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Exhibit 10.1  

TRANSLATION FOR CONVENIENCE ONLY 

 
 

TENANCY AGREEMENT    
    

Made
and signed this 1 day of December 2003 

	BETWEEN	 	Kibbutz Eyal

Cooperative Agricultural Society Ltd.,

No. 57-000507-4

Mobile Post Central Sharon, 45840, Kibbutz Eyal

(hereinafter—"the Kibbutz")
	

AND	
 	
Eyal Hasharon Farmers

Agricultural Cooperative Society Ltd.,

No. 57-003560-0

Mobile Post Central Sharon, 45840, Kibbutz Eyal

(hereinafter: "the Society")

(The Kibbutz and the Society being hereinafter jointly called—"the Landlord").
	

 	
 	
of the one part:
	

AND:	
 	

Eyal Optical Industries (1995) Ltd.

Private company No. 51-210163-5

Mobile Post Central Sharon, 45840, Kibbutz Eyal

(hereinafter—"the Company" and/or "the Tenant").
	

 	
 	
of the other part:
	

Whereas	
 	

the Landlord is the holder of a long-term headlease in the land and buildings known as Block 7589, part of Parcel 8 delineated in red on the plan attached as Appendix 'A' hereto
(hereinafter—"the Factory" or "the Complex"—as appropriate); and
	

Whereas	
 	

the Tenant has requested from the Landlord and the Landlord is desirous of granting to the Tenant, an unprotected tenancy of the Premises (as hereinafter defined); and
	

Whereas	
 	

the parties are desirous of regulating the rights and obligations and the agreement between them as more particularly set out in this Agreement;

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

	1.
	Preamble and Appendices

	1.1
	The
preamble and Appendices hereto constitute an integral part thereof.

	1.2
	The
headings in this Agreement have been inserted for convenience only. 

 

	2.
	Definitions

Unless
the context otherwise requires, the following terms in this Agreement shall bear the meanings set out opposite them: 

	

 	
 	

 	
 	

 
	

 	
 	
"the Factory"—	
 	

the factory building having an area of approximately 970 square meters delineated in blue on the plan attached hereto as Appendix 'B'.
	

 	
 	
"the Warehouses"—	
 	

the Warehouses having an area of approximately 1,198 square meters delineated in green on the plan attached hereto as Appendix 'B'.
	

 	
 	
"the Premises"—	
 	

the Factory and the Warehouses (as hereinbefore defined) including the Additional Buildings and New Construction (as defined in section 6.1.3 hereof).
	

 	
 	
"Shamir"—	
 	

Shamir Development and Optical Industry Agricultural Co-operative Society Ltd., No. 57-003541-0, having its address at Upper Galilee Mobile Post 2135, Kibbutz Shamir.
	

 	
 	
"the Agreement"—	
 	

This Agreement, including the Appendices thereto.
	

 	
 	
"Dollar"—	
 	

US Dollar.
	

 	
 	
"representative rate of exchange"—	
 	

The representative rate of exchange of the Dollar compared with the New Shekel, published by the Bank of Israel from time to time being the last representative rate of exchange known on the date of making the particular payment, provided that payment
will be made on the date on which banks conduct transactions in foreign currency, and in any event not later than 12:00 noon of the date of making the payment.
	

 	
 	

 	
 	

If any payment is paid on a day on which the representative rate of exchange is not published, or after 12:00 noon, such payment will be computed in accordance with the representative rate of exchange first published after the date of making the
payment (hereinafter—"the New Rate"). Accordingly, such payment will be made in accordance with the representative rate of exchange known on the date of payment, and immediately after publication of
the New Rate, an adjustment of the amount will be made and the party liable will pay (or refund) to the entitled party the difference immediately upon publication of the New Rate.
	

 	
 	

 	
 	

If the Bank of Israel ceases to regularly publish the representative rate of exchange, the representative rate of exchange of the Dollar in New Shekels will be fixed for purposes of this Agreement in accordance with the mean rate between the buying
and the selling rate of the US Dollar for transfers and checks in Bank Hapoalim BM on the date payment is made.
	

 	
 	
"CPI"—	
 	

The Consumer Price Index (including fruit and vegetables), published by the Central Bureau of Statistics, even if published by any other governmental institution, including any other official index in substitution therefor; in the absence of any
official index, the CPI for purposes of this Contract will be that customary in Bank Hapoalim BM.
	

 	
 	
"CPI—Linked"—	
 	

The amount linked increased by the rate of increase of the Consumer price index in accordance with the New CPI known in comparison with the Base CPI.
	

 	
 	
"Base CPI"—	
 	

The CPI known on the date of making this Agreement, that is for the month of November 2003.
	 	 	 	 	 

2

 

	3.
	Approvals

The
parties are aware that the tenancy of the Factory to which this Agreement relates is in accordance with Decision No. 834 of the Israel Lands Administration. 

	4.
	The Tenancy

	4.1
	The
Landlord hereby grants to the Tenant and the Tenant hereby takes from the Landlord, a tenancy of the Premises.

	4.2
	The
tenancy is for the term and on the conditions set out in this Agreement.

	4.3
	The
purpose of the tenancy is to continue the operation of an optics plant (hereinafter—"the Tenancy Purpose") subject to
the performance of all the Tenant's undertakings under this Agreement, including performance of its undertakings to make all the payments under this Agreement.

	4.4
	The
Tenant undertakes not to make any use of the Premises other than for the Tenancy Purpose, unless it first receives the prior written approval of the Landlord.

 

	5.
	Term of the Tenancy

	5.1
	The
tenancy of the Premises under this Agreement is for a term of 10 (ten) years commencing in January 2003 and expiring not later than 31 December 2012
(hereinafter—"the Tenancy Term"). 

Delivery
of possession in the Premises will be effective on the date of the commencement of the Tenancy Term. 

	5.2
	The
Landlord may bring this Agreement to an end before the expiration of the Tenancy Term in the event of the Tenant committing a fundamental breach of this Agreement.

	5.3
	Notwithstanding
the foregoing, the Tenant will be entitled, after 5 (five) years from the commencement of the Tenancy Term, to bring this Agreement to an end by 12 months'
prior notice to the Landlord in the event of a decision being adopted by the executive of Shamir to terminate production of plastic lenses in Israel on a commercial basis and the Company no longer
requiring the Premises.

	5.4
	If
such a decision mentioned in section 5.3 above is adopted, the Tenant will be entitled to sub-lease the Premises or any part thereof, provided the prior written
consent of the Landlord will have been received to the identity of the sub-tenant and the use that it will make of the Premises, by its authorized signatories, and subject to the
Landlord's rights in accordance with this Agreement not being prejudiced and subject to the Tenant remaining jointly and severally liable with the sub-tenant for the performance of its
obligations under this Agreement. 

The
Landlord will not unreasonably withhold its consent to the identity of and use to be made by, the sub-tenant of the Premises. 

	6.
	Rent

	6.1
	The
rent in respect of the term of this Agreement and the manner of the payment thereof will be as follows:

	6.1.1
	In
respect of the Factory, the Tenant will pay the Landlord for each month the amount in Shekels equal to the sum of $4,035 (four thousand and thirty five Dollars)
(hereinafter—"the Factory Rent"). 

3

 

	6.1.2
	In
respect of the Warehouses, the Tenant will pay the Landlord for each month the amount in Shekels equal to the sum of $2,800 (two thousand eight hundred Dollars)
(hereinafter—"the Warehouse Rent").

	6.1.3
	The
Kibbutz will, in addition, during the term of this Agreement (and for a period not exceeding 10 (ten) years), provide for the use of the Tenant at the rent set out in  Appendix 'C' additional
buildings having an area of approximately 1,272 square meters (delineated in orange on the plan
attached as Appendix 'B' to this Agreement) (hereinafter—"the Additional
Buildings") including additional buildings and/or installations as the Tenant will, if at all, build, subject to the provisions of this Agreement and subject also to the
provisions prescribed in Appendix 'C' (hereinafter—"the New
Construction"). 

(The
Factory Rent, Warehouse Rent, rent in respect of the Additional Buildings and rent in respect of the New Construction will be (hereinafter collectively
called—"the Rent"). 

	6.2
	To
all the sums (including interest) mentioned in section 6 (including the sub-sections thereof) Value Added Tax will be added in accordance with the statutory rate
thereof on the date of actual payment of the Rent.

	6.3
	Each
payment of Rent will be paid against a lawful tax invoice being provided.

	6.4
	For
the removal of any doubt it is clarified that the Rent prescribed in sections 6.1.1—6.1.3 above is absolute and final and will not be affected by discounts and/or
concessions in respect of consideration that the Tenant may provide to its customers and/or on account of the Tenant's lost or doubtful debts, and the foregoing shall not operate to reduce and/or vary
the Rent and/or the payment dates prescribed in this Agreement unless otherwise agreed between the Tenant and the Landlord.

	6.5
	Procedure for paying the Rent and the Accounting in respect of making up Payments

The
procedure for paying the Rent, as prescribed in sections 6.1 - 6.3 above will be as follows: 

	6.5.1
	To
facilitate collection, the Tenant will deposit with the Landlord on the date of signature of this Agreement and at the beginning of each year of the tenancy, 12
post-dated checks for the 15th of each month, each of which being in the Shekel sum equivalent
to                        according to the representative rate of exchange of the
Dollar on the date of the signature of this Agreement, with the addition of Value Added Tax in accordance with the law.

	6.5.2
	The
Tenant will additionally pay to the Landlord exchange rate differentials, if due, in respect of each post-dated check that has fallen due, in accordance with the
representative rate of exchange of the Dollar on the date of actual payment, not being later than 7 (seven) business days after the date on which a written demand for payment of such exchange rate
differentials will have been received.

	6.5.3
	The
Landlord agrees that so long as the Tenant (as defined above) will be the party leasing the Premises mentioned, the Tenant will not be required to perform the terms contained in
sections 6.5.1, 6.5.2 and 6.5.5 contained herein during the currency of the Tenancy Term, and the Rent will be paid to the Landlord monthly in advance, by not later than the 15th of each
month in which it is payable, to the Landlord's account in the United Mizrachi Bank Branch No. 424 to account number 101761 or in such other manner as will be notified by the Landlord to the
Tenant from time to time. Save that if the Premises or any part thereof will be sub-leased by the Tenant, as defined in section 5.4 above and/or the Tenant's rights in any of the
bodies corporate (which constitute a party to this Agreement) will be assigned and/or transferred and/or sold to 

4

 

third
parties, the Tenant will strictly perform the provisions of sections 6.5.1, 6.5.2 and 6.5.5 herein, as a condition for the Landlord's consent to the sub-tenancy and/or all for the
purpose of that stated in section 13 hereof. 

	6.5.4
	Once
every half-year (at the end of every six months), an accounting will be made between the parties and the Tenant will make up to the Landlord the shortfall amounts
to the extent such exist or the Landlord will repay to the Tenant overpaid amounts, to the extent such have been paid.

	6.5.5
	A
delay exceeding 7 days in paying the Rent will incur linkage differentials to the CPI with the addition of interest according to the interest for unauthorised drawings
customary in Bank Hapoalim BM for overdraft accounts as from the date prescribed for payment until the date of actual payment.

	6.6
	In
the event of the Tenant being desirous of acquiring from the Tenant [sic] additional services and the Landlord being desirous of supplying the same to the
Tenant, and the Landlord being able to supply such services, the parties will draw up an agreement accordingly.

	7.
	Declarations and Covenants of the Tenant

	7.1
	The
Tenant declares that it has the ability and has available the financing and resources to perform all its obligations under this Agreement.

	7.2
	The
Tenant undertakes to fulfil and abide by all statutory provisions, Regulations, Orders or By-laws relating to the Premises or the possession or use thereof in
accordance with the Tenancy Purpose.

	7.3
	The
Tenant declares that it is familiar with the Premises, has examined and double, checked the Premises and found them to be in their present condition, suitable for its needs for
the Tenancy Purpose, and hereby waives any claim of defect and/or fault in connection therewith.

	7.4
	To
the extent the matter pertains to the Tenant's ongoing maintenance and/or activity, the Tenant undertakes to maintain the Premises in the customary and reasonable manner, perform
and fulfil all statutory provisions and obligatory Regulations applicable now or hereafter, from time to time, to the Factory and/or the activity therein carried on, including maintaining suitable
conditions of maintenance, cleaning and safety, in compliance with the demands of the competent authorities.

	7.5
	The
Tenant undertakes to keep the Premises in good, proper and safe condition and not to effect any act or deed which could endanger and/or harm and/or damage the same.

	7.6
	The
Tenant undertakes to keep the Premises and the surroundings thereof clean.

	7.7
	Damages
that will be caused to the Premises and which fall within the responsibility of the Tenant will be fixed by the Tenant as soon as possible after they have been caused or come
about. Damages that will be caused to the Premises and falling within the responsibility of the Landlord will be fixed by the Landlord promptly after receiving notice and/or a demand for that purpose.

	7.8
	The
Landlord and/or its representatives will have the right to enter upon the Premises at any reasonable time by prior arrangement, and examine the performance of the provisions of
this Agreement and the Tenant undertakes to allow the Landlord's representatives entry to the Premises for the purpose of the foregoing.

	7.9
	The
Tenant hereby expressly declares, as a fundamental and basic condition of this Agreement, that it has not paid nor undertaken to pay nor will it purport to pay any key money in
any form whatsoever in connection with the Premises and/or the tenancy 

5

 

relationship
under this Agreement, and the Tenant in no way, event or situation will be regarded as a protected tenant in accordance with the provisions of the Tenants Protection Law (Consolidated
Version) 5732-1972, and will not be entitled to claim, in any event or situation that this law and any other law that will be added to or replace the same or be substituted therefor will
apply to this Agreement and/or the Tenant and/or the Premises. 

6

  

	8.
	Alterations and Additions to the Premises and New Construction

	8.1
	The
Tenant will not make any external alteration and/or do any works at the Premises (other than within the Premises) (hereinafter—"Refurbishing
Works") without requesting and receiving the Landlord's consent thereto. If such consent in writing is given by the Landlord, the Tenant may carry out the Refurbishing Works
independently and at its own expense in accordance with but subject to the Landlord's consent and according to any law.

	8.2
	The
Tenant will, from the date the Refurbishing Works commence at the Premises as mentioned in this section, ensure that the works will be carried out by it or on its behalf in a
manner as will not harm or create any disturbance to the regular activity in the environment of the Premises.

	8.3
	All
repairs and/or alterations and/or additions relating to or permanently obtained with the Premises that have been carried out by the Tenant with the Landlord's consent will, upon
the termination of the Tenancy Term, pass to and into the ownership of the Landlord without the Tenant being able to demand or receive any compensation or payment for them unless otherwise agreed by
and between the parties.

	8.4
	Notwithstanding
the foregoing, the Tenant may dismantle and take possession of the investments which are suitable for its own needs provided this does not harm the Premises.

	8.5
	For
the avoidance of any doubt it is hereby declared and agreed that nothing in the foregoing shall confer upon the Tenant any right whatsoever, including any right pursuant to the
Tenants Protection Laws.

	8.6
	Should
the Tenant effect at the Premises alterations and/or refurbishing that will require a building permit to be obtained, the Landlord will be responsible for obtaining all the
necessary licences and permits, at the Tenant's expense, and the Landlord and/or the Tenant, as appropriate, will sign all the necessary documentation, applications and maps to the extent required.
The Tenant will reimburse the Landlord for all costs incurred by the Landlord for which the Tenant is liable as stated in this sub-section (for the removal of any doubt it is clarified
that the Landlord's costs do not include its direct costs which arise by the intrinsic filing of the application, such as costs in respect of the time invested by the Landlord in filing the
application, travelling costs and the like).

	8.7
	The
Tenant undertakes to compensate and indemnify the Landlord in respect of all and any damage and/or claim and/or payment that it will be compelled to pay under judgment as a result
of any problem or defect and/or non-compliance with building permits according to section 8.6 above, provided the Landlord notifies the Tenant in writing of the existence of such
claim of demand or damage in respect of which the Tenant owes indemnity under this section, within a reasonable time of becoming apprised of the filing of such claim or demand and has enabled it to
enter a defence against them.

	8.8
	Everything
stated above will, mutatis mutandis, similarly apply to New Construction, to the extent the Tenant decides to effect the same.

 

	9.
	Payments and Taxes

	9.1
	The
Tenant undertakes to bear, from the commencement of the Tenancy Term and for the entire duration thereof, all payments, taxes, and other compulsory payments applicable to the
party occupying the land, including municipal taxes, electricity, water, telephone, gas, signage fees, guarding, sewerage fees and any other payment applicable to the Premises. 

6

 

	9.2
	The
payment, with the addition of VAT in respect thereof, for the use of electricity, water and gas will be made in accordance with a reading taken from the meters installed at the
Premises.

	9.3
	The
Tenant undertakes to pay all the foregoing payments on their due date according to law or upon the date prescribed by the party demanding payment.

	9.4
	The
Tenant will not be bound to pay any tax, levy, or compulsory payment applicable to the owner of land or which apply by law or custom to the Landlord.

	9.5
	The
Landlord will bear all payments, levies, fees and/or taxes that will be imposed on property owners.

 

	10.
	Licensing and Permits

	10.1
	The
Landlord will be liable for submitting the application to receive any licence or permit required by law for the performance of this Agreement and/or the activity thereunder,
whereas the Tenant undertakes to comply with all the conditions required under such licence or permit and will further bear all costs involved therein except for the Landlord's direct costs involved
in the submitting the application (time, travelling expenses). For the removal of any doubt it is clarified that the Landlord's duty as mentioned will only apply to the submission of applications
relating to a license or permit involving construction and/or extensions or improvements of the Factory buildings. The submission of licenses and/or permits relating to the Tenant's commercial or
industrial activity will be borne solely by and be at the Tenant's full responsibility.

	10.2
	The
Landlord undertakes to sign all documents and/or applications required for any permit or license for performing this Agreement and/or activity for which the Landlord's consent is
required, and will not unreasonably withhold his consent therefor.

	10.3
	The
Tenant undertakes to do everything required by law in order to ensure that all the licenses and permits required for performing this Agreement or the activity thereunder (if any)
will remain in force for the entire duration of the term of this Agreement.

 

	11.
	Liability

	11.1
	The
Tenant will be liable fro (while the Landlord will be exempt from), any duty in respect of any loss, damage or harm to person or property of any kind whatsoever caused to the
Landlord or persons on its behalf or to the Tenant and/or its customers and/or persons on its behalf and/or to any third party in all matters relating to or deriving from the Tenant's activity at the
Premises.

	11.2
	The
Tenant will be liable for, (while the Landlord will be exempt from), any duty in respect of damage or spoilage or malfunction that will be caused at the Premises of any kind
whatsoever that will be caused in respect of any acts or omissions of the Tenant or its customers or employees or persons representing it in any matter relating to and deriving from the Tenant's
activity at the Premises, fair wear and tear excepted as caused by natural causes.

	11.3
	All
current expenses involved in repairing any damage, spoilage or malfunction at the Premises will be expended at the responsibility and expense of the Tenant.

	11.4
	The
Tenant undertakes to fully indemnify the Landlord within 30 days of receiving its demand to do so for any such damage or spoilage to the extent of the payments or expenses
which the Landlord will bear or become liable for in respect of such damage or spoilage.

	11.5
	The
Tenant will fully indemnify the Landlord within 30 days of receiving its demand for any damage or spoilage or loss or harm that has been caused to any third party and
which the 

7

 

Landlord
has laid out to the extent of the amount of the payments or expenses that the Landlord will bear or become liable to pay in respect of such damage or spoilage, all without derogating from the
Landlord's rights under this Agreement and/or under any law for any other relief or remedy provided that a statement of claim has been filed against the Landlord and a copy thereof has been forwarded
to the Tenant and the latter enabled to enter a defence against the claims alleged therein in court. 

	11.6
	The
Landlord will not pay nor compromise in respect of any damage that has been caused and which is the responsibility of the Tenant as mentioned above without giving notice thereof
to the Tenant and affording it an opportunity to defend the claims for damages within a reasonable time.

	11.7
	The
liability for repairing all damages at the Premises, including the costs involved in improving direct infrastructures in the yards of the Premises or the Warehouses or the New
Construction and/or resulting from the use of the Premises, will fall on the Tenant.

	11.8
	The
responsibility of repairing damages in buildings which do not fall within the responsibility of the Tenant as provided in section 7.5 above will be borne by the Landlord
provided that the damages result from reasonable use of the buildings.

	11.9
	The
Tenant will be entitled (but not obliged) to effect any repair or replacement for which the Landlord is liable under this Agreement but has not performed, this being at the
Landlord's expense provided that written notice of the necessity of making the repair will have been given to the Landlord 7 (seven) days in advance.

 

	12.
	Insurance

	12.1
	The
Landlord will insure the buildings comprising the Premises at its own expense.

	12.2
	The
Tenant undertakes to effect and maintain at its own expense and for the entire duration of the term of this Agreement, the following insurances:

	12.2.1
	Insurance
of the insured property at its full reinstatement value against loss or damage resulting from fire, smoke, lightning, explosion, earthquake, storm, tempest, flood,
damages caused by liquids, vehicle or aircraft damage or injury, burglary, robbery, strikes, disturbances, malicious damage. 

The
term "insured property" means the cleaning system, fixtures and fittings that have been added to the Premises by the Tenant and which are
permanently affixed thereto, including installation equipment, accessories, improvements and investments in inventory of merchandise and contents of any other kind whatsoever that have been moved into
the Premises by the Tenant. 

	12.2.2
	Consequential
loss insurance and loss of income to the Tenant following damage to the Premises by the risks enumerated in section 11.2.1 above. 

The
Tenant's compulsory legal insurance towards third parties relating to or resulting from the activity at the Premises or the Tenant's occupation of the Premises within the liability limits of not
less than $1,000,000 per event and for the period. The policy will be extended to include the Landlord in respect of its liability for the Tenant's acts and/or omissions. 

This
insurance will not include any reservation or exception (if such exists) relating to a claim under the National Insurance Law, nor any exception or provision which causes the lapse of or limits
any cover for damage caused in consequence of lifting devices, loading and unloading, fire excavations, steam, explosion, flood, toxic or harmful materials in food or drink, defective sanitary
devices, contractors and sub-contractors. 

8

 

	12.2.3
	Employers'
liability insurance in respect of all the workers employed by the Tenant, including sub-contractors with liability limits of not less than $5,000,000 per
claimant, event and for the period. The policy will be extended to indemnity the Landlord in the event of its being deemed to be an employer of the Tenant's employees. 

	12.3
	The
insurance policies will include the following clauses:

	12.3.1
	The
Landlord will be included as an additional assured under a third party policy.

	12.3.2
	Third
party liability insurances will include a cross-liability clause.

	12.3.3
	All
policies will include a waiver clause of subrogation claims of the insurer against the Landlord, its members, directors, employees provided that such waiver of subrogation will
not apply for the benefit of any party who has caused damage with malicious intent.

	12.3.4
	An
express condition whereby the above insurances will not be limited or cancelled for the entire duration of this Agreement unless at least 30 (thirty) days' prior notice is given
to the Landlord to that effect by registered mail before the requested date of cancellation.

	12.3.5
	A
condition that the insurances according to this section 11 [sic]take priority as against any
insurance made by the Landlord, and the insurer waives any demand or claim concerning the sharing of the Landlord's insurances.

	12.4
	Without
derogating from the generality of the foregoing, the Tenant undertakes to produce to the Landlord within 30 (thirty) days of the date of signing this Agreement, a certificate
of the existence of the above insurances. The Tenant undertakes to produce the insured policies to the Landlord for approval prior to signing the same. It is clarified that nothing contained in this
section shall operate to impose any liability whatsoever on the Landlord which falls within the responsibility of the Tenant as expressly stated in this Agreement.

	12.5
	The
Tenant undertakes to punctually pay the insurance premiums. Any insurance premiums not punctually paid by the Tenant may be paid by the Landlord at its sole determination, after
7 (seven) days' notice being given to pay the unpaid amount and the Tenant will be bound to repay the amounts so paid with the addition of interest at the unauthorized drawing rate on overdraft
accounts customary in Bank Hapoalim with the addition of all costs incurred by reason thereof.

	12.6
	The
partners agree that in the event of an insurance event occurring in respect of which any insurance monies are paid out, such monies will be transferred to the Landlord who will
allocate the same for the benefit of restoring the damage, provided that the insurance monies actually received will be sufficient to perform such restoration works. 

To
the extent the insurance money received will be insufficient to cover the damage restoration costs, the Landlord will be entitled, at its sole determination, to decide whether to restore the damage
or not and the Tenant will have no claim or demand against the Landlord in this connection unless the Tenant notifies the Landlord in writing within 7 (seven) days of being apprised that the insurance
monies received are insufficient to cover the costs of the damage, of its wish to make up such damage restoration costs. 

	13.
	Assignment of the Agreement

	13.1
	Subject
as provided in section 5.4 above, the Tenant undertakes not, without receiving the prior written consent of the Landlord, to transfer, dispose of, sell or charge or
assign its rights under this Agreement in whole or in part to any person or body nor suffer any other party to use the same. 

9

 

	13.2
	Section 13.1
above will not apply to a transfer, disposal, sale, charge or assignment of rights under this Agreement to a body corporate controlled by the Tenant provided that
the Tenant's rights in the transferee body corporate will be not less than 75% of the capital and control and the Tenant will continue to be liable for its undertakings under this Agreement.

	13.3
	The
Landlord will be entitled to transfer its rights in the Premises to any other party or parties subject to the Tenant's rights hereunder not being prejudiced and the Landlord will
remain jointly and severally liable with the transferee for the performance of its undertakings under this Agreement.

 

	14.
	Work at the Premises and Prevention of Nuisance

	14.1
	The
Tenant will be entitled to execute any work or use or action at the Premises pursuant to the Tenancy Purpose in accordance with the provisions of any law.

	14.2
	The
Tenant undertakes to operate the Premises without causing nuisances and subject to the statutory provisions dealing with nuisances, including those relating to the environment.
The Tenant will reasonably act to find suitable solutions in order to reduce any nuisance to the satisfaction of the Landlord, having regard to the Tenancy Purpose.

	14.3
	The
Tenant undertakes to remove all waste (if any) from its activity at the Premises, at its own expense.

	14.4
	To
the extent that any fine or other sanction will be imposed on the Landlord by judgment on account of any nuisance under this Agreement, the Tenant will indemnify the Landlord for
any payment which it is compelled to pay provided the Landlord has notified the Tenant in writing of the existence of such penalty or sanction in respect of which the Tenant is liable to indemnity
under this section, within a reasonable time of its having become aware of the filing of the claim or the demand or the penalty or the section and, to the extent it depends on it, the Tenant has been
afforded an opportunity to defend against such claim, demand, penalty or sanction.

 

	15.
	Fundamental Breach

Without
derogating from the provisions of any law and the terms of this Agreement it is agreed that the parties' undertakings contained in sections 4.3; 5; 6; 7; 8; 9; 10; 11; 12; 13; and 14 are
fundamental undertakings the breach of which by any of the parties will be a fundamental breach, provided the party claiming such fundamental breach has notified the other in writing of the breach and
it has not been cured within five business days of the date on which it was informed of the breach (hereinafter—"Fundamental Breach"). 

	16.
	Termination or Rescission of the Tenancy Term

	16.1
	The
Tenant undertakes, at the expiration of the Tenancy Term, as appropriate, or upon the termination of this Agreement for any reason, to quit the Premises and surrender the same in
clean, vacant, good and usable condition except for reasonable wear by reason of regular use.

	16.2
	The
Premises will be delivered up to the Landlord including all alterations, refurbishing, addition, repair, and installation permanently affixed to the Premises including also those
added or installed by the Tenant at its own expense unless the Landlord has demanded the removal of such addition / installation, and the Tenant will have no claim or demand against the Landlord to
receive any consideration or compensation in respect thereof. Notwithstanding that stated, it is agreed that the Tenant will be entitled to dismantle and remove from the Premises fixtures belonging to
the Tenant provided it restores the Premises to the condition in which it was as of the date of the commencement of the tenancy. 

10

 

The
Tenant hereby declares that if it fails to independently quit the Premises on the date mentioned above, the Landlord will be entitled to evict any person and remove any thing belonging to the
Tenant from the Premises, all at the Landlord's sole determination, the costs of such eviction and removal to fall on the Tenant. 

	17.
	Dispute Resolution

	17.1
	All
disputes and differences between the parties pertaining to this Agreement, including the validity, interpretation, performance and breach thereof will be resolved by the parties
themselves, and all determinations and conclusions that will be agreed on with the CEO of the Company and the Kibbutz Housekeeping Coordinator will be binding upon the parties.

	17.2
	All
disputes and differences between the parties pertaining to this Agreement that remain unresolved as mentioned above and/or through their attorneys will be submitted for
clarification to a mediator that will be selected by the parties who will act to settle the dispute quickly and positively. The mediation procedures will not commence if any party has notified that it
does not desire them and will be immediately terminated on the date on which such party gives notice to that effect, any party being entitled to give such a notice for any reason whatsoever and even
without providing any reasons.

	17.3
	The
dispute will be referred to the determination of an arbitrator if the differences between the parties have not been resolved by consent or in accordance with section 17.2
above.

	17.4
	The
arbitrator will be appointed with the agreement of the parties. Absence of agreement by the parties regarding the arbitrator's identity within 14 days of the demand for
such appointment first being requested by either of the parties will lead to the arbitrator being appointed by Advocate Ossnat Naveh, by application of either of the parties.

	17.5
	The
arbitrator will not be bound by procedure and rules of evidence but will be subject to substantive law and be empowered to issue temporary awards and be bound to provide reasons
for his award. The arbitrator will give his reasoned decision in writing after hearing the parties, and to the extent possible within 60 days of the matter being referred to him.

	17.6
	The
provisions of this section will be deemed to be an arbitration agreement between the parties according to the Arbitration Law, 5728-1968.

 

	18.
	Miscellaneous

	18.1
	This
Agreement and the Appendices thereto expressly provide for and encompass all the conditions, undertakings and provisions applicable to the engagement between the parties. This
Agreement supersedes all and any undertaking, agreement, declaration and understanding (if made) between the parties to this Agreement in writing or verbally, prior to the signature thereof.

	18.2
	No
modification to the provisions of this Agreement will be of any effect nor binding unless made in writing and signed by all the parties.

	18.3
	Any
concession, time or waiver granted by one party to the other or other forbearance in connection with any breach of this Agreement will not constitute any waiver of the rights of
the party injured by such breach or waiver of the undertakings of the infringing party or consent to any further breach of this Agreement, and will be in effect for the specific instance and time only
and create no estoppel in the future.

	18.4
	All
notices under this Agreement given by hand or by fax or by registered mail sent within Israel according to the parties' addresses as set out at the beginning of this Agreement or
to such other address as will be notified in accordance with this section will be deemed to have been received on the date of delivery thereof by an authorized representative of such party or 

11

 

24 hours
after the date of the transmission by fax provided that a telephonic acknowledgement of receipt of the fax has been received from the recipient or 72 hours from the date the
letter is sent by registered mail. 

 
 

In witness whereof the parties have set their hands:    
    

	

Kibbutz Eyal	
 	

 
	

Eyal Hasharon Farmers	
 	

 
	

Eyal Optical Industries (1995) Ltd.	
 	

 

12

 

Appendix 'C'  

 
  Rent in Respect of Additional and New Buildings  
    

	1.
	The
Rent in respect of the office building and the approach leading thereto, aggregating 263 square meters, will be paid commencing 11 years after the end of the construction of
the building, namely 1 January 2011.

	2.
	The
Rent in respect of extending the building north-west and south, aggregating 302 square meters, will be paid commencing 10 years after the end of the construction
of the building, namely 1 July 2008.

	3.
	The
Rent in respect of the two storey building, aggregating 707 square meters will be paid commencing from 10 years after the end of the construction of the building, namely
1 December 2012. 

New
Construction, if any, after the date of the commencement of the Agreement will be carried out and paid for by the Tenant. The Rent in respect of New Construction will be paid commencing from
10 years after the end of construction. 

	

Kibbutz Eyal	
 	

 
	

Eyal Hasharon Farmers	
 	

 
	

Eyal Optical Industries (1995) Ltd.	
 	

 

13

QuickLinks

TENANCY AGREEMENT

In witness whereof the parties have set their hands

Rent in Respect of Additional and New BuildingsExhibit 10.2  

TRANSLATION FOR CONVENIENCE ONLY  

Labor Services Supply Agreement

Made and executed in Kibbutz Shamir on this 9th day of February 2005  

	

BETWEEN:	
 	
Kibbutz Shamir Co-operative Society

Registered Society no. 57-000272-5

Mobile Post Upper Galilee 12135

(hereinafter: "the Kibbutz")
	

 	
 	
of the one part
	

AND:	
 	
Shamir Optic Development and Industry—Agricultural Co-operative Society Ltd.

Agricultural Co-operative Society no. 57-003541-0 or such limited company as will derive from the Agricultural Co-operative Society

Of Kibbutz Shamir, Mobile Post Upper Galilee 12135

(hereinafter: "the Company")
	

 	
 	
of the other part
	

WHEREAS	
 	

On the date of execution of this Agreement the Company is incorporated as an agricultural co-operative society limited; and
	

WHEREAS	
 	

It is the Company's intention to vary, on or about the Operative Date (as hereinafter defined) its corporate configuration in accordance with section 345 of the Companies Law, 5759-1999, from an agricultural co-operative society limited to a
company limited by shares in a manner whereby all its rights and obligations, including under this Agreement, will belong to and be within the responsibility of such limited company; and
	

WHEREAS	
 	

The Company is proprietor of a factory which develops, manufactures, markets and sells spectacle lenses and moulds for producing plastic spectacle lenses (hereinafter: "the Plant"); and
	

WHEREAS	
 	

The Company receives from the Kibbutz, in addition to salaried employees, labor services through kibbutz members and/or candidates for membership according to an agreement dated January 1, 1999 (hereinafter: "the Existing
Agreement"); and
	

WHEREAS	
 	

The Company is desirous of continuing to receive from the Kibbutz labor services for the purpose of operating the Plant according to the terms of this Agreement; and
	

WHEREAS	
 	

The Kibbutz has agreed to make available to the Company for the purpose of operating the Plant, labor services by kibbutz members pursuant to the conditions hereinafter set out;

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

1.     Preamble and Interpretation  

	1.1
	The
preamble to this Agreement and the Appendices thereto constitute an integral part thereof.

	1.2
	The
section headings in this Agreement are for convenience only and no meaning will be attributed thereto for purposes of interpreting this Agreement. 

 

	1.3
	Save
as otherwise expressly stated, the following expressions used in this Agreement shall bear the meanings set out opposite them: 

"the  Operative Date"—the date on which the Company will list its shares for trading on NASDAQ. 

"the
Existing Agreement"—as defined above. 

"the
Services"—the labor services to be provided by the Kibbutz to the Company through the staff as mentioned below in this Agreement. 

"Kibbutz Member/s"—Kibbutz member/s and/or candidate/s for membership in the Kibbutz. 

"Staff"—Kibbutz members through whom the Services are currently or will in the future be provided to the Company in accordance with the
terms hereof, as hereinafter provided. 

"the
Base Consideration"—the gross consideration for a full time position to any future Staff. 

"Working Hour"—a full hour during which work will be carried out for the Company by a Staff employee. 

"Job"—labor services to be supplied by a Staff employee to the extent of 186 working hours per month. 

2.     The Services  

	2.1
	The
Kibbutz will use its best endeavors to supply to the Company, upon demand, for the entire duration of this Agreement, the Services and fill the Jobs pursuant to the Company's
needs and for the Staff in charge of the Kibbutz.

	2.2
	In
the event of the Company being in need of additional labor services, the Kibbutz will be afforded the first opportunity to offer employees to the Company from among the Kibbutz
members and the Company will have the sole discretion to accept the Kibbutz's offer provides it will not unreasonably refuse to accept the Services through such additional employees from among the
Kibbutz Members.

	2.3
	Subject
as provided in section 2.1 above, the Company will be entitled to determine, at its sole
discretion, the number and type of the Jobs to be supplied to it by the Kibbutz, the number of working hours to be supplied to it by each of the Staff employees, and the Base Consideration of each of
them who (a) will start performing the services following the signature of this Agreement; or (b) whose services to be supplied to the Company will change after the signature date of
this Agreement .

	2.4
	Any
modification to the Base Consideration of the Staff employees will be made with the written consent of both parties hereto.

	2.5
	The
Company will not employ directly nor turn to any of the Staff or Kibbutz Member offering to employ him/her otherwise than through the Kibbutz as provided by this Agreement, except
in respect of the positions of managing director and deputy managing director who, as of the Operative Date, will be employed by the Company directly.

	2.6
	The
Kibbutz undertakes to use its best endeavors in order to supply the Services to the Company through Staff having the ability, skill and experience required to carry out the duties
for which they will appointed in the Company.

	2.7
	The
Kibbutz undertakes to use its best endeavors to ensure that the Staff through whom the Services will be provided will carry out their positions with devotion, skill and loyalty,
in accordance with the instructions of the Company's management and his/her direct superiors. 

2

 

	2.8
	The
Company may, at its sole discretion, demand that the Kibbutz replace at any time, a particular Staff employee through whom the Services are provided or refuse to hire for work any
Staff employee, on reasonable grounds. In such a case, the Kibbutz undertakes to use its best endeavors to provide in lieu of such Staff employee, a substitute. In the absence of suitable substitute
Staff, as solely determined by the Company, the Company will be under not constraint to hire an employee not being a kibbutz member.

	2.9
	The
Company may send, at its own expense, Staff employees for professional or vocational studies or other continuing education relating to the Company's activity.

	2.10
	For
the avoidance of any doubt, notice by the Kibbutz to the Company to the effect that it is unable or does not have the appropriate Staff to fill the Job requested by the Company,
will not be regarded as a breach of this Agreement by the Kibbutz. 

3.     Consideration  

        In consideration for providing the Services, the Company will pay the Kibbutz the following consideration: 

	3.1
	The
Company will pay the Kibbutz a monthly payment to be computed as set out in Appendix 'A'.

	3.2
	Deleted.

	3.3
	The
tariffs in respect of Jobs provided to the Company as set out in Appendix 'A' will be linked to the
Consumer Price Index (hereinafter: "the CPI"), the base CPI being that published on the Operative Date. Consideration for future Staff will be updated
in a manner whereby the base CPI will be that known on the date on which the future Staff joins the Company.

	3.4
	The
payment mentioned in section 3.1 above plus linkage differentials in respect thereof will be
made on the 10th of each month in respect of the preceding month.

	3.5
	VAT
as required by law will be added to every payment and be paid to the Kibbutz against the provision of a tax invoice to the Company.

	3.6
	Every
payment, tax or levy of any kind whatsoever (except for VAT), applicable to the payments mentioned in this section will apply to and be exclusively paid by, the Kibbutz. Should
the Company make any such payment or levy or tax, the Kibbutz will indemnify it in respect of such expense immediately upon the Company's first demand.

	3.7
	Any
payment mentioned in this section which has not been paid on due date will bear arrears interest at the average rate customary for the time being in Bank Hapoalim B.M., Bank Leumi
le-Israel B.M., and the First International Bank of Israel Ltd., in respect of payments in arrear as from the maturity date thereof through the date of actual payment. 

4.     Bonus

Whenever
any bonuses are divided by the Company to the Company employees, the Company will pay the Kibbutz for the Staff employees through whom the Kibbutz supplies the labor services under the
Agreement, a cash bonus in a sum to be fixed for each individual employee of the Staff employees according to the same criteria according to which the bonuses to the Company employees are fixed. 

3

 

5.     Staff status  

	5.1
	The
Kibbutz hereby declares that in supplying the Services to the Company it will do so as an independent contractor.

	5.2
	The
Kibbutz will be solely responsible for performing all obligations which apply (if at all) towards the Staff as employer in connection with the employer-employee relationship.

	5.3
	Pursuant
to the foregoing, the Kibbutz alone will bear all costs and payments originating from, and in the termination of, the employer-employee relationship in respect of the Staff,
including any tax attracted by such relationship. 

6.     Insurance  

	6.1
	The
Company shall be responsible for acquiring an employers' liability insurance policy, at its own expense, to cover all the Staff, under which the beneficiaries will be the Kibbutz
and/or the Company, and for keeping such policy in force for the entire duration of this Agreement.

	6.2
	The
Company will furnish the Kibbutz with a copy of the policy mentioned in section 6.1 above, and
of any renewal thereof or of the documents pertaining thereto, immediately upon receipt. 

7.     Confidentiality, copyright and non-competition  

	7.1
	The
Kibbutz undertakes to keep confidential and use its best endeavors to procure that the Staff will keep confidential, all commercial, technical or other information that it
receives from the Company or becomes apprised of within the framework of providing the Services to the Company, including, but without limitation, production and development techniques, contracts,
software, customer and supplier lists and prices, with the exception of know-how that is in the public domain (hereinafter: "the
Know-how"). The Kibbutz further undertakes not to use, and ensure, to the best of its ability, that the staff will not make or use any Know-how
otherwise than for purposes of the Company's activity, and prevent the disclosure of the Know-how or any part thereof to any third party except where required for purposes of providing the
Services to the Company, subject to the Company's directions in this regard, and/or as will be required of it by any competent authority, pursuant to any statutory provisions. 

This
section will continue to survive the rescission or other termination of this Agreement for any reason whatsoever. 

	7.2
	All
rights relating to technological developments and/or inventions that will be developed by the Staff during the period that the Services are provided by them to the Company and for
a period of 12 months commencing from the date of the termination of the provision of the Services by them, in connection with the Company's activity, will be the Company's exclusive property
and neither the Kibbutz nor the Staff will have any claim or demand in connection with such rights.

	7.3
	The
Kibbutz will use its best endeavors to ensure the Staff's fulfillment of the provisions of this section, and undertakes to sign, and use its best ability to obtain the Staff
employees' signature to any document required for purposes of securing the fulfillment of the provisions of this section, including the documents required for transferring or assigning rights and/or
any waiver thereof. 

4

 

8.     Term and termination of this Agreement  

	8.1
	This
Agreement will endure for a period of 60 (sixty) months commencing from the Operative Date (hereinafter: "the Initial Period") and
will automatically be extended for further periods of five years each, unless either party to this Agreement notifies the other, in writing, of its desire not to extend the Agreement at least
180 days prior to the expiration of the Initial Period or any extended period.

	8.2
	Each
party will be entitled to bring this Agreement to an end by written notice to the other party if the other party has committed a fundamental breach of this Agreement and fail to
cure the same within 30 days of receiving written notice from the other party of the existence of the fundamental breach.

	8.3
	For
the avoidance of any doubt the undertakings of the Kibbutz mentioned in sections 5.3 and 7 above will
survive the termination or other rescission of this Agreement for any reason, and remain in effect and be binding upon the Kibbutz. 

9.     Condition precedent  

	9.1
	This
Agreement is conditional upon the Company's securities being listed for trading on an American exchange. If, by the 31st day of December, 2005 such condition
precedent will not be fulfilled, this Agreement will be null and void and the parties will have no claim or demand or cavil in relation to the Agreement. For the avoidance of any doubt in the event of
a rescission of this Agreement as stated above, the relationship between the parties hereto will be governed by the terms of the Existing Agreement.

	9.2
	Immediately
upon the condition precedent being fulfilled, the Existing Agreement will come to an end and no longer be of any effect and the parties will act in accordance with the
present Agreement. Upon this Agreement entering into effect, the parties declare and covenant that they have no mutual claims and demands and waive any claim that may exist. 

10.   Arbitration  

	10.1
	Any
disputes relating to this Agreement, the application and interpretation thereon will be referred to a mediation process and in the absence of a determination in that process,
will be exclusively subject to the determination of a sole arbitrator to be appointed with the consent of the parties, and, in the absence thereof, will be appointed by the Chairman of the Auditors
Council.

	10.2
	The
arbitrator will be subject to substantive law and be bound to assign reasons for his decision but will not be subject to the rules of evidence.

	10.3
	This
section constitutes an arbitration agreement within the meaning of the Arbitration Law, 5728-1968. 

11.   Whole Agreement, modification and waiver  

	11.1
	This
Agreement and all the Appendices hereto exclusively determine and encompass all the conditions and provisions applicable to the engagement between the parties in relation to the
provisions therein contained. Commencing from the Operative Date, this Agreement supersedes any agreement, declaration and understanding made (if any) between either of the parties hereto and any
other party or parties to this Agreement, verbally or in writing, prior to this Agreement having been signed. 

5

 

The
parties regard the overall stipulations contained in this Agreement as a single, overall obligation and declare that they have entered into this Agreement with the intention that all the
stipulations thereof will be fulfilled as part of a single transaction. 

	11.2
	No
variation to the provisions of this Agreement will be valid or have any binding effect unless made in writing and duly signed by all the parties. 

No
waiver by a party to this Agreement of any of its rights will be of any effect unless made in writing and if valid will only be effective at the time and for the particular matter for which it is
made only, and will create no estoppel or forebearance as regards the future. 

	11.3
	Even
if this Agreement will be severable as stated in section 19 of the Contracts (General Part) Law, 5733-1973, if any right of rescission arises for any of the
parties pertaining to a specific part or parts thereof, it will not be possible to rescind such part only. 

12.   Costs  

	12.1
	Each
party will bear its own costs in connection with this Agreement.

	12.2
	Stamp
duty, if applicable to this Agreement, will be borne by the Company. 

13.   Notices  

	13.1
	Any
notice sent by one party to the other will be sent in writing by registered mail according to the addresses appearing in the preamble to this Agreement or be served personally.
Notice given by mail will be deemed to have been received within 72 hours of dispatch by registered mail. Notice given personally will be deemed to have been received upon delivery.

	13.2
	For
purposes of this section, Sabbaths and Jewish Festivals will not be taken into account. 

In witness whereof the parties have set their hands:  

	
 	
 	

 	
 	

 	
 	

 
	

/s/  UZI TZUR      
 Uzi Tzur	

 	

/s/  EFRAT COHEN      
 Efrat Cohen

	

 	

/s/  RAMI BEN-ZEEV      
 Rami Ben-Zeev	

 	

/s/  AVRAHAM HADAR      
 Avraham Hadar

	
Kibbutz Shamir	
 	

 	
 	
Shamir Optic Development and Industry—Agricultural

Co-operative Society Ltd.

6

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