Document:

Exhibit 10.3

 

 

COLLPLANT HOLDINGS LTD.

(the “Company”)

 

SHARE OWNERSHIP

AND OPTION PLAN (2010)

 

 

TABLE OF CONTENTS

 

1.                            Preamble.

 

2.                            Administration of the Plan.

 

3.                            Shares Subject to the Plan.

 

4.                            Option Exercise Prices.

 

5.                            Exclusivity of the Plan.

 

6.                            Grant of the Options and Issuance of the Shares to the Trustee.

 

7.                            Option or Share Purchase Agreement; Termination of Employment.

 

8.                            Acceleration of an Option; Liquidation.

 

9.                            Term of Options; Exercise.

 

10.                     Additional Documents.

 

11.                     Taxation.

 

12.                     Dividends.

 

13.                     Rights and/or Benefits arising out of the Employee/Employer Relationship and the Absence of an Obligation to Employ.

 

14.                     Adjustments upon Changes in Capitalization.

 

15.                     Term, Termination and Amendment.

 

16.                     Effectiveness of the Plan; Approvals.

 

17.                     Release of the Trustee and the Attorney from Liability.

 

18.                     Governing Law.

 

APPENDICES

 

Appendix A:                                                                                  Employee’s Notice to the Trustee as to Exercise of the Option (Section 9.2).

 

Appendix B:                                                                                  Notice to the Company of Exercise of the Option by the Trustee (Section 9.2).

 

Appendix C:                                                                                  Proxy and Power of Attorney (Section 10.2).

 

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1.              PREAMBLE

 

1.1.         Purpose; Eligibility.  This plan, as amended from time to time, shall be known as the “CollPlant Holdings Ltd. Share Ownership and Option Plan (2010)” (the “Plan”).  The purpose and intent of the Plan is to provide incentives to employees, directors and/or service providers including advisors of the Company and/or of subsidiaries and/or affiliated companies of the Company (each a “Related Company” and collectively, “Related Companies”) by providing them with the opportunity to purchase shares of the Company. In addition the Company may provide individual grantees who are employed by advisors or service providers and approved by the  Board of Directors of the Company (the “Board”) the opportunity to purchase shares of the Company under the Plan.

 

1.2.         Types of Awards; Tax Regimes.  The Plan is intended to enable the Company to grant options and issue shares under various and different tax regimes, including, without limitation: (i) pursuant and subject to Section 102 of the Israeli Income Tax Ordinance (New Version), 1961 (the “Income Tax Ordinance”) or any provision which may amend or replace it and any regulations, rules, orders or procedures promulgated thereunder (collectively, “Section 102”) and to designate them as either grants made through a trustee or not through a trustee;  (ii) pursuant and subject to Section 3(i) of the Income Tax Ordinance; (iii) as “incentive stock options” within the meaning of Section 422 of the United States Internal Revenue Code of 1986, as amended (“Incentive Stock Options” and the “Code”, respectively); (iv) as options to U.S. residents, which would not qualify as Incentive Stock Options (“Non-Qualified Stock Options”); (v) to grantees in jurisdictions other than Israel and the United States; and (vi) as restricted shares.

 

The Company, however, does not warrant that the Plan will be recognized by the income tax authorities in any jurisdiction or that future changes will not be made to the provisions of applicable laws, or rules or regulations which are promulgated from time to time thereunder, or that any exemption or benefit currently available, whether pursuant to Section 102 or otherwise, will not be abolished.

 

1.3.         Adjustments and Compliance with Tax Laws.  The Board shall have the authority to make any requisite adjustments in the Plan and determine the relevant terms in any Agreement (as defined in Section 7 below) in order to comply with the requirements of any of the relevant tax regimes. Furthermore, should any provision of Section 102 be amended, such amendment shall be deemed included in the Plan with respect to options granted or shares issued in the context of Section 102.  Where a conflict arises between any section of the Plan, the Agreement or their application, and the provisions of any relevant tax law, rule or regulation, whether relied upon for tax relief or otherwise, the Board at its sole discretion shall determine the necessary changes to be made to the Plan and its determination regarding this matter shall be final and binding.

 

1.4.         Grants as Public Company.  The Plan contemplates the grant of option awards by the Company as a company whose shares are publicly-traded.  The Company’s shares are registered for trading on the Tel-Aviv Stock Exchange Ltd. and may in the future be traded on other stock exchanges or on an electronic quotation system, whether in Israel or abroad. Therefore, the options and/or shares allotted in accordance with the Plan may be made conditional to any requirement or instruction of the stock exchange authorities or of any other relevant authority acting pursuant to applicable law as shall exist from time to time.  In such case, by means of a Board resolution, the Plan and the Agreements prepared pursuant hereto, may be amended as 

 

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necessary to meet such requirements. In the event of a contradiction between any such amendment and the Plan’s provisions, the amendment shall prevail.

 

2.              ADMINISTRATION OF THE PLAN

 

2.1.         The Plan shall be administered by the Board and/or by any committee of the Board so designated by the Board.  Any subsequent references herein to the Board shall also mean any such committee if appointed and, unless the powers of the committee have been specifically limited by law or otherwise, such committee shall have all of the powers of the Board granted herein. Without derogating from the generality of the foregoing, the Board shall have the authority to designate grants made pursuant to Section 102 as either grants made through a trustee or not through a trustee and to determine (and from time to time, change, subject to Section 102) the tax route applicable to options granted through a trustee pursuant to Section 102 (e.g., the capital gains route or the employment income route) and to make any other elections with respect to the Plan pursuant to applicable law.  Subject to Sections 4 and 15, the Board shall have plenary authority to determine the terms and conditions of all options (which need not be identical), including, without limitation, the purchase price of the shares covered by each option, the identity of those to whom, and the time or times at which, options shall be granted, the number of shares to be subject to each option, whether an option shall be granted pursuant to Section 102 or otherwise and when an option can be exercised and whether in whole or in installments. Subject to Section 15, the Board shall have plenary authority to construe and interpret the Plan, to prescribe, amend and rescind the rules and regulations relating to it and to make all other determinations deemed necessary or advisable for the administration of the Plan. All determinations and decisions of the Board pursuant to the provisions of the Plan and all related orders and resolutions of the Board shall be final, conclusive and binding on all persons, including the Company, its shareholders, grantees and their estates and beneficiaries.

 

2.2.         Any directive or notice signed by a member of the Board shall constitute conclusive proof and authority for every act or decision of the Company.

 

2.3.         No director or officer of the Company shall be personally liable or obligated to any grantee as a result of any decision made and/or action taken with respect to the Plan or its execution.

 

3.              SHARES SUBJECT TO THE PLAN

 

The shares subject to the Plan shall be Ordinary Shares of the Company.  The initial maximum number of shares that may be issued under the Plan is 17,000,000 Ordinary Shares of NIS 0.01 nominal value each, as such number of shares may be adjusted in accordance with Section 14.  The Board may from time to time increase or decrease the maximum number of shares that may be issued under the Plan.  Such shares may be in whole or in part, as the Board shall from time to time determine and subject to applicable law, authorized and unissued Ordinary Shares or issued and fully paid Ordinary Shares which shall have been purchased by the Company or the Trustee (as hereinafter defined) hereunder with funds provided by the Company, or otherwise as the Board shall determine. If any option granted under the Plan shall expire, terminate or be canceled for any reason without having been exercised in full, the shares subject to the expired, terminated or cancelled portion of such option shall again be available for the purposes of the Plan.

 

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4.              OPTION EXERCISE PRICES

 

The consideration to be paid by a grantee for each share purchased by exercising an option (the “Option Exercise Price”) shall be as determined by the Board on the date of the option approval (the “Date of Grant”), but, in the case of an Incentive Stock Option, not less than 100% of the Fair Market Value (as defined in Section 9.5 below) of the underlying Ordinary Shares on the Date of Grant or such other amount as may be required pursuant to the Code, and provided that the Option Exercise Price shall not be less than the nominal value of the shares subject to the option.

 

No Incentive Stock Option shall be granted to a grantee who at the time of grant owns (or is considered to own within the meaning of Section 424(d) of the Code) shares possessing more than 10% of the total combined voting power of all classes of shares of the Company (or any parent or subsidiary of the Company), unless at the time the Option Exercise Price is at least 110% of the Fair Market Value of the underlying Ordinary Shares and the Incentive Stock Option by its terms is not exercisable after the expiration of five (5) years from the Date of Grant.

 

The Board may, at its discretion, grant the holder of an outstanding option, in exchange for the surrender and cancellation of such option, a new option having an Option Exercise Price lower than provided in the option so surrendered and canceled, and containing such other terms and conditions as the Board may prescribe in accordance with the provisions of this Plan, provided that such new Option Exercise Price shall not be less than the nominal value of the shares subject to the new option.

 

5.              EXCLUSIVITY OF THE PLAN

 

Unless otherwise determined by the Board in any particular instance as part of the Agreement, each grantee hereunder will be required to declare and agree that all prior agreements, arrangements and/or understandings with respect to shares of the Company or options to purchase shares of the Company which have not actually been issued or granted prior to execution of the Agreement shall be null and void and that only the provisions of the Plan and/or the Agreement shall apply.

 

Notwithstanding the above, the adoption of this Plan, by itself, shall not be construed as amending, modifying or rescinding any incentive arrangement previously approved by the Board or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of options otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.

 

6.              GRANT OF THE OPTIONS AND ISSUANCE OF THE SHARES TO THE TRUSTEE

 

6.1.         The Board shall appoint a trustee for the purposes of this Plan, which trustee shall be approved, with respect to grants designated as grants made through a trustee pursuant to Section 102, in accordance with Section 102 (the “Trustee”). The Trustee shall have all the powers provided by law, Section 102 and the Plan and shall act pursuant to the provisions thereof, as they shall apply from time to time.  The Company shall pay the Trustee a fee as shall be agreed between the Trustee and the Company.

 

6.2.         Unless otherwise determined by the Board, all option awards shall be issued by the Company in the name of the Trustee and the share certificates representing any 

 

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shares issued pursuant to options exercised hereunder, and any and all other or additional rights or shares deriving from or issued in connection therewith, if any, such as, but not limited to, bonus shares (share dividends) (“Additional Rights”), shall be issued by the Company in the name of the Trustee in trust for the designated grantee and shall be deposited with the Trustee, held by him and registered in his name in the register of members of the Company for such period as determined by the Board but, in the case of grants designated as grants made through a trustee pursuant to Section 102, not less than the period required, or approved, with respect thereto pursuant to Section 102, as shall be in effect from time to time (the “Lock-Up Period”).

 

Furthermore, and without derogating from the aforesaid or any other provision hereof, with respect to options granted or shares issued which were designated as made through a trustee pursuant to Section 102: (i) they may not be sold until the end of the Lock-Up Period, unless otherwise allowed or determined by the Israeli tax authorities; and (ii) all Additional Rights will be subject to the same tax route applicable to the original option and/or shares.

 

6.3.         Without derogating from the provisions of Sections 6.2 above or 6.7 below, and unless otherwise determined by the Board generally or in any particular instance, the shares issued with respect to any options granted hereunder and all Additional Rights, if any, will be held by the Trustee and registered in his name. Since the Company is listed for trade in the Tel-Aviv Stock Exchange Ltd., the grantee may request the registration of the options in his/her name and transfer to him/her subject to the provisions of Section 102, applicable laws and the Plan all as shall be in effect from time to time (e.g., payment of taxes, etc.). Notwithstanding the above, options granted and designated as grants made through a trustee pursuant to Section 102 will be held by the Trustee and registered in his name in trust for the designated grantee, for not less than the Lock-Up  Period.

 

6.4.         Options granted hereunder shall not confer upon the holder thereof any of the rights of a shareholder of the Company with respect to the shares subject to such options until such shares are issued and registered in the name of the holder upon the exercise of the options.

 

6.5.         For as long as any shares are held by the Trustee or registered in his name or for as long as the certificates representing any shares are held by the Trustee, the Trustee alone shall be entitled to receive every notice to which a shareholder is entitled, or to demand any information, and any financial and/or other report to which a shareholder is entitled from the Company, and only he or whomever he shall designate pursuant to the Proxy and Power of Attorney referred to and as defined in Section 10.2 below (the “Attorney”), shall be entitled to exercise every other right of the shareholders vis-a-vis the Company including the right to participate in and to vote at all shareholders’ meetings.  No grantee shall be entitled to exercise any of these rights as shareholder nor make any demand or request of the Trustee and/or of the Attorney in this regard.

 

6.6.         Shares registered in the Trustee’s name shall be represented at meetings of shareholders of the Company and shall be voted by the Trustee or the Attorney.

 

6.7.         Nothing in the aforegoing provisions shall derogate from the power of the Board to grant options or to allot shares to the Trustee otherwise than under the provisions of Section 102, or to allot shares or grant options to grantees directly otherwise than through the Trustee or on terms which differ from those specified above, or to 

 

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approve the transfer of shares from the Trustee to the name of any grantee(s) upon such conditions as shall be determined by the Board.

 

7.              OPTION OR SHARE PURCHASE AGREEMENT; TERMINATION OF EMPLOYMENT

 

Unless otherwise determined by the Board, every grantee shall be required to sign an option or share purchase agreement or other document as shall be determined by the Board, in the form approved by the Board (the “Agreement”).

 

The Agreement shall specify the type of option award granted and whether it constitutes an option pursuant to Section 102, and if so, under which regime, an option pursuant to Section 3(i) of the Income Tax Ordinance, an Incentive Stock Option, a Non-Qualified Stock Option or otherwise.  The Agreement need not be identical with respect to each grantee.  The following terms, however, shall apply to all options, and, mutatis mutandis, shares, unless expressly otherwise decided in respect of a particular option:

 

7.1.         Unless otherwise determined by the Board or in the Agreement, the Option Exercise Price shall be paid by the grantee to the Company no later than the date of exercise of the option in such manner as the Company may prescribe.

 

7.2.         The grantee shall have no right of first refusal to purchase shares of the Company which may be offered for sale by shareholders of the Company, and shall have no pre-emptive rights to purchase shares which are being allotted or shall in the future be allotted by the Company, to the extent any such rights otherwise exist.

 

7.3.         The option and/or the right to the option and/or the shares are personal and except insofar as is specified in this Plan, and, where applicable, subject to Section 102, may not be transferred, assigned, pledged, withheld, attached or otherwise charged either voluntarily or pursuant to any law, except by way of transfer pursuant to the laws of inheritance, and no power of attorney or deed of transfer, whether the same has immediate effect or shall take effect on a future date, shall be given with respect thereto.  During the lifetime of the grantee, the option may only be exercised by the designated grantee or, if granted to the Trustee, by the Trustee on behalf of the designated grantee.   A note as to the provisions of this sub-section or a legend may appear on any document which grants the option and in particular in the Agreement, and also on any share certificate.

 

7.4.         The right to exercise the option is granted to the Trustee on behalf of the grantee.  Vesting shall be in installments, gradually over a period of 4 (four) years from the Date of Grant of the option or such other period or periods as determined by the Board.  Unless otherwise determined, at the conclusion of each period for the exercise of the option as determined in the Agreement (“Vesting Periods”), the option may, from time to time, be exercised in relation to part or all the shares allocated for that period, in such manner that at the end of 1 (one) year from the granting of the option, the Trustee shall, in the absence of a contrary determination in the Agreement, be entitled to exercise on behalf of the grantee and at his or her request, up to 25% (twenty five percent) of the shares subject to the option and thereafter 1/16 of the options quarterly over 3 years.

 

In addition, during each of the Vesting Periods, the option may be exercised in relation to all or part of the shares allocated for any previous Vesting Period in which the option was not fully exercised, provided, subject to the provisions of Section 7.6 hereof, that at the time of the exercise of the option the grantee has

 

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continued to be employed by or to serve as a director of or provide services to, the Company or a Related Company on a continual basis from the Date of Grant thereof until the date of their exercise.  After the end of the Vesting Periods and during the balance of the option period, the option may be exercised, from time to time, in relation to all or part of the shares which have not at that time been exercised and which remain subject to the option, subject to the provisions of Section 7.6 hereof and to any condition in the Agreement, if such exists, which provides a minimum number of shares with respect to which the option may be exercised and any provision which determines the number of times that the Trustee may send the Company notice of exercise on behalf of the grantee in respect of the option.  The Board shall be entitled at any time to shorten the vesting schedule or any Vesting Period.

 

7.5.         The Board may determine at its sole discretion, that any grantee shall be entitled to receive the options or the shares, through the Trustee, pursuant to the provisions of this Plan or, subject to the provisions of Section 102 as relevant, directly in the name of the grantee, immediately upon execution of the Agreement or on such other date or dates as the Company has undertaken towards such grantee.  In the event that a grantee is exempt from the Vesting Periods (pursuant to the provisions of Section 7.4), the Board shall be entitled to determine that where the grantee does not comply with the conditions determined by the Board or ceases to be an employee, director or service provider of the Company or a Related Company, the Trustee, the Company or a Related Company shall have the right to repurchase the shares from the grantee for nominal or any other consideration paid by the grantee or as otherwise determined by the Board at the time of grant. The Board may set additional conditions to this right of repurchase, including the provision of appropriate arrangements for the monies which shall be available to the Trustee or a Related Company or others for the purpose of the repurchase and may set conditions with respect to the voting rights of the grantee, rights of first refusal or pre-emptive rights to purchase shares in the Company, to the extent such rights exist, the grantees right to receive reports or information from the Company, and the grantee’s right to a dividend in respect of shares which are subject to a right of reacquisition as aforesaid.  For as long as the aforegoing conditions of the Board (including a minimum period of employment or engagement as a condition for the lapse of the right to reacquisition) have not been complied with, the grantee shall not be entitled to sell or charge or transfer in any other manner the shares which are subject to the right of reacquisition.  As security for the compliance with this undertaking, the share certificate will be deposited with the Trustee who will release the same to the grantee only after the grantee becomes entitled to the shares and the same are not subject to any other restrictive condition.

 

7.6.         Termination of Engagement

 

7.6.1                  If a grantee ceases to be an employee, director or service provider (or, if relevant, an employee of a service provider) of the Company or a Related Company, other than: (i) by reason of death, disability (as determined by the Board in its absolute discretion) or retirement as provided in Section 7.6.3 below; or (ii) for Cause (as defined below) (at which time the option shall terminate immediately upon the earlier of such cessation or notice of cessation); the option shall remain exercisable for a period of ninety (90) days following the earlier of such cessation or notice of cessation (but only to the extent exercisable at termination of employment, the director or service-provider relationship and not beyond 

 

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the scheduled expiration date) (unless the Agreement provides otherwise).

 

The term “Cause” shall mean, for the purposes hereof: (i) conviction of any felony involving moral turpitude or affecting the Company; (ii) embezzlement of funds of the Company or its affiliates; (iii) any breach of the grantee’s fiduciary duties or material breach of duties of care of the Company, including without limitation disclosure of confidential information of the Company; or (iv) any conduct (other than conduct in good faith) reasonably determined by the Board of Directors to be materially detrimental to the Company.

 

7.6.2                  Notwithstanding the above, in the event of termination of employment or the director or service-provider relationship by the Company or a Related Company within twelve (12) months after a Significant Event (as defined below) the option shall remain exercisable (but only to the extent exercisable at termination and not beyond the scheduled expiration date) for a period of three (3) months following the earlier of such termination or notice of termination (unless the Agreement provides otherwise).

 

Each of the following shall be a “Significant Event”:  a consolidation or merger of the Company with or into another corporation in which the Company is the ongoing or surviving corporation or in which, if the Company is not the ongoing or surviving corporation, the ongoing  or surviving corporation (or, if such transaction is effected through a subsidiary, the parent of such ongoing or surviving corporation) assumes the option or substitutes it with an appropriate option in the surviving corporation (or in the parent as aforesaid).

 

7.6.3                  If the employment or the director or service-provider relationship of a grantee is terminated by reason of death, disability (as determined by the Board in its absolute discretion) or retirement after age 60 with the approval of the Board, the option shall remain exercisable for a period of twelve (12) months following such termination (but only to the extent exercisable at termination of employment, the director or service-provider relationship and not beyond the scheduled expiration date).

 

7.6.4                  The Board may determine whether any given leave of absence constitutes a termination of employment, the director or service-provider relationship.  Options awarded under this Plan shall not be affected by any change of employment, the director or service-provider relationship so long as the grantee continues to be an employee, director or service-provider, as applicable, of the Company or a Related Company.

 

7.6.5                  Notwithstanding the foregoing, the Board may at its absolute discretion, extend the period of exercise of the option by a grantee or grantees for such time as it shall determine either with or without conditions.

 

8.              ASSUMPTION OF AN OPTION; LIQUIDATION

 

In the event of: (i) a sale of all or substantially all of the assets of the Company; or (ii) a consolidation or merger of the Company in which the Company is not the ongoing or surviving corporation, then, and unless in each case: (i) the applicable Agreement provides otherwise; or (ii) the Board determines otherwise, the Company shall be entitled

 

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to determine that all of the outstanding unexercised options held by or for the benefit of any grantee shall be assumed or substituted for an appropriate number of options of the successor company, provided that the aggregate amount of the exercise price for such options shall be equal to the aggregate amount of the exercise price of the Company’s unexercised options held by each grantee at such time.

 

9.              TERM OF OPTIONS; EXERCISE

 

9.1.         The term of each option shall be for such period as the Board shall determine, but not more than 10 (ten) years from the Date of Grant thereof or such shorter period as is prescribed in Section 7.6 or 8.3 hereof or, with respect to Incentive Stock Options, as prescribed in Section 4 above.

 

9.2.         A grantee who desires that the Trustee exercise an option granted to the Trustee on his or her behalf shall so instruct the Trustee in writing in the form annexed hereto as Appendix A or in such other form as shall be approved by the Board from time to time.  The notice shall be accompanied by, or specify the arrangements for, payment of the full Option Exercise Price of such shares as provided in the Agreement.  The Company may require, as a condition to the exercise of an option, that the grantee pay or otherwise make arrangements to the Company’s satisfaction, for the payment of the tax and other obligatory payments applicable to him or her (including all sums payable arising out of or in connection with the Company’s obligation to deduct tax and other obligatory payments at source) pursuant to applicable law and the provisions of the Plan.  The Company may also require that the grantee provide or make such representations and agreements as to grantee’s investment intent and such other matters as the Company may deem necessary, advisable or appropriate at such time.  Upon receipt of all the requisite documents, approvals and payments from the grantee, including sufficient proof of payment or other arrangement with respect to the payment of any applicable taxes in form satisfactory to the Company and the Trustee, the Trustee shall deliver a notice to the Company in the form annexed hereto as Appendix B or in such other form as shall be approved by the Board from time to time, whereupon the Company shall allot the shares in the name of the Trustee.

 

9.3.         A grantee who desires to exercise an option granted directly to him or her (and not through the Trustee) shall so notify the Company in writing in such form as shall be prescribed by the Board from time to time.  As a condition for the exercise of the option, the grantee shall pay or otherwise make arrangements, to the Company’s satisfaction, for the payment of the tax and other obligatory payments applicable to him or her (including all sums payable by the Company arising out of its obligation to deduct tax and other obligatory payments at source) pursuant to applicable law and the provisions of the Plan. Upon receipt of all the requisite documents, approvals and payments from the grantee, including sufficient proof of payment or other arrangement with respect to the payment of any applicable taxes in form satisfactory to the Company, the Company shall allot the shares in the name of the grantee.

 

9.4.         Without limiting the foregoing, the Board may, with the consent of the grantee, from time to time cancel all or any portion of any option then subject to exercise, and the Company’s obligation in respect of such option may be discharged by: (i) payment to the grantee or to the Trustee on behalf of the grantee of an amount in cash equal to the excess, if any, of the Fair Market Value (as defined below) of the relevant shares at the date of such cancellation subject to the portion of the option so canceled over the aggregate Option Exercise Price of such shares; (ii) the issuance 

 

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or transfer to the grantee or to the Trustee on behalf of the grantee of shares of the Company with a Fair Market Value at the date of such transfer equal to any such excess; or (iii) a combination of cash and shares with a combined value equal to any such excess, all as determined by the Board in its sole discretion.

 

For purposes hereof, the “Fair Market Value” of the Ordinary Shares shall mean, as of any date, the average reported sale price of the Ordinary Share during the last 30 trading days prior to that date, of the Ordinary Shares of the Company on the principal securities exchange on which such shares are then traded; provided, however, that if such shares are not publicly traded for 30 days prior to the date as of which Fair Market Value is to be determined, “Fair Market Value” of the Ordinary Shares shall mean the value as determined in good faith by the Board.

 

10.       ADDITIONAL DOCUMENTS

 

10.1.                                           The grantee shall provide, any certificate, declaration or other document which the Company or the Trustee shall consider to be necessary or desirable whether pursuant to any law, whether local or foreign, or otherwise, including any undertaking on the part of the grantee not to sell his or her shares during any period which shall be required by an underwriter or investment bank or advisor of the Company for the purpose of any share issue, whether private or public (including lock-up and/or market stand-off arrangements and undertakings), and including any certificate or agreement which the Company shall require, if any, from the grantees as members of a class of shareholders, or any certificate, declaration or other document the obtaining of which shall be deemed by the Board or the Trustee to be appropriate or necessary for the purpose of raising capital for the Company, of merging the Company with or into another company (whether the Company is the surviving entity or not), or of reorganization of the Company, including, in the event of a consolidation or merger of  the Company or any sale, lease, exchange or other transfer of all or substantially all of the assets or shares of the Company, for the sale or exchange, as the case may be, of any shares the grantee (or the Trustee on his or her behalf) may have purchased hereunder all as shall be deemed necessary or desirable by the Board or the Trustee.

 

As long as the shares and/or the options are registered in the Trustee’s name, the same shall be authorized to sign the grantee’s name and on his/her behalf on any of the aforesaid documentation.  In the event that the options or shares have been transferred into the name of the grantee, and he/she has refused to confirm any document required by the Company as aforesaid by placing his/her signature thereon, the Trustee shall be entitled, at the request of the Company, to sign any document in the name of the grantee and on his/her behalf.

 

10.2.                                           In order to guarantee the aforesaid, and because the rights of the Company and the other shareholders are dependent thereon, the grantee shall, upon signing the Agreement and as a condition to the grant of any options hereunder, execute the Proxy and Power of Attorney attached hereto as Appendix C, or in such other form as shall be approved by the Board from time to time (the “Proxy and Power of Attorney”), irrevocably empowering the Trustee and/or the Attorney,  to sign any document and take any action in his or her name as aforesaid, and the grantee shall have no complaint or claim against the Trustee and/or the Attorney in respect of  any such signature or action, or in respect of any determination of the Trustee pursuant hereto, including pursuant to Section 6.6 or 10.1 above. The grantee will authenticate his or her signature in the presence of a notary if he or she shall be 

 

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asked to do so by the Company, in order to give full validity to the Proxy and Power of Attorney.

 

11.       TAXATION

 

11.1.                                           General

 

The grantee shall be liable for all taxes, duties, fines and other payments which may be imposed by the tax authorities (whether in Israel or abroad) and for every obligatory payment of whatever source (including, but not limited to, social security, health tax, etc., as may be applicable) in respect of the options, the shares (including, without limitation, upon the grant of the options, the exercise of the options, the issuance of the shares, the sale of the shares or the registration of the shares in the grantee’s name) or dividends or any other benefit in respect thereof and/or for all charges which shall accrue to the grantee, the Company, any Related Company and/or to the Trustee in connection with the Plan, the options and/or the shares, or any act or omission by the grantee or the Company in connection therewith or pursuant to any determination by the applicable tax or other authorities, including, without limitation, any such payments required to be made by the Company as the result of any sale by the grantee of shares which were designated as made through a trustee pursuant to Section 102 prior to the end of the Lock-Up Period.  Notwithstanding the foregoing, if the Company elects the “employment income” route for options granted through a trustee pursuant to Section 102, the Company or the Related Company, as applicable, shall pay, at its expense, any social security payments payable by the employer with respect to options so granted to the extent required as a result of such choice.

 

11.2.                                           Deduction at Source

 

The Company (including any Related Company) and/or the Trustee shall have the right to withhold or to require the grantee to pay an amount in cash or to retain or sell without notice Ordinary Shares in value sufficient to cover any tax or obligatory payment required by any governmental or administrative authority to be withheld or otherwise deducted and paid with respect to the options or the Ordinary Shares subject thereto (including, without limitation, upon their grant, exercise, issuance or sale or the registration of the Ordinary Shares in the grantee’s name) or with respect to dividends or any other benefits in respect thereof (“Withholding Tax”), and to make payment (or to reimburse itself or himself for payment made) to the appropriate tax or other authority of an amount in cash equal to the amount of such Withholding Tax.  Notwithstanding the foregoing, the grantee shall be entitled to satisfy the obligation to pay any Withholding Tax, in whole or in part, by providing the Company and/or the Trustee with funds sufficient to enable the Company and/or the Trustee to pay such Withholding Tax.

 

11.3.                                           Certificate of Authorization of Assessing Officer

 

The Company (including any Related Company) or the Trustee shall at any time be entitled to apply to the Assessing Officer, and in the case of a grantee abroad, to any foreign tax authority, and to any other governmental or administrative authority for receipt of their certificate of authorization as to the amount of tax or other obligatory payments which the Company or any Related Company or the grantee or the Trustee is to pay to the tax or other authorities resulting from 

 

12

 

granting the options or allotting the shares, or regarding any other question with respect to the application of the Plan.

 

11.4.                                           Security for Payment of Taxes

 

Without derogating from the above, the Company (including any Related Company) and/or the Trustee shall have the right to require that any grantee provide guarantees or other security to the Company’s satisfaction to guarantee the payment of any taxes or other obligatory payments which may be payable as a result of or in connection with the grant of an option, the exercise thereof, the issuance, sale or transfer of any shares and/or the registration of any options or shares in the grantee’s name (including any sum payable arising out of or in connection with the Company’s obligations to deduct tax and other obligatory payments at source); and, with respect to options granted pursuant to Section 102 which were not designated as made through a trustee, if the grantee’s employment with the Company or any Related Company is terminated for any reason, the grantee will be obligated to provide the Company with a guarantee or other security to its satisfaction and at its discretion, to cover any tax obligations which may arise thereafter in connection with the disposition of the shares.

 

12.       DIVIDENDS

 

The Ordinary Shares issued as a result of the exercise of the options shall participate equally with the Company’s other Ordinary Shares in every cash dividend which shall be declared and distributed subject to the following provisions:

 

12.1.                                A cash dividend shall be distributed only to persons registered in the register of members as shareholders on the record date fixed for the distribution of the dividend.

 

12.2.                                A dividend with regard to shares which are registered in the name of the Trustee shall be paid to the Trustee, subject to any lawful deduction of tax, whether such rate is at the usual rate applicable to a dividend or at a higher rate. The Trustee shall transfer the dividend to the grantees in accordance with instructions that he shall receive from the Company.  Alternatively, the Company shall be entitled to pay the dividend directly to the grantee subject to the deduction of the applicable tax.

 

12.3.                                Without derogating from the provisions of Sections 11.2 and 12.2 hereof, the Company or the Trustee shall be entitled to set off and deduct at source from any dividend any sum that the grantee owes to the Company (including any Related Company) or the Trustee, whether under the Plan or otherwise, and/or any sum that the grantee owes to the tax or other authorities.

 

Notwithstanding the above, if at any time following the grant of options to the grantee, or to the Trustee on behalf of the grantee, the Company shall distribute a cash dividend to its shareholders, then upon record date fixed for the purpose of such distribution, the Option Exercise Price of each unexercised or unvested option at such time shall be reduced by an amount equal to the total cash dividend amount paid for each Company’s share (i.e., prior to any Withholding Tax required for such distribution).

 

13

 

13.       RIGHTS AND/OR BENEFITS ARISING OUT OF THE EMPLOYEE/ EMPLOYER RELATIONSHIP AND THE ABSENCE OF AN OBLIGATION TO EMPLOY

 

13.1.                                No income or gain which shall be credited to or which purports to be credited to the grantee as a result of the Plan, shall in any manner be taken into account in the calculation of the basis of the grantee’s entitlements from the Company or any Related Company or in the calculation of any social welfare right or other rights or benefits arising out of the employee/employer relationship. If, pursuant to any law, the Company or any Related Company, shall be obliged for the purposes of calculation of the said items to take into account income or gain actually or theoretically credited to the grantee, the grantee shall indemnify the Company or any Related Company, against any expense caused to it in this regard.

 

13.2.                                Nothing in the Plan shall be interpreted as binding the Company or any Related Company to employ the grantee and nothing in the Plan or any option granted pursuant thereto shall confer upon any grantee any right to continue in the employment or the director or service-provider relationship of the Company or any Related Company or restrict the right of the Company or any Related Company to terminate such employment or the director or service-provider relationship at any time. The grantee shall have no claim whatsoever against the Company or any Related Company as a result of the termination of his or her employment or the director or service-provider relationship, including, without limitation, any claim that such termination causes any options to expire and/or prevents the grantee from exercising the options and/or from receiving or retaining any shares pursuant to any agreement between him or her and the Company, or results in any loss due to an imposition, or earlier than anticipated imposition, of tax or other liability pursuant to applicable law.

 

14.       ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

 

Notwithstanding any other provisions of the Plan, the Board shall take such actions, if any, as it deems appropriate for the adjustment of the number and class of shares subject to each unexercised or unvested option, and in the option prices in the case of, changes in the outstanding share capital of the Company by reason of any share dividend (bonus shares), stocksplit, recapitalization, combination, exchange of shares, merger, consolidation, liquidation, split-up, split-off, spin-off or other similar occurrences or changes in capitalization.  In the event of any such event, the Board may make any adjustments it deems appropriate, including in the aggregate number and class of shares available under the Plan, and the Board’s determination in this regard shall be conclusive.

 

Provided however, that in the event that following the grant of options to the grantee, or to the Trustee on behalf of the grantee, the Company shall offer securities to its shareholders by way of a rights offering, then upon the record date of such offering, the Option Exercise Price of each unexercised or unvested option shall be reduced by an amount equal to the difference between the price per share applicable on the distribution date and the actual price of securities issued under the rights offering prospectus.

 

15.       TERM, TERMINATION AND AMENDMENT

 

Unless the Plan shall theretofore have been terminated as hereinafter provided, the Plan shall terminate on, and no option shall be granted after, the tenth anniversary of the date the Plan is adopted by the Board.  The Board may at any time terminate, modify or amend the Plan in such respects as it shall deem advisable.  Options granted prior to

 

14

 

termination of the Plan may, subject to the terms of the Plan and any Agreement, be exercised thereafter.  Without the consent of the grantee to whom any option shall theretofore begranted, any amendment or modification of the Plan may not adversely affect the rights of such grantee under such option.

 

16.       EFFECTIVENESS OF THE PLAN; APPROVALS

 

The Plan shall become effective as of the date determined by the Board.  Notwithstanding the foregoing and Sections 3 and 15 above, in the event that approval of the Plan or any modification or amendment thereto by the shareholders of the Company is required under applicable law or pursuant to applicable stock exchange rules or regulations, such approval shall, to the extent possible, be obtained within the time required under the applicable law, rule or regulation.  If such shareholder approval is required in connection with the application of specified tax treatments, the Company shall make reasonable efforts to obtain such approval within the required time.

 

17.       RELEASE OF THE TRUSTEE AND THE ATTORNEY FROM LIABILITY

 

In no event shall the Trustee or the Attorney be liable to any grantee under the Plan, or to a purchaser of shares from any grantee with respect to any act which has been or will be carried out in relation to the Plan, its execution and any matter connected thereto or arising therefrom.  The grantee will be required to covenant, upon signing the Agreement that he or she will not make any claim against the Trustee or the Attorney in any manner whatsoever and on any ground whatsoever and that he or she will expressly agree that if the Trustee or the Attorney are sued by them, then the Trustee or the Attorney shall be entitled by virtue of this Section alone to apply to the court for dismissal of the action against them with costs.

 

18.       GOVERNING LAW

 

The Plan and all instruments issued thereunder, shall be governed by and construed in accordance with the laws of the State of Israel, subject to the provisions of the Code with respect to Incentive Stock Options and, in the event of any ambiguity or conflict, the provisions hereof shall be so construed and applied as to give effect to the intention that any Incentive Stock Option granted will qualify as such under Section 422 of the Code.

 

15

 

COLLPLANT HOLDINGS LTD.

 

Appendix A

 

to CollPlant Holdings Ltd.’s Share Ownership

and Option Plan (2010)

 

(Section 9.2)

 

NOTICE OF EXERCISE

 

Date:                              

 

The Trustee under the CollPlant Holdings Ltd.

Share Ownership and Option Plan (the “Plan”)

 

Dear Sirs,

 

Re: Notice of Exercise

 

I hereby wish to inform you that it is my desire that of the Option which was granted to you on          to acquire        (        ) Ordinary Shares of CollPlant Holdings Ltd. (the “Company”) on my behalf, you exercise and acquire on my behalf        (        ) of the Ordinary Shares subject to the said Option at a price of NIS      per share, all in accordance with the Plan.

 

Attached to this Notice is a check in the amount of NIS          (NIS         ) as payment for the abovementioned shares.

 

I am aware that all the shares shall be allotted to you, registered in your name and that you shall hold all the share certificates representing such shares.

 

Likewise, I am aware of and agree to all the other provisions of the Plan and applicable law.

 

	
 
    	
Yours sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Employee’s name
    

 

16

 

COLLPLANT HOLDINGS LTD.

 

Appendix B

 

to CollPlant Holdings Ltd.’s Share Ownership

and Option Plan (2010)

 

(Section 9.2)

 

NOTICE OF EXERCISE

 

Date:                              

 

CollPlant Holdings Ltd.

 

Dear Sirs,

 

Re: Notice of Exercise

 

Please be advised that I hereby exercise          (        ) of the Ordinary Shares subject to the Option which was granted to me on behalf of            on          to acquire          (        ) Ordinary Shares of CollPlant Holdings Ltd., at a price of NIS      per share, all in accordance with the Plan.

 

Attached to this Notice is a check in the amount of NIS          (NIS         ) as payment for the abovementioned shares.

 

	
 
    	
Yours sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
The Trustee
    

 

17

 

COLLPLANT HOLDINGS LTD.

 

Appendix C

 

to CollPlant Holdings Ltd.’s Share Ownership

and Option Plan (2010)

 

(Section 10.2)

 

IRREVOCABLE PROXY AND POWER OF ATTORNEY

 

I, the undersigned,          , hereby appoint               and/or            or whomever shall replace him as trustee pursuant to CollPlant Holdings Ltd.’s  Share Ownership and Option Plan (2010) (the “Trustee” and the “Plan”, respectively)  or whomever the Trustee shall designate (the Trustee and/or such designee shall be referred to hereafter as the “Attorney”) as my proxy to participate and vote (or abstain) for me and on my behalf as the Attorney at his sole discretion shall deem appropriate, on all matters and at all meetings of shareholders (whether ordinary, extraordinary or otherwise), of CollPlant Holdings Ltd. (the “Company”), on behalf of all the shares and/or options of the Company held by the  Trustee on my behalf and hereby authorize and grant a power of attorney to the Attorney as follows:

 

I hereby authorize and grant power of attorney to the Attorney for as long as any shares and/or options which were allotted or granted on my behalf are held by the Trustee or registered in his name, or for as long as the certificates representing any shares are held by the Trustee, to exercise every right, power and authority with respect to the shares and/or options and to sign in my name and on my behalf any document (including any agreement, including a merger agreement of the Company or an agreement for the purchase or sale of assets or shares (including the shares of the Company held on my behalf) and any and all documentation accompanying any such agreements, such as, but not limited to, resolutions, decisions, requests, instruments, receipts and the like), and any affidavit or approval with respect to the shares and/or options or to the rights which they represent in the Company in as much as the Attorney shall deem it necessary or desirable to do so. In addition and without derogating from the generality of the foregoing, I hereby authorize and grant power of attorney to the Attorney to sign any document as aforesaid and any affidavit or approval (such as any waiver of rights of first refusal to acquire shares which are offered for sale by other shareholders of the Company and/or any waiver of any preemptive rights to acquire any shares being allotted by the Company, in as much as such rights shall exist pursuant to the Company’s Articles of Association as shall be in existence from time to time) and/or to make and execute any undertaking in my name and on my behalf if the Attorney shall, at his sole discretion, deem that the document, affidavit or approval is necessary or desirable for purposes of any placement of securities of the Company, whether private or public (including lock-up and/or market stand-off arrangements and undertakings), whether in Israel or abroad, for purposes of a merger of the Company with or into another entity, whether the Company is the surviving entity or not, for purposes of any reorganization or recapitalization of the Company or for purposes of any purchase or sale of assets or shares of the Company.

 

This Proxy and Power of Attorney shall be interpreted in the widest possible sense, in reliance upon the Plan and upon the goals and intentions thereof.

 

This Proxy and Power of Attorney shall be irrevocable until such time as the rights of the Company and the Company’s shareholders are dependent hereon.  The revocation of this Proxy and Power of Attorney shall in no manner effect the validity of any document (as aforesaid), affidavit or approval which has been signed or given as aforesaid prior to the revocation hereof and in accordance herewith.

 

This Proxy and Power of Attorney shall also apply to all shares and/or options in other entities issued or granted to or on behalf of the undersigned and held by the Trustee in consideration or in exchange for, or by virtue of, any shares and/or options of the Company in connection with any consolidation, merger, spin-off or like transaction with respect to the Company, and the term “Company” when used herein shall include any other such entity.

 

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IN WITNESS WHEREOF, I have executed this Proxy and Power of Attorney on     the    day of         ,         .

 

	
 
    	
 
    

Name:

I.D. Number:

 

CONFIRMATION

 

I, the undersigned,         , hereby confirm the signature of          which appears above.

 

 

19Exhibit 10.4

 

[Translation from Hebrew]

 

Science Park — Kiryat Weizmann

 

- Lease Agreement -

 

Africa Israel Properties Ltd.

 

A Member of the Africa Israel Investments Group Ltd.

 

 

Unprotected Lease Agreement

 

Drafted and signed in Kiryat Weizmann on June 19, 2008

 

Between:

 

Africa Israel Properties Ltd.

Of 4 Derech HaHoresh Rd., Yehud

(Hereinafter: the “Lessor”)

 

Of the first part;

 

And:

 

Collplant Ltd.

Reg. Co. No. 513578260

Of 2 Pakaris St., Rehovot, P.O. Box 2310

(Hereinafter: the “Lessee”)

 

Of the second part;

 

Whereas:                                          The Lessor holds the rights to the Leased Property, as defined below, according to which it is entitled to lease the Leased Property to the Lessee; and

 

Whereas:                                          The Lessee wishes to lease the Leased Property from the Lessor, and the Lessor agrees to the foregoing, subject to the provisions of this Agreement;

 

[Signatures] [Official Stamp of Africa Israel Properties Ltd.]

[Signatures] [Official Stamp of Collplant Ltd., Reg. Co. No. 513578260]

 

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Now therefore, the parties have declared and warranted between them as follows:

 

1.              The preamble presented above constitutes an inseparable part of this Agreement.

 

2.              Interpretation

 

2.1.                            The terms specified below will be interpreted according to the definitions provided alongside them:

 

	
“Park”
    	
The plot of   land in Ness Tziona known as Kiryat Weizmann — Science Park.
    
	
 
    	
 
    
	
“Building”
    	
The building   located in the Park which includes / will include the Leased Property, as   specified in the Addendum, and as marked in red in Annex “B”.
    
	
 
    	
 
    
	
“Leased Property”
    	
A part of   the Building, including all of its fixed facilities, which is marked in green   in the Addendum, and as specified in Annex “C”,   and the area of which may be expanded or reduced with the parties’ consent.
    
	
 
    	
 
    
	
“Institute”
    	
The Weizmann   Institute of Science.
    
	
 
    	
 
    
	
“Addendum”
    	
The addendum   to this Agreement.
    
	
 
    	
 
    
	
“Control”
    	
The holding   of at least 51% of the shares and rights, of any type whatsoever, of a   corporation, including the right to appoint at least 51% of the managers, and   the right to appoint the CEO.
    

 

2.2.                            It is hereby agreed between the parties that any modification of this Agreement by the parties, with reference to the description of the Leased Property, the Lease Period, the Rent, and the Rent payment method, or regarding any other matter, will only enter into effect if it has been prepared in writing and signed by both parties to this Agreement.

 

2.3.                            The sections headings in this Agreement constitute an inseparable part hereof, and may not used to interpret the Agreement.

 

2.4.                            The annexes to this Agreement constitute an inseparable part hereof.

 

2.5.                            The provisions of this Agreement exclusively exhaust the entire agreement between the parties, and any negotiations which preceded the signing hereof, or which existed concurrently with the signing hereof, as well as any declarations, representations, undertakings or understandings which preceded, or which constituted a condition for, the signing of this Agreement, are hereby rendered null and void. Any verbal declarations and notices given by the managers, officials and employees of the Lessor will not be binding towards the Lessor, and the Lessor will be obligated only by the document which has been duly signed by its authorized signatories.

 

2

 

2.6.                            In the event that the Lessee includes several individuals, they will be bound, jointly and severally, by all of the Lessee’s undertakings under this Agreement, and by all documents and notices which have been signed by the Lessee, and which have been prepared by virtue of its provisions.

 

3.              The Transfer

 

The Leased Property will be transferred to the Lessee on the date specified in the Addendum (hereinafter: the “Transfer Date”), in its current condition (“as is”), and the Lease Period will commence from the foregoing date, regardless of whether or not the Lessee has appeared to receive possession of the Leased Property on the Transfer Date. It is hereby clarified that that the electrical connection to the Leased Property, which will be provided by the Lessor, will be up to 0.25 ampere per gross square meter of the area of the Leased Property, and no more. It is hereby clarified that that any cost which may be involved with the electrical connection, in an amount exceeding the foregoing, will apply in full to the Lessee, and the Lessee will pay the aforementioned amount to the Lessor and/or the competent authority, immediately upon the first demand by the Lessor and/or the competent authority, as applicable.

 

For the avoidance of doubt, it is hereby declared and agreed that any non-appearance by the Lessee on the Transfer Date for the purpose of accepting the Leased Property into its possession will nor derogate from any of the Lessee’s undertakings in accordance with this Agreement.

 

4.              The Lease and the Lease Period

 

4.1.                            The Lessor hereby leases the Leased Property to the Lessee, and the Lessee hereby leases the Leased Property from the Lessor, for the period specified in the Addendum (hereinafter: the “Lease Period”), beginning from the Transfer Date. The Lessee will have the option to extend the Lease Period in the event that the foregoing option has been specified in the Addendum.

 

4.2.                            The Lessee will not be entitled to terminate the Lease before the end of the Lease Period. Any cessation of the use of the Leased Property and/or any vacation of the Leased Property by the Lessee before the end of the Lease Period will not release the Lessee from its undertakings under this Agreement, including, but without derogating from the generality of the foregoing, the Lessee’s undertaking to pay the Rent to the Lessor.

 

4.3.                            The Lease in accordance with this Agreement constitutes a “net lease”, and the Lessee will be obligated to pay all payments with respect to the Leased Property during the Lease Period, whether these apply to owners or to occupants, and whether these apply on the signing date of this Agreement, or will apply in the future.

 

4.4.                            The provisions of this section constitute a fundamental provision of this Agreement, and any breach thereof will constitute a fundamental breach of the Agreement.

 

5.              Familiarity with the Leased Property

 

The Lessee hereby declares that it has visited the Park, the Building and the Leased Property, and has seen and examined them and their surrounding areas, and is familiar with and aware of all of the plans and details pertaining thereto, which could affect its engagement in this Agreement, and

 

3

 

has found all of the foregoing suitable, in all respects, for its purposes, and subject to the transfer of the Leased Property into its possession in accordance with the provisions of this Agreement, and hereby waives any claim of unsuitability, and any other claim pertaining to the Park, the Building, the Leased Property, the possibilities of use thereof, and its engagement in this Agreement.

 

For the avoidance of doubt, the Lessee hereby declares that it accepts the Leased Property in its current condition (“as is”), without any correction and/or modification whatsoever, and affirms that the Leased Property, in its current condition, is indeed suitable for its purposes, in all respects, and that it will not demand, and will not be entitled to receive, from the Lessor, any correction and/or modification in the Leased Property.

 

6.              Lease Purpose

 

The Lessee undertakes not to use the Leased Property for any purpose whatsoever, in any manner whatsoever, other than for the Lease Purpose, as specified in the Addendum.

 

The provisions of this section constitute a fundamental provision of this Agreement, and any breach thereof will constitute a fundamental breach of this Agreement.

 

7.              Rent

 

7.1.                            The Lessee undertakes to pay the Rent to the Lessor in accordance with the installments, dates and manner specified below:

 

7.1.1.                  The Basic Rent during the Lease Period will be linked to the Index, and will be paid by the Lessee to the Lessor in advances, on the dates specified in the Addendum.

 

7.1.2.                  The payments of Basic Rent will be linked to the Index in accordance with the following provisions:

 

“Index”              -          The index known as the consumer price index (including fruits and vegetables), as published by the Central Bureau of Statistics and Economic Research, and any similar index, if published by any other official institute or entity.

 

Additionally, any other official index which will replace the foregoing, regardless of whether or not if it is based on the same principles.

 

In the event that another index enters into effect, and the aforementioned Bureau, entity or institution have not established the ratio between it and the index replaced by the Chairman of the Management Committee of Bank Leumi Le-Israel Ltd., or any person who may actually fulfill such role, at any time, upon the Lessor’s demand.

 

“Base Index”    -        As specified in the Addendum.

 

4

 

“New Index”     -          Interpretation regarding each payment of Rent — the known index on the date specified for execution of that payment, or on the date of its actual execution, whichever is higher.

 

If, on the date of actual payment of any one of the payments of Basic Rent, the New Index is higher than the Base Index, the payment in question will be increased according to a ratio which corresponds to the rate of increase of the New Index relative to the Base Index. If, on the actual payment date of any one of the rent payments, the New Index will be equal to or lower than the Base Index, the payment in question will remain unchanged.

 

7.1.3.                  The Rent and the Service Fees (as defined below), with respect to the first 3 months of the Lease, with the addition of VAT for the foregoing, will be paid to the Lessor at the time of the signing of this Agreement.

 

7.2.                            To facilitate the collection of Rent and the linkage differentials with respect thereto, as well as any other amount which may be owed by the Lessee to the Lessor, the Lessee undertakes to transfer to the Lessor, on the date specified by the Lessor, and in any case, within 7 days after the signing date of this Agreement, or 7 days before the Transfer Date, whichever is earlier, permission to charge its account, in the wording conventionally practiced by Bank Leumi Le-Israel Ltd. It is hereby declared, for the avoidance of doubt, that the acceptance of permission, and any use thereof by the Lessor, will not be considered repayment, and payment will only be considered as the full and timely execution of all payments.

 

7.3.                            In the event that two consecutive and contiguous payments of Rent, and/or any other payment which is owed by the Lessee to the Lessor, have not been paid by the required date for the aforementioned payments, including by 7 days after the provision of written notice regarding the foregoing from the Lessor to the Lessee, all of the Lessee’s other payments will be required for immediate payment, and the Lessee will be required to pay the total amount of Rent, with respect to the entire Lease Period, which have not yet been paid by the foregoing date, by the end of two business days after the Lessor’s first demand, without derogating from the Lessor’s right to consider any failure to pay on time a breach of this Agreement and of its rights hereunder. It is hereby declared, for the avoidance of doubt, that the collection of Rent in the foregoing case will not be considered as any waiver or consent on the part of the Lessor for the Lessee’s breach of the Agreement.

 

7.4.                            Notwithstanding the foregoing, the Rent will be increased at the start of each year, beginning from the second year of the Lease Period, according to the rate specified in the Addendum, and the increased Rent will be subject to the provisions of section 7.1 above, mutatis mutandis.

 

7.5.                            For the avoidance of doubt, the undertaking to pay the Rent and all other payments which the Lessee is required to pay to the Lessor applies absolutely to the Lessee, and any failure to submit a bill for rent by the Lessor will not derogate from or reduce the Lessee’s aforementioned undertaking.

 

7.6.                            The Lessor will charge any amount that has been received from the Lessee, in its exclusive discretion, on account of amounts which the Lessee will owe to the Lessor at that time.

 

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7.7.                            The provisions of this section constitute a fundamental provision of this Agreement, and any breach thereof, or of any part thereof, will constitute a fundamental breach of this Agreement.

 

8.              Taxes, Fees and Other Payments

 

8.1.                            In addition to the Rent, and without derogating from the generality of the provisions of section 4.3 above, the Lessee undertakes to pay, during the Lease Period, the following payments (hereinafter: the “Lessee’s Payments”):

 

8.1.1.                  All taxes, fees, municipal taxes, levies, mandatory payments and expenses (hereinafter, jointly: the “Taxes”), whether national or municipal, which are required for payment and/or which may be required for payment in the future, regardless of whether they currently exist or will be imposed in the future, with respect to the Leased Property, and with respect to the business conducted therein, regardless of whether such Taxes apply by law to owners, lessees or occupants, and regardless of whether they apply to owners.

 

The taxes which apply to a lessee or occupant will be paid by the Lessee directly to the competent authorities, while the Taxes which apply to the owner will be paid by the Lessee to the Lessor upon the presentation of a document requiring the payment of such Taxes to the component authority.

 

8.1.2.                  Fees and payments with respect to the electricity meter and the water meter.

 

8.1.3.                  Value added tax with respect to the Rent, and with respect to any other payment which applies to the Lessee under this Agreement, which will be paid together with any payment to which it applies.

 

8.1.4.                  Stamp tax as applicable to this Agreement, and all documents and notices given in accordance therewith, and with respect thereto.

 

8.1.5.                  All fees and payments which pertain to the consumption of water and electricity in the Leased Property, and to the use of telephones, if installed, during the Lease Period.

 

8.1.6.                  Any expense which may be caused due to unreasonable and/or non-standard use of the Leased Property and its surrounding area, including, but without derogating from the generality of the foregoing, with respect to the removal of waste which has been caused by the Lessee, repair of the sewage system, etc.

 

8.1.7.                  The expenses for the insurance by which the Lessor will insure the Leased Property (separately, or as part of the insurance of the entire Building) with respect to the risks deemed appropriate in the Lessor’s discretion, and according to the insurance amount and any other conditions determined by the Lessor from time to time.

 

6

 

In the event that any of the aforementioned payments are due to charges which apply to the Building in its entirety, the Lessee will pay a proportional part of the payments which apply to the Building, according to the ratio between the gross area of the Leased Property and the gross area of the Building.

 

8.1.8.                  Additional charges which apply by law and/or if specified in the Addendum.

 

8.2.                            In the event that the Lessee has not executed any of the Lessee’s payments immediately upon demand by the competent authority or upon the Lessor’s demand, without derogating from its aforementioned obligation, the Lessor will be entitled, following the provision of notice to the Lessee two business days in advance, to pay the aforementioned bills at the Lessor’s expense, and the Lessee will be obligated to repay to the Lessor the entire amount which has been paid by it to cover any of the Lessee’s aforementioned payments, within 7 days after the Lessor’s first demand.

 

8.3.                            The provisions of this section constitute a fundamental provision of this Agreement, and any breach of any part thereof will constitute a fundamental breach of the Agreement.

 

9.              Non-application of the Tenant Protection Law

 

9.1.                            The Lessee hereby declares and agrees that the construction of the Leased Property was completed after August 20, 1968, and that the Leased Property and the Lease therein will not be subject to the provisions of the Tenant Protection Law (Combined Version), 5732-1972, or any law which may come in its place. The Lessee further declares that apart from the Rent specified in the Addendum and its undertakings to pay the Rent payments, as specified in section 9 above, the Lessee has not paid, and is not paying, to the Lessor, any amount whatsoever with respect to the Lease and the use of the Leased Property, whether as key money, or in any other manner whatsoever, and that it will not be entitled to receive key money or any other payment whatsoever upon the Lessee’s vacation of the Leased Property.

 

10.       Repairs, Maintenance and Services

 

10.1.

 

10.1.1.           The Lessor undertakes to provide, for the common property in the Building, cleaning and maintenance services according to a scope and level which will be determined by it, provided that they will maintain the common property in functional and reasonable condition. In exchange for these services, the Lessor will be entitled to charge from the Building’s occupants, including the Lessee, Service Fees which will be equal to the total expenses and costs spent by the Lessor for the provisions of the aforementioned services, with the addition of 15% (hereinafter: the “Building Service Fees”).

 

The Service Fees which the Lessee will be required to pay to the Lessor will be an amount whose proportion to the Service Fees t the Building will be equal to the proportion between the gross area of the Leased Property and the gross area held by lessees in the Leased Property, save for the Lessor, so long as it does not make any real use of the area under its possession, or according to any other proportion which will be determined by the Lessor, in consideration of the Lease Purpose.

 

7

 

The maintenance department on behalf of the Lessor will provide gardening, Parking Lot maintenance, elevator maintenance, machine maintenance and routine maintenance services during conventional work days in the Park, Sundays to Thursdays, from 7:00 AM to 5:00 PM.

 

10.1.2.           Additional Service Fees for buildings with central cooling systems

 

In buildings where an air conditioning system is installed which is based on central cooling tower, the Lessee will pay, in addition to the Service Fees specified above, the amount out of the operating, maintenance and service costs of the central air conditioning system in the Building, which will be equal to the Leased Property’s proportional share out of the total area of the Building.

 

10.2.                     Save for the provisions of this section, the Lessor will not be bound by any liability or warranty for any repairs and/or maintenance and/or examination and/or any services whatsoever (hereinafter: “Services”), in the Leased Property and/or in the Building, and additionally, the Lessor will not be bound by any liability or warranty, whether under this Agreement or by law, for any damage and/or malfunction and/or defect, of any kind whatsoever, in the Leased Property or in the equipment located in the Leased Property, including air conditioning equipment; however, save for the manufacturer’s warranty period, whether the foregoing is due to defective work, defective or unsuitable materials, or due to non-correspondence with the specification or otherwise, and whether the foregoing were discovered, or could have been discovered, and whether during or after the Lease Period, and regarding all of the above — whether they were caused by works in the Leased Property which were performed upon the Lessor’s initiative, or upon the Lessee’s initiative and/or plan and/or request.

 

10.3.                     In the event that the Lessor has decided, in its judgment, and/or is required by the Institute and/or by any other competent authority whatsoever, whether municipal, national or otherwise, to perform maintenance and examination services, of any kind whatsoever, in any public area, and/or in any open private area located in the Park and/or in any structures and/or buildings which are designated for the user or service of the Park’s residents, or any part thereof, the Lessee will be required to pay to the Lessor the Service Fees specified below.

 

The service fees which will be paid by all occupants of the buildings located in the Park will be equal to the total sum of all expenses and costs spent by the Lessor in the provision of the aforementioned maintenance services, with the addition of 15% (hereinafter: the “Total Service Fees”). The Service Fees which the Lessee will be required to pay to the Lessor will be an amount whose proportion relative to the Total Service Fees will be equal to the proportion between the gross area of the Leased Property and the total gross constructed area of all buildings (including all floors) in the Park, which are actually in the possession of lessees or owners, save for the Lessor, so long as it does not make actual use of any area which is in its possession.

 

Notwithstanding the foregoing, the Lessor will be entitled to require the Lessee to pay additional or greater Service Fees than those which it owes according to the aforementioned calculation, in the event that the services which will be required due to the use of the Leased

 

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Property by the Lessee will involve work or expenses which are greater than ordinary regarding other lessees in the Park, or in the event that the services provided to the Leased Property allow greater use thereof, relative to other lessees in the Park. The foregoing will apply, mutatis mutandis, also in the event that the Lessor has decided to provide maintenance and examination services for the Building. The foregoing will not impose on the Lessor any obligation to perform services in any of the Park’s areas, or in connection therewith.

 

10.4.                     In the event that the Lessor is required, or the Lessor has decided, to perform the maintenance and/or examination services specified in section 10.3 above, the Lessor will be entitled to perform the foregoing through any other entity which will be in its discretion, and will be entitled to require the Lessee, at any time, to engage in a services agreement with the aforementioned entity, in a wording which will be determined by the Lessor, provided that the maintenance and/or examination fee which the Lessor will be required to pay will be determined in accordance with the principle specified in section 10.3 above.

 

10.5.                     It is hereby agreed that the cost of any repair which will be performed by the Lessort as part of the services given by it as part of this section, and which is covered under insurance in whose payment the Lessee has participated, will not be included in the expenses for the purpose of the calculation of the Service Fees.

 

11.       Use of the Leased Property

 

11.1.                     The Lessee will be required to obtain from the competent authorities all licenses which are required to manage the business in the Leased Property, within the framework of the Lease Purpose, and undertakes to manage the business only in accordance with the aforementioned licenses, legal requirements and requirements issued by any competent authority.

 

The Lessee hereby declares that it knows and has verified that it is possible to obtain the licenses specified in this section, and that the Lessor will bear no liability whatsoever in the event that the Lessee is unable to obtain them.

 

Without derogating from the provisions of this subsection, it is hereby clarified that the Lessee undertakes, as a condition for the transfer of the possession of the Leased Property, to obtain from the fire department in the Rehovot district a fire extinguishing certificate with respect to the Leased Property, and for this purpose, to furnish to the fire department any authorization which may be required, to install any facility and/or system which may be required, all at the Lessee’s own expense and under the Lessee’s responsibility.

 

11.2.                     The Lessee will not keep any materials, tools, equipment, products, inventory, or any other Chattels whatsoever (hereinafter, jointly: “Chattels”) outside of the Leased Property, without the Lessor’s consent. In the event that any of the Lessee’s Chattels are located outside of the Leased Property, without having obtained the Lessor’s consent to the foregoing, the Lessor will be entitled to remove them from the location, at the Lessee’s expense, and will not bear any liability whatsoever for their condition.

 

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11.3.                     The Lessee will comply with all laws, regulations and bylaws which apply to the Leased Property, the use thereof, and the business, the work and the actions performed therein.

 

11.4.                     The Leased Property, or any part thereof, may not be used in a manner which causes noise, odors, shocks, pollution, smoke, dust or any other nuisance which exceeds a reasonable degree, in consideration of the nature of the Park in general, and the nature of the Leased Property’s close surrounding area in particular.

 

11.5.                     The Lessee will not dispose into the sewage system any waste which in terms of its quantity or quality may harm the aforementioned system, or affect its proper functioning, or which may risk the ordinary use of water sources, rivers, lakes, the sea, or any other source.

 

For the purpose of this section — “sewage system” shall mean central sewage or absorption pits, as well as tunneling and drainage systems and water purification systems, if any.

 

The Lessee is required to ensure that no solid materials are present in the sewage which may harm the pipes or tunnels, and harm or clog the sewage pipes, inspection cells, measurement instrument or purification facilities.

 

11.6.                     The Lessee undertakes not to hang, not to install and not to draw any signs, marking or advertisements of any form whatsoever in any part of the Building in which the Leased Property is located, without the Lessor’s advance consent. The Lessee will be entitled to receive, at its own expense, a sign at the entrance to the Park, in the Building and on the floor where the Leased Property is located, according to the conventional framework used in the Park.

 

11.7.                     All areas outside of the Leased Property may not be used other than for the purpose of accessing the Leased Property according to the way and manner determined by the Lessor from time to time.

 

11.8.                     The Lessee undertakes not to use the Leased Property and any materials and devices maintained therein, and not to perform any actions with respect thereto which involve risks which exceed the insured risks, as specified in this Agreement, unless the Lessor has given its advance written consent for the foregoing. In the event that such consent has been given, the Lessee undertakes to maintain insurance to the Lessor’s satisfaction, against any physical injury and damage to property which may be caused due to such risks, without derogating from the Lessor’s right to prepare the aforementioned additional insurance independently, in which case the Lessee will be obligated to repay to the Lessor, immediately upon its demand, any amount which the Lessor has spent in connection therewith.

 

11.9.                     The Lessee will use the Leased Property and its surrounding area in a manner which will not cause any disturbance to the other occupants of the Building, or to their welfare or use of their leased properties, while maintaining the intactness and cleanliness of the common property in the Building and its facilities.

 

11.10.              Without derogating from the provisions stated above in this section, the Lessee undertakes not to make any use of the Leased Property which causes any noise and/or nuisance and/or pollution and/or ensuing result which is in breach of the provisions of any law, and without

 

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derogating from the generality of the foregoing, will not make any use of the Leased Property which involves and/or which creates, whether directly or indirectly, any chemical compounds and/or smoke and/or gas and/or malodors and/or other active substances which cause harm and/or which may cause harm to the environment, in any manner whatsoever.

 

It is hereby especially emphasized that in any case, the Lessee must absolutely refrain from performing actions involving cooking and/or frying in the Leased Property, and that insofar as the Lessee will be permitted to operate a lunch room, kitchenette, or any similar space in the Leased Property, the foregoing will only constitute permission to warm prepared food in the Leased Property only, under the conditions as instructed by the Lessor, including regarding the installation of ventilators, etc.

 

11.11.              The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof, or of any part thereof, will constitute a fundamental breach of the Agreement.

 

12.       Prohibition of Modifications

 

12.1.                     The Lessee undertakes not to perform or implement any modifications, corrections, upgrades, additions, or any construction works whatsoever, in any manner whatsoever, in the Leased Property (all of the foregoing shall jointly be referred to hereinafter as: the “Works”) without first obtaining the Lessor’s written consent. It is particularly emphasized that no railings or air conditioners may be installed in the Leased Property without the Lessor’s advance written consent, and then only in the manner and form as instructed by the Lessor.

 

In the event that works have been performed without the Lessor’s consent, then without derogating from the Lessor’s right to view the above as breach of this Agreement, the Lessor will be entitled to perform the following actions:

 

12.1.1.           To demand that the Lessor destroy and/or dismantle and/or remove the Works from the Leased Property, in which case the Lessee will be required to perform all repairs which will be required in the Leased Property due to the foregoing, in order to restore the Leased Property to its condition prior to the performance of the Works, and to conclude performance of all of the foregoing within 14 days after the Lessor’s demand. In the event that the Lessee has not done so, the Lessor will be entitled to do so at the Lessee’s expense, or:

 

12.1.2.           To leave the Works as its property, in which the Lessee agrees that the Works will be the exclusive property of the Lessor, and the Lessee will have no entitlement whatsoever with respect to the aforementioned Works.

 

12.2.                     In the event that Works have been performed with the Lessor’s consent, then upon vacation of the Leased Property by the Lessee, the Lessee will have the following choice:

 

12.2.1.           To destroy and/or dismantle and/or remove the Works from the Leased Property, in which case, the Lessee will be required to perform all repairs in the Leased Property which will be required as a result thereof, in order to restore the part of the Leased Property where the Works were performed to its condition prior to the

 

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performance of the Works, and to conclude the performance of all the foregoing no later than the end of the Lease Period under this Agreement. In the event that the Lessee has not done so, the Lessor will be entitled to do so at the Lessee’s expense; or:

 

12.2.2.           To keep the Works in the Leased Property, in which case they will become the Leased Property of the Lessor, and the Lessee will have no entitlement whatsoever with respect to the foregoing.

 

12.3.                     The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof, or of any part thereof, will constitute a fundamental breach of the Agreement.

 

13.       Furniture and Equipment

 

The Lessee is entitled to furnish the Leased Property, and to install equipment therein, provided that the installation of any furniture and equipment whatsoever will not harm the Leased Property. The equipment which the Lessee will be entitled to install and operate in the Leased Property will be subject to section 12 above.

 

14.       Maintenance of the Leased Property

 

14.1.                     The Lessee undertakes to use the Leased Property in a cautious and reasonable manner, and to maintain its cleanliness and the cleanliness of its surrounding area, and to prevent any malfunction and any damage to the Leased Property, including all facilities which serve the Leased Property, whether independently or jointly with other leased properties.

 

14.2.                     The Lessee will be obligated to immediately repair any damage and/or malfunction which may be caused to the Leased Property and to the facilities, as stated in section 14.1 above, and to replace them immediately with another, of the same type as the facility installed in the Leased Property which was lost or damaged.

 

14.3.                     In the event that the Lessee has not performed any repair which it is required to perform, as stated above, or has not replaced it any unit which it is required to replace, as stated above, the Lessor will be entitled, but not obligated, to do so, at the Lessee’s expense, and in any case, the Lessee will be required to fully compensate the Lessor with respect to any damage, malfunction, loss or destruction, as stated above.

 

14.4.                     The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof, or of any part thereof, will constitute a fundamental breach of the Agreement.

 

15.       Liability and Indemnification

 

15.1.                     The Lessor and/or any of its agents of representatives will not be liable, in any manner whatsoever, for any damage and/or harm which may be caused to the Lessee and/or to the Leased Property and/or to the business conducted in the Leased Property and/or to any equipment and/or facilities located in the Leased Property or in its surrounding area.

 

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15.2.                     Without derogating from in subsection 15.1 above, the Lessor and/or any of its agents and/or representatives will bear no liability whatsoever for any damages caused to person and/or property, of any kind whatsoever, to the Lessee and/or to its employees and/or to any other party operating on its behalf, including its agents, suppliers, representatives, contractors, customers, and any other person located in the Leased Property, whether with or without permission.

 

15.3.                     For the avoidance of doubt, the Lessee and the Lessee alone will be liable for any damages, including any physical injury and/or damage to property and/or reputation and/or prevention of profits which the Lessor and/or any third party may incur in connection with the negligence of the Lessee and/or of any other party on its behalf, and for any offense which may occur in connection with the possession and/or the use by the Lessee or by any other party on its behalf of the Leased Property and/or the Building and/or the Park.

 

15.4.                     The Lessee will indemnify the Lessor and/or any other party on its behalf with respect to any damage and/or claim and/or charge which the Lessor and/or any other party on its behalf will be required to pay in connection with any damage and/or offense for which the Lessee is responsible, as stated above, immediately upon the receipt of the Lessor’s first written demand.

 

16.       Insurance

 

Without derogating from the Lessee’s liability and undertakings under this Agreement and/or by law, from the date of the introduction of any assets and/or property whatsoever into the Leased Property, or from the date of this Agreement’s entry into effect, whichever is earlier, the Lessee undertakes to acquire, at its own expense, and to maintain valid, throughout the entire Lease Period, the insurance policies specified below (hereinafter: the “Lessee’s Insurance Policies”):

 

16.1.                     Property insurance — insurance for the entire worth and full restatement value of the content of the Leased Property and/or other property which the Lessee owns and/or is responsible for, and which is located outside of the Leased Property, including any correction, modification, improvement, renovation and addition to the Leased Property, which have been and/or which will be performed by the Lessor and/or on its behalf, against the conventional risks protected in extended fire insurance, including fire, smoke, lightning, explosion, earthquake, storm, tornado, flood, damage due to water or other liquids and the rupture of pipes, damage caused by aircraft, supersonic booms, collision, strikes, riots, malicious harm and break-in.

 

16.2.                     Loss of profit insurance for the Lessee, due to any damage caused to the Leased Property and/or to its contents, as a result of the insured risks as specified in section 16.1 above (excluding break-in), for a reimbursement period of no less than 12 months.

 

The insurance policies specified in sections 16.1 and 16.2 above will include an express section stipulating that the insurers waive subrogation rights towards the Lessor and/or its representatives and/or other lessees and/or other entities hold possession of the Building and/or their employees and managers, whose insurance policies have a clause specifying a

 

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waiver of subrogation rights towards the Lessee, provided that the waiver of subrogation rights does not apply in favor of any person who has caused malicious damages.

 

The Lessee undertakes to update the insurance amounts with respect to the insurance policies specified in sections 16.1 and 16.2 above from time to time, in a manner whereby they will always reflect the entire worth, at restatement value, of the property insured thereunder.

 

16.3.                     Third party liability insurance — insurance of the Lessee’s liability towards the Lessor and/or towards any third party whatsoever, in accordance with the laws of the State of Israel, with liability limits which will be no less than an amount in New Israeli Shekels equivalent to USD 1,000,000 per single event, and in total for an annual insurance period.

 

The aforementioned insurance will not be subject to any restriction regarding liability due to fire, panic, explosion, lifting, unloading and loading devices, defective sanitary facilities, poisoning, any harmful substances in food or beverage, strike and lockdown, and claims by the National insurance Institute.

 

The aforementioned insurance will be expanded to include the Lessor and any representative thereof, as additional insurants subject to a cross liability clause, stipulating that the insurance will be considered as if it had been prepared separately for each individual in the insurant, including specification that the Lessor and/or any representative thereof are not responsible for the payment of any premiums whatsoever, to cover the liability of the Lessor and/or any representative thereof as the owners and/or managers of the Leased Property, and with respect to their liability for the actions and/or omissions of the Lessee.

 

16.4.                     Employers’ liability insurance with respect to the Lessee’s liability towards its employees and/or any other persons employed by it and on its behalf, in accordance with the Torts Ordinance (New Version) and/or in accordance with the Liability for Defective Products Law, 5740-1980, with respect to death and/or physical injury caused to any employee as a result of accident or illness, during or due to their work, with liability limits which will not fall below a total of USD 5,000,000 (five million US Dollars) per injured person, per event and in total for the annual insurance period.

 

The aforementioned insurance will not include any restriction regarding work hours, work at height and in depth, contractors, subcontractors and their employees, baits and poisons, or regarding the employment of minors.

 

The aforementioned insurance policy will be expanded to include indemnification of the Lessor and/or any representative thereof, if the foregoing are considered employers of any or all of the Lessee’s employees.

 

16.5.                     The Lessee’s Insurance Policies, as specified above, will be subject to the following provisions:

 

16.5.1.           The insurance policies will be obtained by the Lessee, and at its expense, from a reputable insurance company which is duly licensed to prepare insurance policies in Israel.

 

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16.5.2.           The Lessee undertakes to pay the premiums which were agreed upon with the insurer in a timely manner, and upon the Lessor’s request, to furnish authorizations of premium payments.

 

16.5.3.           The Lessee’s Insurance Policies will include an express condition stipulating that they have higher precedence over any insurance policy which has been prepared by the Lessor and/or by any other party on its behalf, and that the insurer waives any demand or claim regarding the inclusion of the insurance policies of the Lessor and/or any representative thereof. Additionally, the insurer will undertake that the policies will not be reduced or canceled unless written notice has been sent via registered mail to the Lessor at least 60 days in advance.

 

16.5.4.           With no requirement for any demand on the part of the Lessor, the Lessee hereby undertakes to present to the Lessor, no later than the commencement date of this Agreement, or the date of the instruction of any assets whatsoever into the Leased Property, whichever of the aforementioned two dates is earlier, a certificate of insurance with respect to the Leased Property, in accordance with the working of the “Certificate of the Lessee’s Insurance Policies”, which is attached as an annex to this Agreement, with it being duly signed by the insurer. The Lessee declares that it is aware that the provision of the Certificate of the Lessee’s Insurance Policies constitutes a suspending and preliminary condition for the commencement of the Lessee’s activities in the Leased Property and/or the introduction of any assets whatsoever into the Leased Property, as stated above, and the Lessor will be entitled to prevent the Lessee from engaging in its activities in the Leased Property and/or from introduction any such assets into the Leased Property in the event that the aforementioned certificate has not been furnished to it before the date specified above. Additionally, the Lessee undertakes to furnish to the License original copies of the insurance policies with respect to the Leased Property within 30 days after the date of the Lessor’s demand.

 

16.5.5.           For the avoidance of doubt, it is hereby clarified that any failure to provide the certificates of insurance and the insurance policies by the aforementioned date will not reduce the Lessee’s undertakings under this Agreement, including, and without derogating from the generality of the foregoing, regarding the execution of any payment which applies to the Lessee, and the Lessee undertakes to fulfill all of its undertakings under the Agreement, including if it is prevented from performing works and/or receiving possession of the Leased Property and/or introducing assets into the Leased Property and/or opening its business in the Leased Property, due to a failure to present the certificates and insurance policies in a timely manner.

 

In this context, it is hereby clarified that the preparation of the aforementioned insurance policies by the Lessee will not reduce or derogate, in any manner whatsoever, from any of the Lessee’s undertakings under this Agreement, and will not release it from its obligation to compensate the Lessor and/or any representative thereof, and any person whatsoever, with respect to any damage for which the Lessee is liable under this Agreement and/or by law.

 

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The payment of any insurance benefits whatsoever will not result in a reduction of the compensation and/or indemnification amount to which the Lessor and/or any party on its behalf will be entitled dye to the damage or loss.

 

16.5.6.           No later than 14 days before the end of the period of the Lessee’s Insurance Policies, the Lessee undertakes to furnish to the Lessor and/or to any other party on its behalf, the certificate of insurance specified in section 16.5.4 above, with respect to the extension of the insurance’s validity for an additional year, and within 30 days after the date of the Lessor’s demand, the Lessee will submit the original copies of the Lessee’s Insurance Policies, so long as the Lessee continues holding possession of the Leased Property.

 

16.5.7.           The Lessor and/or any other party on its behalf will be entitled to examine the certificates of insurance and/or the insurance policies which will be provided by the Lessee, as specified above, and the Lessee undertakes to perform any modification or correction which may be required in order to adjust them according to its undertakings. The Lessee hereby declares and undertakes that the rights of the Lessor and/or any other party on its behalf to conduct the examination and to demand the modifications specified above will not impose on the Lessor and/or on any other party on its behalf, or on their behalf, any obligation or liability whatsoever regarding the aforementioned certificates of insurance and insurance policies, nor regarding their contents, scope or validity, or any absence thereof, and the foregoing will not derogate from any obligation whatsoever which applies to the Lessee under this Agreement, whether they have demanded the foregoing or not, and whether they have examined the foregoing or not.

 

16.5.8.           The Lessee undertakes to comply with all of the terms of the policy specified above in this section, to pay the insurance premiums in a full and timely manner, and to ensure and verify that the insurance policies with respect to the Leased Property will be renewed from time to time, as needed, and will be valid for the entire Lease Period.

 

16.5.9.           In the event that the Lessee has not fulfilled its obligation under section 16, in its entirety, the Lessor and/or any other party on its behalf will be entitled, but not obligated, to prepare the insurance policies or any part thereof, in place of the Lessee, and at the Lessee’s expense, and/or to pay in the Lessee’s place any amount whatsoever, without derogating from the Lessor’s right to any other remedy.

 

16.5.10.    The Lessee undertakes not to perform and/or not to permit the performance, by any other party on its behalf of any action or omission which may increase the insurance costs which apply to the Lessor and/or to any other party on its behalf and/or to the other lessees with respect to the insurance for the Building or for the leased properties therein.

 

16.5.11.    The Lessee undertakes that if the Lessor and/or any other party on its behalf will be required to pay additional insurance premiums, above the conventional

 

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amount, with respect to the Lessee’s activities, the Lessee will pay to the Lessor and/or to any other party on its behalf, as applicable, the aforementioned addition, immediately upon the receipt of first demand.

 

16.6.                     The Lessor will be entitled to acquire, and to maintain valid, whether independently or through any other party on its behalf, during the entire Lease Period, the following insurance policies (hereinafter: the “Lessor’s Insurance Policies”):

 

16.6.1.           Insurance for the entire worth and full restatement value of the Building of the Leased Property, including all attached facilities, as well as any additions and improvements which have been performed in the Leased Property by the Lessor, regarding the conventional risks protected in extended fire insurance, including smoke, lightning, explosion, earthquake, riots, strikes, malicious damages, storm, flood, damage caused by water and other liquids and the rupture of pipes, damage caused by aircraft, supersonic booms, collision and break-insure, and against any additional risk which is required in the opinion of the Lessor and/or any other party on its behalf, in amounts or without restriction as to amount, as will be determined by the Lessor and/or by any other party on its behalf, in their exclusive judgment, provided that the insurance amount does not fall below the restatement value of the Building of the Leased Property, including all appendages.

 

The insurance policy will include a clause regarding the waiver of subrogation rights towards lessees and/or occupants in the Building of the Leased Property, with respect to any damage which has been caused by them to the Building of the Leased Property, provided that the foregoing regarding the waiver of subrogation rights will not be apply towards any person who has caused damages with malicious intent.

 

For the purpose of the provisions of this section, the term “Building of the Leased Property” will include all systems which constitute an inseparable part of the Building, and will expressly not include the content of the leased properties, or any addition, correction, modification, improvement of extension which have been performed in the leased properties by the lessees, or by any other parties on their behalf.

 

The insurance premiums which will be charged to the Lessor with respect to the insurance of the Building of the Leased Property will be paid to it by the Lessee within 7 days after the date of demand by the Lessor.

 

16.6.2.           Loss of rent insurance for the Lessor and/or for any other party on its behalf, as a result of loss or damage to the Building of the Leased Property, due to the risks specified in section 16.6.1 above, for a period which will be no less than 12 months.

 

The aforementioned insurance policy will include a clause specifying a waiver of subrogation rights towards lessees and/or occupants in the Building of the Leased Property, with respect to any damage which has been caused by them, provided

 

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that the foregoing regarding a waiver of subrogation rights towards the lessees and/or occupants of the Building of the Leased Property, with respect to damage which has been caused by them, will not apply towards any person who has caused damage with malicious intent.

 

16.6.3.           The Lessor declares that it will not have any claim and/or demand and/or suit towards the Lessee with respect to any damage for which the insurer has paid reimbursement and/or compensation, up to the amount which the insurer actually paid, and from the date of execution of the aforementioned payment.

 

17.       Access by the Lessor to the Leased Property

 

17.1.                     The Lessor and/or the Institute and/or representatives thereof, and any other party on their behalf, will be entitled to build, in the Building or in its surrounding area, additional floors and/or to perform other construction works and/or to transfer through the Leased Property (or on its exterior) any pipes, tunnels and other conductors for water, sewage, drainage, gas, electricity, telephone, or for any other purpose whatsoever, and to perform any other works or installations in the Leased Property, for the purpose of using the property which is adjacent to the Leased Property, and for any other similar purpose, provided that the use of such authorities will be implemented in a manner which will reduce, as much as reasonably possible, the inconvenience and disturbance caused as a result thereof, and provided that the Lessor, or the Institute, have performed, or have caused the other parties in their place or on their behalf, to perform, in the parts of the Leased Property which will be harmed by the performance of such works, all repairs required to restore the previous condition.

 

17.2.                     The Lessor or its representatives will be entitled, following advance coordination with the Lessee, to perform the following actions:

 

17.2.1.           To enter the Leased Property at any reasonable time, in order to verify the fulfillment of the provisions of this Agreement.

 

17.2.2.           To enter the Leased Property at any reasonable time, in order to perform, in the area of the Leased Property, repairs as required for the purpose of the Building or any parts thereof.

 

17.2.3.           During the last six months of the Lease, to enter the Leased Property during reasonable works hours, accompanied by visitors.

 

17.2.4.           To instruct the Lessee to allow the performance, in the Leased Property, of any repairs which will be required for performance in the area of the Leased Property, regardless of whether or not these refer to the Leased Property or to other parts of the Building.

 

17.3.                     The Lessee undertakes not to prevent access by the Lessor to the Leased Property, as specified in sections 17.1 and 17.2 above, and to allow the Lessor, or the Institute, to perform the works specified in those sections.

 

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18.       Prohibition Against the Transfer of Rights

 

18.1.                     The Lessee undertakes not to transfer the Lease of the Leased Property, or any part thereof, to any other party other than the Lessee, and not to transfer, not to deliver and not to rent the Leased Property or any part thereof to any other party, and not to allow any other party to use the Leased Property, or any part thereof, not to involve any other party in the possession and/or use and/or benefit of the Leased Property, or any part thereof and/or in the business which is conducted in the Leased Property, and not to provide to any other party any beneficiary rights, or any other rights whatsoever with respect to the Leased Property or any part thereof, whether with or without consideration, and not to transfer, not to pledge, and not to charge its rights under this Agreement.

 

18.2.                     For the purpose of section 18.1 above, in the event that the Lessee is a corporation, any action, of any kind whatsoever, which causes a change in the control of the Lessee, will be considered a transfer which requires the Company’s consent. The definition of the term “Control” in this section will be as follows: “The holding of at least 51% of the shares and rights, of any kind whatsoever, in a corporation, including the right to appoint at least 51% of its managers, and the right to appoint the CEO”.

 

18.3.                     The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof will constitute a fundamental breach of the Agreement.

 

19.       Vacation

 

19.1.                     The Lessee undertakes than no later than the conclusion date of the Lease Period and/or, in the event that the Agreement has been terminated by the Lessor due to a breach hereof by the Lessee, as stated in section 23.1 below, the Lessee will vacate the Leased Property and transfer it to the Lessor. The Lessee undertakes that on the date of vacation of the Leased Property and the return of possession of the Leased Property to the Lessor, the Leased Property will be free and clear of any person or object, with the Leased Property being in proper, functional and orderly condition, as received by the Lessee, subject to the provisions of sections 3.2 and 12 above, and subject to wear and tear due to reasonable and cautious use of the Leased Property by the Lessee, and in accordance with the provisions of this Agreement. For the avoidance of doubt, it is hereby agreed that the Leased Property will be returned to the Lessor after being re-painted or re-whitewashed by the Lessee and at the Lessee’s expense in the paint or whitewash which correspond to the color, material and quality of the Leased Property when it was received by the Lessee from the Lessor.

 

19.2.                     In the event that the Lessee has not fulfilled its undertakings in accordance with section 19.1 above, without derogating from the Lessor’s right to exercise its rights, in any manner in the Lessor’s discretion, and without derogating from any other right which will be available to the Lessor by law and/or by agreement, in consideration of the relevant circumstances, the Lessee will be required to pay to the Company, so long as it has not fulfilled its aforementioned undertakings, appropriate usage fees, in the amount specified in the Addendum, with the addition of VAT, for every day, as predetermined liquidated damages.

 

The Lessee will also be required to pay the Service Fees for the Building and the Total Service Fees, with the addition of VAT, with respect to the period of the delay in vacation, and it is hereby agreed, with respect to the payment of the Service Fees, as stated above, delay in vacation of part of one month will be considered delay of an entire month.

 

19

 

The appropriate Service Fees will be linked to the Index, and the provisions of section 7.1 above will apply, mutatis mutandis.

 

The date for payment of the liquidated damages with respect to each day of delay in vacation will be at the start of each day of delay, as stated above.

 

It is hereby expressly declared and agreed between the parties that the amount of predetermined liquidated damages was determined following a cautious and reasonable evaluation, at a proportion which is reasonable for the damages which can be predicted in advance at the time of signing of this Agreement, and no claim whatsoever by the Lessee will be heard contending that the aforementioned amount was determined as a fine, and the Lessee will be prevented from brining any such claim.

 

19.3.                     It is hereby expressly agreed and declared between the parties that the provisions of section 19.2 above will not release the Lessee from its undertakings in accordance with section 19.1 above, and/or will not grant to the Lessee any right whatsoever, of any kind whatsoever, including, but without derogating from the generality of the foregoing, any lease right which is protected by law, and/or will not constitute consent on the part of the Lessor for the extension of the Lease Period in the Leased Property by the Lessee, and/or will not constitute any waiver on the part of the Lessor towards the Lessee and/or will not derogate from or reduce any of the Lessor’s rights and/or will not injure the Lessor’s right to receive any other relief or remedy in accordance with this Agreement or in accordance with the law, including removal of the Lessee from the Leased Property, and additional compensation for any damage which the Lessor may incur, due to a failure by the Lessor to vacate the Leased Property in a timely manner.

 

19.4.                     In the event that, at the time of vacation of the Leased Property and the return thereof to the Lessor, the Leased Property is not in the condition specified in section 19.1 above, the Lessee will be required to repay to the Lessor, immediately upon its first demand, all expenses which the Lessor has paid in order to restore the Leased Property to the condition in which the Lessee was required to return it to the Lessor, and all expenses associated with the foregoing, and to compensate the Lessor for all damages, losses and lost profits which are due to the condition of the Leased Property and/or to the need to restore it to proper and functional condition, and the performance of the works associated therewith.

 

19.5.                     The vacation and return of the Leased Property to the Lessor will be performed in the presence of the Lessor and the Lessee, who will prepare a vacation protocol which will reflect the condition of the Leased Property. In the event that the vacation has been performed without the presence of the Lessee, due to the Lessee’s fault, the protocol will be prepared by the Lessor independently, and its contents will be binding towards the Lessee.

 

19.6.                     In addition to any right which may be available to the Lessor in accordance with any law, and in accordance with this Agreement, in the event that the Lessee has not vacated the Leased Property in a timely manner, the Lessor, or any entity appointed by it, will be authorized and entitled, and the Lessee hereby provides its consent and permission for the following, to enter the Leased Property through the breaking of locks and replacing them with other locks, and through the use of reasonable force, to receive exclusive possession of the Leased Property and to remove the Lessee’s property therefrom, and to store them at the Lessee’s

 

20

 

expense and liability, in any location in the Lessor’s discretion, and the Lessee will be required to repay to the Lessor all expenses which have been spent by the Lessor in connection therewith. The Lessor will not be liable for any damages, of any kind whatsoever, which may be caused to the Lessee and/or to its property, if any, during the performance of the aforementioned actions by the Lessor, and the Lessee will not have, and hereby waives, any claim or suit against the Lessor in connection with the performance of all of the foregoing.

 

19.7.                     The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof, or of any part thereof, will constitute a fundamental breach of the Agreement.

 

20.       Guarantees

 

20.1.

 

20.1.1.           As security for the fulfillment of the Lessee’s undertakings in accordance with this Agreement, the Lessee will furnish to the Lessor, within 48 hours after the signing date of this Agreement, a bank guarantee in a wording which is acceptable to the Lessor, for an amount equal to 9 months’ Rent, with the addition of VAT, as well as the maintenance fees for 9 months of the Lease, in accordance with the last known rate prior to the provision of the aforementioned guarantee, with the addition of VAT. The amount of the guarantee will be linked to the Index, and the provisions of section 7.1 above will apply to the linkage of the guarantee amount, mutatis mutandis.

 

20.1.2.           In the event that the Rent and/or maintenance fees and/or VAT rates have been updated and/or modified, the Lessee will furnish to the Lessor, within 14 days after the receipt of the Lessor’s demand, an alternative or additional bank guarantee, which will secure the Rent payments for a period of nine months, in accordance with the new payment rates.

 

20.1.3.           The Lessee undertakes to renew the guarantee or guarantees from time to time, no later than 7 days after their expiration dates. In the event that the Lessee has not done so, the Company will be entitled to realize the guarantees, without releasing the Lessee from its obligation to furnish to the Company a new guarantee or guarantees, and without releasing the Lessee from any of its undertakings under this Agreement. In the event that the amount realized in accordance with the aforementioned guarantee exceeds the amount owed at that time by the Lessee to the Lessor, the remainder will be deposited with the Lessor as a deposit, in accordance with conditions which will be determined by the Company at that time. The Lessee will not be entitled to receive any other compensation and/or payment with respect to any direct or indirect damages, or any other payment whatsoever, with respect to the realization of the guarantee or guarantees by the Lessor in accordance with this section.

 

20.2.                     In the event that funds, if any, are owed by the Lessee to the Lessor in accordance with the provisions of this Agreement and/or any breach hereof, the Lessor will be entitled to use the

 

21

 

bank guarantee which is deposited with it, in an amount equal to the sums which will be owed to the Lessor by the Lessee, if any.

 

20.3.                     It is hereby declared and agreed between the parties that the submission of the bank guarantee by the Lessee to the Lessor and/or the presentation of the deposit for repayment by the Lessor will not injure the Lessor’s right to collect from the Lessee, by any means possible, the damages which it has incurred due to a b reach of any of the Lessee’s undertakings under this Agreement, or release the Lessee from any of its undertakings under this Agreement, and/or grant to the Lessee any right whatsoever which is protected by law and/or prevent the Lessor’s exercising of its aforementioned rights and/or restrict the amount of compensation and/or damages which the Lessor will be entitled to receive from the Lessee due to a breach of any of its undertakings under this Agreement.

 

20.4.                     The Lessee will be entitled to make use of the bank guarantee and/or guarantees in accordance with section 20.2 above in its exclusive judgment, and the use of all or any of the guarantees will not injure any of the Lessor’s rights in accordance with any agreement or by law.

 

20.5.                     In the event that no amounts are owed by the Lessee to the Lessor under this Agreement, the Lessor will be obligated, 90 days after the date of return of the Leased Property by the Lessee to the Lessor, to return the bank guarantee to the Lessee, subject to the presentation of all receipts and authorizations for the performance of the various payments by the Lessee.

 

20.6.                     The provisions of this section constitute a fundamental provision of the Agreement, and any breach thereof will constitute a fundamental breach of this Agreement.

 

21.       Indemnification of the Lessor

 

In the event that the Lessee has not fulfilled any of its undertakings under this Agreement, the Lessor will be entitled (but not obligated), in addition to, and without derogating from its rights and authorities under this Agreement by law, to perform any actions which the Lessee was required to perform, and the Lessee will be required to reimburse and to repay to the Lessor, immediately upon its demand, any payment or expense which the Lessor has incurred in connection with the foregoing.

 

22.       Interest

 

22.1.                     Without derogating from any of the Lessor’s rights under the provisions of this Agreement, and by law, in the event that the Lessee is in arrears in the payment of any amount whatsoever, which it is required to pay to the Lessor, in accordance with this Agreement, the Lessee will be required to pay to the Lessor interest on the amount in arrears, with the addition of duly payable VAT. The interest rate will be the maximum rate permitted by law at that time, and if there is no legal restriction on the interest rate — the interest will be according to the maximum rate used by Bank Leumi Le-Israel Ltd. at that time to collect unapproved withdrawals in revolving debitory accounts, and the approval of the central branch of that bank will determine on this matter; or interest at a rate of 5% per month (unlinked), or linkage differentials due to the increase of the consumer price index, from the date when the Lessee was required to execute the payment to the Lessor, until the actual

 

22

 

execution of that payment, with the addition of interest of 48% per year, whichever is greater.

 

23.       Breach

 

23.1.                     Any party which has breached or not fulfilled any of its undertaking in accordance with this Agreement will be required to compensate the fulfilling party for all damages and losses which the fulfilling party has incurred due to the foregoing, without derogating from the right of the fulfilling party to receive any other and/or additional remedy and relief, including specific performance or eviction order.

 

23.2.                     In the event that the Lessee has performed a fundamental breach of this Agreement, as defined in this Agreement, and/or the Lessee has performed a non-fundamental breach of this Agreement, and has not cured the aforementioned breach within 15 days after receiving notice of the foregoing from the Lessor, the Lessor will be entitled to notify the Lessee that the Lease under this Agreement is terminated and cancelled, in which case the Lessee will be required to vacate the Leased Property as specified in section 19 above, within 10 days after the date of the aforementioned notice, without derogating from the Lessor’s rights under this Agreement, including but without derogating from the generality of the foregoing, the right to receive the entire Rent and all other amounts to which it would have been entitled has this Agreement been fulfilled, and without derogating from its right to receive any other remedy or relief, including compensation for any damages which the Lessor has incurred due to the aforementioned breach or non-fulfillment.

 

It is hereby emphasized that between the parties that the aforementioned period of 10 days has been determined by them as a reasonable period for the purpose of the provisions of the Contracts Law (Remedies for Breach of Contract), 5731-1970.

 

24.       Transfer of Rights by the Lessor

 

The Lessor will be entitled to lease and/or to sell its rights to the Park and/or to the Building and/or to the Leased Property to any entity whatsoever, and for any purpose whatsoever (including a purpose which is similar to the Lease Purpose) in its discretion, and also to perform any construction works in the Building in which the Leased Property and its surrounding area are located, including if the foregoing constitute a structural change to the Building, without the requirement to obtain any consent from the Lessee, and without injuring the Lessee’s rights to the Leased Property in accordance with this Agreement.

 

The Lessee declares that it is aware that the Lessor does not undertake that businesses which are identical to, or which compete with, the business which the Lessee will manage in the Leased Property, will not be managed in the other units in the Building, or in any other location in the Park.

 

25.       Miscellaneous

 

25.1.

 

25.1.1.           No action taken by any of the parties will be considered a waiver of any of its rights under this Agreement, or by law, or as a wavier or consent on its part for

 

23

 

any breach of non-fulfillment of the terms of this Agreement by the other party, or as granting any deferral or extension for the performance of any action which the other party is required to perform, or as any modification, cancellation of addition of any term whatsoever, unless the waiver, consent, deferral, modification, cancellation or addition have been expressly prepared in writing.

 

25.1.2.           It is hereby expressly agreed that the performance of each and every one of the Lessor’s undertakings under this Agreement is conditional upon the Lessee’s prior fulfillment of its undertakings under this Agreement, as applicable, and the Lessor will be entitled, without derogating from the provisions of any other section of this Agreement, to delay the performance of any of its undertakings until the Lessee has fulfilled its undertakings.

 

25.1.3.           It is hereby declared and agreed that the provisions of this Lease Agreement are pursuant to the Lease and Rental Law, 5731-1971, and that the provisions of Chapter A of the aforementioned Law will not apply to the Lease under this Agreement.

 

25.2.                     In the event that the Lessee is a foreign resident, the Lessee undertakes to perform its undertakings under this Agreement in accordance with the Supervision of Currency Law, 5738-1978, and in accordance with all regulations, ordinances and permits pursuant thereto.

 

25.3.                     The Lessor’s bills will constitute prima facie evidence of any charge and any settlement of accounts included therein, and any claim by the Lessor from the Lessee, whose amount and details are approved by an accountant, will be binding towards the Lessee, and the Lessee agrees that it will serve as sufficient written proof of its filing with the Court through shortened proceedings.

 

25.4.                     The parties hereby agree that the competent court of the city of Tel Aviv will have the exclusive jurisdiction on all matters associated with this Agreement and any notices sent in accordance with herewith.

 

25.5.                     The addresses of the parties are as specified in the heading of the Agreement, and any notice sent to either of the parties to the address appearing alongside its name will be considered as having been received by it 72 hours after its sending by registered mail.

 

In the event that the Lessee includes several individuals, the notice will be considered as having been sent to each individual in the Lessee, it has been sent, as stated above, to one of the individuals in the Lessee, to the aforementioned address.

 

IN WITNESS WHEREOF, the parties have signed the Agreement as of the ate stated above.

 

	
 
    	
 
    	
 
    
	
Official   Stamp of Africa Israel Properties Ltd.
    	
 
    	
Official   Stamp of Collplant Ltd.
    

 

[Handwritten — I hereby affirm that this Agreement has been signed by the authorized signatories of the Lessor, who have been authorized for this purpose in accordance with the resolution passed by the Lessor’s Board of Directors on May 19, 2008]

[Signature and Stamp of Elad Moretzky, Adv., License No. 49807]

 

24

 

List of Annexes

 

	
Annex “A”
    	
-
    	
Addendum
    
	
Annex “B”
    	
-
    	
Site Plan of   the Building’s Location in the Park
    
	
Annex “C”
    	
-
    	
Certificate   of Insurance for the Leased Property
    
	
Annex “D1”
    	
-
    	
Certificate   of Insurance for Construction Works
    
	
Annex “E”
    	
-
    	
Policy   Regarding Heat Works
    
	
Annex “F”
    	
-
    	
Text of Bank   Guarantee
    
	
Annex “G”
    	
-
    	
Maintenance   and Other Services
    

 

25

 

Annex “A”

 

To the Unprotected Lease Agreement Dated June 19, 2008

 

Name of Lessee: Collplant Ltd., Reg Co. No. 513578260

 

The parties hereby agree that the provisions of this Annex are intended to amend and modify the Agreement only with respect to the sections and/or provisions which will be amended and/or added and/or deleted in accordance with this Annex.

 

The sections which will be added and/or amended and/or deleted will take precedence over the provisions of the Agreement, notwithstanding the provisions of the Agreement.

 

	
Property:
    	
 
    	
An area   located on floor 2 in building no. 3 of the Science Park in Kiryat Weizmann   (hereinafter, respectively: the “Building”   or the “Park”), on No. 3   Sapir St., in Ness Tziona, which is marked in red in the diagram attached to   this Agreement as Annex “C”.
    
	
 
    	
 
    	
 
    
	
Area of the Leased Property:
    	
 
    	
The area of   the Leased Property for the purpose of payment under this Agreement is   approximately 533 gross square meters. It is hereby clarified that that the   aforementioned area includes loading with respect to the Leased Property’s   proportional share of the shared used of public areas in the Building.
    
	
 
    	
 
    	
 
    
	
Transfer Date:
    	
 
    	
June 19,   2008.
    
	
 
    	
 
    	
 
    
	
Lease Period:
    	
 
    	
A period of   62 months, commencing on the Transfer Date.

 

Notwithstanding   the foregoing, it is hereby agreed that the Lessee will be entitled to   terminate its lease of the Leased Property at the end of 38 months after the   Transfer Date, i.e., on August 17, 2011 (hereinafter: the “Exit Station”). The termination of the   Lessee’s lease of the Leased Property on the Exit Station will only be   permitted subject to the receipt of a written notice without reservations   from the Lessee expressing its desire to terminate the Lease of the Leased   Property, as stated above, on the date of the aforementioned Exit Station   (hereinafter: the “Notice”),   which will be received by the Lessor at least 180 days before the date of the   Exit Station, and subject to the payment of compensation which will   constitute 40% of the actual Construction Budget, as defined below, with the   addition of linkage differentials (where the Base Index will be as specified   in section 7 of the Agreement), and duly payable VAT, which will be performed   up to 30 days before the Exit Station. It is hereby clarified that that the   above conditions for the termination of the Lease of the Leased Property on   the Exit Station Date are cumulative.
    
	
 
    	
 
    	
 
    
	
Section 2
    	
 
    	
The Lessor   hereby declares and confirms that it holds the exclusive leasing rights to   the Leased Property, and that it holds exclusive possession of the 
    

 

26

 

	
 
    	
 
    	
Leased Property,   and that the Building was built in accordance with duly issued construction   permits, the plans which apply to the land, and the provisions of the law,   and that no restriction exists which would prevent its engagement in this   Agreement, including regarding the permitted uses of the Leased Property,   subject to all stipulations, arrangements and provisions specified in this   Agreement.

 

The Lessor   further declares that the Leased Property is free and clear of any debt,   lien, pledge, mortgage, claim, judicial order, administrative order,   demolition order, and any other third party right whatsoever, which could   prevent the lease of the Leased Property to the Lessee and/or the timely   fulfillment of the Lessor’s undertakings under this Agreement.
    
	
 
    	
 
    	
 
    
	
Section 3
    	
 
    	
Subject to   the fulfillment of all of the Lessee’s undertakings as specified in sections   7.2, 16.5.4. and 20.1.1, and the payment of the amount specified in section   7.1.3 of the Agreement, the possession of the Leased Property will be   transferred to the Lessee on the Transfer Date in accordance with the   provisions of this Agreement, with it being in its current condition (“as   is”) on the signing date of this Agreement. 

 

Together   with the performance of the works specified in section 12 of this Agreement,   the Lessor will perform in the Leased Property works required to separate the   area of the Leased Property from the leased areas which border with the   Leased Property (i.e., installation of barriers and separation of systems   only, including separation of electrical and air conditioning systems), in   accordance with the Lessor’s plans only, and to change the location of the   entry door to the area in floor 2 of the Building (which also contains the   Leased Property), in a manner whereby the door will be situated at the   entrance to the Leased Property only, in the location marked with the letter   A in the diagram which is attached to surrounding area as Annex “C” (the aforementioned works   will hereinafter be referred to as: the “Lessor’s   Works”). The Lessee undertakes not to disrupt and not to object to   the Lessor’s Works, in whole or in part, including but not limited to   disturbances which may be caused to the Lessee, if caused during the   performance of the Lessor’s works. The Lessee further undertakes to allow the   Lessor, in coordination with the Lessee, free access to the Leased Property   at any time for the purpose of the performance of the Lessor’s Works.

 

The Lessee   will attempt to ensure, as much as possible, that the Lessor’s Works will not   disturb the performance of the Construction Works, as defined below, and also   undertakes to arrange for the coordination of the dates of performance of the   Lessor’s Works with the Lessee, in order to prevent, as much as possible,   disturbances which could be caused during the performance of the Construction   Works. 

 

Save for the   performance of the Lessor’s Works, as specified above, the Lessor will not be   obligated to perform any works and/or modifications and/or amendments and/or   improvements and/or renovations whatsoever in the 
    

 

27

 

	
 
    	
 
    	
Leased   Property. The foregoing provisions in this section will not derogate from the   provisions of this Annex with respect to the Construction Budget, as defined   below.
    
	
 
    	
 
    	
 
    
	
Section 4.3
    	
 
    	
The   foregoing will apply subject to the provisions of section 8.1.1 of this   Agreement.
    
	
 
    	
 
    	
 
    
	
Section 5
    	
 
    	
The words   “and all details pertaining thereto” will be replaced by the words “including   all details thereof”; after the words “in accordance with the provisions of   the Agreement”, the following text will be added: “and subject to the   correctness of the Lessor’s declarations”; after the words “and its   engagement in this Agreement”, the following text will be added: “save for   any claim of hidden defect which the Lessee could not have discovered in a   reasonable examination by a non-expert person”.
    
	
 
    	
 
    	
 
    
	
Section 6
    	
 
    	
The Lease   Purpose with respect to the Leased Property is for use as offices and   research laboratories, and the Lessee’s development and production in the   field of biotechnology.
    
	
 
    	
 
    	
 
    
	
Section 7
    	
 
    	
Base Index:   The consumer price index (general) with respect to April 2008, which was   published on May 15, 2008 (108.0558 points, base 2002).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Rent: The Rent with   respect to the Leased Property during the Lease Period will amount to NIS 50   per square meter in the gross area of the Leased Property, per month, with   this amount being linked to the Base Index, and with the addition of duly   payable VAT. It is hereby agreed that the Lessee will be exempt from the   obligation to pay Rent only with respect to the first two months of the Lease   of the Leased Property, during which time the Lessee will perform the   Construction Works, as defined below (hereinafter: the “Exemption Period”). It is hereby declared   and agreed that the foregoing regarding the Exemption Period will not   derogate from the Lessee’s other obligations under this Agreement, including   and without derogating from the foregoing, Service Fees, municipal taxes, and   other payments and charges.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
On the   signing date of this Agreement, the Lessee will pay the Rent and the Service   Fees with respect to three months of the Lease of the Leased Property, and   subsequently, payment of the Rent and the Service Fees will be executed in   advance for each quarter of the Lease Period, on the first business day of   the first month of each quarter, as stated above, through a permission to   charge the Lessee’s account, as stated in section 7.2 of the Agreement.
    
	
 
    	
 
    	
 
    
	
Section 7.2
    	
 
    	
The Lessor   will make use of the permission to charge the Lessee’s account only in   accordance with and subject to the provisions of this Agreement.
    
	
 
    	
 
    	
 
    
	
Section 7.3
    	
 
    	
The word   “two” will be replaced by the word “three”; after the text “which will be   owed to the Lessor by the Lessee, on the determined date, with respect to the   aforementioned payments”, the following text will be added: “and have not   been paid to the Lessor also at the end of 30 days after the date of   provision of written warning to the Lessee”; the text “all other payments of   Services Fees, 
    

 

28

 

	
 
    	
 
    	
and the   Lessee will be required to pay the entire Rent with respect to the entire   Lease Period, which have not yet been paid by that date, after the end of two   business days”, will be replaced by the following text: “all other payments   of Service Fees with respect to the coming six months which have not yet been   paid, and the Lessee will be required to pay them at the end of five business   days”.
    
	
 
    	
 
    	
 
    
	
Section 7.4
    	
 
    	
Cancelled.
    
	
 
    	
 
    	
 
    
	
Section 8.1.1
    	
 
    	
Notwithstanding   the provisions of section 8 of the Agreement, it is hereby clarified that   that during the Lease Period, the Lessee will bear the payments, fees,   municipal taxes, taxes, and other payments with respect to the Leased   Property, provided that the foregoing apply by law to a lessee and/or   occupant and/or user of a leased property.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
However, it   is hereby expressly agreed that in any case, the Lessee will pay the   municipal taxes with respect to the Leased Property and its proportional   share of the common areas, including if those apply by law to the owner. If   is further clarified that insofar as betterment fees will be imposed due to   the Lessee’s use of the Leased Property, in a manner which deviates from the   Lease Period — the Lessee will pay the aforementioned fees.
    
	
 
    	
 
    	
 
    
	
Section 8.1.3
    	
 
    	
Tax invoice   with respect to each of the payments which apply to the Lessee and which are   intended for payment by the Lessee to the Lessor, will be furnished to the   Lessee within 7 days after the execution of payment.
    
	
 
    	
 
    	
 
    
	
Section 8.1.4
    	
 
    	
After the   words “which applies to this Agreement”, the following text will be added:   “insofar as the foregoing applies by law”.
    
	
 
    	
 
    	
 
    
	
Section 8.1.8
    	
 
    	
Cancelled.
    
	
 
    	
 
    	
 
    
	
Section 8.2
    	
 
    	
The word   “second” will be replaced by the word “five”; the words “7 days” will be   replaced by the words “10 days”.
    
	
 
    	
 
    	
 
    
	
Section 10
    	
 
    	
The Service   Fees which will be performed by the Lessee will be according to the   conventional practice, from time to time, in the Building, and will be paid   with the addition of duly payable VAT and linkage to the Index, according to   the conventional practice in the Building. According to the Lessor’s   calculation, for 2008, the Service Fees with respect to 2008 will amount to a   total of approximately NIS 7.13 for each gross square meter of the area of   the Leased Property, per month, linked to the consumer price index published   with respect to August 2006 (104.7 points, 2002 base), and with the   addition of duly payable VAT. The foregoing will not derogate from the   Lessor’s right to update the amount of the Service Fees, in accordance with   the provisions of this Agreement. The specification of the services given by   the Lessor and/or by any other party on its behalf is attached to this   Agreement as Annex “G”.
    
	
 
    	
 
    	
 
    
	
Section 10.1.2
    	
 
    	
No central   air conditioning system in installed in the Building.
    

 

29

 

	
Section 10.2
    	
Notwithstanding the provisions of   this section, it is hereby agreed that the Lessor will be responsible to   repair any defects in the envelope of the Leased Property, which constitutes   a part of the Building’s construction, and to repair any defects and faults   in public systems installed in the structure of the Building (including   public systems which pass through the Leased Property, such as the air   conditioning, electrical and sewage systems), throughout the Lease Period,   save in the event that the defects or faults have been caused due to any   unreasonable action and/or omission by the Lessee, or by any other party on   its behalf, in which case the Lessee will be responsible the repair.
    
	
 
    	
 
    
	
Section 10.3
    	
The Service Fees per gross square   meter which will be charged to the Lessee will be at a rate identical to the   management fees per gross square meter which will be charged to businesses in   the Park of the same type as the business managed in the Leased Property. The   foregoing will not derogate from the Lessor’s right to charge additional or   greater Service Fees from the Lessee, with respect to any special expense, in   accordance with the provisions of this section 10.3.
    
	
 
    	
 
    
	
Section 11.1
    	
The Lessor undertakes to sign,   upon the written request of the Lessee, any document and/or request which   will be reasonably required for the purpose of obtaining a license for the   business and/or any other permit which is required to operate the Lessee’s   business in the Leased Property for the Lease Purpose, as specified in this   Agreement, by virtue of law and subject to the provisions of this Agreement   and of the law, provided that the Lessor will not be obligated and/or liable   in any manner for the foregoing, and also provided that the Lessor does not   incur any expenses whatsoever as a result of the foregoing. For the avoidance   of doubt, it is hereby clarified that this undertaking of the Lessor shall   not derogate from the Lessee’s responsibility and undertaking to obtain the   aforementioned licenses, as specified in this subsection.
    
	
 
    	
 
    
	
 
    	
It is hereby clarified that   insofar as a demand will be received from a legally competent authority   (hereinafter: the “Competent Authority”)   to perform in the Leased Property works in connection with the installation   of fire extinguishing systems in and/or outside of the area of the Leased   Property, the Lessee will perform, independently, and at its own expense and   liability, the works required to install plumbing, sprinklers, and detection   systems inside the Leased Property, in an internal location which will be   determined in connection with the Lessor’s consultants and/or any other works   which will be required by the Competent Authority, in coordination with the Lessor.   The connection of sensors to the central detection system will be performed   by the Lessee, and at its expense and liability. The Lessee will be required   for adjusting the secondary system of pipes, sprinklers and fire detection in   the area of the Leased Property, including planning the aforementioned   adjustment. The pipes providing water supply to sprinklers, until the   entrance to the Leased Property (including the emergency water reservoir)   will be performed by the Lessor and at its expense.
    

 

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Section 12
    	
Insofar as the Lessee will   request to perform in the Leased Property any modification and/or renovation   and/or construction and/or adjustment works, the foregoing works will not be   performed in any manner that than that specified in this section below:
    
	
 
    	
 
    
	
 
    	
1.              Prior   to the commencement of the performance of the works, the Lessee will furnish   to the Lessor a set of architectural plans, as well as detailed plumbing, electrical,   air conditioning and safety plans, with the addition of bills of quantities   and a technical specification, which will hereinafter jointly be referred to   as: the “Plans”. The Lessee will not   perform works of any kind whatsoever in the Leased Property, in any manner   other than in accordance with the Plans and technical specifications which   have been approved in advance and in writing by the Lessor, in its exclusive   judgment, which will be exercised for relevant reasons, and in accordance   with the instructions issued by the safety consultant, whose identity will be   approved by the Lessor. It is hereby clarified, regarding this matter, that   any refusal with respect to modification of the construction or envelope of   the Building, or its systems, will not be considered unjustified (all of the   aforementioned works, insofar as they are approved in writing by the Lessor,   shall hereinafter be referred to as: the “Construction   Works”). The Lessee will also furnish to the Lessor, prior to the   commencement of the works, the list of the systems consultants and   contractors with whom the Lessee intends to engage for the purpose of   planning the Construction Works (hereinafter: the “Systems   Consultants” and “Contractors”).   The Lessee will perform the Construction Works only in accordance with plans   which have been prepared through the Systems Consultants which have been   approved in advance and in writing by the Lessor, in its exclusive judgment,   which will be exercised for relevant reasons, and the Lessee will have no   claim and/or demand in connection therewith. The Lessor undertakes to provide   its approval or remarks regarding the Plans, the Systems Consultants and/or   the Contractors, as early as possible, after the date of receipt of the Plans   or the Lists, as applicable.
    
	
 
    	
 
    
	
 
    	
2.              The   process of performing the works will be executed in full coordination with   the Lessor, and including updating the Lessor regarding any material details.   Material changes to the Lessee’s Plans and/or Specifications, if any, will   only be performed after the Lessor has given its consent, and will be   submitted to the Lessor for approval prior to their performance, and will not   be performed unless such approval has been given. Particularly, but without   derogating from the generality of the foregoing, it is hereby emphasized that   the Lessee will not perform any action and/or cause any damage to the   envelope of the Building, including due to the drilling of holes and/or   openings, etc.
    
	
 
    	
 
    
	
 
    	
3.              The   Lessee hereby undertakes that the Contractors operating on its
    

 

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behalf, who will perform the   works in the Leased Property, will be licensed, authorized and reputable   contractors in the field. It is hereby clarified that that the Lessee will be   responsible for ensuring that the Contractors on its behalf, who will perform   the works, will perform examination repairs, including as required by law,   regarding all works in the Leased Property. The Lessee further undertakes   that all materials and products which are intended for the performance of the   works will be of acceptable quality and type, and will be in accordance with   the current Israeli standards.
    
	
 
    	
 
    
	
 
    	
4.              The   Lessor will bear no liability whatsoever with respect to the Lessee’s works,   and the Lessee will bear exclusive liability for all matters associated with   and involved in the performance of the Lessee’s works, including liability   for any physical injury or damage to property which has been caused, if any,   to any third party, to the property of the Lessor and/or to the property of   the Lessee and/or to the property of any third party. Additionally, the   Lessee and the Lessee alone will be exclusively responsible for the quality   of the materials and the works, including for the performance of the Lessee’s   works in accordance with the Plans, and the performance thereof in accordance   with any law, and the Lessee will be exclusively responsible for performing   and repair and examination regarding the works, at its own expense, during   the Lease Period of the Leased Property.
    
	
 
    	
 
    
	
 
    	
5.              The   Lessee undertakes to prepare and to maintain valid, throughout the entire   period of the works in the Leased Property, appropriate insurance policies   for all conventional risks regarding the performance of works of the same   type as the Lessee’s works, and will present to the Lessor a certificate of   insurance regarding the Construction Works, in the wording attached as Annex   “D1” to this Agreement, before the commencement of the works, and before the   introduction of any equipment whatsoever by the Lessee, or on its behalf,   into the area of the Leased Property.
    
	
 
    	
 
    
	
 
    	
6.              Without   derogating from the Lessee’s liability under this Agreement, and without   imposing on the Lessor any liability whatsoever, the Lessor will be entitled   to enter the Leased Property, through a representative on its behalf, at any   time during the performance of the works, subject to advance coordination   with the Lessee, for the purpose of verifying the fulfillment of the   provisions of this Agreement by the Lessee, including examination of the   quality of the materials used by the Lessee in the performance of the works   and the performance of works in accordance with the approve Plans. In the   event that the Lessor has found that the Lessee is not strictly fulfilling   all of the provisions of this Agreement, the Lessor will be entitled to   instruct the Lessee, through its representatives in the field, to perform any   actions which is required of the Lessee in accordance with this Agreement, or   to refrain from performing any action which is prohibited under the   provisions of this
    

 

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Agreement.
    
	
 
    	
 
    
	
 
    	
7.              Without   derogating from any of the provisions of this Agreement, the Lessee hereby   expressly declares that it bears exclusive and sole responsibility for   obtaining any license and/or permit and/or authorization for the performance   of the works, and that it undertakes to perform and to supervise all works in   accordance with this Agreement and the provisions of any applicable law. Any   permission or authorization, insofar as any will be given by the Lessor to   the Lessee, will be valid only subject to the provisions of the law.
    
	
 
    	
 
    
	
 
    	
8.              The   Lessee undertakes to perform the works in a manner which will prevent, as   much as possible, and reduce to the absolute minimum, any disruption to the   areas surrounding the area of the Leased Property, and undertakes to take all   reasonable measures in order to prevent and/or reduce such disruption.
    
	
 
    	
 
    
	
 
    	
9.              During   the performance of the works, and after their conclusion, the Lessee will   remove, independently and at its own expense, any waste, of any kind   whatsoever, including construction waste, assistive materials, residues,   packaging residues, etc., to an authorized waste removal site, and in   accordance with the law.
    
	
 
    	
 
    
	
 
    	
10.       Without   derogating from the foregoing, the Lessee undertakes to fulfill all of the   provisions of Annex “E” of this Agreement regarding heat works.
    
	
 
    	
 
    
	
 
    	
11.       Subject   to and following the performance of the provisions of this section, including   the examination and approval of the Construction Works by the Lessor, and   subject to and following the Lessor’s signing of a latter certifying the   absence of claims in connection with the works, the presentation of the   Contractors’ invoices, the transfer of tax invoices by the Lessee, prepared   in the name of the Lessor, with respect to payments for the Construction   Works which are fixed and which constitute a permanent connection to the   additional area (as opposed to furniture and/or Chattels, etc.), the   Lessor will participate in the costs of the Construction Works which were   actually spent, up to a total of NIS 267,433 (which are $150, calculated   according to the known US Dollar exchange rate on the signing date of this   Agreement, for each square meter of the gross area of the Leased Property),   with the addition of duly payable VAT, and with the addition of linkage   differentials (where the Base Index will be as specified in section 7 of the   Agreement) (hereinafter: the “Construction Budget”).   the Construction Budget will be paid to the Lessee according to the end of   months + 60 days method. It is hereby agreed that insofar as the Construction   Budget will not be used in full, and insofar as the Lessee will perform, to   the Lessor’s satisfaction, the works specified in section 11.1 of this Annex,   the balance of the Construction Budget will be paid
    

 

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to the Lessee as the Lessor’s   participation in the performance of the works specified in section 11.1   above.
    
	
 
    	
 
    
	
 
    	
The   Lessor will cooperate with the Lessee and with the entities performing the   Construction Works on its behalf, and will act, as much as possible, not to   disrupt the performance of the Construction Works, and to allow the Lessee,   the Contractors, the employees, representatives and any other person which   the Lessee desires to introduce into the Leased Property and/or into the   Building for the purpose of performing the Construction Works, including   allowing entry and access into the Park for various work vehicles, for the   purpose of the performance of the Construction Works, in coordination with   the Lessor, and subject to the receipt of the Lessor’s advance consent. It is   hereby clarified that and agreed that at the end of the Lessee’s lease of the   Leased Property, the Construction Works will be the exclusive property of the   Lessor, and the Lessee will have no claim and/or demand towards the Lessor with   respect to the Construction Works and/or with respect to its investment   therein.
    
	
 
    	
 
    
	
Section 14.2
    	
After the text “as specified in   section 14.1 above”, the following text will be added: “as a result of use of   the Leased Property by the Lessee and/or by any other party on its behalf”.
    
	
 
    	
 
    
	
Section 14.3
    	
The contents of this section will   be replaced by the following text “ In the event that any party to this   Agreement has not performed any repair which it is required to perform, as   stated above, or has not replaced any unit which it is required to replace,   as stated above, within 14 days after the provision of written notice, the   other party will be entitled, but not obligated, to do so at the expense of   the breaching party, and in any case, the breaching party will be required to   fully compensate the repairing party with respect to any damage, malfunction,   loss or destruction, as stated above.
    
	
 
    	
 
    
	
Section 15.1
    	
The following text will be added   at the end of the section: “save for any damages which have been caused as a   direct result of any negligent and/or malicious action and/or omission by the   Lessor and/or by the management company and/or by any other party on their   behalf and/or any damages for which the Lessor and/or the Management Company   and/or any other party on their behalf are liable by law”.
    
	
 
    	
 
    
	
Section 15.2
    	
The following text will be added   at the end of the section: “save for any damages which have been caused as a   direct result of any negligent and/or malicious action and/or omission by the   Lessor and/or by the management company and/or by any other party on their   behalf and/or any damages for which the Lessor and/or the Management Company   and/or any other party on their behalf are liable by law”.
    
	
 
    	
 
    
	
Section 15.3
    	
The words “and the Lessee alone” will   be erased; after the text “any offense which may occur “, the following text   will be added: “by the Lessee and/or by any entity over which the Lessee   holds controls”. Additionally, it is hereby
    

 

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agreed that that the provisions   of this subsection will not apply regarding any damages which have been   caused as a result of any negligent and/or malicious action and/or omission   by the Lessor and/or by the Management Company and/or by any on their behalf   (where, for this purpose, the other occupants of the Building will be   considered as “other parties on behalf of” the Lessee, provided that the   Lessee had no control over the actions / omissions of the other occupants of   the Building).
    
	
 
    	
 
    
	
Section 15.4
    	
The following text will be added   to the end of the section: “subject to a ruling whose execution will not be   stayed”. The provisions of this subsection will apply subject to the   provision of notice by the Lessor regarding aforementioned the claim and/or   charge, and provided that the Lessee has not been given reasonable   opportunity to defend against them. Additionally, it is hereby agreed that   any settlement in connection with the aforementioned charge and/or claim will   be performed in coordination with the Lessee.
    
	
 
    	
 
    
	
Section 16
    	
The provisions of section 16 of   the Lease Agreement will be replaced by the following text:
    
	
 
    	
 
    
	
 
    	
“16A.                     Subject   to the provisions of the Agreement on all matters associated with obtaining   permission to perform the works in the Leased Property, in the event that any   works whatsoever have been performed in the Leased Property, as stated above,   by the Lessee and/or on its behalf, prior to the initial occupation of the   Leased Property by the Lessee and/or on any date during the Lease Period, the   Lessee undertakes to furnish to the Lessor and to the Management Company the   certificate of insurance for construction works, which is attached to this   Agreement as Annex “D1”   and which constitutes an inseparable part thereof (hereinafter, respectively:   the “Certificate of Insurance for Construction Works”   and the “Construction Works Insurance”),   signed by the insurer.
    
	
 
    	
 
    
	
 
    	
16B.                           Without   derogating from the liability and undertakings of the Lessee under this   Agreement and/or by law, beginning on the date of introduction of any assets   and/or property whatsoever into the Leased Property, save for property which   is included in the works which are insured under the Construction Works   Insurance, as specified in Annex “D1”,   or from the commencement date of this Agreement, whichever is earlier, the   Lessee undertakes to acquire, at its own expense, and to maintain valid,   throughout the entire Lease Period, the insurance policies specified below   (hereinafter: the “Lessee’s Insurance Policies”):
    
	
 
    	
 
    
	
 
    	
16.1.                          Property   insurer — insurance to cover the entire worth and restatement value of the   contents of the Leased Property and/or other property which is owned by the   Lessee or for which the Lessee is responsible, and which is located outside   of the Leased Property, including any correction, modification, improvement,   renovation and
    

 

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addition   to the Leased Property which have been performed and/or which will be   performed by the Lessee and/or on its behalf (however, excluding works which   have been performed by the Lessor and/or the Management Company), against the   risks conventionally covered in extended fire insurance, including: fire,   smoke, lightning, explosion, earthquake, storm, flood, damage due to water or   other liquids, rupture of pipes, damage caused by aircraft, supersonic boom,   collision, strikes, riots, malicious damages and break-ins.
    
	
 
    	
 
    
	
 
    	
16.2                             Loss   of profit insurance for the Lessee, excluding loss of rent, Parking Fees and   management fees to the Lessor and to the Management Company (if any) to the   Lessee, due to any damage which has been caused to the Leased Property and/or   to its contents, due to the risks which are covered, as stated above, in   accordance with section 16.1 above (excluding break-in) for an   indemnification period of 12 months.
    
	
 
    	
 
    
	
 
    	
Notwithstanding the foregoing in this section 16.2, it is hereby   agreed that the Lessee will be entitled not to prepare loss of profit   insurance as specified above in this section 16.2, in whole or in part;   however, the exemption specified in section 16.5.12 below will apply as if   the aforementioned insurance had been prepared in full.
    
	
 
    	
 
    
	
 
    	
The insurance policies specified in section 16.1 and 16.2 above   will include an express clause stipulating that the insurers waive their   subrogation rights towards the Lessor and/or the Management Company and/or their   employees and managers, including employees of manpower companies who are   hired through invoices by the Lessor and/or the Management Company, as well   as corporate officers or companies under their control who are hired through   invoices, and also towards the other lessees and/or occupants of areas in the   Building and/or their employees and managers, whose insurance policies   include a waiver clause regarding subrogation rights towards the Lessee,   provided that the waiver of subrogation rights will not apply towards any   person who has caused malicious damages.
    
	
 
    	
 
    
	
 
    	
The Lessee undertakes to update the insurance amounts with   respect to the insurance policies specified in sections 16.1 and 16.23 above,   from time to time, in a manner which ensures that they will reflects, at all   times, the entire value of the subjects covered under the applicable   insurance.
    
	
 
    	
 
    
	
 
    	
16.3                             Third   party liability insurance — insurance to cover the Lessee’s liability towards   the Lessor and/or towards any third party whatsoever, in accordance with the   laws of the State of Israel, with liability limits in New Israeli Shekels   equal to USD 1,000,000 per incident and in total for the annual insurance   period.
    
	
 
    	
 
    
	
 
    	
The aforementioned insurance will not be subject to any limit as   to
    

 

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liability due to fire, panic, explosion, lifting, loading and   unloading devices, defective sanitary facilities, poisoning, any harmful   substances in food or beverage, strike or lockdown, liability with respect to   and towards contractors, subcontractors and their employees, as well as   subrogation claims by the National Insurance Institute.
    
	
 
    	
 
    
	
 
    	
The aforementioned insurance will be extended to include   indemnification towards the Lessor and the Management Company as additional   insurants with respect to their liability for the actions and/or omissions of   the Lessee, subject to a cross liability clause, according to which the   insurance will be considered as if it had been prepared separately for each   individual in the insurant, and including specification that the Lessor   and/or the Management Company are not responsible for the payment of any   premiums whatsoever.
    
	
 
    	
 
    
	
 
    	
16.4                             Employers’   liability insurance with respect to the Lessee’s liability towards the   employees who are employed by the Lessee, pursuant to the Torts Ordinance   (New Version) and/or the Liability for Defective Products Law, 5740-1980,   with respect to any death and/or physical injury which has been caused to any   employee as a result of an accident or illness during or due to their work,   with liability limits of USD 5,000,000 (five million US Dollars) per injured   party, per event, and in total per annual insurance period.
    
	
 
    	
 
    
	
 
    	
The aforementioned insurance policy will not include any   restriction as to work hours, work at height and in depth, contractors,   subcontractors and their employees (in the event that these are considered   employees of the Lessee), baits and poisons, and regarding the employment of   minors.
    
	
 
    	
 
    
	
 
    	
The aforementioned insurance will be extended to include   compensation to the Lessor and/or the Management Company, if these are   considered employers of any or all of the Lessee’s employees.
    
	
 
    	
 
    
	
 
    	
16.5                             The   Lessee’s Insurance Policies, as specified above, will be subject to the   following provisions:
    
	
 
    	
 
    
	
 
    	
16.5.1                   The   insurance policies will be prepared by the Lessee and at the Lessee’s   expense, through a duly licensed insurance company in Israel.
    
	
 
    	
 
    
	
 
    	
16.5.2                   The   Lessee undertakes to pay the premiums on the dates which have been agreed   upon with the insurer.
    
	
 
    	
 
    
	
 
    	
16.5.3                   The   Lessee’s Insurance Policies will include an express condition stipulating   that they take precedence over any insurance which has been prepared by the   Lessor and/or by the Management Company, and that the insurer waives any   demand or claim regarding the involvement of the insurance policies of the   Lessor and/or the
    

 

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Management   Company. Additionally, the insurer will undertake that the policies will not   be reduced or canceled unless written notice has been delivered, through   registered mail, to the Lessor, at least 30 days in advance.
    
	
 
    	
 
    
	
 
    	
16.5.4                   With   no need for issuance of demand on the part of the Lessor, the Lessee hereby   undertakes to furnish to the Lessor, no later than the commencement date of   the Lease Period, or the date of introduction of any assets whatsoever into   the Leased Property, whichever of these two dates is earlier, a certificate   of insurance with respect to the Leased Property, in the wording attached to   this Agreement as Annex “D”,   duly signed by the insurer. The Lessee declares that it is aware that the   presentation of the aforementioned certificate of insurance with respect to   the Leased Property constitutes a suspending and preliminary condition for   the commencement of the Lessee’s activities in the Leased Property and/or for   the introduction of any assets whatsoever into the Leased Property, as stated   above and the Lessor will be entitled to prevent the Lessee from performing   its activities in the Leased Property and/or from introducing assets, as   stated above, in the event that the aforementioned approval has not been   presented to it before the date specified above.
    
	
 
    	
 
    
	
 
    	
16.5.5                   For   the avoidance of doubt, it is hereby clarified that any failure to present   the certificates of insurance, as stated above, will not injure the Lessee’s   undertakings under this Agreement, including, but without derogating from the   generality of the foregoing, for the execution of any payment which applies   to the Lessee, and the Lessee undertakes to fulfill all of its undertakings   under this Agreement, including if it is prevented from performing works   and/or receiving possession of the Leased Property and/or introducing assets   into the Leased Property and/or opening its business in the Leased Property,   due to a failure to present the certificates of insurance in a timely manner.
    
	
 
    	
 
    
	
 
    	
In this context, it is hereby clarified that the preparation of   the aforementioned insurance policies by the Lessee will not reduce or   derogate, in any manner whatsoever, from any of the Lessee’s undertakings   under this Agreement, and will not release it from its obligation (if any) to   compensate the Lessor and/or any other party on its behalf, and any person   whatsoever, with respect to any damage whatsoever for which the Lessee is   liable under this Agreement and/or by law.
    
	
 
    	
 
    
	
 
    	
16.5.6                   No   later than the conclusion date of the periods of the Lessee’s Insurance   Policies, the Lessee undertakes to furnish to the Lessor and/or to as part of   on its behalf a certificate of insurance, as specified in section 16.5.4   above, regarding the extension of its validity for an additional year.
    

 

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16.5.7                   The   Lessor and/or the Management Company will be entitled to evaluate the   certificates of insurance which have been presented by the Lessee, as stated   above, and the Lessee undertakes to perform any modification or correction   which may be required in order to adjust them to its undertakings, as   specified in this Agreement. The Lessee declares and undertakes that the   rights of the Lessor and/or the Management Company regarding conducting the   examination, and regarding the demand for modifications, as specified above,   do not impose on the Lessor and/or the Management Company and/or any other   party on their behalf any duty or liability whatsoever regarding the   certificates of insurance and policies, nor regarding their provisions,   scope, and validity, or regarding any absence thereof, and the foregoing will   not derogate from any obligation whatsoever which applies to the Lessee under   this Agreement, regardless of whether or not they have demanded it, and   regardless of whether or not they have performed any examination.
    
	
 
    	
 
    
	
 
    	
16.5.8                   The   Lessee undertakes to comply with all terms of the policies specified above in   this section, to pay the insurance premiums in full and on time, and to   ensure and verify that the insurance policies for the Leased Property are   renewed from time to time, as required, and will remain valid throughout the   entire Lease Period.
    
	
 
    	
 
    
	
 
    	
16.5.9                   In   the event that the Lessee has not fulfilled its undertaking under the entire   section 16 above, the Lessor and/or any other party on its behalf will be   entitled, but not obligated, to prepare the insurance policies or any part   thereof in place of the Lessee and at the Lessee’s expense, and/or to pay in   its place any amount whatsoever, without derogating from the Lessor’s right   to any other remedy.
    
	
 
    	
 
    
	
 
    	
16.5.10            Cancelled.
    
	
 
    	
 
    
	
 
    	
16.5.11            Cancelled.
    
	
 
    	
 
    
	
 
    	
16.5.12            The   Lessee hereby exempts the Lessor and/or the Management Company and/or their   employees and managers, including employees of manpower companies who are   hired by the Lessor and/or the Management Company through invoices, and   corporate officers or companies under their control who are hired through   invoices, and/or the other occupants of parts of the Building and/or their   employees and managers, whose lease agreements, or any other agreements which   confer upon them rights to the Building, include a corresponding exemption   towards the Lessee, from liability with respect to damage for which the   Lessee is entitled to indemnification in accordance with the insurance policies   which are prepared in accordance with sections 16.1 and 16.2 above (or for   which it would have been entitled to indemnification if not for the   deductibles
    

 

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specified in the policy); however, the aforementioned   exemption will not apply towards any person who has caused malicious damages.
    
	
 
    	
 
    
	
 
    	
16.6                             The   Lessor undertakes to acquire and to maintain valid, whether independently or   through the Management Company, throughout the entire Lease Period, the   following insurance policies (hereinafter: the “Lessor’s   Insurance Policies”):
    
	
 
    	
 
    
	
 
    	
16.6.1                   Extended   fire insurance, to cover the entire worth and restatement value of the parts   of the Building which are owned by the Lessor, and expressly including the   Building of the Leased Property, including its appendages, including contents   and/or other property which is owned by the Lessor and/or the Management   Company, as well as any additions and improvements which have been performed   in the Leased Property by the Lessor and/or by the Management Company,   against the risks conventionally covered by extended fire insurance,   including smoke, lightning, explosion, earthquake, riots, strikes, malicious   damages, storm, flood, damages due to water and other liquids and the rupture   of pipes, harm caused by aircraft, supersonic boom, collusion or break-in,   and also against any additional risk which is required in the opinion of the   Lessor and/or the Management Company and/or any other party on their behalf,   in their exclusive judgment, provided that the insurance amount is no lower   than the restatement value of the Building of the Leased Property, including   its appendages.
    
	
 
    	
 
    
	
 
    	
The insurance will include a clause stipulating a waiver of   subrogation rights towards lessees and/or occupants in the Building of the   Leased Property, and expressly towards the Lessee and/or its employees and   managers, including employees of manpower companies who are hired by the   Lessee through invoices, and corporate officers or companies under their   control, who are hired by the Lessee through invoices, provided that the   foregoing regarding the waiver of subrogation rights will not apply towards   any person who has caused malicious damages.
    
	
 
    	
 
    
	
 
    	
For the purpose of the provisions of this section, the term   “Building of the Leased Property” will include all systems which constitute   an inseparable part of the Building, and expressly will not include the   content of the leased properties and any addition, correction, modification,   improvement or extension which have been performed in the leased properties   by the lessees or as part of on their behalf.
    
	
 
    	
 
    
	
 
    	
The insurance premiums which the Lessor will be required to pay   with respect to the insurance for the Building of the Leased Property will be   paid to it by the Lessee (in accordance with its proportional share of the   Leased Property), within 7 days after the date of demand by the Lessor.
    

 

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16.6.2                   Resultant   loss insurance, including loss of rent and management fees and Parking Fees   (if any) to the Lessor and/or to the Management Company as a result of loss   or damage to the Building of the Leased Property due to the risks specified   in section 16.6.1 above, for a period of no less than 12 months.
    
	
 
    	
 
    
	
 
    	
It is hereby agreed that the Lessor and/or the Management   Company will be entitled not to prepare resultant loss insurance, as   specified in this section 16.6.2 above, in whole or in part; however, the   provisions of section 16.6.3 below will apply as if the aforementioned   insurance had been prepared in full.
    
	
 
    	
 
    
	
 
    	
The aforementioned insurance policy will include a waiver   regarding subrogation rights towards lessees and/or occupants in the Building   of the Leased Property, and expressly towards the Lessee and/or its employees   and managers, including employees of manpower companies who are hired by the   Lessee, through invoices, and corporate officers or companies under their   control, who are hired by the Lessee through invoices, provided that the   foregoing regarding the waiver of subrogation rights towards lessees and/or   occupants in the Building of the Leased Property, with respect to damage   caused by them, will not apply towards any person has caused malicious   damages.
    
	
 
    	
 
    
	
 
    	
16.6.3                   The   Lessor hereby exempts the Lessee and/or its employees and managers, including   employees of manpower companies who are hired by the Lessee through invoices   and corporate officers or companies under their control who are hired by the   Lessee through invoices, in its name and in the name of the Management   Company, from liability with respect to damages for which they are entitled   to compensation in accordance with the insurance policies which have been   prepared in accordance with sections 16.6.1 and 16.6.2 above (or for which   they would be entitled to compensation if not for the deductibles specified   in the policies); however, the aforementioned exemption from liability will   not apply towards any person who has caused malicious damages.
    
	
 
    	
 
    
	
 
    	
Notwithstanding the foregoing, in the event of the occurrence of   an insurance event which is insured under sections 16.6.1 and 16.6.2, in   circumstances for which the Lessee is liable, in accordance with the   Agreement and/or by law, the Lessee will bear the amount of incurred damages   up to the amount of the deductibles specified in the aforementioned policies,   provided that the amount paid by the Lessee, as stated above, with respect to   each event, does not exceed USD 10,000.
    
	
 
    	
 
    
	
 
    	
16.6.4                   Third   party liability insurance, with liability limits of $3,000,000 (three
    

 

41

 

	
 
    	
million   US Dollars) per event and cumulatively in accordance with the policy, which   covers the legal liability of the Management Company and the Lessor with   respect to physical injury or harm to property, which may be caused to the   person and/or property of any person or legal entity whatsoever in the   Building and in its surrounding area. The aforementioned insurance policy   will not be subject to any restriction as to liability due to fire,   explosion, panic, poison, lifting, loading and unloading devices, animals,   strikes and lockdowns, liability with respect to and towards contractors and   subcontractors (of any rank) and their employees, as well as subrogation   claims from the National Insurance Institute. The insurance will be extended   to include indemnification of the Lessee with respect to any liability which   may be imposed on the Lessee due to any action and/or omission of the   Management Company and/or the Lessor and/or any other party on their behalf,   for each one of the individuals in the insurant.
    
	
 
    	
 
    
	
 
    	
16.6.5                   Employers’   liability insurance covering the liability of the Management Company and the   Lessor towards their employees, with respect to physical injury and/or   profession illness which may be caused to any of the foregoing, during and   due to their work in the Building and its surrounding area, with liability   limits of $5,000,000 per claimant, per event and cumulatively in accordance   with the policy. This insurance will not include any restriction regarding   works at height and depth, work hours, baits and poisons, contractors, subcontractors   and their employees (in the event that these are considered employees of the   Lessor and/or the Management Company), and regarding the employment of   minors. The insurance will be extended to include indemnification of the   Lessee in the event that it is claimed, regarding the occurrence of any work   accident and/or professional illness whatsoever, that it bears any employer’s   obligations whatsoever towards any of the employees of the Management Company   and the Lessor.”
    
	
 
    	
 
    
	
Section 17.1
    	
After the words   “and any entity acting on their behalf”, the following words will be added:   “subject to advance coordination with the Lessee”. 
    
	
 
    	
 
    
	
Section 18.1
    	
Notwithstanding   the provisions of this section, it is hereby agreed that the Lessee will be   entitled to assign its obligations and rights under this Agreement, as an   entire single unit, to an alternative lessee (hereinafter: the “Alternative Lessee”), who will continue   operating the Leased Property for the Lease Purpose, as defined in this   Agreement, for the remainder of the Lease Period in the Leased Property, and   for the Lease Period only. The foregoing will apply subject to the   stipulation that the identity of the Alternative Lessee will be subject to   the advance written approval of the Lessor, in the Lessor’s exclusive   judgment, and for relevant reasons only. Without derogating from the   foregoing, it is hereby clarified that any refusal by the Lessor due to   unsuitability of the Alternative Lessee, in light of matters associated with   the reputation and/or reliability and/or economic ability of the Alternative   Lessee,
    

 

42

 

	
 
    	
will not be   considered unjustified refusal.

 

In the event   that the Alternative Lessee has been approved, subject to the foregoing, and   without derogating from the Lessee’s undertakings under this Agreement, the   Alternative Lessee will accept all of the Lessee’s obligations and   undertakings under this Agreement, and in the Lessor’s discretion, will be   required to sign a lease agreement in the wording conventionally practiced by   the Lessor, under reasonable conditions, according to the conventional   practice in the Park at that time, and under commercial terms which will not   be inferior to the terms of the Lessee’s Lease in accordance with this   Agreement. Additionally, the Lessee will pay all handling fees and all   expenses spent by the Lessor due to the transfer of the aforementioned rights   and obligations. it is hereby clarified that and agreed that in the event   that the Alternative Lessee has been approved, as stated above, the   Alternative Lessee will not be entitled to transfer its rights to the Leased   Property. It is hereby emphasized that, within the framework of the transfer   of the rights and obligations, as stated above, in addition to the signing of   the Lease Agreement between the Lessor and the Alternative Lessee, a   tri-party agreement (between the Lessor, the Lessee and the Alternative   Lessee) will be signed, which will set forth the rights to the Leased   Property from the Lessee to the Alternative Lessee.

 

Subject to   the signing of the aforementioned tri-party agreement, the Alternative   Lessee’s signing of a lease agreement, and the full and timely fulfillment of   the Lessee’s undertakings, until the transfer date of the rights and   obligations to the Alternative Lessee — the Lessee will be exempt from its   undertakings under this Agreement, beginning on the date of the transfer of   the rights and obligations to the Alternative Lessee.

 

It is hereby   agreed that the Lessee will be entitled to allow a sublessee on its behalf   (hereinafter: the “Sublessee”)   to make use of all or parts of the additional area. The foregoing will apply   subject to the stipulation that the Lessor will provide its advance written   consent for the Sublessee and for the scope of the areas which the Lessee   will use, in the exclusive judgment of the Lessor, and for relevant reasons   only. It is hereby clarified that any refusal by the Lessor regarding the   identity of the Sublessee for reasons associated with the reputation and/or   economic stability of the Sublessee and/or the unsuitability of the Sublessee   to the mix of business in the Park will not be considered unjustified   refusal. In the event that the identity of the Sublessee has been approved,   subject to the foregoing, and without derogating from the Lessee’s   undertakings under this Agreement, the Sublessee will accept upon itself all   of the obligations and undertakings of the Lessee under this Addendum. For   the avoidance of doubt, the Lessor will bear no cost and/or expense and/or   liability whatsoever in connection with the Sublessee’s use of the additional   area, including as regards internal adjustments of the internal area for the   purposes of the Sublessee. It is hereby expressly emphasized that the   Sublessee’s aforementioned lease will be implemented and set forth only upon   the signing of a licensee document by the Lessor, the Lessee and the   Sublessee, in the wording conventionally practiced by the Lessor, which   confers
    

 

43

 

	
 
    	
upon the   Lessee the status of “licensee” towards the Lessor, and subject to the   fulfillment of its terms.
    
	
 
    	
 
    
	
Section 19.1
    	
The text   “the Agreement has been cancelled” will be replaced with the text “the Agreement   has been cancelled in the appropriate manner”; the words “sections 3.2 and 12   above” will be replaced with the words “section 12 above”.
    
	
 
    	
 
    
	
Section 19.2
    	
In the   second paragraph, the words “and it is hereby agreed, regarding any payment   of Service Fees, as stated above, delay in vacation of part of one month will   be considered delay of an entire month.”

 

Appropriate   Service Fees per day will be in a sum equal to the monthly Rent divided by   30.
    
	
 
    	
 
    
	
Section 19.4
    	
After the   words “and all expenses associated therewith”, the following text will be   added: “subject to the presentation of appropriate authorizations”.
    
	
 
    	
 
    
	
Section 19.6
    	
It is hereby   agreed that between the parties that the exercise of the Lessor’s authorities   under this section is conditional upon the provision of written notice to the   Lessee at least 21 days in advance.
    
	
 
    	
 
    
	
Section 20.1.3
    	
After the   words “after their expiration dates”, the following words will be added:   “subject to the Lessor’s provision of written notice regarding the foregoing”.
    
	
 
    	
 
    
	
Section 20.2
    	
The   following text will be added at the end of the section: “subject to the   provision of written notice to the Lessee 7 business days in advance”.
    
	
 
    	
 
    
	
Section 20.4
    	
The   following text will be added to the beginning of the section: “Subject to the   provisions of section 20.2”.
    
	
 
    	
 
    
	
Section 20.5
    	
It is hereby   agreed that insofar as all receipts and authorizations regarding the   execution of the various payments by the Lessee have been presented, before   90 days have passed since the date of return of the Leased Property, the   Lessor will return the bank guarantee to the Lessee, as close as possible   after the date of receipt of all receipts and authorizations, as stated   above.
    
	
 
    	
 
    
	
Section 21
    	
The words   “immediately upon its demand” will be replaced with the words “within 14 days   after the receipt of its written demand”; the following text will be added at   the end of the section: “subject to the presentation of appropriate   authorizations”. 
    
	
 
    	
 
    
	
Section 22
    	
The   following text will be deleted: “(unlinked), or linkage differentials due to   the increase of the consumer price index, from the date when the Lessee was   required to execute the payment to the Lessor, until the actual execution   thereof, with the addition of interest of 48% per year.

 

Notwithstanding   the provisions of this section, it is hereby agreed that three
    

 

44

 

	
 
    	
delays of up   to five days each on the part of the Lessee in the execution of any payment   whatsoever to the Lessor during the Lease Period will not bear interest in   arrears. Any arrears beyond the foregoing and/or any arrears in the execution   of such payment which exceeds five days will bear interest in arrears with   respect to the entire period of arrears, in other words — beginning from the   effective date for payment, until the actual payment date. 
    
	
 
    	
 
    
	
Section 23.1
    	
Before the   words “damages and losses”, the following word be added: “proven”. 
    
	
 
    	
 
    
	
Section 23.2
    	
Before the   word “warning”, the word “written” will be added; the words “15 days” will be   replaced with the words “20 days”; the words “10 days” will be replaced with   the words “20 days”.
    
	
 
    	
 
    
	
Parking
    	
During the   Lease Period of the Leased Property, the Lessee will be entitled to make use,   for parking purposes only, of 12 Parking Spaces (hereinafter: the “Parking Spaces”), which will be allocated   to it by the Lessor in the Parking lot in buildings 1-3 of the Park. With   respect to each Parking Space, the Lessee will pay to the Lessee an amount in   NIS equal to NIS 220 per month, with the addition of duly payable VAT, with   this amount being linked to the Base Index. The Lessor will be entitled to   change the location of the Parking Spaces from time to time, subject to the   provision of advance notice, provided that the alternative Parking Spaces are   also located in the aforementioned Parking Lot. 
    

 

45

 

Annex “B” — Site Plan

 

 

46

 

Annex “C”

 

 

 

47

 

Annex “D”

 

Certificate of Insurance for the Leased Property

 

	
 
    	
 
    	
 
    	
Date:
    	
 
    

 

Attn.:

 

Africa Israel Properties Ltd. and/or subsidiaries and/or associate companies and/or consolidated companies

 

4 Derech HaHoresh St.

 

Yehud

 

(Hereinafter, jointly: the “Lessor”)

 

Dear Sir/Madam,

 

Re: Certificate of Insurance for the Leased Property

 

We hereby affirm that we have prepared for               (hereinafter: the “Lessee”) property insurance in connection with section 16 of the agreement between you and the Lessee dated           , as specified below, with respect to the property located in Kiryat Weizmann — Science Park in Ness Tziona (hereinafter: the Leased Property”), for the period from        to         (at midnight) (hereinafter: the “Insurance Period”), in accordance with the following conditions, where the scope of cover given in accordance with the aforementioned insurance policy does not exceed the scope of cover in accordance with the text of the policy known as “Bit” 2008, or any other text which may come in its place:

 

1.              Property insurance — This policy will insure the full worth and full restatement value of the contents of the Leased Property, the equipment of the Leased Property, the equipment used for the Leased Property which is owned by the Lessee and/or for which the Lessee is responsible and which is located outside to the Leased Property in the area of the Building, as well as any repair, modification, improvement, renovation and addition to the Leased Property which have been performed and/or which will be performed by the Lessee and/or on its behalf, as well as furniture, equipment, facilities and inventories of any kind whatsoever, against the risks conventionally covered under extended fire insurance, including the following risks: loss or damage due to fire, smoke, lightning, explosion, earthquake, riots, strikes, malicious damages, flood, damages due to storms, damage due to vehicles and aircraft, damage due to water and other liquids and the rupture of pipes, damage due to supersonic booms, as well as damages due to collision and break-in.

 

48

 

2.              Resultant loss insurance, excluding loss of rent and management fees and parking (if any), which the Lessee has incurred due to the risks specified in subsection 1 above, according to their full value, for a reimbursement period of 12 months.

 

The insurance policies specified in subsections 1 and 2 above include an express condition stipulating that the insurer waives any subrogation rights towards the Lessor and/or towards the management company of the Park (hereinafter: the “Management Company”) and/or their employees and managers, including employees of manpower companies who are employed through invoices, and towards the other lessees and/or other occupants of areas in the Building and/or their employees and managers, whose insurance policies include a clause regarding the waiver of subrogation rights towards the Lessee, provided that the waiver of subrogation rights will not apply towards any person who has caused malicious damages.

 

3.              Third party liability insurance — to insure the Lessee’s legal liability towards any third party whatsoever, including its guests, invitees, and customers, as well as the Lessor, the Management Company and any other party on their behalf or in their name, with liability limits of $1,000,000 (one million US Dollars) per event and per annual insurance period. This insurance will not be subject to any restriction regarding liability due to fire, explosion, panic, lifting, loading and unloading devices, defective sanitary facilities, strike and lockdown, liability due to and towards contractors and subcontractors (of any rank) and their employees, poisoning, any harmful substances in food or beverage, as well as claims from the National Insurance Institute. The install will be extended to include indemnification of the Lessor and the Management Company as additional insurants, subject to a cross liability clause, according to which the insurance will be considered as if it has been prepared separately for each individual in the insurant, and including specification that the Lessor and the Management Company are not responsible for the payment of any premiums whatsoever, with respect to their liability as the owner and/or manager of the Leased Property, and with respect to their liability for the actions and/or omissions of the Lessee and/or any other party on its behalf.

 

4.              Employers’ liability insurance with respect to the Lessee’s liability towards all employees employed by it, with liability limits of $5,000,000 (five million US Dollars) per event and per annual insurance period. This insurance will not include any restriction regarding contractors, sub contractors and their employees (in the event that these are considered employees of the Lessee), work hours, poisons and baits, and regarding the employment of minors, in accordance with the provisions of the law. This insurence will be extended to include indemnification of the Lessor and/or the Management Company, in the event that these are considered employers of all or any of the Lessee’s employees.

 

We hereby affirm that the aforementioned insurance policies take precedence over any insurance policy which has been prepared by the Lessor and/or the Management Company, and we hereby waive any demand or claim regarding the involvement of the insurance policies of the Lessor and/or the Management Company. We further undertake that the insurance and the policy will not be reduced,

 

49

 

and will not be cancelled, during the Insurance Period, unless written notice has been sent to you, via registered mail, 30 days in advance.

 

Subject to the terms and reservations specified in the original policy, insofar as these have not been expressly modified in accordance with the foregoing.

 

	
 
    	
 
    
	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of   the Insurer
    

 

50

 

Annex “D1”

 

Certificate of Insurance for Construction Works

 

	
 
    	
 
    	
 
    	
Date:
    	
 
    

 

Attn.:

 

Africa Israel Properties Ltd. and/or subsidiaries and/or associate companies and/or consolidated companies (hereinafter: the “Lessor”)

 

4 Derech HaHoresh St.

 

Yehud

 

Dear Sir / Madam,

 

Re: Certificate of Insurance for Construction Works

 

We hereby affirm that we have prepared for               (hereinafter: the “Lessee”) insurance for construction works, as specified in section       of the agreement between you and the Lessee dated           , as specified below, with respect to the Construction Works in the Leased Property located in Kiryat Weizmann — Science Park (hereinafter: the Leased Property”), for the period from        to         (at midnight) (hereinafter: the “Insurance Period”),

 

This insurance policy has been prepared in the name of the Lessee, the Lessee’s contractors and sub contractors, the Lessor and the Management Company of the Science Park (hereinafter: the “Management Company”) (hereinafter, jointly: the “Individuals of the Insurant”), and includes the following insurance chapters, where the scope of cover given under the aforementioned insurance will not fall below the scope of cover given in accordance with the text of the policy known as “Bit” 2008, or any other text which may come in its place:

 

1.              Chapter 1 — “All risks” insurance, covering the entire value of all performed works and of all repairs, renovations, improvements, modifications and additions which will be performed in the Leased Property, as well as insurance for property located nearby the property on which the works are performed, up to a total of $100,000 (five hundred thousand US Dollars) [Translator’s Comment- inconsistency in original document] per event and per annual insurance period.

 

This chapter includes a clause specifying a waiver of subrogation rights towards the Lessor and/or the Management Company and/or their employees and managers, including employees of manpower companies who are employed by the Lessor and/or the Management Company, through invoices, and corporate officers or companies under their control who are hired

 

51

 

through invoices, and also towards lessees and/or occupants of areas in the Park, and their employees and managers, whose insurance policies include a corresponding clause regarding the waiver of subrogation rights towards the Lessee, provided that the waiver of subrogation rights will not apply towards any person who has caused malicious damages.

 

2.              Chapter 2 — Third party liability insurance, with liability limits of $1,000,000 (one million US Dollars) per event and per annual insurance period.

 

This chapter includes the Lessor and the Management Company as additional insurants, and is subject to a cross liability clause, stipulating that the insurance will be considered as if it had been prepared separately for each individual in the insurant. It is hereby expressly clarified, for the avoidance of doubt, that the property of the Lessor and/or the Management Company will be considered third party property for the purpose of this chapter.

 

3.              Chapter 3 — Employers’ liability insurance with respect to liability towards employees, contractors and subcontractors who are hired in the performance of the works, with liability limits of $5,000,000 (five million US Dollars) per event and per annual insurance period.

 

This insurance does not include any restriction regarding contactors, subcontractors and their employees, or regarding work hours and the employment of minors.

 

We hereby affirm that these insurance policies take precedence over any insurance policy which has been prepared by the Lessor, and we further undertake that the insurance and the policy will not be reduced, and will not be cancelled, during the Insurance Period, unless written notice has been sent to you, via registered mail, 30 days in advance.

 

Subject to the terms and reservations specified in the original policy, insofar as these have not been expressly modified in accordance with the foregoing.

 

	
 
    	
 
    
	
 
    	
Sincerely,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Signature of   the Insurer
    
	
 
    

 

52

 

Annex “E”

 

Policy Regarding Heat Works

 

1.              Waste materials, empty boxes, cases and wood and paper waste materials will be removed from the Leased Property by the Lessee on a daily basis, and will be store at a safe distance from the Leased Property, in areas designated for this purpose inside the Park.

 

2.              “Heat works” will not be performed in the area of the Leased Property within a radius of 10 meters from any inflammable materials whatsoever, in any manner which is not in accordance with the policy specified below:

 

2.1.         The term “heat works” means the performance of any works which involve the use of welding and/or cutting using heat and/or which involves the use of open fire.

 

2.2.         Any contractor or subcontractor whose work involves the performance of heat works will appoint a supervisor (hereinafter: the “Supervisors”), who will be responsible for ensuring that heat works are not performed in any manner other than as specified in this policy.

 

2.3.         Before commencing the performance of any heat works whatsoever, the Supervisor will survey the area in which heat works are intended for purchase, and will verify the removal of all inflammable materials, of any kind whatsoever, located within a min radius of 10 meters from the location where the heat works will be performed, where fixed inflammable materials, which cannot be moved, will be covered with a non-flammable cover.

 

2.4.         The Supervisor will appoint a person who will be designated as a fire watchman (hereinafter: the “Fire Watchman”), who will be equipped with fire extinguishing equipment as appropriate for the inflammable material located in the area for the performance of heat works (but not less than two properly functioning 6 kg. fire extinguishers during the performance of welding works ). The sole role of the Fire Watchman will be to observe the performance of heat works, and to immediately extinguish any fire which may be caused due to the heat works.

 

2.5.         The Fire Watchman will be present in the location for performance of the heat works from the start of their performance until at least 30 minutes after their conclusion, in order to verify that no sources of fire remain.

 

53

 

Text of Bank Guarantee

 

Attn.:

 

Africa Israel Properties Ltd.

 

4 Derech HaHoresh St.

 

Yehud

 

Dear Sir / Madam,

 

Re: Bank Guarantee

 

At the request of            (hereinafter: the “Lessee”), we hereby undertake and guarantee towards you, on behalf of the Lessee, to pay any amount, up to the limit of NIS         , linked to the consumer price index (including fruits and vegetables), as published by the Central Bureau of Statistics, where the Base Index will be the index for the month of      in the year      (hereinafter: the “Guarantee Amount”), in connection with securing the Lease Agreement between you and the Lessee, and to secure the vacation of the Leased Property in accordance with the provisions of the aforementioned lease agreement.

 

We hereby undertake to pay to you any amount which will be demanded by you, up to the Guarantee Amount, immediately upon your first written demand, and no later than two business days after the date of the demand, with no requirement for you to provide reasons or grounds for your demand.

 

You will be entitled to demand from us payment of the Guarantee Amount in full, or to demand from us, from time to time, payment of amounts on account of the Guarantee Amount, and in the foregoing case, after each payment, the Guarantee will remain in effect regarding the remaining amounts of the Guarantee, provided that the sum total of all your demands will not exceed the total Guarantee Amount.

 

This Guarantee will be in effect, in its entirety, until         at 12:00 o’clock, and in general, and any demand issued in accordance herewith must be submitted no later than the foregoing date.

 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Bank
    

 

54

 

Annex G — Maintenance and Other Services *

 

The maintenance company in the Kiryat Weizmann Science Park provides maintenance services for the public areas. The set of provided services includes the following maintenance services:

 

1.              Routine daily cleaning of the area around the buildings.

2.              Routine cleaning of public areas inside the building.

3.              Routine cleaning of public restrooms (if any).

4.              Routine cleaning of the parking lots.

5.              Removal of waste (excluding exceptional waste).

6.              Removal of cardboard items.

7.              Removal of trees and trimmings.

8.              Maintenance of the external water system.

9.              Maintenance of the public sewage systems.

10.       Maintenance of public electrical systems and street lighting.

11.       Annual thermographic tests of public / main power boards.

12.       Maintenance of sidewalks.

13.       Routine maintenance of signage systems in public areas.

14.       Maintenance of electrical gate systems.

15.       Gardening, including maintenance, installation and replacement of plants, grass and trees.

16.       Rental of security and guard services for the public areas, including hotline services.

17.       Maintenance services for the air conditioning systems which are currently installed in the Leased Property as of the commencement date of the Lease, provided that no modification is implemented to them by the Lessee and/or by any other party on its behalf. For the avoidance of doubt, the handling, repair and maintenance of any air conditioning equipment and/or of the air conditioning units which may be installed by the Lessee in the Leased Property will be performed by the Lessee, and at the Lessee’s exclusive liability and expense.

18.       Maintenance of elevators and performance of periodic tests.

19.       Maintenance of fire detection systems in the public areas.

20.       Handling of fixed and mobile fire extinguishing systems in public areas.

21.       Maintenance of buildings, both internal (public areas) and external.

22.       Maintenance and repairs of sanitation equipment, waste containers, compressors, etc.

 

The provisions specified above are subject to the provisions of [handwritten correction, including signatures:] the lease agreement which will be signed between the parties.

 

55

 

Collplant Holdings Ltd.

(Formerly — Portfolio Green Ltd.)

Summary Consolidated Statements of Cash Flows

For the 6 Month and 3 Month Periods Ended June 30, 2010

 

	
 
    	
 
    	
3 Months Ended June 30
    	
 
    	
6 Months Ended
   June 30
    	
 
    	
Year Ended
   December 31
    	
 
    
	
 
    	
 
    	
2010
    	
 
    	
2009*
    	
 
    	
2010
    	
 
    	
2009*
    	
 
    	
2009*
    	
 
    
	
 
    	
 
    	
(Unaudited)
    	
 
    	
(Audited)
    	
 
    
	
 
    	
 
    	
Thousands of NIS
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   operating activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash used in activities (see annex)
    	
 
    	
(9,429
    	
)
    	
(6,911
    	
)
    	
(5,425
    	
)
    	
(3,987
    	
)
    	
(11,450
    	
)
    
	
Interest received in cash
    	
 
    	
11
    	
 
    	
56
    	
 
    	
10
    	
 
    	
52
    	
 
    	
54
    	
 
    
	
Net cash used in operating   activities
    	
 
    	
(9,418
    	
)
    	
(6,855
    	
)
    	
(5,425
    	
)
    	
(3,935
    	
)
    	
(11,396
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   investing activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Acquisition of fixed assets
    	
 
    	
(699
    	
)
    	
(293
    	
)
    	
(200
    	
)
    	
(197
    	
)
    	
(624
    	
)
    
	
Sale of fixed assts
    	
 
    	
10
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Acquisition of software programs
    	
 
    	
 
    	
 
    	
(7
    	
)
    	
 
    	
 
    	
 
    	
 
    	
(5
    	
)
    
	
Sale of assets at fair value   through profit and loss
    	
 
    	
 
    	
 
    	
1,307
    	
 
    	
 
    	
 
    	
1,307
    	
 
    	
1,299
    	
 
    
	
Net cash from investing activities   (used in investing activities)
    	
 
    	
(689
    	
)
    	
1,007
    	
 
    	
(200
    	
)
    	
1,110
    	
 
    	
670
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   financing activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Receipts due to reverse   acquisition
    	
 
    	
13,230
    	
 
    	
 
    	
 
    	
13,230
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exercise of options to employees
    	
 
    	
482
    	
 
    	
 
    	
 
    	
482
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash from financing   activities
    	
 
    	
13,712
    	
 
    	
—
    	
 
    	
13,712
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Increase (decrease)   in cash and cash equivalents
    	
 
    	
3,605
    	
 
    	
(5,848
    	
)
    	
8,097
    	
 
    	
(2,825
    	
)
    	
(10,726
    	
)
    
	
Balance of cash and   cash equivalents at start of period
    	
 
    	
13,568
    	
 
    	
24,023
    	
 
    	
8,851
    	
 
    	
22,720
    	
 
    	
24,023
    	
 
    
	
Profit (loss) from   linkage differentials with respect to cash
    	
 
    	
437
    	
 
    	
1,441
    	
 
    	
662
    	
 
    	
(279
    	
)
    	
271
    	
 
    
	
Balance of cash and   cash equivalents at end of period
    	
 
    	
17,610
    	
 
    	
19,616
    	
 
    	
17,610
    	
 
    	
19,616
    	
 
    	
13,568
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additional   information -
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Income tax received (paid)
    	
 
    	
(15
    	
)
    	
26
    	
 
    	
—
    	
 
    	
26
    	
 
    	
—
    	
 
    

 

*Restated, see Note 1C.

 

The attached notes constitute an inseparable part of these summary financial statements.

 

 

Collplant Holdings Ltd.

(Formerly — Portfolio Green Ltd.)

Summary Consolidated Statements of Cash Flows

For the 6 Month and 3 Month Periods Ended June 30, 2010

 

	
 
    	
 
    	
3 Months Ended June 30
    	
 
    	
6 Months Ended
   June 30
    	
 
    	
Year Ended
   December 31
    	
 
    
	
 
    	
 
    	
2010
    	
 
    	
2009*
    	
 
    	
2010
    	
 
    	
2009*
    	
 
    	
2009*
    	
 
    
	
 
    	
 
    	
(Unaudited)
    	
 
    	
(Audited)
    	
 
    
	
 
    	
 
    	
Thousands of NIS
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   operating activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash used in activities (see   annex)
    	
 
    	
(9,429
    	
)
    	
5,470 (6,911
    	
)
    	
(5,425
    	
)
    	
4,266 (3,987
    	
)
    	
(11,450
    	
)
    
	
Interest received in cash
    	
 
    	
11
    	
 
    	
56
    	
 
    	
10
    	
 
    	
52 
    	
 
    	
54
    	
 
    
	
Net cash used in operating   activities
    	
 
    	
(9,418
    	
)
    	
5,414 (6,855
    	
)
    	
(5,425
    	
)
    	
4,214 (3,935
    	
)
    	
(11,396
    	
)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   investing activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Acquisition of fixed assets
    	
 
    	
(699
    	
)
    	
(293
    	
)
    	
(200
    	
)
    	
(197
    	
)
    	
(624
    	
)
    
	
Sale of fixed assts
    	
 
    	
10
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Acquisition of software programs
    	
 
    	
 
    	
 
    	
(7
    	
)
    	
 
    	
 
    	
 
    	
 
    	
(5
    	
)
    
	
Sale of assets at fair value   through profit and loss
    	
 
    	
 
    	
 
    	
1,307
    	
 
    	
 
    	
 
    	
1,307
    	
 
    	
1,299
    	
 
    
	
Net cash from investing   activities (used in investing activities)
    	
 
    	
(689
    	
)
    	
1,007
    	
 
    	
(200
    	
)
    	
1,110
    	
 
    	
670
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash flows from   financing activities:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Receipts due to reverse   acquisition
    	
 
    	
13,230
    	
 
    	
 
    	
 
    	
13,230
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Exercise of options to employees
    	
 
    	
482
    	
 
    	
 
    	
 
    	
482
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net cash from financing   activities
    	
 
    	
13,712
    	
 
    	
—
    	
 
    	
13,712
    	
 
    	
—
    	
 
    	
—
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Increase (decrease)   in cash and cash equivalents
    	
 
    	
3,605
    	
 
    	
4,407 (5,848
    	
)
    	
8,097
    	
 
    	
3,104 (2,825
    	
)
    	
(10,726
    	
)
    
	
Balance of cash and   cash equivalents at start of period
    	
 
    	
13,568
    	
 
    	
24,023
    	
 
    	
8,851
    	
 
    	
22,720
    	
 
    	
24,023
    	
 
    
	
Profit (loss) from   linkage differentials with respect to cash
    	
 
    	
437
    	
 
    	
1,441
    	
 
    	
662
    	
 
    	
(279
    	
)
    	
271
    	
 
    
	
Balance of cash and   cash equivalents at end of period
    	
 
    	
17,610
    	
 
    	
19,616
    	
 
    	
17,610
    	
 
    	
19,616
    	
 
    	
13,568
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Additional   information -
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Income tax received (paid)
    	
 
    	
(15
    	
)
    	
26
    	
 
    	
—
    	
 
    	
26
    	
 
    	
—
    	
 
    

 

 

Addendum to the Unprotected Lease Agreement

 

Drafted and signed in Ness Tziona on May 20, 2010

 

Between

 

Africa Israel Properties Ltd.

Of 4 Derech HaHoresh Rd., Yehud

(Hereinafter: the “Lessor”)

 

Of the first part;

 

And

 

Collplant Ltd.

Reg. Co. No. 513578260

Of Kiryat Weizmann Science Park

Ness Tziona, 76362

(Hereinafter: the “Lessee”)

 

Of the second part;

 

Whereas:                                          The Lessee is leasing from the Lessor various areas, with a total gross area of approximately 605 square meters, in building no. 3 in Kiryat Weizmann Science Park (hereinafter, respectively: the “Leased Property”; the “Building”; and the “Park”), by virtue of the unprotected lease agreement which was signed between the Lessor and the Lessee on June 19, 2009 (hereinafter: the “Original Lease Agreement”), which was amended and extended through an addendum dated August 6, 2008 (the Original Lease Agreement, including the addenda thereto, shall hereinafter be referred to as: the “Lease Agreement”); and

 

Whereas:                                          The Lessee has submitted to the Lessor a request to lease, through an unprotected lease, an additional area in the Building, in accordance with the terms of the Lease Agreement, mutatis mutandis; and

 

Whereas:                                          The Lessor has agreed to the Lessee’s aforementioned request, in accordance with the specifications and stipulations specified below in this Addendum:

 

[Signature]

 

 

Now therefore, the parties have agreed, warranted and stipulated between them as follows:

 

1.              The preamble to this Agreement and its annexes constitute an inseparable par hereof.

 

2.              The Lessee hereby leases from the Lessor, and the Lessor hereby leases to the Lessee, an area in the ground floor of the Building, with a gross area of 106 square meters (including loading with respect to shared use of common areas in the Building), with the borders marked in red in the diagram which is attached hereto as Annex “A” (hereinafter: the “Additional Area”).

 

3.              The Lease Period with respect to the Additional Area will commence on May 15, 2010 (hereinafter: the “Transfer Date”), and will conclude on August 18, 2013 (hereinafter: the “Lease Period”). On August 18, 2013, the Lease Period with respect to the Additional Area will conclude, and the provisions of the Lease Agreement will apply with respect to the termination of the Lease and the vacation of the Leased Property, mutatis mutandis, with respect to the Additional Area.

 

4.              Rent and Service Fees with respect to the Additional Area

 

4.1.                The rent with respect to the Additional Area during the Lease Period for the Additional Area will amount to a total of NIS 5,724 per month (calculated according to NIS 54 per gross square meter of the area in the Additional Area), with this amount being linked to the consumer price index (general index) which was published on July 15, 2008, with respect to June of 2008 (108.8 points, 2002 base), and with the addition of duly payable VAT.

 

4.2.                The Service Fees which the Lessee will pay with respect to the Additional Area will be as conventionally practiced from time to time in the Building, and will be performed with the addition of duly payable VAT and linkage to the Index, according to the conventional practice in the Building.

 

4.3.                The Rent and the Service Fees which will be paid by the Lessee to the Lessor with respect to the Additional Area will be paid on the dates and in the manner set forth in the Lease Agreement.

 

5.              The Lessee will bear the payment of all taxes, fees and levies which will apply with respect to the Additional Area and which apply to an occupant and/or user and/or lessee, in accordance with law and/or common practice, including, and without derogating from the generality of the foregoing, municipal taxes, electricity, telephone, gas, communication, water, etc. It is hereby clarified that that the municipal taxes with respect to the Additional Area and with respect to its share of the public areas will apply to the Lessee, and will be paid by the Lessee, including if it is determined in law that the municipal taxes applies to the owner.

 

2

 

6.              For the avoidance of doubt, it is hereby clarified that the Additional Area will be transferred to the Lessee in its current condition (“as is”), on the Transfer Date, and the Lessor is not obligated to perform any work and/or renovation and/or improvement in the Additional Area.

 

7.              The Lessee hereby declares and affirms that the Lessor’s consent to engage with it in the Addendum, in connection with the Additional Area, has been given based on the Lessee’s fundamental undertakings, as specified below (cumulatively):

 

7.1.                To obtain, at its own expense and responsibility, all licenses and permits which are required by law in order to operate its business and to perform all of its activities in the Additional Area.

 

7.2.                To comply with the safety rules which are required by law and with the instructions issued by any authority, and to comply with the instructions issued by the safety consultants on behalf of the Lessor.

 

For the avoidance of doubt, it is hereby expressly emphasized that the non-fulfillment of the Lessee’s fundamental undertakings, as specified in sections 7.1 and 7.2 above, in a full and timely manner, will constitute a fundamental breach of the Lease Agreement and of this Addendum, and in the foregoing case, the Lessor will be entitled to cancel this Addendum, and to demand the Lessee to vacate the Additional Area, without derogating from all other remedies which are available to the Lessor under the Lease Agreement and this Addendum, and by law.

 

8.              It is hereby clarified that and agreed that insofar as the Lessee desires to perform, in the Additional Area, various construction and/or adjustment works, all of the aforementioned construction and/or adjustment works will be performed by the Lessee and at the Lessee’s expense and liability. It is hereby clarified that all of the aforementioned construction and/or adjustment works which will be performed subject to and in accordance with the provisions of the Lease Agreement with respect to the performance of works in the Leased Property, mutatis mutandis with respect to the Additional Area, and particular subject to the stipulation that the Lessee will obtain the Lessor’s written consent for the performance of the aforementioned works, in accordance with the Construction Works which the Lessee will submit to the Lessor’s consultants for approval.

 

9.              It is hereby clarified and agreed that insofar as demand will be received from the Lessor and/or from a competent authority in accordance with the law (hereinafter: the “Competent Authority”) to perform, in the Additional Area, works in connection with the installation of fire extinguishing systems in and/or outside of the Additional Area, the Lessee will perform independently, at its own expense and liability, works required to install pipes, sprinklers and detection systems inside the Additional Area, in an internal location which will be determined in coordination with the Lessor’s consultants and/or any other works which will be required by the competent authority, in coordination with the Lessor, through a licensed contractor whose identity will be approved in advance and in writing by the Lessor. The connection of sensors to the central detection and extinguishing system will be performed by the Lessee, and at the Lessee’s expense and liability,

 

3

 

through a licensed contractor whose identity will be approved in advance and in writing by the Lessor. The Lessee will be responsible for adjusting the system of secondary pipes, sprinklers and fire detectors in the area of the Additional Area, including planning the aforementioned adjustment. The water supply pipes leading up to the sprinklers, until the entrance to the Additional Area (including an emergency water reservoir) will be installed by the Lessor and at the Lessor’s expense.

 

10.       The Lessee hereby declares and undertakes that it will make available and furnish to the Lessor, within 3 business days after the signing of this Addendum, or until 3 days before the Transfer Date (whichever is earlier), an autonomous bank guarantee, in accordance with the provisions of the Lease Agreement, exercisable in installments, in an amount equal to the Rent, the Service Fees and VAT with respect to the foregoing, for 9 months lease of the Additional Area (hereinafter: the “Supplementary Guarantee”). The amount of the Supplementary Guarantee will be linked to the consumer price index which was published on July 15, 2008, with respect to June 2008 (108.8 points, 2002 base). The Supplementary Guarantee will be used, together with the other securities which have been furnished to the Lessor, to secure the Lessee’s undertakings towards the Lessor in accordance with the Lease Agreement and in accordance with this Addendum.

 

11.       Any failure to furnish the Supplementary Guarantee on the date specified in section 10 above and/or any failure to furnish to the Lessor the appropriate authorizations with respect to the preparation of the insurance policies specified in section 12 below will constitute a fundamental breach of the Lease Agreement and of this Addendum, for all intents and purposes, including regarding the exercise of the remedies which are available to the Lessor in accordance with the Lease Agreement.

 

12.       The Lessee declares and undertakes that it will maintain the validity of the insurance policies in accordance with its undertakings under the Lease Agreement and under this Addendum, in a manner whereby they will apply to the Lessee’s lease of the Agreement, throughout the entire Lease Period of the Additional Area, and will furnish to the Lessor, by the signing date of this Addendum, on authorization of the foregoing, signed by the insurer.

 

13.       Parking

 

13.1.         In addition to the Parking Spaces which are being used by the Lessee in accordance with the Lease Agreement, the Lessee will be entitled to make use, for parking purposes only, in accordance with the provisions of the Lease Agreement and of this Addendum, of 3 Parking Spaces, located in the Parking lot of building 3 of the Park, which will be allocated to it by the Lessor (hereinafter, respectively: the “Parking Spaces” and the “Parking Lot”).

 

The usage rights with respect to the Parking Spaces will commence on May 1, 2010 and will conclude on the termination date of the Lessee’s lease of the Additional Area in accordance with this Addendum (hereinafter: the “License Period”). Notwithstanding the foregoing, it is hereby agreed between the parties that the Lessor will be entitled to cancel, at any time

 

4

 

during the License Period, the usage rights with respect to one Parking Space out of the Parking Spaces, in its excusive judgment, and after issuing notice regarding the foregoing to the Lessee (hereinafter: the “Notice”). In the event that the Notice has been given, the Lessee will vacate and will cease all use of the Parking Spaces within 14 days after the provision of the Notice.

 

13.2.         It is hereby clarified that the Parking Fees which will be paid with respect to the Parking Spaces, as specified below, will be paid with respect to the right to use the Parking Spaces only, and not for security or the provision of other services to the Lessee and/or for the vehicles which will park in the Parking Spaces. By signing this Addendum, the Lessee affirms that it is aware that the Lessor does not provide security services of any kind in the Parking lot. The Lessee hereby exempts the Lessor from any responsibility to provide security for the vehicles which will park in the Parking Spaces, and the provisions of the Bailees Law, 5727-1967, will not apply to this Addendum.

 

13.3.         It is hereby agreed that the Lessor will be entitled to modify, from time to time, and in its exclusive judgment, the location of the Parking Spaces, and the Lessee will have no claim and/or demand and/or suit with respect to the modification of the location of the aforementioned Parking Spaces.

 

13.4.         The Lessee will bear all taxes and fees which apply to the Parking Spaces, if any, including and without derogating from the foregoing, the payments of municipal taxes with respect to the Parking Spaces.

 

13.5.         The Lessee and/or its representatives undertake to fulfill all instructions issued by the Lessor and/or by any other party on its behalf with respect to the management and operation of the Parking lot, parking and traffic arrangements in the Parking lot, etc. — including instructions which will be posted, from time to time, in the Parking lot, through signs and/or by any other means.

 

13.6.         For the avoidance of doubt, the Lessor and/or any representatives thereof and/or any entity and/or person employed by it and/or operating on its behalf will not be liable for any harm, theft, damage, loss or destruction, of any kind whatsoever, and/or for any reason whatsoever, which has been caused to the Lessee and/or to any other party on its behalf, to a vehicle and/or to any other person or property in the area of the Parking lot.

 

13.7.         With respect to the use of each one of the 3 Parking Spaces, the Lessee will pay to the Lessor a total of NIS 220 per month (i.e., 220X3), with this amount being linked to the consumer price index (general index) which was published with respect to June 2008 (108.8 points, 2002 base), and with the addition of duly payable VAT.

 

5

 

The Parking Fees will be paid in advance with respect to each quarter during the License Period, on the first business day of each quarter, as stated above, through a letter of permission to charge the Lessee’s account, which has been furnished to the Lessor in accordance with the provisions of the Lease Agreement.

 

13.8.         The payment of Parking Fees, as specified in subsection 13.7 above, shall not derogate from any other charge and/or payment which is owed to the Lessor with respect to the Lease and/or use and/or any other undertaking of the Lessee in connection with additional areas and/or Parking Spaces in the Park.

 

14.       Save for the issues expressly specified and arranged in this Addendum, the lease of the Additional Area in accordance with this Addendum will be subject to all of the provisions of the Lease Agreement.

 

15.       All of the terms which have been used in this Agreement will be interpreted according to the definition provided for them in the Lease Agreement, except if expressly determine otherwise in this Addendum, or if required in light of the applicable context.

 

In witness whereof, the parties have signed, in the location and on the date specified in the heading of this Addendum:

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Signature   and Stamp of Collplant Ltd., Reg Co. No. 513578260]
    
	
The Lessor
    	
 
    	
The Lessee
    

 

[Signature]

 

6

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