Document:

exv10w28

 

Exhibit 10.28

FIRST AMENDMENT TO INDUSTRIAL LEASE AGREEMENT

This First Amendment dated January 18, 2004, to that certain Lease dated December 2001 by and
between Balch LLC, a California Limited Liability Company (“Lessor”) and Veraz Networks, Inc., a
Delaware Corporation (“Lessee”), formerly known as NexVerse Networks, Inc., a Delaware Corporation.

RECITALS

WHEREAS, Lessee leases a 24,747 ± square foot portion of a 46,430 ± square foot building known as
926 Rock Avenue, San Jose, CA, as shown on Exhibit A, attached hereto and made a part hereof.

WHEREAS, the original term of this Lease commenced on November 19, 2001, and ends on April 30,
2004. Tenant now wishes to extend the Lease term through October 31, 2005.

WHEREAS, Tenant wishes and Landlord agrees to modify the Base Rent commencing March 1, 2004

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS

	1.	 	The term of this Lease for 926 Rock Avenue shall be extended and expire on October 31, 2005.
	 
	2.	 	Effective March 1, 2004, the monthly rent shall be as follows:
	 
	 	 	March 1, 2004 — October 31, 2005           $17,075.43 per month ($0.69q. ft.) NNN.
	 
	 	 	Any late fees shall be reduced from ten percent (10%) to five percent (5%).
	 
	3.	 	The current Security Deposit held by Balch LLC is $28,756.01. The Security Deposit shall be
reduced to $17,075.00. The difference will be refunded to the Lessee on or before April 1,
2004.
	 
	4.	 	Lessor will allow Lessee to store a 20-foot container in it’s adjacent building, known as 900
Rock Avenue, San Jose, CA, free of rent during tenant’s lease term until such time as Lessor
executes leases at 900 Rock Avenue. The storage of this container will not be allowed in the
parking lot.
	 
	5.	 	Subject to Paragraph 7 of the Lease, during Lessees’ term, Lessee has the right to install
Non-Structural Alterations or Non-Structural Utility Installations in the total amount of
$10,000.00, without Lessor’s consent. Lessor agrees that prior to the approval of any
subsequent tenant improvements to be constructed by Lessee, that Lessee will be notified in
writing before construction begins, if there is any portion of the tenant improvements that
Lessor will require Lessee to remove at the end of the term. At no time shall Lessee remove
any improvements without Lessor’s written consent.

 

 

	6.	 	Tenant shall have two (2) option(s) to renew for one (1) year each at 95% of the then Fair
Market Rent. Tenant shall exercise its option with written notice to Landlord not more than
270 days or less than 120 days prior to the expiration of the then current lease term.

	7.	 	Tenant shall have a first right to negotiate on any contiguous space that becomes available
in the building. Tenant shall have seven (7) business days to respond to Landlord’s written
notice of such space becoming available.

	8.	 	Assignment and Subleasing: Tenant shall have the right to sublease or assign the Premises.
Landlord shall give its consent within fifteen (15) days of Tenant’s documentation of a
proposed sublease and or assignment.
	 
	 	 	Landlord shall not have the right to recapture the Premises unless tenant subleases the entire
Premises for the full remaining term of the Lease. Any profits from an assignment or subleasing
of the Premises shall be split fifty-fifty (50%-50%), after deducting brokerage fees, legal
costs, and any tenant improvements.

The $1,000.00 processing fee for any sublease and or assignment shall be changed to $500.00,
excluding legal fees.

Except as stated above, all other terms and conditions of the Lease shall remain in full force and
effect.

Mutually Accepted:

	 	 	 	 	 	 	 	 	 	 	 
	LESSOR:	 	 	 	LESSEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BALCH LLC	 	 	 	VERAZ NETWORKS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Illegible
	 	 	 	By:
	 	/s/ John M. Thompson	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Its:

	 	 	 	 	 	Its:
	 	CFO	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	Date:

	 	3/3/2004
	 	 	 	Date:
	 	February 27, 2004	 	 

30960 Huntwood Avenue

Hayward, CA 94544

(510) 429-9400

 

 

Exhibit A

(graphics)exv10w29

 

Exhibit 10.29

SECOND AMENDMENT TO INDUSTRIAL LEASE AGREEMENT

This Second Amendment dated April 7, 2005, to that certain Lease dated December 2001 by and between
Balch LLC, a California Limited Liability Company (“Lessor”) and Veraz Networks, Inc., a Delaware
Corporation (“Lessee”), formerly known as NexVerse Networks, Inc., a Delaware Corporation.

RECITALS

WHEREAS, Lessee leases a 24,747 ± square foot portion of a 46,430 ± square foot building known as
926 Rock Avenue, San Jose, CA, as shown on Exhibit A, attached hereto and made a part hereof.

WHEREAS, the original term of this Lease commenced on November 19, 2001, and ended on April 30,
2004. The Lease was extended by the First Amendment dated January 18, 2004 for eight months
beginning on March 1, 2004 and ending on October 31, 2005. Tenant now wishes to extend the Lease
term for three (3) years beginning on November 1, 2005 and ending on October 31, 2008.

NOW THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS

	1.	 	The term of this Lease for 926 Rock Avenue shall be extended commencing November 1, 2005 and
expiring on October 31, 2008.
	 
	2.	 	Effective November 1, 2005, the monthly rent shall be as follows:
	 
	 	 	November 1, 2005 – October 31, 2006 $17,075.43
per month ($0.69 sq. ft.) NNN.

November 1, 2006 – October 31, 2007 $17,817.84 per
month ($0.72 sq. ft.) NNN.

November 1, 2007 – October 31, 2008 $18,560.25 per month ($0.75 sq. ft.) NNN.
	 
	3.	 	The current Security Deposit held by Balch LLC is $17,075.43. The Security Deposit shall be
increased to $18,560.25; the difference of $1,484.82 shall be paid to the Lessor on or before
November 1, 2005.
	 
	4.	 	Lessor has assigned ninety-eight (98)-parking stalls to the Lessee as shown on Exhibit B,
attached hereto and made a part hereof.
	 
	5.	 	This Agreement is contingent upon the property Lender’s approval of the terms and conditions
herein.

Except as
stated above, all other terms and conditions of the Lease shall
remain in full force and effect.

Mutually Accepted:

	 	 	 	 	 	 	 	 	 	 	 
	LESSOR:	 	 	 	LESSEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BALCH LLC	 	 	 	VERAZ NETWORKS, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Jack W. Balch
 

	 	 
	 	By:
	 	/s/ Allen Morton
 

	 	 
	 

	 	          Jack W. Balch
	 	 	 	 	 	          Allen Morton	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title: Managing Member	 	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 4/18/05	 	 	 	By:	 	/s/ Doug Sabella	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	 	 	          Doug Sabella	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	30960 Huntwood Avenue	 	 	 	Title: CEO, President	 	 
	(510) 429-9400	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date: 4/14/05	 	 

 

 

Exhibit A

(graphics)

Exhibit B

(graphics)exv10w30

 

Exhibit 10.30

Unprotected Tenancy Contract 

Made and Executed in Tel Aviv, this 31st day of December, 2003

	 	 	 
	BETWEEN:

	 	Amcol Engineering and Industrial Company Ltd.,
Private corporate no. 51-000669-5

of 92 Yigal Alon Street, Entrance 5, Tel Aviv
(hereinafter: “the Landlord”)
	 
	 	 
	 

	 	of the one part
	 
	 	 
	AND:

	 	Veraz Networks Ltd., Private corporate no. 51-3044537

Of 43 Hasivim Street, Ramat Siv Industrial Zone, Petach Tikvah
(hereinafter: “the Tenant”)
	 
	 	 
	 

	 	of the other part
	 
	 	 
	WHEREAS

	 	The Landlord is the proprietor of the rights and is entitled to
be registered with title as owner of the land known as Parcel 28
in Block 6393 situated at Hasivim Street, Ramat Siv, Kiryat
Matalon, Petach Tikvah (hereinafter: “the Land”); and
	 
	 	 
	WHEREAS

	 	Certain buildings exist on the Land which are designed for
high-tech and clean industry, including the Building (as
hereinafter defined) (hereinafter: “the Project”); and
	 
	 	 
	WHEREAS

	 	The Landlord declares that there is nothing by law or agreement
to prevent it from granting a tenancy of the Premises (as
hereinafter defined) to the Tenant as set out in this Agreement;
and
	 
	 	 
	WHEREAS

	 	The Tenant wishes lease the Premises (as hereinafter defined)
from the Landlord on an unprotected tenancy, subject to the
provisions hereinafter contained; and
	 
	 	 
	WHEREAS

	 	The Landlord is desirous of granting a lease of the Premises (as
hereinafter defined) on an unprotected tenancy, subject as
hereinafter provided;

It is therefore agreed and stipulated between the parties as follows:

Preamble, Appendices and Definitions

	1.	a.	 	 The preamble and the Appendices hereto constitute an integral part thereof.
	 
	 	b.	 	The headings to the clauses are for ease of reference only and do not constitute
a part of the Agreement nor are they to be taken into account for interpretation
purposes.
	 
	 	c.	 	Appendices of the Contract 

	 	Appendix “A” — 	 	plan of the Project;
	 
	 	Appendix “B1” — 	 	plan of the Premises area on the fourth floor of the Building;
	 
	 	Appendix “B2” —	 	  plan of the Premises area on the third floor of the Building;

 

 

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	 	Appendix “B3” —	 	  the Premises area on the second floor of the Building;
	 
	 	Appendix “B4” —  	 	plan of the parking areas and storage area on the basement level,
minus 1
	 
	 	Appendix “B5” —  	 	plan of the parking areas and storage area on the basement level,
minus 2
	 
	 	Appendix “B6” —  	 	plan of the parking areas and storage area on the basement level,
minus 3
	 
	 	Appendix “C” —  	 	Management Agreement
	 
	 	Appendix “D” —  	 	Insurance
	 
	 	Appendix “D1” — 	 	Insurance certificate of the Tenant during the Tenancy Term
	 
	 	Appendix “D2” —  	 	Insurance certificate of the Tenant’s Works
	 
	 	Appendix “E” —  	 	Bank guarantee

	 	d.	 	The following terms in this Contract will bear the meanings set out opposite
them:

	 	1.	“the Building” — 	means the building known as Stage 2 of the “Amcol”
Project in the Ramat Siv Industrial Zone in Petach Tikvah, marked in red on the
plan attached hereto as Appendix “A”;
	 
	 	2.	“the Premises” —	 the whole of the fourth floor of the Building having
an area of some 1,272 sq.m., (gross) marked in red on the plan attached hereto as
Appendix “B1” (hereinafter: “Area A”);
	 
	 	 	 	and also:
	 
	 	 	 	the whole of the third floor of the Building having an area
of some 1,272 sq.m., (gross) marked in red on the plan
attached hereto as Appendix “B2” (hereinafter:
“Area B”);
	 
	 	 	 	and also:
	 
	 	 	 	Some 971 sq.m., (gross) situated on the second floor of the
Building marked in red on the plan attached hereto as
Appendix “B3” (hereinafter: “Area C”);
	 
	 	 	 	and also:
	 
	 	 	 	74 covered parking places marked in the parking lot of the
Building, as marked in red in Appendices “B4”, “B5”, and
“B6” (hereinafter: “the Covered Parking Spaces”) and 4
parking places that are not covered situated adjacent to
the Building and marked in red in Appendix “A” hereto,
(hereinafter: “the Open Parking Spaces”) (the Covered
Parking Spaces and the Open Parking Spaces being
hereinafter collectively called: “the Parking Spaces”);
	 
	 	 	 	and also:

 

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	 	 	 	Storage areas having an average area of some 214sq.m.,
(gross) situated in the basements of the Building and
marked in red on the plans as Appendices “B4”, “B5”, and
“B6” hereto (hereinafter: “the Storage Areas”)
	 
	 	 	 	(Area A, Area B, Area C, the Parking Spaces and the Storage
Areas being hereinafter collectively called: “the
Premises”).

The Transaction 

	2.	 	The Landlord hereby grants to the Tenant and the Tenant hereby takes from the Landlord a
tenancy of the Premises in its condition “as is” on the date of the redelivery of possession
of the Premises by the Present Tenant of the Premises (as hereinafter defined) to the Landlord
and the Tenant hereby waives any claim and/or demand and/or complaint against the Landlord
and/or against any person on its behalf in connection therewith (subject as hereinafter
mentioned with respect to the making of acoustic renovations to the Premises in a manner
whereby persons when speaking will not be heard to an unreasonable degree, between the
separate floors and the separate rooms.
It is agreed that before possession of the Premises is conveyed to the Tenant, the parties
will receive an opinion from an acoustic expert of the Building, Joseph Perla (Eng.) of the
“M.G. Acoustics Consultants” office (hereinafter: “the Expert”) concerning the required
specification for improving the acoustics and that the Landlord will carry out implementation
of his directions contained in the related opinion.

The Landlord will use its best endeavours to improve the acoustics as mentioned to the extent
required, within 60 days from the date of receiving the Expert’s opinion, including his
directives regarding the manner of implementing the improvement.

Non-applicability of the Tenants Protection Laws

	3.	 	It is expressly agreed and declared that construction of the Premises was completed after
20.8.1968 and that the Tenant has not paid nor has been demanded to pay, directly or
indirectly, key money and/or any other premium in respect of the Premises or any part thereof,
and that the Tenant will not be deemed to be a protected tenant of the Premises according to
this Contract and the provisions of the Tenants Protection (Consolidated Version) Law,
5732-1972 (as amended), and any other statute dealing with tenancy protection, including the
Regulations and Orders by virtue thereof, do not and will not apply to the tenancy of the
Premises.

Tenant’s Declarations 

	4.	 	The Tenant hereby declares that as of the date of the execution of this Agreement, it is
subleasing from the Present Tenant (as hereinafter defined) office areas, laboratories, the
storage areas and parking places situated in the Building and that it is well familiar with
the Building and the Premises and has examined the Premises, the possibilities of using the
same according to law generally and for the purpose of its business and activity generally,
and found the same to be suitable for its purposes and hereby waives any claim concerning
unsuitability or in relation to the method of use of the Premises, subject as provided in
clause 2 above.

	5.	 	Cancelled.

 

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Term of the Tenancy 

	6.	a.	 	 It is agreed that the Tenancy Term of the Premises under this
Contract is for 24 months commencing from 1.1.2004 and
expiring on 31.12.2005 (hereinafter: “the Tenancy Term”).
It is agreed that the date of commencement of the Tenancy
Term will be deemed to be the date of delivery of possession
of the Premises to the Tenant for all intents and purposes,
the Premises being vacant of all and any persons or things
(except for persons or objects representing or belonging to
the Tenant (hereinafter: “the Possession Date”).
	 
	 	b.	 	Subject to the full and punctual performance of all the Tenant’s undertakings
during the Tenancy Term, the Tenant is granted an option to extend the tenancy Term by a
further Tenancy Term of 24 months, commencing from the expiration of the Tenancy Term
(hereinafter: “the Option” and “the Further Tenancy Term” respectively) provided the
Tenant notifies the Landlord of its wish to exercise the Option in advance and in
writing, and such notice will have been received at the Landlord’s offices at least 90
days before the expiration of the Tenancy Term.
	 
	 	 	 	In the absence of a notice by the Tenant as mentioned above resulting in the
non-exercise of the Option, the Tenancy Term will expire in accordance with that stated
in sub-clause (a) above.
	 
	 	c.	 	The terms of this Contract will, mutatis mutandis, apply during the Further
Tenancy Term with the exception of the grant of the Option to extend the Tenancy Term
during the Further Tenancy Term.

Rent and Maintenance Fees 

	7.	a.	1. 	 The Tenant undertakes to pay the Landlord in consideration of the tenancy of the
Premises during the Tenancy Term, the Rent set out below (hereinafter: “the Rent during the
Tenancy Term”):
	 
	 	 	 	1.1	The sum of US$6.50 in respect of each sq.m., (gross) of
Areas A, B and C, namely an aggregate area of some 3,515sq.m., (gross) and
aggregating some US$22,847.50 for each tenancy month namely, US$68,542.50
for each quarter.
	 
	 	 	 	1.2	The sum of US$3.50 in respect of each sq.m., (gross) of
the area of the Storage Areas of some 214sq.m., (gross) and aggregating some
US$749.00 for each tenancy month namely, US$2,247.00 for each quarter.
	 
	 	 	 	1.3	The sum of US$50.00 in respect of the 74 Covered Parking
Spaces aggregating US$3,700.00 for each tenancy month, namely, US$11,000.00
for each quarter.
	 
	 	 	 	1.4	The sum of US$25.00 in respect of each of the 4 Open
Parking Spaces aggregating some US$100.00 for each tenancy month namely,
US$300.00 for each quarter.

 

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	 	 	 	1.5	It is agreed that the Rent enumerated in clauses 1.1 –
1.4 above and which equals US$82,189.50 for each quarter, will be translated
into new shekels according to the representative rate of exchange known of
US$1 on 1.1.2004, and thereafter will be linked to the Consumer Price Index
in accordance with the provisions contained in sub-clause 7.d., and 7.e.,
hereof.
	 
	 	 	 	1.6	If any changes occur in the area of the Premises and/or
in the number of Parking Places after the execution of this Agreement, the
Rent will be adjusted according to the prices specified above.

	 	 	2.	The Tenant undertakes to pay the Landlord during the Further Tenancy
Term monthly Rent in a sum equal to the shekel rent paid by the Tenant in the last
tenancy month of the Tenancy Term (including linkage differentials), with an
increment in real terms of 5% (hereinafter: “the Rent during the Further Tenancy
Term”).
The Rent during the Tenancy Term and the Rent during the Further Tenancy Term
will hereinafter be collectively called: “the Rent”.
	 
	 	 	3.	The Rent, the Maintenance Fees and the Electricity User Fees (as
defined in the Management Agreement attached as Appendix “C” hereto) (hereinafter:
“the Management Agreement”), will be paid to the Landlord by the Tenant together
with Value Added Tax as required by law on the dates set out in sub-clause (b)
hereof with the addition of the linkage differentials mentioned in sub-clause (e)
hereof. The Landlord will furnish a lawful VAT invoice to the Tenant after the
payment has actually been made, and not later than 30 days after the payment.
	 
	 	b. 	The Rent, Maintenance Fees and the Electricity User Fees will be paid monthly and
on the 1st of each month, before the commencement of the calendar quarter of
the tenancy to which the payment relates, by means of a bank transfer to the Landlord’s
account maintained with the Principal Branch of the Union Bank (no. 063) – account no.
491900/89 (hereinafter: “the Landlord’s Account”), with the exception of the method of
payment of the first installment in respect of the Rent and advance payments of the
Maintenance and Electricity fees as hereinafter set forth.
	 
	 	 	It is agreed that the Tenant will pay the Landlord on the date of the execution of this
Agreement in respect of the first tenancy quarter for the Tenancy Term (namely, the
Tenancy quarter falling between 1.1.2004 and 31.3.2004) for payment of the Rent,
advance payments of the Maintenance and Electricity User Fees which sum amounts in the
aggregate to the equivalent of US$119,097 plus VAT as required by law (US$82,189.50 for
the Rent and US$36,907.50 in respect of advances of the Maintenance and Electricity
User Fees) which will be translated into new shekels as hereinafter set forth by means
of a bank transfer to the Landlord’s Account.
	 
	 	 	It is agreed that payment for the first quarter mentioned above will be linked to the
rate known on 1.1.2004 of US$1; meaning that to the extent the known rate of the U.S.
dollar on 1.1.2004 will be higher than that known dollar rate for which payment of the
first quarter will have been made by the Tenant, the Tenant will

 

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	 	 	 	remit to the Landlord, by 15.1.2004 payment equal to such linkage differentials (plus
VAT as required by law) and to the extent the known rate of the US$ on 1.1.2004 will
be less than that known and at which the payment for the first quarter will have been
made by the Tenant, the Landlord will remit to the Tenant, by 15.1.2004 payment equal
to those linkage differentials (plus VAT as required by law).
	 
	 	 	 	The Tenant undertakes to pay all the payments that are payable by it pursuant to the
provisions of this Agreement and the Management Agreement, including payment of the
Rent, Maintenance and Electricity User Fees, even if it quits the Premises and/or fails
to make any or even partial use of the Premises.
	 
	 	c.	 	The Tenant may not make any pre-payments without the prior consent of the
Landlord.
	 
	 	d.	 	The Rent will be linked to the Consumer Price Index (CPI) as stated below:
	 
	 	 	 	If it transpires from the CPI last published before the actual payment of any
installment of the Rent (hereinafter: “the New CPI”) that the New CPI has risen
compared with the known CPI of November 2003 that will be published on 15 December,
2003 (hereinafter: “the Base CPI”), then the Rent will correspondingly increase at the
rate at which the New CPI will have risen against the Base CPI (hereinbefore and
hereinafter called: “the linkage differentials”).

If any CPI will be lower for any reason whatsoever than the Base CPI, such installment
will not reduce.
	 
	 	e.	 	In this Agreement “the Consumer Price Index” or “the CPI” means the Consumer
Price Index, including fruit and vegetables fixed by the Central Bureau of Statistics
and Economic Research, including such index even if published by any other official
institution or body, including any other official index in substitution therefor,
whether based on the same data on which the existing index is based or not. If there is
another index, and the Central Bureau of Statistics and Economic Research fails to
determine the relationship between the current and the replaced index, the Landlord’s
and the Tenant’s accountants will determine the ratio between the two.
	 
	 	f.	 	Delay exceeding 14 days in payment of the Rent constitutes a fundamental breach
of the Contract.

Interest on Arrears

	8.	a.	 	 Any sum becoming due from the Tenant to the Landlord that is
not paid on due date, will, in addition to linkage to the
CPI, bear arrears interest on the amount in arrears at the
maximum rate customary in Bank Hapoalim B.M., on unauthorized
overdrawings in overdraft accounts, the interest accruing
monthly, as from the payment date prescribed in this
Agreement, with respect to the amount in arrears until the
date of actual payment of that sum, plus VAT as required by
law.
Any payment of arrears as mentioned above exceeding 14
(fourteen) days will be deemed to be a fundamental breach of
the Contract.
	 
	 	 	 	The arrears interest will be charged in a manner whereby the
interest will be compounded with the installment payable by
the Tenant to the Landlord after the

 

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	 	 	 	date of the payment that is in arrears and will, together with such installment and the
linkage differentials in respect thereof, be deemed to be principal for purposes of
calculating future arrears interest.
	 
	 	b.	 	Nothing contained in sub-clause (a) above will be construed as conferring upon
the Tenant any right to fall into arrears in payment of the Rent under this Contract.

Purpose of the Tenancy 

	9.	a.	 	 The Tenant undertakes to use the Premises solely for the
purpose of marketing, developing, manufacturing and storing
communication systems, electronics and high-tech systems,
including providing the services and processes required to
accomplish such purpose, and for such purpose only.

	 
	 	 	 	The Tenant hereby undertakes not to use nor allow the
Premises or any part thereof to be used for any other purpose
whatsoever except for that stated above, and the Tenant shall
be prohibited from engaging at the Premises in any other
business or manufacturing or selling or marketing at the
Premises any products, merchandise, commodities or other
services of any kind whatsoever that are not included amongst
those falling in the ambit of the purpose of the lease, as
set out below.
	 
	 	b.	 	The Landlord undertakes to grant leases of the other areas (that have not been
taken on a tenancy by the Tenant) for uses that do not prejudice those contained in
sub-clause (a).
	 
	 	c.	 	Without derogating from the foregoing it is hereby agreed that the responsibility
for obtaining a business licence and any other permit, including a permit from the
Police and/or the Ministry of Health and/or municipal authority and/or the fire fighting
authorities (if required by law) and all the taxes and payments that will become due to
the authority and/or the government and/or any other body in respect of obtaining the
licence, including business tax, signage tax, fees and licences for the business and the
management thereof required to operate the Tenant’s business at the Premises, will be
the sole responsibility and be at the expense of the Tenant only. It is agreed that the
Landlord will forward to the Tenant, within a reasonable time of receiving an
application to that effect from the Tenant, copies of any approval, permit or licence
that is in the Landlord’s possession and is required by the Tenant to be presented to
the authorities, provided that no liability or responsibility whatsoever in connection
therewith will attach to the Landlord.
	 
	 	 	 	It is further agreed that the Tenant will bear payment of the costs that will be
required in respect of furnishing copies of the foregoing documents, in accordance with
the Landlord’s demand.
	 
	 	d.	 	The Tenant may not vary the purpose of the tenancy without receiving the
Landlord’s prior written consent. If the Tenant wishes to vary the purpose of the
tenancy, it will apply in writing to the Landlord specifying the new purpose and the
reasons for the variation. A refusal by the Landlord to agree to the variation of the
purpose of the tenancy will not constitute a breach of this Contract on the part of the
Landlord.

 

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Use and Repair of the Premises 

	10.	a.	 	 The exclusive possession of the Premises will be conveyed to
the Tenant upon the commencement of the Tenancy Term on
condition that this Contract has been executed and the Rent
and the advance payment of the Maintenance Fees and
Electricity User Fees will have been paid in respect of the
first tenancy quarter of the Tenancy Term as provided in
clause 7 above and in the Management Agreement, and on
condition that all the collateral hereinafter enumerated and
certificates of the existence of the insurance contained in
the Appendices hereto, will have been furnished by the Tenant
to the Landlord.
	 
	 	 	 	With respect to those areas on the second floor of the
Building only, and which the Tenant is not currently using as
of the execution date of this Agreement, and to the extent it
makes no use thereof up till the Possession Date, a
memorandum of delivery will be drawn up on the Possession
Date on which will be noted the defects in those areas not
being the result of fair wear and tear, to the extent any
such exist. The Landlord or any person on its behalf will
make the repairs pursuant to the memorandum of delivery (to
the extent they will be required) within a reasonable time.
	 
	 	b.	 	As from the date of commencement of the Tenancy Term, all the obligations and
duties resulting from this Contract, including responsibility for any damage that will
be caused by any act of the Tenant or by persons on its behalf, will be borne by the
Tenant, whether the Tenant has appeared on that day to take possession or not, and
whether a memorandum of delivery has been prepared or not.
	 
	 	c.	 	Cancelled.
	 
	 	d.	 	The Tenant undertakes to carry on its business at the Premises, in the common
areas of and adjacent to the Building, in a manner whereby no risk and/or safety or
health or other disturbance will occur.
	 
	 	e.	 	The Tenant undertakes to operate its business reasonably and cautiously and in
co-ordination with the Landlord’s activity or that of the Management Company or persons
on their behalf.
	 
	 	f.	 	The Tenant will not be entitled to make any use of the pavements, roads and any
other public area falling within the boundaries of the Land, except for the purpose for
which those public areas are designed.
	 
	 	g.	 	The Tenant undertakes to use the Premises in a proper and reasonable manner and
properly keep and maintain the Premises, and repair personally and at its own expense,
any defect, malfunction or damage that will be caused at the Premises by or on behalf of
the Tenant, including by its employees, visitors and invitees and redeliver possession
of the Premises to the Landlord at the expiration of the Tenancy Term or the Further
Tenancy Term or at the end of this Agreement (howsoever determined), the Premises being
free and clear of any person and thing belonging to the Tenant and in good, proper and
clean condition as they were delivered to the Tenant, with the exception of fair wear
and tear, and available for immediate use and may, at its own expense, effect any repair
that will be required in order to fulfil its undertaking mentioned, by not later than
the

 

9

	 	 	 	date on which the Landlord is entitled to take possession of the Premises as mentioned.
	 
	 	h.	 	If the Tenant fails to carry out the repairs mentioned above in this clause as
notified by the Landlord and/or fails to properly carry them out in the Landlord’s
reasonable opinion, the Landlord will be entitled, but be under no duty, to enter upon
the Premises and carry out such repair and maintenance works, either personally or by
others, in lieu of, but at the expense of, the Tenant, without derogating from any other
rights and relief that are conferred upon the Landlord under this Agreement, and all if
the Tenant has failed to carry out such repairs within 7 days of the Landlord notifying
it in writing of its intention to enter upon the Premises for the purpose of carrying
out such repairs.
	 
	 	i.	 	The Landlord will repair as soon as possible malfunctions and damages that will
be caused to the external shell of the Premises and in the Building and which do not
result from reasonable wear, and to a standard being no less than that which existed on
the date of the execution of this Contract fair wear and tear excepted.
	 
	 	j.	 	The Tenant undertakes not to effect any alterations or additions whatsoever in
the Premises, without receiving the consent of the Landlord, its consultants, including
the fire safety consultant and building architect, in advance and in writing, subject to
obtaining a lawful licence and permit if such licence/permit is required, and subject to
the performance of the Landlord’s or its representatives directives, to the extent such
exist.
	 
	 	 	 	As a fundamental condition precedent for the carrying out of such alterations or
additions, to the extent the consents for such purpose have been granted, the Tenant
further undertakes to furnish, prior to making the alterations and/or additions, the
insurance certificates in the form attached hereto as Appendix “D2”. The
Landlord undertakes not to oppose the making of such alterations except on reasonable
grounds, and to provide its response to the Tenant’s application within a reasonable
time.
	 
	 	 	 	Without derogating from the Landlord’s rights under this clause, the Tenant will be
liable immediately upon receiving the Landlord’s demand to do so, to remove, at its own
expense, all additions and/or alterations that will have been made contrary to the
provisions of this sub-clause and the Landlord will have the right to do this at the
Tenant’s expense.
	 
	 	 	 	Alterations which cannot be easily removed or the removal of which will cause damage to
the Premises from the aesthetic or structural standpoint, will be left in place with
the Landlord’s consent and pass into the Landlord’s ownership free of any consideration
upon the conclusion of the Contract or the Tenancy Term, as appropriate.
	 
	 	k.	 	In the event of the Tenant ceasing to use the Premises for any period during the
Tenancy Term and the Further Tenancy Term (to the extent it is realized), the Tenant
will be liable for all its undertakings under this Agreement during such period.
	 
	 	l.	 	The Tenant may not install any signage on the external frontages of the Building
and/or the internal common areas of the Building (with the exception of internal signage
within the Premises), save as subject to the prior written and express approval of the
Landlord and/or the Management Company pertaining to the

 

10

	 	 	 	form, content and location of the signage and pursuant to the provisions of any law,
including a permit from the local authority.
	 
	 	 	 	The Landlord will be entitled to remove at the Tenant’s expense any sign that will be
installed by the Tenant in breach of the provisions of this clause, provided that 7
days’ advance notice of its intention to do so is given to the Tenant. Any cost and tax
or liability applying to or imposed in respect of such signage will be borne solely by
the Tenant.
	 
	 	 	 	It is clarified that subject to the foregoing, the Landlord will not oppose in
principle signage in which the names of the companies whose products are being sold at
the Premises will appear, except on special grounds and the Landlord undertakes to
grant its response to the Tenant’s request within a reasonable time. The Landlord is
also aware of, and agrees to, the signs currently existing in the Building.
	 
	 	m.	 	The Landlord’s employees and agents will be entitled to enter upon the Premises
at any time during usual business hours provided that this is done by prior arrangement
with the Tenant and the visit will be accompanied by a representative of the Tenant –
all for purposes of examining the Premises, making repairs and fulfilling the terms of
this Contract.
	 
	 	n.	 	A breach of this clause will be deemed to be a fundamental breach of this
Contract.

Levies and payments 

	11.	a.	 	 The Tenant undertakes to pay, as from the date of the
commencement of the Tenancy, all taxes of their various
kinds, fees, municipal rates, levies and other payments,
imposed now or hereafter during the Tenancy Term (and the
Further Tenancy Term to the extent it is exercised),
according to the provisions of any law, on the tenant of a
property, as distinct from the owner thereof, and relating to
the Premises and/or to the business there carried on,
directly, and on the legal date on which they are payable to
the various authorities.
	 
	 	 	 	The Tenant will further bear all costs of any kind whatsoever
that are involved in maintaining the Premises, including its
share of the common property, and, without derogating from
the generality of the foregoing, expenses in respect of
insurances, maintenance, electricity, communications and
telephone.
	 
	 	 	 	It is hereby clarified that the Tenant will make the payment
for the costs of using the electricity and water directly to
the Management Company (as that term is defined in the
Management Agreement), or any person on its behalf, pursuant
to the terms of the Management Agreement.
	 
	 	 	 	It is hereby clarified that the Tenant will, at its own
expense or in conjunction with the Tenant’s of the Building,
to the extent it desires, either personally or by means of a
third party, arrange for access control services in the lobby
of the Building or to the Premises, to the generator services
in times of emergency, UPS backup, communications, computer
and telephony systems.
	 
	 	b.	 	The Landlord undertakes to ensure that the Tenant will be allowed free access to
the areas of the Premises on the second, third and fourth floors and also to the

 

11

	 	 	 	Storage Areas by means of the approaches and corridors on each floor between Stage A of
the Building and Stage B thereof, in which the Premises are situated.
	 
	 	c.	 	The Tenant undertakes to reimburse the Landlord within 14 days of receiving a
demand to do so in writing, or within 14 days of the actual payment date of the
insurance, whichever is the later, its proportional share of the insurance costs paid by
the Landlord in respect thereof pursuant to the proportional share of the Premises as
against the overall areas of the Project for purposes of insuring the Building and the
areas leased in the Project with respect to insurance of loss of profits, as more
particularly set out in Appendix “D” hereto.
	 
	 	d.	 	The Tenant undertakes to produce to the Landlord from time to time, at the
Landlord’s request, copies of all the receipts and certifications testifying to the fact
that it has indeed paid the payments applicable to it under this Contract and on the
termination of the Tenancy Term and/or of the Further Tenancy Term and/or the end of
this Agreement (howsoever determined), to remit to it the original receipts and/or bills
and/or clear photocopies of those documents.
The Tenant undertakes to produce to the Landlord receipts and/or certifications
testifying to the payments that have been made after the completion of the Tenancy Term
and/or of the Further Tenancy Term (if exercised) and/or the end of this Agreement,
(howsoever determined), and which relate to the Tenancy Term and/or the Further Tenancy
Term (if exercised) respectively.
	 
	 	e.	 	To the extent the Landlord and/or the Management Company, makes, for any reason
any payment which, by this Contract, is payable by the Tenant, the Tenant will reimburse
the Landlord and/or the Management Company for any sum so paid immediately upon their
first demand together with the management fees, linkage differentials to the CPI as well
as arrears interest at the rate fixed above from the date of the payment thereof by the
Landlord and/or the Management Company until the date of actual payment thereof to the
Landlord and/or the Management Company.
	 
	 	f.	 	A breach of this clause will be deemed to be a fundamental breach of this
Contract.

Management and maintenance 

	12.	a.	 	The Tenant undertakes to sign on the execution of this
Agreement with the Landlord (hereinafter also: “the
Management Company”), the Management Agreement in the form
attached as Appendix “C” hereto (hereinafter: “the
Management Agreement”). The Landlord may provide management
services pursuant to the Management Agreement directly or by
means of a third party to be appointed by it.
	 
	 	 	 	The Tenant further undertakes to comply with all its
commitments under the Management Agreement including payment
of the advances on a quarterly basis in advance in respect of
the Management Fees and Electricity User Fees, without
derogating from payment of the Rent. The Tenant undertakes to
co-operate with any doorman and/or guard that will be placed
in the Building, (if at all) on the Landlord’s behalf or on
behalf of the Management Company (as hereinbefore defined)
and obey all their instructions.

 

12

	 	 	 	Without derogating from the generality of the foregoing, the
Tenant undertakes to co-operate with any such body, in every
way and form.
	 
	 	 	 	
For the avoidance of any doubt it is hereby clarified that
the conditions of the Management and Maintenance Agreement
will be no less favourable than those of the management and
maintenance that have or will be agreed with other tenants in
the Building.
	 
	 	b.	 	A breach of any of the conditions or undertakings contained in the Management
Agreement by any of the parties will constitute a fundamental breach of this Tenancy
Agreement and confer upon the aggrieved party the right to exercise against the
counterparty all the relief and remedies conferred upon it under this Agreement and/or
under the Management Agreement and/or at law.

Assignment of rights

	13.	a.	 	 The Tenant hereby undertakes not to transfer or assign its
rights under this Contract to any other body or person nor
grant any lease or convey to any other person or persons nor
allow or grant any right whatsoever to any person or persons
to use the Premises or any part thereof, nor share with any
person possession of the Premises or the use thereof or any
part thereof in any manner and way whatsoever, for
consideration or otherwise, without receiving the Landlord’s
prior written consent. Notwithstanding the foregoing, this
clause will not apply to a sub-lease to the parent company,
sister-company and subsidiary, as defined in the Securities
Law, 5728-1968 and/or the assignment of the Agreement to any
third party that will acquire all (or a substantial part of)
the Tenant’s assets, provided that the Landlord’s rights will
not be diminished and the Tenant (or any third party, as
appropriate) will assume performance of all its undertakings
under this Agreement.
	 
	 	 	 	Where the consent of the Landlord is required, the Landlord
will not unreasonably withhold its consent but may stipulate
reasonable conditions that will be intended to ensure the
continued performance of the Tenant’s undertakings under this
Agreement.
	 
	 	b.	 	The Landlord on its part may transfer its rights and obligations under this
Contract to any other person or body without requiring the Tenant’s consent, on
condition that the Tenant’s rights under this Contract will not be diminished.

Liability and Insurance 

	14.	a.	 	 Without derogating from any provision of law concerning liability, the Tenant will be
solely responsible for any loss or damage to person or property that will be caused to the
Landlord and/or the Management Company and/or their employees and workers and/or to the Tenant
or its employees or workers and/or to any third party whatsoever following the use of the
Premises or the Tenant’s activity at the Premises or following any act or omission of the
Tenant or its employees or workers and/or those who are employed by it or by persons on its
behalf.

 

13

	 	b.	 	The Tenant undertakes to indemnify the Landlord and/or the Management Company
immediately upon receipt of first demand in respect of any reasonable liability or
expense (including expenses of defence and/or legal fees) that will be imposed on any of
them following any demand or claim resulting from any damage, act or omission for which
the Tenant is responsible as aforesaid, on condition that the Landlord will give prompt
notice to the Tenant of the existence of such demand or claim and allow it to bring
defence against the same.
	 
	 	c.	 	The undertakings of the parties regarding insurance are set out in Appendix “D”
hereby and in the insurance certificates attached as Appendices “D1 –D2” hereto and the
provisions of those Appendices will be binding upon the parties and take precedence over
any other provision to the contrary.

Vacation of the Property 

	15.	a.	 	 The Tenant undertakes to quit the Premises immediately upon the expiration of the Tenancy
Term or the Further Tenancy Term or the end of this Agreement (howsoever determined), all
according to the circumstances, and redeliver exclusive possession of the Premises to the
Landlord, the Premises being free and clear of all persons and things, and in good and proper
condition as received by it, with the exception of fair wear and tear pursuant to that stated
in clause 10(g) above.
	 
	 	b.	 	In addition to the remedies and relief enumerated in this Agreement and/or at
law, if the Tenant fails to quit the Premises on the date of the vacation thereof as
stated above, the Tenant will be liable to pay the Landlord a pre-agreed and estimated
sum of new shekels equal to the Rent multiplied by 3 (three hundred per centum) of the
last monthly Rent which it ought to have paid according to this Agreement before the
delay in vacating began, plus linkage differentials and VAT in respect of each month of
delay from the beginning thereof until the actual redelivery of the Premises to the
Landlord in accordance with the terms hereof. For the avoidance of any doubt, a period
of delay that is shorter than one month will be computed as a proportional part of a
full month for purposes of this calculation.
	 
	 	c.	 	Without derogating from the Tenant’s obligation to quit the Premises, and without
derogating from any other relief conferred upon the Landlord pursuant to this Agreement
and/or at law, the Landlord and/or the Management Company will be entitled, in the event
of the Tenant failing to quit the Premises on the date prescribed in sub-clause (a)
above, to bring suit against the Tenant for payment of all the sums, taxes,
installments, undertakings, repair expenses, damages, losses and all other payments
without exception as set out in this Agreement and/or in the Management Agreement on
account of the period commencing from the date on which the Tenant ought to have vacated
the Premises until the date on which it will actually do so and redeliver the same to
the Premises in accordance with the terms of this Agreement as if the Tenancy Term and
the Further Tenancy Term (if it is exercised) will have continued.
	 
	 	d.	 	For the avoidance of any doubt it is clarified that receipt of the payments
mentioned in sub-clause (c) above will not create any tenancy relationship between the
Tenant and the Landlord with respect to the period following the date of vacation of the
Premises.

 

14

	 	e.	 	Nothing contained in this Contract shall derogate from any remedy conferred upon
the Landlord by law, including the right to specific performance of the Contract.

Breaches and Remedies 

	16.	a.	 	 The Contracts (Remedies by reason of Breach of Contract) Law, 5731-1970, will apply to a
breach of this Contract by either of the parties.
	 
	 	b.	 	In addition to the foregoing and without derogating from any other relief or
remedy conferred upon the Landlord by this Contract or at law, the Tenant hereby agrees
that if it has committed a fundamental breach of this Contract and/or any of the terms
thereof, the Landlord will be entitled to rescind this Contract and demand the surrender
and exclusive possession of the Premises from the Tenant and the Tenant undertakes to
respond to this demand within 14 days, remove the equipment, employees and
representatives from the Premises and to the extent it fails to do so, the Landlord will
be entitled to remove the same from the Premises in such manner as it will deem fit,
including by way of discontinuing the provision of any service and/or supply of energy
and/or water and/or air-conditioning to the Premises and similarly by replacing the
locks at the Premises.
	 
	 	 	 	Without derogating from the foregoing, each of the following events will be deemed to
confer upon the Landlord the right to terminate the tenancy hereunder, demand the
immediate vacation of the Premises by the Tenant and recoup payment from the Tenant by
such legal method as is conferred upon it, including by way of realizing the collateral
mentioned below to cover all the Landlord’s damages, including eviction of the Tenant,
removal of its equipment, employees and representatives from the Premises:

	 	(1)	 	The Tenant commits a breach of one or more of its undertakings under
this Agreement which breach is described as or is deemed to be a fundamental
breach of this Agreement and such breach is not cured within 14 days of written
notice to the Tenant to do so, or, in the case of a breach other than a
fundamental breach, the same has not been cured within 30 days of written notice
having been given to the Tenant;
	 
	 	(2)	 	A judicial closure order has been issued for the Tenant’s business at
the Premises and such order has not been vacated within 30 days of issue.
	 
	 	(3)	 	Bankruptcy or winding-up proceedings have been taken against the
Tenant by either the Tenant or a third party, and are not vacated within 90 days
of issue.
	 
	 	(4)	 	Any execution proceedings have been taken against the Tenant at the
Premises that prevent the Tenant from performing its undertakings hereunder,
including payment of Rent and Maintenance Fees, and such proceedings are not
vacated within 60 days.
	 
	 	(5)	 	A receiver is appointed over all or a material part of the Tenant’s
property which prevents the Tenant from performing its undertakings hereunder,
including payment of Rent and Maintenance Fees, and such proceedings are not
vacated within 60 days.

 

15

	 	(6)	 	The Tenant has abandoned the Premises or terminated the use thereof
for a period exceeding 30 consecutive days for any reason related to the Tenant
and has failed to perform its undertakings hereunder, including payment of Rent
and Maintenance Fees.
	 
	 	(7)	 	Cancelled.
	 
	 	(8)	 	A petition for stay of proceedings is filed against the Tenant and
such petition has not been vacated within 90 days.
	 
	 	(9)	 	A trustee is appointed for the Tenant and such appointment is not
vacated within 90 days;
	 
	 	c.	 	Without derogating from any other right of the Landlord by law or
under this Agreement, in the event of a rescission of the Agreement by reason of a
breach thereof and the tenancy being terminated, the Tenant undertakes to pay the
Landlord pre-determined and agreed damages in the sum equal to the Rent, as
existing on the date of the breach, for three (3) months of the tenancy, with the
addition of linkage and VAT as required by law.
	 
	 	d.	 	Without derogating from the generality of the foregoing, the right of
lien, and the right to exercise the lien over any property of the Tenant at the
Premises, is hereby granted by the Tenant to the Landlord. Should the Landlord
elect to exercise the lien no obligation will apply to the Tenant to remove from
the Premises such property in respect of which the Landlord will have exercised
the right of lien.
	 
	 	e.	 	Nothing contained in this clause shall derogate from the parties’
rights under this Contract or at law.

Bank Guarantee 

	17.	 	To secure the performance of all the Tenant undertakings hereunder, the Tenant will furnish
the Landlord upon the execution of this Contract with an unconditional autonomous guarantee of
a recognized and reputable bank for the entire period of the Tenancy Term and the Further
Tenancy Term (if it is exercised) in an amount equal to US$140,000.00 which will be translated
into new shekels in accordance with the U.S. dollar rate known on the date of the issue of the
guarantee by the bank, plus VAT, such guarantee to be in the form attached hereto as
Appendix “E”. The above guarantee will be issued for a period of one year and extended
from time to time by the Tenant in a manner whereby it shall remain in force until three
months following the expiration of the Tenancy Term and the Further Tenancy Term (if it is
exercised). The extended guarantee will be presented to the Landlord by the Tenant 60 (sixty)
days before the expiration date of the existing guarantee (with the exception of the
expiration of the guarantee after the three months following the Tenancy Term and the Further
Tenancy Term (if it is exercised), and as appropriate), failing which the existing guarantee
will be called. The guarantee will be held by the Landlord to secure performance of the
Tenant’s undertakings hereunder and be returned to the Tenant 3 months following the date of
an accounting being made between the parties upon the Premises being vacated pursuant to the
terms hereof.

 

16

Setoff 

	18.	 	It is hereby agreed that the Tenant will not be entitled to set off the Landlord’s and/or the
Management Company’s debts against it under this Agreement and/or under the Management
Agreement against the Rent and Management Fees and Electricity User Fees payable by the Tenant
to the Landlord and/or to the Management Company under this Agreement and the Management
Agreement.

Stamp Duty

	19.	 	The stamp duty costs of this Agreement and the copies thereof (to the extent it applies) will
be borne by the parties in equal shares.

General 

	20.	a.	 	This Contract supersedes any memorandum of agreement and/or agreement or proposal and/or
representation signed or made between the parties (if so made or signed) and/or any paper and
other representation on which negotiations were conducted, and will replace the same in all
respects and all matters relating to this Agreement.
	 
	 	b.	 	The parties confer exclusive jurisdiction on the competent court in the city of
Tel Aviv — Jaffa.

Notices 

	21.	a.	 	 The addresses of the parties for purposes of this Contract
are set out in the preamble thereof.
	 
	 	 	 	

Following the commencement of the Tenancy Term, the Tenant’s
address for the purposes of this Contract will be at the
Premises.

	 	b.	Any notice sent by either party to the other to the addresses appearing above
will be sent by registered mail and/or be delivered personally and be deemed to have
reached its destination within 72 hours of being posted or being served – and if served
by hand at the official offices of the parties, the date it reaches its destination will
constitute the delivery date.

In witness whereof the parties have set their hands:

	 	 	 
	/s/
Illegible	 	/s/
Israel Zohar
	The Landlord
Amcol
Engineering and
Industrial Company Ltd.
	 	The Tenant

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