's waiver of any right of subrogation vis-a-vis the Tenant) and vis-a-vis all the successors and assigns of the parties mentioned above, save for damage occasioned with
malicious intent.



	(3)
	Third
party liability insurance with a limit of liability not less than an amount in shekels equal to US$1,000,000 (one million US dollars) per event. This insurance is not subject to
any restriction regarding liability deriving from fire, explosion, panic, lifting, loading and unloading instruments, defective sanitary installations, poisoning, any harmful substance in food or
beverage and any claims by the National Insurance Institute. The insurance shall be extended to indemnify Matam in respect of its liability for the Tenant's acts and/or omissions, and in respect of
its liability in the area of the premises alone by virtue of its being the owner of the premises and the provider of services in respect thereof.



	(4)
	Employers'
liability insurance in respect of the Tenant's liability vis-a-vis all those employed by it and on its behalf with the highest limits of liability customary on the Israeli
insurance market at the time of taking out the insurance and/or on the date of its renewal.



	

	This
insurance shall not include any restriction regarding contractors, sub-contractors and their employees, baits and poisons and regarding the employment
of youth.



	

	The
said insurance shall be extended to indemnify Matam in the event that it is deemed as the employer of the Tenant's employees or any of them.






	(b)
	The
Tenant undertakes to update the insurance amount in respect of the insurance taken out pursuant to clause 12(a)(1) above from time to time, so that it always reflects the full
value of the property insured pursuant thereto.



	

	The
Tenant undertakes to use the monies received from the insurance company pursuant to the insurance mentioned in clause 12(a)(1) above solely for
the immediate restoration of the damages the subject of the said insurance.



	(c)
	The
Tenant warrants that it shall not have any complaint and/or demand and/or claim against Matam for damage in respect whereof it is entitled to indemnity under the insurance taken
out pursuant to clauses 12(a)(1) and 12(a)(2) above, and it hereby exempts Matam from any liability for such damage.



	(d)
	Without
the need for any request by the Company, the Tenant undertakes, no later than the date of commencing the Tenant's business in the premises or prior to the date of placing any
assets in the premises, whichever is the earlier, to furnish the Company with a certificate regarding the taking out of the premises' insurance in accordance with the form of wording in the
"Certificate of the Premises' Insurances" (annexed hereto and marked as appendix "F"), duly signed by the insurer.



	

	The
Tenant warrants that it is aware that the furnishing of the "Certificate of the Premises' Insurance" as aforesaid is a suspensory condition and
condition precedent for the delivery of possession of the premises and/or the placing of any assets in the premises, and the Company 



4







 


shall
be entitled to prevent the Tenant from commencing its business in the premises and/or from placing assets as aforesaid if the said certificate is not furnished prior thereto and at the time
indicated above. 



	(e)
	For
the avoidance of doubt, it is expressed that the failure to furnish the insurance certificates on time as provided in clause 12(d) above shall not affect the Tenant's
obligations pursuant hereto, including, and without prejudice to the generality of the aforegoing, any payment obligation applicable to the Tenant, and the Tenant undertakes to perform all its
obligations pursuant hereto even if it is prevented from executing works and/or receiving possession of the premises and/or placing assets in the premises and/or commencing its business in the
premises as a result of the failure to furnish the certificates on time.



	(f)
	The
Tenant undertakes to comply with the terms and conditions of the policies, to pay the insurance fees in full and on time, and to procure and ascertain that the premises' insurance
policies are renewed from time to time as necessary and are valid for the duration of the tenancy term.



	(g)
	No
later than 14 days prior to the end of the term of the premises' insurances, the Tenant undertakes to deposit a certificate with the Company of the taking out of insurance as
provided in clause 12(f) above in respect of an extension of their validity [sic] for an additional year and within 30 days of the renewal of the insurance as aforesaid
the Tenant shall deposit the original copies of the premises' insurances. The Tenant undertakes to redeposit a certificate of the taking out of the insurance, at the times fixed, each insurance year
so long as this agreement is in force.



	(h)
	The
Tenant warrants and undertakes that the Company's right to review and inspect the insurance certificates and to instruct alterations does not impose any liability and/or
responsibility upon the Company and/or anyone acting on its behalf in respect of the nature and scope of the said insurance certificates and policies or in respect of their absence, and does not
derogate from any obligation imposed upon the Tenant pursuant hereto.



	(i)
	The
Tenant undertakes not to do and/or permit others to do any act or omission in the premises and/or the building which is likely to cause an explosion and/or conflagration and/or
which might increase the insurance expenses for which Matam and/or the other tenants are liable in respect of the insurance of the building or the premises situated therein.



	(j)
	Without
derogating from the Tenant's obligations pursuant hereto and pursuant to any law, Matam shall purchase and maintain, for the duration of the tenancy term, all or any of the
insurance policies specified below, in its exclusive discretion:



	(1)
	employers'
liability insurance—for the insurance of Matam's liability vis-a-vis its employees pursuant to the Civil Wrongs Ordinance (New Version), in respect of any
bodily injury to an employee during and in consequence of his employment in the building and/or its surroundings;



	(2)
	third
party liability insurance—for the insurance of Matam's and the Tenant's liability vis-a-vis any third party within the common areas, with limits of liability that
shall not be less than US$1,000,000 (one million US dollars) per event and in total for the insurance term.



	

	The
policy shall include a "cross liability" clause.



	

	For
the avoidance of doubt, the policy shall not insure the Tenant's liability in respect of bodily injury and/or damage to property in the premises and/or
the rented areas and/or the areas designated for rental in the building; 






5







 


	(3)
	property
insurance—insurance of the building and any other property belonging to Matam in the area of the building and its surroundings, against loss or damage in
consequence of the following risks: fire, explosion, earthquake, storm, tempest, flood, water damages, aircraft, collision, strikes, riots, malicious damage, break-in, glass breakage and any further
risk necessary in the opinion of the Company and/or the management company.



	

	The
said insurance shall include a clause regarding waiver of the right of subrogation vis-a-vis the Centre's tenants in respect of damage unintentionally
occasioned by them to the building. For the purpose of this clause, the expression "building" shall include all the systems comprising an integral part of the building, and shall expressly not include
the contents of the building's rented areas and any addition, improvement or extension effected to the building's rented areas by or for the tenants;



	(4)
	insurance
against loss of rent occasioned to Matam by reason of damage caused to the premises' structure or by reason of the destruction of the premises' structure as a result of the
risks specified in clause 12(j)(3) for an indemnity period of 12 (twelve) months.






	(k)
	The
Company shall furnish the Tenant with a certificate of the existence of the insurances specified in clause 12(j) within seven days of the parties' execution hereof.



	(l)
	The
following provisions shall apply to the policies mentioned in clause 12(j) above:



	(1)
	Matam
is entitled from time to time to alter and/or cancel and/or replace the policies and/or to take out additional insurances, all in its exclusive discretion;



	(2)
	the
policies shall be made available for the Tenant's inspection at the Company's offices by prior coordination. The Tenant may, at its expense, purchase any other, additional or
supplementary insurance besides the aforementioned policies in its discretion, if the aforementioned policies are not to its full satisfaction or do not, in its opinion, meet the needs of the
structure and/or the premises;



	(3)
	the
Tenant undertakes to meticulously and fully comply with all the provisions of the policies in order to preserve the rights of Matam, the management company and the other tenants
within the framework of the policies;



	(4)
	the
Tenant shall cooperate with Matam in the event that a claim is submitted to the insurance company and shall immediately furnish any document, testimony and the like required for
the purpose of submitting the claim.






	(m)
	The
Tenant warrants that it shall not have any complaint and/or demand and/or claim against Matam in respect of any damage for which it is entitled to indemnity (or for which it would
be entitled to indemnity were it not for the excess fixed in the policy) under the insurances taken out pursuant to clause 12(a) above, and it hereby exempts Matam from any liability for such
damage. As aforesaid, the provisions of this clause shall add to (and not derogate from) any other provision hereof regarding exemption from liability vis-a-vis Matam.



	

	Furthermore,
the Tenant exempts the other tenants and residents in the building from any liability for damage as aforesaid, provided that the tenancy
agreements or any other agreement vesting them with rights in the building include a parallel clause regarding exemption from liability in favour of the Tenant.



	(n)
	In
clause 11 above and in this clause 12, the following expressions shall bear the following meanings:



	(1)
	"damage"—as
defined in the Civil Wrongs Ordinance, including indirect damage, derivative damage, consequential damage, loss of income and damage to goodwill; 






6







 


	(2)
	"Matam"—Matam
Science Industries Centre Haifa Ltd, the Haifa Economic Co. Ltd, Haifa Municipality and Shatam Haifa Ltd.



	

	The
Company shall be the agent for all the entities mentioned in this sub-clause (n) insofar as the provisions of this clause are concerned.


 




	13.
	Transfer Or Charge of Rights and Right of Pre-emption



	(a)
	The
Tenant's rights by virtue hereof may not be howsoever charged, in whole or in part.



	(b)
	The
Tenant may not howsoever transfer and/or assign its rights and/or obligations pursuant hereto or any of them to another or others (for consideration or otherwise), unless it has
received the Company's prior written consent thereto. The Company shall not withhold its consent on unreasonable grounds. In any event of a transfer of rights and/or obligations, the Tenant shall
remain liable for the performance of its obligations pursuant hereto.



	

	Notwithstanding
the above provisions of this sub-clause (b), it is agreed that the Tenant may assign its rights pursuant hereto to its parent company, Zoran
Corporation, whose registered office is located at 2041 Mission College Boulevard, Santa Clara, California 95054, USA (hereinafter referred to as "the parent company"), subject to all the terms and
conditions specified below:



	(1)
	the
Tenant shall send the Company at least two months' prior written notice of its intention to assign its rights to the parent company;



	(2)
	from
the assignment date the parent company shall be liable for the performance of all the Tenant's obligations pursuant hereto, and for the performance of all the Tenant's past
obligations if and insofar as such have not been performed by it;



	(3)
	without
derogating from the above provisions of sub-clause (b)(2), it is hereby expressed that the assignment of the Tenant's rights to the parent company shall not howsoever derogate
from the Tenant's obligations pursuant hereto until the assignment date and/or shall not derogate from and/or constitute a waiver by the Company of any complaint and/or right available to the Company
pursuant hereto and/or pursuant to any law;



	(4)
	the
parent company shall, prior to the date of assignment of the Tenant's rights and as a condition therefor, give the Company, for the purpose of securing the performance of all its
obligations pursuant hereto, an autonomous bank guarantee to the Company's satisfaction in an amount of US$90,000 from a bank that shall be approved by the Company in advance and in writing.



	

	The
guarantee shall be valid until 90 days have elapsed from the end of the tenancy term. The aforementioned bank guarantee shall replace the promissory
notes given by the Tenant to the Company in accordance with the provisions hereof.






	(c)
	The
Company may transfer and/or assign and/or charge its rights and/or any of them pursuant hereto (including the ownership of the premises) to another or others without requiring the
Tenant's consent, provided that the Tenant's rights pursuant hereto are not prejudiced.



	(d)
	In
order to clarify matters, its is agreed and warranted by the parties that the rights to build on the roof of the building shall belong to the Company alone, and the Tenant hereby
grants its consent to building on the roof of the building as the Company decides from time to time, provided that such does not disturb, to the extent possible, the Tenant's ordinary operations in
the premises.



	

	Notwithstanding
the aforegoing, the Company warrants that it shall not build on the building's roof until May 1999. 





7







 




	14.
	Provisions Regarding The Use of The Premises



	(a)
	The
Tenant may use the premises solely for the purpose of conducting its business and not for any other object.



	

	Furthermore,
the Tenant confirms that it is aware that another tenant (other tenants) shall use the common area of the premises and the building, and the
Tenant undertakes not to prevent such tenant (or tenants) from making reasonable use of the common area, including the grant of access to the common area, as necessary.



	

	The
Company hereby confirms that its tenancy agreements with the tenants of the Centre and the building contain clauses similar to sub-clauses (a) to
(l) below.



	(b)
	The
Tenant shall procure that the plant shall function in accordance with the custom in the Centre and the Tenant shall obey and comply with all the instructions given to it from time
to time by the Company and/or Shatam in connection with the rules of conduct therein. The Tenant shall ascertain and ensure that its employees and/or successors and assigns also act pursuant to
the provisions of this clause.



	(c)
	


	(1)
	The
Tenant may not execute alterations and/or install anything in the premises, save for minor alterations that do not amount to rigid construction, unless it obtains the Company's
prior written consent thereto and pursuant to terms and conditions that the Company shall determine. The Company shall not refuse the execution of such alterations and repairs, save on reasonable
grounds.



	

	Any
structural alteration executed in contravention of the provisions of this sub-clause shall be removed by the Tenant at its expense immediately upon
receipt of the Company's request to do so, whether during the tenancy term or thereafter. If the Company approves an alteration as aforesaid, such alterations and/or installations shall be removed
from the premises, at the Company's request, at the end of the tenancy term, at the Tenant's expense, in order that the premises be restored to the Company in their original condition. If the Company
does not request removal as aforesaid and the Tenant decides to leave the alterations and/or installations, the aforementioned alterations and/or installations shall remain owned by the Company, and
the Tenant shall not be entitled to request any compensation in respect thereof.



	(2)
	Any
alterations and/or installations executed in the premises in accordance with the provisions of sub-clause (c)(1) above shall be effected by the Tenant at its full expense
and liability, and the Company shall not be howsoever liable as landlord and/or owner.






	(d)
	The
Tenant shall maintain order and cleanliness in the premises and shall comply with all the instructions of the Company, Shatam and the municipal by-laws in connection with the
cleaning arrangements, the manner of disposing of garbage and waste and maintaining the proper working order of the building's drainage and sewerage system. The failure to give instructions as
aforesaid shall not release the Tenant from its obligations pursuant to this clause.



	(e)
	The
Tenant warrants that it is presently in possession of, or will obtain by the commencement of the tenancy term, all the approvals and licenses necessary for the management of the
plant and/or the use of the premises in accordance with the provisions hereof and the provisions of any law, and that it shall, pursuant to the provisions of the law and the regulations in connection
therewith, keep and always be equipped with appropriate valid licenses and approvals in respect of any activity connected with the management of the plant and/or the use of the premises which require
approval or a license pursuant to law. 





8







 



	

	The
failure to obtain the said licenses and/or any of them shall not constitute a cause for the termination hereof and/or for the non-performance of the
Tenant's obligations pursuant hereto and in particular for non-payment of the rent and the other payments pursuant hereto.



	(f)
	The
placing of any sign or advertising means or other display on behalf of the Tenant on the premises' external walls or in the building's common areas or in the vicinity thereof
shall require the Company's prior written approval.



	(g)
	In
addition to the provisions of clause 8 above and in addition to all the payments for which the Tenant is liable pursuant hereto, the Tenant shall pay the Company for the costs of
maintaining the common areas of the building, including the dining room costs, all as provided in appendix "I" hereto which constitutes an integral part hereof.



	(h)
	The
Tenant shall comply with the instructions of the Company and any other competent authority in connection with fire extinguishing and fire prevention arrangements and procedures,
the Civil Defence, safety and security, and shall purchase and/or install, at its expense and by prior written coordination with the Company, pursuant to the instructions of the above entities, all
the preventative and safety equipment required for the application and maintenance of the above instructions. The equipment shall remain owned by the Tenant which may remove it from the premises at
the end of the tenancy term and it shall do so if requested by the Company. 



9













  




	(i)
	Disturbances, Avoidance of Nuisances and Preservation of the Environment



	(1)
	The
Tenant shall manage the plant and use the premises by refraining from bothering neighbours and by refraining from creating a nuisance in the premises or its surroundings and all
in accordance with the practice in the building and/or the Centre and/or with the Company.



	(2)
	The
Tenant hereby confirms that its plant does not constitute an ecological hazard and that it shall not constitute such during the tenancy term pursuant hereto.



	(3)
	Without
derogating from all the above provisions, the Tenant shall act and instruct its employees and anyone acting on its behalf to act in accordance with the provisions of the
Abatement of Nuisances Law, 5721-1961 and the Maintenance of Cleanliness Law, 5744-1984 and all the regulations and orders thereunder and of all the by-laws of the Haifa Municipality and the local
authority.






	(j)
	The
Tenant undertakes to refrain from any act or omission in the premises, and to refrain from permitting an act or omission by another or others in the premises, which is likely to
impose liability upon the Company pursuant to law, including damages to person and/or property.



	(k)
	The
Tenant shall totally refrain from taking any possession of the common area.


 



	15.
	Warranty for the Quality of the Buildings and the Premises



	(a)
	The
Company shall, within the framework of the warranty of the contractor which built the premises for it (hereinafter referred to as "the contractor"), be liable to repair the
defects and/or faults detected and/or arising in the premises within one year of the delivery date (hereinafter referred to as "the warranty period") and deriving from defective work and/or the use of
defective materials. The Tenant must notify the Company in writing of any such defect immediately upon its detection.



	

	If
the Tenant does not notify the Company of defects at the aforesaid time, such shall be deemed confirmation on its part that there were no such defects in
the premises.



	(b)
	If
the Tenant notifies the Company after the end of the warranty period of a defect in respect whereof the Company has a warranty from the contractor which executed the work in the
premises for a period longer than the warranty period as defined in sub-clause (a) above, the Company shall exercise its right pursuant to the aforementioned warranty, such that the performing
contractor shall repair the defect, and such being without recognising any obligation and/or liability on the Company's part.



	

	The
Company shall act to the best of its ability in order to realise the contractors' full liability towards it as provided in sub-clause (a) above
and in this sub-clause.



	

	If
the parties decide to enable the Tenant to exercise the Company's rights pursuant to the contractor's warranty as provided above, the Company shall
assign all its rights pursuant to the agreement between it and the contractor, and the Tenant for its part may not have recourse to the Company for any reason. The Company may not refuse to assign its
rights as aforesaid, save on reasonable grounds.



	(c)
	The
Tenant shall be liable, at its expense, for the routine maintenance of the premises and their systems, including the air conditioning systems, and shall, at its expense, repair
all the routine faults discovered in the premises, as speedily as possible in the circumstances of the case. 





1







 



	(d)
	Without
derogating from the aforegoing, the Tenant shall use the premises with appropriate care, maintain them in good and proper condition (including whitewashing and painting)
throughout the tenancy term and effect, without delay and at its expense, all the repairs necessary in order to perform its obligation pursuant to this clause.



	(e)
	If
the Tenant and/or the Company do not perform their obligations as provided above in this clause, the second party may (but is not obliged), after giving the other party ten days'
prior written notice during which the obligation is not performed or the performance thereof is not commenced, itself perform the maintenance and repairs for which the other party is liable, and the
Tenant or the Company, as the case may be, shall reimburse the second party with all the expenses incurred by it for such purpose, immediately upon its first demand and in accordance with the
provisions of such request.


 



	16.
	Non-Applicability of The Tenants' Protection Laws



	

	The
parties hereby warrant that:



	(a)
	the
construction of the building and the premises was completed after 5728-1968 and that the Tenants' Protection Law (Consolidated Version), 5732-1972 shall not apply to the tenancy
by virtue hereof, or at all;



	(b)
	no
key money or other similar payment has been or shall be paid to the Company or any other person and such has not been nor shall be received from the Tenant in consideration for the
delivery of use of the premises and everything connected therewith;



	(c)
	the
Tenants' Protection Law (Consolidated Version), 5732-1972 and/or any other law for the protection of tenants presently existing or which shall be promulgated in the future shall
not apply in respect of this agreement and to the parties' relations by virtue hereof.


 



	17.
	Right of Entry to The Premises



	

	The
Company's representatives shall have a right of entry to the premises (subject to security restrictions) during reasonable hours and by prior
coordination with the Tenant in order to ascertain the degree to which the provisions hereof are being performed and/or in order to show the premises to others and/or in order to do the acts and take
the steps prescribed herein or in any law and obliging entry to the premises, provided that any damage occasioned to the Tenant as a result of its refusal to permit entry in the said cases and for the
said objects or its refraining from coordinating entry as aforesaid to the premises shall be borne by the Tenant alone, and the Tenant shall not have any complaint and/or claim against the Company by
reason thereof.



	

	The
Company shall act to the best of its ability to ensure that the disturbance to the Tenant shall be as minor as possible and that the premises are
restored to their previous condition as soon as possible and insofar as possible.



	18.
	Vacation of The Premises



	(a)
	No
later than the date on which the tenancy term comes to an end, the Tenant shall vacate the premises and return possession thereof to the Company, with them being vacant of any
person and object (save for equipment and accessories belonging to the Company) and in good and proper condition as delivered to the Tenant, save for reasonable wear and tear.



	(b)
	In
respect of and for each day of delay in returning possession of the premises contrary to the provisions of sub-clause (a) above, the Tenant shall pay the Company the full
month's rent for the last month of the tenancy term divided by 10 together with due VAT. This payment, which shall be deemed pre-agreed liquidated damages, shall not derogate from any other remedy to
which the Company is entitled pursuant to any law and/or agreement. 





2







 



	(c)
	On
the vacation date, the representatives of the Company and the Tenant shall draw up vacation minutes which shall state the defects and repairs which the Tenant must effect in order
to restore the premises to a good and proper condition and pursuant to the timetable agreed upon.



	

	Notwithstanding
the aforegoing, Matam may effect the repairs itself and the Tenant shall reimburse Matam with the costs of effecting the repairs pursuant to
invoices submitted to it by Matam. Matam may withhold the collaterals mentioned in clause 10 until completion of the repairs by the Company and if necessary it may realise the collaterals as cover for
its aforementioned expenses.


 



	19.
	Negation of Representation, The Tenant's Employees



	(a)
	The
provisions hereof and/or the parties' conduct by virtue hereof shall not be interpreted as empowering one party to appear in the other party's name or stead, or as conferring,
pursuant to the aforesaid, the status of representative of the other party.



	(b)
	The
employees of one party shall not be deemed the employees of the other party in any circumstances and for any object.


 



	20.
	Fundamental Breach of The Agreement



	

	Without
derogating from the provisions of any law, each of the following acts or omissions shall be deemed a fundamental breach of the agreement by the
Tenant and shall serve as a cause for vacation of the premises forthwith and for their return to the exclusive possession of the Company, and all on prior written notice of 21 days, unless the
fundamental breach hereof is rectified by the Tenant to the Company's satisfaction by the date fixed in the aforementioned notice:



	(a)
	the
cessation of the Tenant's activity for a period exceeding 180 days, save in circumstances of force majeure alone, and/or the submission of an application for the Tenant's winding
up and for the appointment of a receiver over a material part of the Tenant's property, and the application or appointment, respectively, is not cancelled within 60 days;



	(b)
	a
delay in payment of the rent, including the supplemental rent, or in effecting any of the other payments for which the Tenant is liable by virtue hereof and/or the breach thereof
for a period exceeding 30 (thirty) days from the time fixed for the payment thereof, provided that the Tenant is sent notice thereof requesting that the payments be made and it does not comply
therewith within seven days;



	(c)
	the
grant of a use right or the transfer or charge of rights or any of them in contravention of the provisions of clause 14 above;



	(d)
	the
Tenant's failure to take out and/or maintain the insurance in contravention of the provisions of clause 13 above;



	(e)
	the
failure to return possession of the premises at the time, in the manner and in the condition specified herein;



	(f)
	the
grant of an order in connection with the Tenant containing an arrangement with creditors and/or an arrangement in favour of creditors and/or a receivership and/or bankruptcy
and/or winding up of any type whatsoever and/or the dissolution of business in any manner, and the order is not cancelled within sixty days;



	(g)
	the
non-performance of the obligations pursuant to the agreement between the Tenant and Matam and the failure to comply with the instructions of Shatam, the Centre's services company;



	(h)
	the
Tenant causes any nuisance pursuant to clause 15(h) hereof; 





3







 



	(i)
	effecting
alterations in the premises without obtaining the Company's prior written permission;



	(j)
	the
non-performance of the obligation to use the premises as provided in clause 15 hereof;






	

	The
provisions of this clause do not prejudice the Company's right to any other relief to which it is entitled against the Tenant pursuant to law and/or
agreement in respect of its breach.



	21.
	Early Vacation Or Abandonment



	

	If
the Tenant vacates or abandons the premises or is evicted from the premises prior to the end of the tenancy term or in the case of a breach of this
agreement without the Company's prior written consent, the Tenant shall continue paying the Company rent and all the other payments for which it is liable by virtue hereof until the end of the tenancy
term, as if it had continued to possess and use the premises. The provisions hereof shall not derogate from the Company's right to terminate the agreement on the basis of the provisions of clause 20
above.



	

	It
is agreed and warranted by the parties that this clause shall not apply in the case of force majeure as defined below:



	

	for
the purpose of this clause 21, force majeure
means:                                        
                  



	

	It
is agreed and warranted by the parties that the Tenant shall be entitled to bring an alternative tenant in its stead, provided that all the following
cumulative conditions are fulfilled:



	(a)
	the
Tenant fulfills all the terms and conditions of the agreement until the date on which the premises are actually transferred to the alternative tenant who shall be approved by the
Company as provided below; and



	(b)
	the
Company is given at least two months' prior written notice thereof; and



	(c)
	the
alternative tenant is approved by the Company, whose decision shall be exclusive and final; however, the Company shall not withhold its consent, save on reasonable grounds; and



	(d)
	the
terms and conditions of the new tenancy agreement with the alternative tenant shall be agreed between it and the Company to the Company's satisfaction, provided that they shall
not be inferior to the terms and conditions hereof; and



	(e)
	subject
to the provisions of sub-clause (d) above, the alternative tenant shall perform all the Tenant's obligations and give the Company collaterals / guarantees to its
satisfaction.



	

	The
above provisions of this paragraph do not derogate from the Tenant's obligations pursuant hereto.


 



	22.
	Self-help



	

	Wherever
an obligation is imposed on a party hereto and such party does not absolutely perform it or does not perform it properly, for any reason
whatsoever, the second party may (but is not bound to) perform or complete the performance of any such obligation itself and/or by others, within a reasonable time, and all the reasonable expenses
involved therein shall be borne by the other party. Such expenses shall be reimbursed to the second party on the production of an invoice (based on appropriate references) submitted by it to the other
party within 30 days of the invoice's submission. If the Tenant incurs any such expense, it may deduct it from the rent if it has given the Company 30 days' prior written notice thereof and the
Company has failed to indemnify it in respect of the said expense.



	23.
	Construction, Repairs, Improvements and Development Works



	

	The
provisions hereof shall not prevent the Company and Shatam from erecting installations and executing construction, repairs, improvements and development
works in the building, the 


4







 

premises,
its surroundings and/or the Centre, so long as such do not unreasonably disturb the Tenant in the management of its plant. The Tenant shall not object to the execution of the above acts and
shall cooperate with the Company and/or Shatam as aforesaid and at their expense insofar as the execution thereof is concerned. 



	

	It
is agreed that the aforementioned works shall be at the Company's liability and expense, unless the parties otherwise agree in writing.



	24.
	Evidence and Modification of The Agreement



	(a)
	Any
alteration hereto and/or modification hereof shall only be effected in an express written document that shall be signed by the parties hereto.



	(b)
	The
consent of a party hereto to a deviation from the terms and conditions hereof in a particular case or in a series of cases shall not constitute a precedent and no inference shall
be drawn therefrom in the same case and/or in any other case in the future.



	(c)
	If
a party to this agreement has not used or has delayed in using any of the rights vested in it pursuant hereto in a particular case or in a series of cases, such shall not be deemed
a waiver of any of its rights.



	(d)
	It
is agreed between the parties that the acceptance of a cheque or notes does not constitute payment, until they have actually been paid.


 



	25.
	Jurisdiction



	

	It
is agreed between the parties that any dispute and/or difference and/or judicial proceeding in connection herewith and the obligations deriving herefrom
shall be decided solely and exclusively pursuant to the Israeli law, and that the sole and exclusive place of jurisdiction is the competent court in Haifa.



	26.
	Stamp Duty



	(a)
	All
the costs of stamping this agreement and the copies hereof shall be borne and paid by the parties in equal shares.



	(b)
	Stamps
tax applicable to the collaterals mentioned in clause 9 above (including the costs of obtaining them) shall be paid by the Tenant.


 



	27.
	Confidentiality



	

	For
so long as the agreement is in force, the parties undertake to maintain confidentiality in respect of all the plans connected with the building, the
floor and its systems, with the aim of preventing any malicious sabotage of the building.



	

	Wherever
such a disclosure is obliged, the parties undertake to obtain from the person receiving the plans, save for government entities, a written
undertaking to maintain confidentiality in respect thereof and to return them when the need to continue holding them comes to an end.



	

	Furthermore,
the parties undertake to maintain confidentiality in respect of the terms and conditions hereof, save for the commercial details insofar as
such are required by an external entity or external entities or for the Tenant's activity.



	28.
	Notices and Warnings



	(a)
	Any
notice and/or warning and/or request sent from one party to the other in connection herewith shall be sent by registered mail or delivered by hand to the addresses of the parties
set forth below (or any other address of which appropriate written notice is given), and such notice or warning shall be deemed to have been delivered to the addressee upon its actual 





5







 


delivery—if
delivered by hand, and if sent by mail in Israel—at the end of 72 hours from being placed in the mail, with the postage fees having been fully paid in advance. 



	(b)
	The
addresses of the parties as aforesaid are:



	(1)
	the
Company—Matam—Science Industries Centre Ltd, Postal Agency Matam 31905 Haifa;



	(2)
	the
Tenant—at the premises.









	29.
	The
parties warrant and confirm that they have read this agreement and all the clauses and appendices hereto and they have understood the contents, nature and significance thereof and
agree to the provisions thereof. 


 
 

AS WITNESS THE HANDS OF THE PARTIES:    
    



	
 The Company	 	
 The Tenant




6








  



 
 

APPENDIX "I"
  ADDENDUM TO THE TENANCY AGREEMENT DATED    
    



	

Between:	
 	
Matam—Science Industries Centre Haifa Ltd

PC 51-068740-3

(hereinafter referred to as "the Company")
	

 	
 	
of the one part
	

And:	
 	
Zoran Micro-Electronics Ltd

PC 51-094944-9

(hereinafter referred to as "the Tenant")
	

 	
 	
of the other part
	

Whereas	
 	

the Tenant wishes the Company to manage the building's common areas (as defined below);
	

And Whereas	
 	

the Company has agreed to see to the management and maintenance of the building's common areas for the consideration and subject to the terms, conditions and provisions specified in this addendum (hereinafter referred to as "the addendum") and the
appendices hereto;
	

And Whereas	
 	

the Tenant wishes catering services to be provided in the building to its employees and guests;
	

And Whereas	
 	

the Company has agreed to assign a section of the building's common areas which shall serve as a dining room (as defined below) for the purpose of providing catering services to the companies renting areas in the building and their guests for the
consideration and subject to the terms, conditions and provisions specified in this addendum and the appendices hereto;





Accordingly, it is warranted and provided between the parties as follows:


	1.
	Recitals



	1.1
	The
recitals and appendices hereto constitute an integral part hereof.



	1.2
	This
addendum constitutes an integral part of the tenancy agreement executed between the parties
on                                         
                 (hereinafter referred to as "the agreement").



 



	2.
	Definitions



	

	In
this addendum—



	

	"The Building"—as defined in the tenancy agreement;



	

	"The Contractor"—Norcate Ltd, which has undertaken to supply catering services to the tenants in
building 30 and its guests in accordance with the terms and conditions of the agreements executed between it and each of the tenants in building 30 or any other contractor elected by the tenants in
building 30 in accordance with the terms and conditions of the agreements executed between them and the contractor;



	

	"The Tenants in Building 30"—i.e. Aurec, ABB, Madge Israel and/or anyone renting areas in the
building from the Company instead of any of them;



	

	"The Tenant's Employees"—the Tenant's employees and guests and/or anyone permitted by the
Tenant's representative (as defined below) to enter the dining room (as defined below) and to use 


1







 

the
catering services as defined below in this clause, all in accordance with the written guidelines given by the representative to the contractor; 



	

	"The Company's Representative"—anyone appointed from time to time by the Company in its
exclusive discretion to supervise and monitor the use made of the dining room;



	

	"The Tenant's Representative"—a representative appointed by the Tenant, whose position involves
the ordering of the catering services, approval of the contractor's invoices and the payment thereof, and any routine acts in connection with the catering services;



	

	"The Dining Room"—an area of approx. 315 square metres in building 30 as marked in red in
appendix "A" which is designated for the purpose of operating a dining room and the provision of the catering services as defined below, which includes a dining hall (designated to accommodate approx.
120 seats for diners) and a kitchen for heating and/or rewarming;



	

	"The Catering Services"—the preparation of meals and their service to the Tenant's employees in
the dining room in the manner, to the extent and subject to the terms, conditions and provisions provided hereinbelow;



	

	"Common Area" or "Common Areas"—as defined in
the tenancy agreement and together with the dining room as defined above;



	

	"The Routine Expenses"—expenses in respect of maintaining the common areas, including, inter
alia, the following components:



	(a)
	the
cleaning and maintenance of the common area (including the building's external walls and roof);



	(b)
	the
maintenance of the common equipment, elevators, air conditioning equipment and the like;



	(c)
	electricity
in the common area;



	(d)
	water
in the building (including water in the conveniences on all the floors);



	(e)
	the
costs of operating the dining room, including structural insurance, the maintenance of the dining room structure and rates, and save for the cost of obtaining the catering
services from the contractor for which the Tenant and all the other tenants in building 30 are solely and exclusively liable;






	

	"The Index"—the consumer price index published by the Central Bureau of Statistics and Economic
Research, including such index even if published by another government institution, whether built on the same data on which the existing index is built or not. If the index is replaced as aforesaid,
the Central Bureau of Statistics shall determine the ratio between it and the cost of living index which replaces it;



	

	"The Base Index"—the index for March 1996 which was published on 15th April 1996
and which stands at 133.0 points, save where this addendum expressly otherwise provides;



	

	"The Determining Index"—the index known on the date of actually effecting any payment;



	

	"The Proportional Part of the Routine Expenses"—the Tenant's part of the routine expenses, which
shall be computed pursuant to the proportional part rented by the Tenant in the building in relation to the total area of the building, i.e. 21.6%;



	

	"Overheads and Management Fees"—payment for the general management of the common area which
shall constitute 12% of the proportional part of the routine expenses; 


2







 
	

	"The Dining Room Expenses"—payment for the assignment of an area in the building for the
operation of the dining room and the expenses involved therein.



	3.
	Management of The Common Areas



	3.1
	The
parties hereby agree and undertake that the Company and/or someone acting on its behalf shall manage the maintenance of the common areas in the building on standards acceptable in
buildings which were constructed in the Centre, and in consideration the Tenant shall pay the Company the proportional part of the routine expenses as defined above.



	

	The
Tenant shall pay the proportional part of the routine expenses in accordance with the provisions of clause 5 below.



	3.2
	It
is hereby agreed that in addition to payment of the proportional part of the routine expenses as provided above, the Tenant shall also pay the Company, at the same times, overheads
and management fees as defined above for managing the maintenance of the common areas.



	3.3
	In
addition to and without derogating from the provisions of sub-clauses 3.1 and 3.2 above, the Tenant shall pay the Company in respect of the dining room expenses as provided below:



	3.3.1
	the
area of the premises for the purpose of paying rent for the premises each month, as prescribed in clause 1(a) of the agreement (i.e. 1,646 square metres) shall be
increased by 5.3% to 1,733 square metres, commencing from the date of the dining room's operation;



	3.3.2
	for
the avoidance of doubt, it is hereby agreed that the increase of the area of the premises as provided in sub-clause 3.3.1 above is for the purpose of charging for the dining
room expenses alone and such shall not add to and/or alter the Tenant's rights insofar as the rental of areas in the building are concerned and/or increase the actual area of the premises.






	3.4
	It
is hereby agreed between the parties that the Company's representative may permit the provision of catering services in the dining room to the employees and guests of companies
which are not renting areas in building 30 (hereinafter referred to as "the external company"), provided that prior written consent thereto is given by the tenants in building 30 together renting more
than 66% of the areas being let in the building, and subject to the external company participating in the dining room expenses at a rate determined by the Company's representative.



	

	Monies
for participation in expenses collected from the external company as provided in this sub-clause shall be distributed amongst the tenants in building
30 which participate in the dining room expenses as provided in clause 3.3 above. The distribution shall be effected pro rata to the tenants' share of the payment of the dining room expenses.



	3.5
	It
is hereby agreed that the Company and/or the Company's representative may use the dining room to hold special functions, provided that use as aforesaid may only be made by prior
coordination with Zoran in order to prevent, insofar as possible, impairment of the catering services.



	

	It
is further hereby agreed that the Tenant and/or any of the tenants in building 30 may hold special functions in the dining room, provided that the date
of holding the special function is coordinated with the Tenant in building 30 [sic].



	

	If
a preferred date for the holding of a function by one of the tenants in building 30 overlaps with a preferred date for the holding of a function by a
third party, preference shall be given to the tenant in building 30. 





3







 



	

	For
the avoidance of doubt and without derogating from the Tenant's liability as provided in the agreement and this addendum, it is hereby expressed that
the Tenant shall be liable for any damage to person and/or property occasioned to the Tenant's employees and/or to any third party which is directly or indirectly connected with a special function
held by the Tenant and/or anyone on its behalf in the dining room.



	

	If
a claim is filed against Matam by any of the Tenant's employees or by any third party in respect of damage for which the Tenant is liable pursuant to
this sub-clause, the Tenant shall indemnify Matam, subject to the Tenant being given notice regarding the existence of the proceedings against the Company and to it being given the opportunity to
defend itself against the claims raised within the framework of the aforementioned proceedings, in respect of any amount which Matam is made liable to pay any of the Tenant's employees and/or any
third party, together with trial costs and including principal, interest, linkage, official fees, advocates' professional fees, VAT and any other expenses deriving from the claim.



	3.6
	Without
derogating from the provisions of clauses 3.1 to 3.3 above and for the avoidance of doubt, it is hereby expressed that on the ground floor and fourth floor of the building
there are expenses relating to the maintenance of the common area which shall only be borne by the companies renting areas on such floors pursuant to their proportional part of the area let by the
Company on such floors in relation to the entire floor area.


 



	4.
	Liability With Regard to The Common Areas



	4.1
	The
Tenant hereby warrants that it is aware and agrees that:



	4.1.1
	The
catering services in the dining room, including the payment in respect thereof, are regulated in the agreement between the contractor and the Tenant which is annexed hereto as
appendix "B".



	

	Matam
shall not be howsoever liable for the catering services and, inter alia and without derogating from the generality of the aforegoing, for the quality
of the food and/or any damage to person and/or property occasioned to the Tenant and/or any third party which is directly and/or indirectly connected with the catering services.



	4.1.2
	Without
derogating from the provisions of clause 11 of the agreement, the Tenant alone shall be liable vis-a-vis Matam and/or any third party, as the case may be, for any injury,
loss or damage to person or property (and without derogating from the generality of the aforegoing, including property of the Tenant, its employees and guests) which occurs or is occasioned in the
domain of the common areas in consequence of an act and/or omission of the Tenant and/or anyone acting on its behalf and/or Matam and/or anyone acting on its behalf and the aforementioned liability
shall not be borne by Matam, subject to the provisions set forth below.



	

	The
Tenant's liability as provided above in this sub-clause, insofar as it relates to an act or omission of Matam and/or those acting on its behalf, shall
be in accordance with that defined under the third party liability insurance policy as provided in clause 12(a)(3) of the agreement, with it being limited to an amount of US$ 5,000,000 per
event and in total for the entire insurance term.



	4.1.3
	If
a claim is filed against Matam by any third party in respect of damage for which the Tenant is liable pursuant to this clause 4, the Tenant shall be liable to indemnify Matam,
immediately upon being requested to do so, in respect of any amount which Matam shall be held liable to pay the third party, together with all Matam's expenses in respect of conducting the trial with
the third party and, without prejudice to the generality of the 








4







 



aforegoing,
principal, interest, linkage, advocates' professional fees, official fees, trial costs, VAT and any other expenses deriving from the claim. 



	

	Matam's
indemnity by the Tenant shall be conditional upon the Tenant being given notice regarding the existence of the proceedings against Matam and upon
the Tenant being given an opportunity to defend itself against the claims raised within the framework of the aforementioned proceedings.



	4.1.4
	The
Tenant undertakes to indemnify and/or compensate Matam immediately upon being requested to do so in respect of any damage and/or expense occasioned to Matam in consequence and
in respect of a breach of the Tenant's obligations pursuant to this addendum.



	4.1.5
	It
is not the intention of this clause, and all the sub-clauses hereof, to create rights in favour of any third party.



	4.1.6
	The
sub-clauses of this clause supplement and do not derogate from each other.



	4.1.7
	For
the purpose of clause 3.5 and this clause 4, the expressions "damage" and "Matam" shall bear the meaning prescribed in clause 12 of the agreement.


 




	5.
	Payment in Respect of the Management and Maintenance of the Common Areas



	5.1
	Subject
to the transfer of data on the planned budget as provided in clause 5.4 below, the Tenant undertakes to pay the Company, at the time of paying the rent as prescribed in the
agreement, the proportional part of the routine expenses, as defined in clause 2 above, overheads and management fees and dining room expenses, as provided in this addendum and the appendices hereto.



	5.2
	The
amount of the routine expenses and overheads and management fees that shall be paid to the Company by the Tenant, as prescribed in this addendum and the appendices hereto, shall
be detailed in a written request that the Company shall give the Tenant from time to time, and they shall be paid by the Tenant to the Company upon effecting the next rent payment following the
receipt of any request.



	

	It
is hereby agreed between the parties that the Tenant may request from the Company, and the Company hereby undertakes to furnish to the Tenant following
receipt of such a request, invoices or other documents approved by the Company's comptroller (including agreements) attesting to the amount of the routine expenses incurred by the Company within the
framework of maintaining the common areas.



	5.3
	For
the avoidance of doubt, it is expressed and agreed by the parties that the payment of monies by the Tenant to the Company for the maintenance and management of the common areas as
prescribed in sub-clause 5.1 and 5.2 above shall be effected commencing from the delivery of the premises to the Tenant as provided in the agreement and until the end of the tenancy term.



	5.4
	It
is hereby agreed that one month before the commencement of each calendar year during the tenancy term the Company shall convey to the Tenant, for its inspection, data on the
planned budget for the management and maintenance of the common areas (hereinafter referred to as "the planned budget") for the coming calendar year. A deviation of more than 5% from the planned
budget shall necessitate the Tenant's prior written consent (in respect of a deviation of more than 5%).



	

	For
the avoidance of doubt, a deviation of up to 5% does not require the Tenant's consent. 





5







 




	6.
	General



	6.1
	The
Tenant hereby warrants that it is aware that pursuant to the agreement that shall be executed/has been executed between the Company and the contractor for the provision of
catering services, the Company is reserving unto itself, inter alia, the right to bring about early termination of the term for borrowing the dining room that shall be given/has been given to the
contractor, and such being by giving 30 days' prior written notice to the contractor and without being required to give grounds for its said decision.



	

	The
Tenant warrants and undertakes that it does not and shall not have any complaints and/or claims and/or demands against the Company in connection
therewith, provided that the Company contracts with another contractor for the provision of catering services and that the provision of the catering services to the tenants in building 30 is not
affected.



	6.2
	It
is hereby agreed that save for the provisions of this addendum and the appendices hereto, there shall be no alteration to the terms and conditions of the agreement and the
appendices thereto. 





 
 

AS WITNESS THE HANDS OF THE PARTIES:    
    



	
 The Tenant	 	
 The Company




6







 
 
 

SPECIAL TERMS AND CONDITIONS APPENDIX    
    


	1.
	The
Company warrants that it intends erecting in the area of the Science Industries Park in Haifa, including the area known as Matam West (hereinafter referred to as "the Centre") a
building of a total area of approx. 5,000 square metres (hereinafter referred to as "the planned building") which shall be built on the basis of a specification that shall be agreed between the
parties and which shall not be inferior to the specification of building 30 and building 23 which were built by the Company in the Centre.



	

	The
location of the planned building shall be determined by Matam within Matam West Park, by consent with Zoran—and Zoran shall not object to
the location on unreasonable grounds.



	2.
	The
Tenant warrants that it wishes to rent an area of approx. 2,500 square metres in the planned building for a term of seven years, commencing at the end of the tenancy term in
respect of the premises in building 30, i.e. commencing from 15th May 1999.



	3.
	It
is hereby agreed that the location and size of the planned building shall be determined by the Company in its discretion, having regard to the Tenant's requirements.



	4.
	It
is further agreed between the parties that:



	4.1
	The
Tenant shall notify the Company in writing by 15th May 1997 if it wishes to increase or reduce the area which it shall rent in the planned building by 500 metres.



	4.2
	The
Tenant may sub-let an area of up to 40% and not more than 1,000 square metres of the area which it shall rent in the planned building for a period of up
to                                         
                 ;
however, it is hereby expressed that a sub-tenancy as aforesaid shall be conditional upon obtaining the Company's prior written approval and to fulfillment of the terms and conditions set forth below:



	4.2.1
	The
Tenant shall give a written prior undertaking to the Company's satisfaction that it shall remain liable for the performance of all its obligations to the Company, including
pursuant to the tenancy agreement and the appendices thereto, that it shall be liable for all the acts and/or omissions of the sub-tenant, and that the sub-letting of the premises and/or any part
thereof by it shall not howsoever derogate, directly or indirectly, expressly or impliedly, from the Tenant's obligations to the Company pursuant to the tenancy agreement and the appendices thereto.



	4.2.2
	The
Tenant shall give the Company written approval from its parent company                             that
it agrees to the Tenant sub-letting the premises and/or any part thereof and that it
is aware and agrees that the guarantee which it has given for the performance of the Tenant's obligations pursuant to the tenancy agreement shall remain in force unaltered and that the sub-letting
shall not howsoever derogate from its obligations and/or the Tenant's obligations vis-a-vis the Company as provided in the tenancy agreement and the appendices thereto.



	

	For
the avoidance of doubt, it is hereby expressed that the collaterals that the Tenant shall give the Company, including the guarantee of the parent
company, shall serve to secure the obligations of the Tenant and the sub-tenant.



	4.2.3
	The
sub-tenant may not transfer and/or assign and/or charge its rights in the premises to any other entity.



	4.2.4
	The
object of the sub-tenant and the nature of its activity accord, in the Company's exclusive discretion, with the normal activity in the Centre. 








7







 



	4.3
	The
remaining areas in the planned building that are not let to the Tenant shall be let to other entities in the Company's exclusive discretion. Letting to other entities as aforesaid
shall be for a term of up to three years, and such being in order to enable Zoran's future expansion by the letting of additional areas in the planned building.



	

	Notwithstanding
the above provisions in this sub-clause, it is hereby expressed that a decision regarding the entities to which the areas in the planned
building should be let and for what period of time is within the Company's exclusive discretion.



	4.4
	It
is agreed between the parties that the rent which the Tenant shall pay the Company for the rental of an area in the planned building or for the alternative premises (as defined in
clause 6 below) shall be as provided below:



	4.4.1
	The
monthly rent for each 1 square metre of the area of the premises in the planned building or in the alternative premises, as the case may be, shall be $12.74 (twelve US dollars
and seventy four cents) together with due VAT and linkage to the index (with the base index being the index for February 1996), as follows:



	4.4.1.1
	the
rent for 1,330 square metres shall be linked, from the commencement of the tenancy term and until 15th May 2003, to the rate of the dollar together with CPI linkage;



	4.4.1.2
	in
respect of the entire area rented that is in excess of 1,330 square metres, the rent shall be linked to the Consumer Price Index in Israel, with the base rate of exchange being
NIS 3.11 per US$1;



	4.4.1.3
	the
rent for 1,330 square metres of the area of the premises, as provided in sub-clause 4.4.1 above, shall, commencing from 16th May 2003, be identical to the average of the rent
for the area of the premises in excess of 1,330 square metres in accordance with the provisions of sub-clause (2) and the rent in NIS in May 2003 computed pursuant to clause (1).


 









	5.
	The Tenant hereby warrants that it is aware and agrees that the Company is not undertaking to erect the planned building and that it
does not and shall not have any complaints and/or claims against the Company in such regard.



	

	The
Tenant further warrants that it is aware that the decision on the planned building's erection is conditional, inter alia, on obtaining the approval of
the Company's board of directors and on obtaining approvals from the various competent authorities.



	6.
	The parties hereby agree that if the planned building is not erected for whatsoever reason, the Company shall let to the Tenant, and the
Tenant shall rent from the Company, alternative premises of an area of approx. 1,330 square metres the specification whereof shall be of a standard similar to that existing in the premises in building
30 mutatis mutandis (hereinafter referred to as "the alternative premises").



	

	The
alternative premises shall be let to the Tenant for a period commencing from 16th May 1999 and ending on 15th May 2003.



	7.
	It is hereby agreed that all the other terms and conditions of the tenancy agreement that shall be executed between the parties
regarding the area in the planned building or the alternative premises, as the case may be, shall be in accordance with the terms and conditions of the agreement executed between the parties regarding
the rental of an area in the building known as building 30 in the Centre, mutatis mutandis. 


8







 
 
 

AS WITNESS THE HANDS OF THE PARTIES:    
    



	
 The Company	 	
 The Tenant




9









 
 

ADDENDUM TO UNPROTECTED TENANCY AGREEMENT    
    


Entered into and Signed on the 31st Day of the month of October in the Year 2004  


Between: 


MATAM, Haifa Industrial Data Center Ltd.

Private Company No. 51-068740-3

("the Company") 


on
the one hand 


and: 


ZORAN Microelectronics Ltd.

Private Company No. 51-094944-9

("the Tenant") 


on
the other hand 



	Whereas	 	and in conformance with the Unprotected Tenancy Agreement dated 16.9.1998 (complete with all Annexes and Addenda thereto), the Tenant is renting from the Company areas in the ground, 2nd, 4th and 5thfloors in the edifice known as Building 30 in the Haifa Industrial Data Center ("the Original
Agreement" and "the Premises"), as specified under the Original Agreement;
	

and whereas	
 	
Tenant wishes to hire from the Company the 3rd floor in the building ("the Floor")
with a gross area of 1,342 m2, in order to increase the rented Premises, all with the consideration and conditions specified hereinafter under the present Addendum;
	

and whereas	
 	

the Company agrees to increase the Premises by adding the Floor, all with the consideration and conditions
specified hereinafter under the present Addendum;
	

and whereas	
 	

the Tenant and the Company wish to enter into a new Tenancy Agreement, in the context of which the Company
shall build a new building at the Haifa Industrial Data Center (hereinafter: "the New Premises") and rent it out to the Tenant, thus instead of the
Premises—all as the Parties shall agree upon in the context of the new contractual agreement;




THE PARTIES HAVE THEREFORE STIPULATED, DECLARED AND AGREED AS FOLLOWS:  


	1.
	Preamble and Annexes:  



The
preamble and annexes to this Addendum constitute an integral part thereof. 



	2.
	Premises Increased Area:



	2.1
	It
is hereby declared that the holding of a 671 m2 area within the floor area was delivered to the  Tenant on 1.11.2004, whereas holding of an
additional 671 m2 area within the floor was
delivered to the Tenant on 28.11.2004;



	2.2
	It
is also declared that the Floor was delivered to the Tenant as free of any man and
object and "as is", in the state it was received from the occupants who held it prior to delivery to the Tenant, and the  Tenant has, nor will they have,
any claim and/ or complaint and/ or demand from the Company in respect
thereof, except claims concerning hidden flaws and/ or defects which could not be detected in the course of a reasonable inspection and/ or inspection performed by the  Tenant;



	2.3
	Upon
delivering holding of the Floor and/ or any part thereof to the Tenant, the  Floor and/ or any part thereof
was added to the Premises area, and all  Tenant's obligations under the provisions of the Original Agreement
shall apply, with the obvious
changes relating to the Premises area in the added Floor or part thereof (together, the  Premises and the
Floor shall hereinafter be referred to as: "the Increased
Premises"), including, and without prejudice to the generalities stated regarding 







 

the  Tenant's liability, increased rental and sureties as specified hereinafter, increased payments for taxes, charges, increased Insurance coverage, and
such. 



	3.
	Adjustment works:



	3.1
	It
is explicitly agreed that all the works to adjust the Floor (design and performance) shall by performed by the  Tenant and at their cost and under their
liability (negating the Company's liability). 



All
the adjustment works shall be performed by the Tenant, only after and subject to receiving the  Company's agreement for such works, in writing and in
advance. The Company shall not withhold its
agreement to the Tenant's works unless for reasonable causes of damage to the construction and/ or external wraparound and/ or the electronic system
and/ or building security. The Company shall approve the Tenant's designs within 14 days from
their being submitted. To avoid any and all doubt, receipt of the Company's approval of the adjusting works shall not impose any liability whatsoever on
the Company concerning these works and/ or prejudice the Tenant's responsibility for the adjustment
works; 



	3.2
	Under
the Law, the Tenant's is responsible for any bodily injury and/ or damage to property of any kind and type whatsoever that may be
caused to any person and/ or the Premises and/ or the Floor and/ or the contents thereof resulting and/
or relating to the adjustment works inasmuch as they are caused and/ or have occurred following an act of negligence and/ or failure on the part of the  Tenant and/ or whomever on their behalf.




Tenant is under the obligation to avoid as much as possible causing nuisances that could prevent the other building occupants from reasonable using
their own premises. 


Tenant is under the obligation to insure the adjustment works performance, in conformation with the Insurance Annex attached as Annex J to the  Tenancy Agreement in relation to the new building; 



	3.3
	Tenant is under the obligation to arrange, at its own expense, for obtaining the licenses required and/ or that shall be required by
Law, inasmuch as those exist, for performing the adjustment works on their own and/ or by whomever on their behalf in the building;



	3.4
	It
is hereby agreed that any completion or addition to be performed in the Increased Premises, as stated hereinabove at the  Tenant's expense, shall become the
Company's property, beginning on the vacation date from the  Increase Premises, thus in the event that the addition or alteration comply with the definition
"connected" as defined under the 1969 Law of Properties,
with the exception of end equipment which is the Company's property;



	3.5
	The  Company is under the obligation to participate in the adjustment works performance cost, up to amount equal in NIS. to US$ 60 per
m2 of the Floor area ("Participation Fees"). The said  Participation Fees shall be paid to the
Tenant for performing additions to interior finish and
completion works, including sprinklers, partitions, acoustic ceilings doors, carpets, lighting, electric infrastructure, communication infrastructure (conduits and inspection pipes), flooring,
painting, air conditioning, design, management and supervision costs, and such. To avoid any and all doubt, the Participation Fees shall not be paid for
furniture, communications (except for infrastructure) and all Tenant's other specific equipment. 



The
Company shall pay the Participation Fees to the  Tenant against approved contractors' invoices. Payment shall
be effected under current + 30 terms; 



	3.6
	The  Company is under the obligation to perform under its responsibility and at its cost, renovation works on the building, in
conformance with the specifications under Annex A to the present Addendum. 


2







 
	4.
	Tenancy:



	4.1
	The  Tenancy in the Premises shall be extended and it shall last until the end of 10
(ten) days from the actual delivery date of the building that shall be erected at the MATAM Industrial Park by the Company for the  Tenant, as defined under
the provisions of the Tenancy Agreement relating the new building and shall be
signed by the Parties. 



Delay
of up to 10 (ten) days in vacating the Increase Premises by the Tenant shall not be considered as
a breach of the Original Agreement and/ or the present Addendum; 



	4.2
	Tenancy of the Floor shall commence on the date of delivery the holding of any part
thereof to the Tenant, as specified under sub- clause 2.1 hereinabove, and shall also last until the  Tenancy completion date in the Premises, as specified under sub- Clause 4.1
hereinabove.



	5.
	Parking:



In
the context of adding a Floor as stated hereinabove, the Company shall allocate to the  Tenant and for the
entire Tenancy' 9 (nine) assigned parking places in addition to the assigned parking
places that were allocated to the Tenant under the provisions of the Original Agreement, at the same
terms defined under the Original Agreement. It is clarified that the overall number of assigned parking places shall stand on...... parking places. 



	6.
	Rent:



	6.1
	On
account of the Floor and/ or any part thereof, the Tenant shall pay to the  Company, beginning on the holding
delivery date as specified under the provisions of sub- Clause 2.1 hereinabove and throughout the  Tenancy and on account thereof, a monthly rent equal in NIS. To US$ 10.40 for every 1 m2,
 with the addition of VAT according to the Law;




	6.2
	Beginning
on 1.6.2005 and until the Tenancy termination date, the Tenant shall pay to
the Company, on account of the entire Increased Premises, a monthly rent equal in NIS. To US$ 10.40 for
every 1 m2 of the Increased Premises area, with the addition of VAT according to the Law. For avoidance of any doubt, it is clarified that
the rent according to sub- Clause 6.1 hereinabove do not come in addition to the rent defined under this sub- Clause, rather they are absorbed within and constitute a
part thereof;



	6.3
	The
said rent mentioned hereinabove shall be converted to NIS (New Israeli Shekel) at the time of signature on thee present Addendum, and they shall bear linkage differentiation to
the Consumer Price Index, in conformance with the ratio between the Index known on the said signature date and the last Index known at the date of actual execution of each and every payment;



	6.4
	Subject
to the alterations mentioned hereinabove, all the provisions under the Original Agreement shall apply to the monthly rent,
including with regard to payment date and execution mode.



	7.
	Guarantees:



To
ensure the implementation of every one of the Tenant obligations under the Original Agreement,
including the present Addendum, the Tenant shall—upon signature of this Addendum—increase the sureties that were given by them
to the Company on account of the Original Agreement, in a relative manner to the increase of premises. 



	8.
	General:



	8.1
	Whenever
in this Addendum any amount in US Dollars was stated, it was meant for convenience only. Upon signature of this Addendum, the amounts mentioned in US Dollars shall be
converted into NIS (New Israeli Shekels) according to the Dollar currency rate at the time of signature, meaning NIS. 4.468 for every US$ 1; 


3







 
	8.2
	It
is explicitly agreed that every provision under the Original Agreement, inasmuch and as much as they were modified under the present
Addendum, shall remain valid, without changes and shall obligate both Parties with all its implications;



	8.3
	In
the event of any contraction among the Original Agreement provisions and those under this Addendum, the latter shall prevail. 


IN WITNESS THEREOF, THE PARTIES HAVE SIGNED AS FOLLOWS:  



	 	 	 
	
The Company	 	
 The Tenant





4











REF: F:/ZORAN/TENANCY APP./SM/29/11/99

[TRANSLATED FROM THE HEBREW] 


 
 

APPENDIX ADDENDUM
  TO UNPROTECTED TENANCY AGREEMENT OF 16.9.97    
    


Made
and signed on the                             day
of                                         
                 1999 



	

Between:	
 	
Matam—Haifa Information Industries Centre Ltd

PC 51-068740-3

(hereinafter referred to as "the Company")
	

 	
 	
of the one part
	

And:	
 	
Zoran Microelectronics Ltd

PC 51-094944-9

(hereinafter referred to as "the Tenant")
	

 	
 	
of the other part
	

Whereas	
 	

in accordance with the unprotected tenancy agreement executed on 16th September 1997 (together with the appendices thereto), the Tenant is renting from the Company an area on the fifth floor and an area on the ground floor in a building known as
building 30 (hereinafter referred to as "the building") in the Haifa Information Industries Centre (hereinafter referred to as "the agreement" and "the premises" respectively), all as provided in the agreement and the appendices thereto;
	

And Whereas	
 	

the building contains an area which is located on the sixth floor as outlined in green on the drawing annexed hereto as appendix "A" and constituting an integral part hereof, including equipment which was installed therein by the Company (hereinafter
referred to as "the additional area");
	

And Whereas	
 	

the Tenant wishes to rent the additional area from the Company in order that it be added to the area of the premises and to extend the tenancy term, for the consideration and on the terms and conditions set forth below;
	

And Whereas	
 	

the Company agrees to the increase of the premises by the addition of the additional area and to the extension of the tenancy term, for the consideration and on the terms and conditions set forth below;





Accordingly, it is provided, warranted and agreed between the parties as follows:  


	1.
	 Recitals and Appendices



	

	The
recitals and appendices hereto constitute an integral part hereof.



	2.
	Increase of The Premises



	2.1
	The
additional area shall be added from 1st February 2000, subject to the Company's obligation as provided in clause 3.1 below, to the area of the premises and all the parties'
obligations pursuant to the agreement (as defined above), save for clause 5(a) (with regard to the tenancy term) shall apply mutatis mutandis to the area of the premises with the addition of
the additional area (the premises and the additional area shall hereinafter jointly be referred to as the "increased premises"), including, and without derogating from the generality of the
aforegoing, with regard to the Tenant's liability, increase in the contribution towards the dining room expenses and management and maintenance of the common areas, increase in the payments of taxes
and levies, increase in the insurance cover and the like. 














	

	Without
derogating from the aforegoing, and for the avoidance of doubt, it is hereby expressed that in consequence of the addition of the additional area to
the area of the premises, the number of designated parking bays that shall be placed at its disposal shall be increased relative to the increase in the area of the premises, that is to say, the Tenant
shall be entitled to receive from the Company, during the tenancy term, a right to use a further nine designated parking bays on the same terms and conditions as laid down in the agreement.



	

	It
is agreed that the tenancy term in respect of the increased premises shall come to an end on 31st May 2005 and not as provided in clause
5(a) of the agreement.



	2.3
	For
the avoidance of doubt, it is hereby expressed that the area of the "additional area" (as defined above) for the purpose of computing the amount of the rent and the other payments
for which the Tenant is liable pursuant to the agreement and this addendum, is the gross area of the "additional area", that is to say, 1,342 square metres, including the Tenant's proportional part of
the common areas.



	

	The
monthly rent which the Tenant shall pay in respect of the rental of the additional area shall be in a sum of US$12.74 for every square metre of the
additional area for the purpose of payment of the rent together with due VAT and linkage as provided in clause 7(c)(1) of the agreement. The monthly rent in respect of the additional area shall
be paid by the Tenant at the times and in the manner mentioned in clause 7 of the agreement.


 



	3.
	Organisation and Execution of The Tenant's Works



	3.1
	The
Company is granting the Tenant and Tenant is receiving from the Company a right to use the additional area two months prior to the date of delivering possession of the additional
area, that is to say, for a period from 1st December 1999 until 1st February 2000 (hereinafter referred to as "the organisation period"). In the organisation period the Tenant's status
in the additional area shall be that of borrower pursuant to the Hire and Loan Law, 5731-1971; however, subject to the Tenant's performance of all its obligations pursuant to the agreement and this
addendum, the Company may not cancel its obligation to grant the organisation period.



	

	The
Tenant acknowledges that the user right granted to it in the organisation period is limited solely to the execution of the Tenant's works in the
additional area for the purpose of adapting it to its requirements and that in the organisation period it may not make any other use of the additional area.



	

	In
the organisation period all the provisions of the agreement, save for the obligation to pay rent, shall apply to the Tenant in relation to the additional
area, mutatis mutandis.



	3.2
	It
is hereby agreed that in the organisation period the Tenant shall execute, at its expense and liability, the Tenant's works specified in appendix "C" hereto in accordance with
detailed plans that shall be prepared by the Tenant pursuant to the aforementioned appendix and which shall be submitted for the Company's prior written approval.



	

	The
Company shall approve and/or respond to the aforementioned detailed plans within seven days of receiving them. The Company warrants that it shall not
object to the plans on unreasonable grounds.



	

	Once
the Company has approved the detailed plans, the Tenant may commence executing the Tenant's works.



	

	The
Company shall participate in financing the cost of executing the Tenant's works specified in appendix "C" pursuant to the plans approved by it as
provided above (hereinafter referred to as "the finishing works"), which shall be executed by the Tenant, in an amount not exceeding a sum in NIS equal to US$200 (two hundred US dollars) for every
square metre of the additional area gross (as specified above in sub-clause 2.3), in accordance with the 












representative
rate of the US dollar last known on the date of the parties' execution hereof together with VAT and linkage to the building inputs index from the index last known on the date of the
parties' execution hereof until the index last known on the date of effecting any payment of the contribution. 



	

	The
contribution towards financing the cost of executing the Tenant's works shall be paid to the Tenant on the terms and conditions and at the times
specified below in sub-clause 3.3.



	3.3
	The
Company shall pay the aforementioned contribution in instalments (to the Tenant and/or to a third party on its behalf pursuant to its written instruction) in accordance with the
actual progress of the Tenant's works, within 30 days of receiving any invoice (interim and/or final) approved by the Tenant attesting to the expenses incurred by the Tenant in the execution of the
Tenant's works.



	

	No
later than the end of 90 days from the end of the execution of the Tenant's works, the Tenant undertakes to send the Company a report certified by an
auditor confirming that the expenses in respect of which the Company will be requested to pay a contribution to the Tenant were indeed incurred by it in the actual execution of the Tenant's works.



	3.4
	During
the organisation period, the Tenant shall execute the Tenant's works using experienced and qualified tradesmen and professionals after receiving, in addition to the aforegoing,
all the approvals required therefor, to the extent necessary, from the competent authorities and after furnishing an engineer's certificate that the Tenant's works are not such as to cause
irreversible damage to the additional area.



	3.5
	In
order to clarify matters, it is agreed and warranted by the parties that the Company's approval as mentioned above and below in this clause is not such as to impose on the Company,
directly and/or indirectly, expressly or impliedly, any liability in relation to the quality of the Tenant's works and/or their compliance with the conditions of the permit, the Israeli standard
and/or the manner of their execution and full liability in respect thereof shall be borne by the Tenant and the Tenant hereby waives any plea and/or claim vis-a-vis the Company in such regard.



	3.6
	The
Tenant shall act to the best of its ability to minimise disturbances and/or nuisances to the occupants of the building as a result of the Tenant's works.



	3.7
	The
Tenant may not store or leave materials and/or equipment and/or waste outside the additional area without the Company's prior written approval.



	3.8
	The
Tenant may not execute other works in the additional area that are not the Tenant's works pursuant to the specifications (appendix "C"), save with the Company's prior written
approval. The Company shall not refuse the Tenant's request to execute other works as aforesaid on unreasonable grounds.



	3.9
	The
Tenant shall be liable for any damage or loss occasioned, if at all, directly or indirectly, in the course and/or in consequence of the execution of the Tenant's works to any
person and/or property and/or the additional area and/or the Centre and/or their surroundings and/or contents. Without prejudice to the generality of the aforegoing, in such regard the approval of the
specifications by the Company shall not impose any obligation or liability on it, [and] shall not constitute a waiver of any right of the Company, and the Tenant hereby exempts
the Company from any liability in connection with approval of the specifications (appendix "C") and/or deriving from such approval.



	3.10
	The
Tenant undertakes to repair any damage and/or loss occasioned in consequence of the execution of the Tenant's works to the additional area and/or the building and/or the Centre
or their contents or to works executed on other premises or the common areas within a reasonable time in accordance with the type of the damage. If the Tenant does not act as aforesaid—the
Company may, after giving the Tenant written notice, immediately effect the necessary repairs instead of the Tenant and at its expense, and the Tenant shall indemnify the 










Company
immediately upon demand in respect of any expense borne by the Company in effecting the repair as aforesaid, together with handling fees at a rate of 20% (twenty percent). 



	3.11
	Without
derogating from the Tenant's liability as provided in clauses 3.9 and 3.10 above, the Tenant undertakes to insure the Tenant's works, at its expense, from the date of the
organisation period's commencement until completion of the execution of the Tenant's works in the additional area or until the date of delivering possession of the additional area, whichever is the
later. The Tenant undertakes to comply with all the insurance company's requirements, if any, in respect of the execution of the Tenant's works, including—but without derogating from the
generality of the aforegoing—with regard to safety measures and facilities, the composition of materials and the like.



	

	The
provisions of clause 12 of the agreement shall apply to the manner of issuing the aforementioned policy and the format thereof, mutatis mutandis.



	3.12
	It
is expressly agreed that, subject to the performance of the Company's obligation as provided in sub-clause 3.1, the execution of the Tenant's work shall not be such as to postpone
the date of delivering the additional area and that even if the Tenant does not complete the execution of the Tenant's works, for any reason, the Tenant shall be bound, from the date of delivering the
additional area and throughout the tenancy term, by all its obligations in relation to the increased premises pursuant to the agreement and this addendum, including the obligation to pay rent.



	3.13
	In
the event that the Tenant does not perform, in the organisation period, any of its obligations and/or does not make any of the payments which it owes pursuant to the terms and
conditions of the agreement and this addendum in the organisation period, all or any of them, such shall constitute a fundamental breach of the agreement and this addendum and the Company may, subject
to giving the Tenant written notice of the breach, and the breach is not rectified by the Tenant within 14 days of the notice's receipt, act in its exclusive discretion as follows:



	3.13.1
	Postpone
the commencement of the tenancy Term in respect of the additional area until the performance of the Tenant's obligations and the making of all the payments which it owes;
however, the Tenant shall be liable to perform all its obligations pursuant to the agreement and the addendum in full as though the additional area had been delivered to it on the date of commencement
of the tenancy term in respect of the additional area specified in this addendum, all without derogating from any other relief to which the Company shall be entitled pursuant to the agreement and the
addendum and/or at law.



	3.13.2
	Notify
the Tenant of the addendum's termination, of the completion of the organisation period and evict it from the additional area immediately, without the need for any warning.



	

	It
is agreed and warranted by the parties that if, notwithstanding the Company's eviction notice, the Tenant and/or anyone on its behalf remains in the
additional area, such shall be by way of trespass, and it shall be estopped from doing any act against the Company and/or from making any plea against it, if the Company takes any steps in order to
remove the Tenant from the additional area and regain full possession thereof.



	

	The
Tenant shall not be entitled to any compensation and/or restitution in respect of expenses borne by it in the execution of the Tenant's works and/or any
amount paid by it in the organisation period.






	3.14
	The
provisions of this clause 3 with regard to the Tenant's obligations are in addition to and do not derogate from the Tenant's obligations pursuant to the agreement and the
addendum and they shall not derogate from any other and/or further right and/or relief vested in the Company pursuant to the agreement and/or the addendum and/or at law. 












	4.
	Early Vacation of The Building's Ground Floor



	4.1
	It
is hereby agreed that in consequence of the delivery of the additional area to the Tenant, as provided above in clause 2, the Tenant may, during the tenancy term, vacate the ground
floor area of a size of 304 square metres, which constitutes part of the increased premises (hereinafter referred to as "the ground floor area"), subject to the fulfilment of all the following
cumulative conditions:



	4.1.1
	The
Tenant shall give the Company at least 30 days' written notice of its intention to vacate the ground floor area.



	4.1.2
	In
consideration for the Company's consent to curtail the tenancy term in respect of the ground floor, insofar as it relates to the ground floor alone, and as a condition therefor,
the Tenant shall pay the Company a sum in NIS equivalent to four months' rent for the ground floor area for the purpose of paying rent (that is to say, the gross ground floor area, including the
Tenant's proportional part, in connection with this area, of the common areas) together with due VAT. The aforementioned amount shall be paid to the Company by the Tenant from the date of the Tenant's
notice as provided above in sub-clause 4.1.1 in four instalments at the times prescribed in the agreement (including this addendum) for payment of the rent in respect of the increased premises and the
linkage conditions laid down in the agreement, including this addendum, shall apply in respect of the aforementioned payments.






	

	If
the area of the premises is reduced as aforesaid, the provisions of clause 2 shall be amended accordingly.


 



	5.
	Collateral



	5.1
	To
secure the performance of all the Tenant's obligations pursuant to the agreement, including this addendum, the Tenant is depositing with the Company (in addition to the collateral
which it gave the Company pursuant to the agreement, which shall continue to remain in force until the end of the tenancy term in respect of the increased premises), at the time of the execution
hereof and as a condition therefor, the following collateral:



	5.1.1
	A
blank promissory note in a sum of US$40,000 (forty thousand US dollars) to the order of the Company, payable upon demand, signed by the Tenant (hereinafter referred to as "the
note"), and all the provisions of clause 10(a) of the agreement shall apply in respect of the aforementioned note.



	5.1.2
	In
addition, the Tenant shall give the Company written confirmation, to the Company's satisfaction, from the parent company Zoran Corporation confirming that it is familiar with the
provisions of this agreement and that it agrees thereto and that the guarantee given by it in accordance with the provisions of clause 10(b) of the agreement shall apply to all the Tenant's
obligations pursuant to the agreement, including this addendum, and that this addendum is not such as to howsoever derogate from the guarantee given by it.


 






	6.
	The Third Floor of The Building



	

	It
is agreed that if by 1st June 2000 Aurec vacates the third floor of the building, the Tenant shall have a right of first refusal to rent this area
from the Company (in addition to the increased premises) for the balance of the tenancy term, as follows:



	6.1
	The
Company shall approach the Tenant with an offer to rent the third floor of the building, stating the price, terms and conditions required which shall be identical to the terms and
conditions offered to a third party.



	

	If
the Tenant does not notify the Company in writing of its wish to exercise the said right of refusal on the terms and conditions specified in the offer,
within 10 days of the Company's approach, the Company shall be entitled to offer the third floor of the building to any third party, at a price and on terms and conditions not better than those stated
in the offer to the 












Tenant,
and the Tenant does not and shall not have any pleas and/or claims and/or demands vis-a-vis the Company in such regard. 



	6.2
	For
the avoidance of doubt, it is hereby expressed that the Tenant's aforementioned right of refusal is for a limited term ending on 1st June 2000 and the Tenant hereby
warrants that it does not and shall not have any pleas and/or claims and/or demands vis-a-vis the Company in such regard.


 



	7.
	General



	

	It
is expressly agreed that all the provisions of the agreement insofar as and to the extent not altered by this addendum shall remain in force without
change and shall bind the parties for all intents and purposes. 


 
 

AS WITNESS THE HANDS OF THE PARTIES:    
    



	(Signed and Stamped)
 The Company	 	(Signed and Stamped)
 The Tenant









 
 

APPENDIX "C"—TECHNICAL SPECIFICATION    
    


	A.
	Division
into offices with single membrane plaster board [?] (width 10 cms with 2" rockwool insulation) of a height of up to 3 metres in a quantity of 440
metres in length.



	B.
	Doors,
wooden 50% with top coat colour at the architect's election, 30 units.



	C.
	Carpet.
Basic price per carpet: $15/sq.m. including panel and laying down the carpet.



	D.
	Demolition
and removal works.



	E.
	Electricity
and telephone: 




        60
power points + with a group of three outlets at each point. 


        60
telephone points. 


        60
computer points (preparation only). 




	F.
	Sprinklers:
adaptation of sprinkler location.



	G.
	Air
conditioning: adaptation of location of Nachshon blower units.



	H.
	Fiber
acoustic ceiling with 60/60 measurements including [?] recessed units on the entire floor. 











QuickLinks



Exhibit 10.36


AGREEMENT



AS WITNESS THE HANDS OF THE PARTIES


APPENDIX "I" ADDENDUM TO THE TENANCY AGREEMENT DATED

AS WITNESS THE HANDS OF THE PARTIES

SPECIAL TERMS AND CONDITIONS APPENDIX

AS WITNESS THE HANDS OF THE PARTIES



ADDENDUM TO UNPROTECTED TENANCY AGREEMENT


APPENDIX ADDENDUM TO UNPROTECTED TENANCY AGREEMENT OF 16.9.97

AS WITNESS THE HANDS OF THE PARTIES

APPENDIX "C"—TECHNICAL SPECIFICATION