EXHIBIT 10.4
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AN AGREEMENT
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made and signed in Tel Aviv on the 29th day of the month of July 1997
BETWEEN
Mifalei Locky l' Bniya Ltd. Public Company 52 - 0041278
of ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
Hereafter: the "Landlord"
AND BETWEEN
Verisity Ltd. Private Company 51 - 2203357
of ▇▇, ▇▇'▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: the "Tenant"
WHEREAS The Landlord owns the right from the Israel Lands Authority in
regard to the parcels of land known as the Industrial Mall in Rosh
Ha'Ayin, Parcels 3, 11, 12, 13 (part) and 16 in Bloc 8863, Lots
516, 519 (hereafter: the "Mall") and which is designated as an
industrial building.
AND WHEREAS The Landlord owns the rights to a unit in the Mall over an area of
approximately 686 square meters gross including public areas, as
well as terraces having an area of approximately 180 square meters
that is located on the third floor according to the attached
drawing, marked with the letter 'A' (unit) signed by the Parties
and which constitutes an inseparable part of the Agreement
(hereafter: the "Rented Premises").
AND WHEREAS It is the wish of the Tenant to rent from the Landlord and the
wish of the Landlord to rent to the Tenant the Rented Premises on
an unprotected tenancy in pursuance of the Tenants Protection Law
(Integrated Version) 5732 - 1972 for a period,
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for consideration of and in accordance with that specified below
in this Agreement.
AND WHEREAS The Landlord has expressed his agreement to rent the Rented
Premises to the Tenant on an unprotected tenancy in pursuance of
the Tenants Protection Law (Integrated Version) 5732 -1972on the
conditions and for the purpose and the period specified below in
this Agreement.
IT IS THEREFORE DECLARED, STIPULATED AND AGREED BETWEEN THE PARTIES AS FOLLOWS:
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1. The Preamble to this Agreement constitutes an inseparable Part
thereof.
2. The Tenant declares that he has seen and examined the Rented
Premises, their nature and condition, has examined well the possibilities of
exploiting and using them , is aware that he is bound, on his responsibility and
at his expense, to connect the Rented Premises to the electricity network, has
found them and all the conditions suitable to him and for his purposes and
subject to the execution of the work which the Landlord is bound to execute on
the Rented Premises in accordance with that agreed between the Parties, he
waives any claim whatsoever in relation to the Rented Premises, to the
possibilities of using it and, in addition, including any claim of unsuitability
but excepting claims in respect of concealed defects.
This section is fundamental.
3. It is hereby explicitly agreed between the Parties:
a. On the date on which the Tenants Protection Law (Sundry
Provisions) 5728 - 1968 came into effect, that is on August 20, 1968, there
was no tenant entitled to possession of the Rented Premises.
b. The Rented Premises are free of any tenant entitled to
possession thereof.
c. The Tenant did not pay nor shall he pay whether directly or
indirectly to the Landlord any consideration whatsoever of any sort
whatsoever for his agreement to rent him the Rented Premises.
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d. The protection of the Tenants Protection Law (Integrated
Version) 5722 - 1972 and any other law that shall replace it or amend it
and that grants protection or privilege of any sort whatsoever to a tenant
shall not apply to this Rental nor to the relationship between the Parties
as specified below in this Contract.
This section is fundamental.
4. The Landlord hereby rents to the Tenant and the Tenant hereby
rents from the Landlord the Rented Premises for a tenancy that is unprotected
for a period of 36 months from its inception on December 1, 1997 and which
terminates on November 30, 2000 (hereafter: the "Period of the Tenancy")
This section is fundamental.
5. a. The aim of the tenancy: the management of the Tenant's
business and his offices exclusively in the hi-tech field and not for any other
purpose whatsoever.
b. The Tenant hereby declares that he has examined the
conditions for the use and operation of the Rented Premises in accordance with
the law, and in particular the Business Licensing Law and that they are known to
him and perfectly clear to him and that he undertakes to act solely in
accordance with those conditions. It is hereby expressly stipulated that the
Tenant only is responsible for obtaining a license from the competent
authorities for the conduct of his business on the rented premises. The Tenant
shall have no claim whatsoever against the Landlord in connection with the
receipt or non-receipt of permits or licenses to conduct his business on the
Rented Premises and he hereby waives in advance any claim whatsoever against the
Landlord. Without derogating from the aforementioned, it is made clear that
failure to obtain a permit or license as stated, for any reason whatsoever,
shall not constitute grounds for the cancellation of the Agreement by the Tenant
or exempt him from the fulfillment of his undertakings in pursuance thereof,
including his obligation to pay the rent specified therein.
c. The Tenant undertakes not to cause any nuisance or
inconvenience whatsoever, including and without derogating from the general
nature of that stated, smells, fire, smoke or noise.
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This section is fundamental.
6. a. The rent, the manner of its payment and its linkage shall be
in accordance with that stated in the attached Payments Appendix (hereafter: the
"Appendix'), signed by the Parties and which constitutes an inseparable part of
this Agreement.
b. In addition to the payment of the rent in pursuance of this
Agreement and together therewith, the Tenant shall pay the Landlord, VAT in
return for a tax invoice.
7. a. The Tenant shall be obligated to pay the Landlord the rent in
full and on the due dates even if he does not use the Rented Premises or if he
does not operate them for any part whatsoever of the Period of the Tenancy, for
whatever reason whatsoever, except in the case of damage caused to the Rented
Premises that significantly and fundamentally disrupts the possibility of using
the Rented Premises for the purpose of the Tenancy, other than through the fault
of the Tenant.
b. To facilitate the collection of the rent only, the Tenant will
deposit with the Landlord, subject to the accounts for the linkage differentials
as stated in Section 6 above, checks that correspond to the amounts of the
payments and their dates however, only actual payment of the checks shall be
deemed as payment of the rent.
This section is fundamental.
8. The Tenant undertakes to allow the Landlord or his representatives
to enter the Rented Premises at any reasonable time and hour, if coordinated in
advance.
9. The Tenant undertakes to use the Rented Premises with care, not to
cause any nuisance or disturbance to other lessees or tenants in the Mall and in
particular not to disturb the public means of access and the access to the other
assets in the Mall, to maintain them in good and proper condition, to repair
immediately at his expense any defect, impairment or breakage that is revealed
in the Rented Premises apart from basic defects that do not result from
unreasonable use of the Rented Premises by the Tenant and apart from reasonable
wear and tear, the repair of which is the
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responsibility of the Landlord, to return the Rented Premises to the Landlord at
the end of the Period of the Tenancy in the condition in which they were when he
received them, apart from reasonable wear and tear.
The Tenant hereby confirms that the Rented Premises shall be transferred to him
in new condition, subject to the defects that are revealed in the Rented
Premises on the date of their transfer. On the transfer of possession of the
Rented Premises, protocol shall be recorded which reflects the condition of the
Rented Premises on that occasion, and the Landlord shall repair, if necessary,
defects and impairments that are revealed in the Rented Premises on transferring
them to the Tenant.
This section is fundamental.
10. During the Period of the Tenancy, the Tenant alone shall be
fully liable to the Landlord, whether criminally, contractually or civilly for
any matter that concerns the possession of the Rented Premises, use thereof, the
operation thereof and all that arises therefrom. That stated in this section
does not in any way derogate from the Landlord's liability in law or of those
who act on his behalf in respect of the building of the Rented Premises.
The Tenant undertakes, irrevocably and unconditionally to compensate and/or
indemnify the Landlord immediately and without delay in respect of and for any
demand submitted to him or in respect of any claim filed against him and which
refers to the Tenant's use during the Period of the Tenancy, or any person
acting on his behalf, of the Rented Premises or that arises as a result thereof
including the payment of expenses and lawyer's fees.
The Landlord undertakes to inform the Tenant at the that time, of any demand or
claim filed against him as stated, in order to enable the Tenant to defend it
should he wish to do so.
Should the Tenant decide to defend the demand or claim, the Landlord shall not
pay it nor shall be make any settlement in respect thereof.
11. a. Without derogating from the provision of the management
agreement as specified below, the Tenant shall be responsible for the payment of
all water and electricity charges and other expenses that are involved in the
use he makes of the Rented Premises.
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b. The general municipal rates or any other tax that applies to the
possessor of real estate shall apply to the Tenant and be paid by him
during the Period of the Tenancy or the Period of the Agreement. Property
Tax and any other tax that applies to owners of real estate, should they
apply, shall apply to the Landlord and be paid by him.
c. The Tenant shall be responsible for all the payments that apply
to him in pursuance of the management agreement as specified below.
This section is fundamental.
12. a. The Tenant may not let and/or transfer and/or allow
use of the Rented premises or any part thereof to any other person and/or body
but, however, the Tenant may employ workers of his own for the purpose of
conducting his business.
b. Should the Tenant be a company or an association of any sort,
then during the period in which this Agreement is valid, there shall be a
prohibition on the transfer of shares or of rights in the Tenant, apart
from a transfer as stated which is not a transfer of control of the Company
or association.
c. The Tenant may not and undertakes not to make and not to execute
without permission alterations or additions of any sort whatsoever in the
Rented Premises or any part thereof without first obtaining the consent in
writing of the Landlord.
This section is fundamental.
13. Subject to that stated in Section 12c. above, and without
derogating from it, it is hereby agreed that any additions or alterations that
are made by the Tenant to the Rented Premises and which are permanently fixed to
the Rented Premises shall be deemed the property of the Landlord, unless the
Landlord demands that the Tenant remove them and/or restore the Rented Premises
to their former condition. In such a case, the Tenant shall be bound to do so,
on his responsibility and at his expense, immediately and without any delay.
Should the Tenant not do so, the Landlord may do so at the expense of the
Tenant. The accounts of the Landlord shall serve as prima facie evidence of the
amounts of the expenses incurred or paid by him in order to execute the
aforesaid.
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14. It is hereby made clear and explicitly emphasized that the
Tenant hereby exempts the Landlord from any responsibility, direct or indirect,
for any damage caused to goods or equipment or any property whatsoever in the
Rented Premises or their surroundings, whatever the reason for the damage
caused, providing that the damage was not caused maliciously.
This section is fundamental.
15. On the occasion on which the Tenant signs this Agreement, he
undertakes to sign, as an inseparable part thereof, the management agreement
with the Kanion Hata'siya Nihool V'Ahzakot Ltd. (hereafter: the "Management
Company") in the attached text, to be signed by the Parties (hereafter: the
"Management Agreement").
The Tenant undertakes to rigorously fulfill all his undertakings as specified in
the Management Agreement and it is hereby made clear and explicitly emphasized
that a breach of the Tenant's undertakings as specified in the Management
Agreement shall constitute, to all intents and purposes, a breach of this
Agreement.
A legal cancellation of the Management Agreement by the Management Company
because of a breach on the part of the Tenant shall, as well, constitute a
breach of this Agreement, to all intents and purposes, and as a result thereof
this Agreement shall be completely cancelled.
16. On November 30, 2000, no later than 24:00 hrs., the Tenant
undertakes to vacate the Rented Premises and to deliver possession thereof to
the Landlord, the Rented Premises being empty and free of any person or object
that does not belong to the Landlord and in accordance with the provisions of
this Agreement.
This section is fundamental.
17. a. Should the Tenant not vacate the Rented Premises and not
return them and the possession thereof to the Landlord at the end of the Period
of the Tenancy or on the legal cancellation of the Agreement, he shall be deemed
a trespasser from that day with all the legal and judicial consequences that
result therefrom.
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b. Without derogating from that stated above in sub-section (a),
the Tenant shall be obliged to pay the Tenant double the daily rent
recorded in the Agreement for each day's delay in vacating the Rented
Premises and returning the possession thereof to the Landlord. This sum
represents user fees fixed and agreed in advance by the Parties which seem
to them to be reasonable for the damage that is likely to be caused to the
Landlord in the event of failure to vacate the Rented Premises on the due
date.
18. Without derogating from the Management Agreement, at the end of
the Period of the Tenancy or on the termination of this Agreement as is the
case, the Tenant shall be obligated to present to the Landlord copies of the
confirmations and receipts that testify to the fact that he has made all the
payments and paid all the taxes and expenses that apply to him in pursuance of
this Agreement.
19 a. Without derogating from that stated above, it is hereby
agreed that any delay in the payment of the rent in excess of 5 days shall
constitute a fundamental breach of this Agreement.
b. Without derogating from that stated above, it is hereby
agreed that in respect of a delay in the payment of the rent or any part
thereof, the Tenant shall pay the Landlord effective interest and linkage at the
rate of 0.15% for each day's delay in payment from the second day's delay until
payment is made in full. Should the delay exceed 2 days, the payment of interest
shall start from the first day of the delay.
20. Despite that stated in section 4 above, it is hereby agreed that
the Tenant reserves the right to extend the Period of the Tenancy for three
further Periods of the Tenancy each period being of only 24 months, the first
starting on December 1, 2000 and ending on November 30, 2002 (hereafter: the
"First Period") and the second starting on December 1, 2002 and ending on
November 30, 2004 (hereafter: the "Second Period") and the third starting on
December 1, 2004 and ending on November 30, 2006 (hereafter: the "Third Period")
subject to the cumulative conditions as follows:
a. The Tenant shall give notice of his intention to extend
the Period of the Tenancy for the First Period and/or the Second Period and/or
the Third Period, as is the case, at least 60 days before the end of the actual
period of the Tenancy, such notice to be sent in writing by registered mail.
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b. The Tenant has fulfilled all his fundamental undertakings during
the period of the Tenancy prior to the extended period.
c. The Tenant shall extend the validity of the bank guarantee
recorded in Section 22 below.
If not all the conditions specified above are fulfilled together, this right of
the Tenant shall be cancelled.
21. a. The rent during the period of the extended tenancy shall
bear linkage differentials as stated in Section 6 above and in its Appendix.
b. In addition to the rent and together with it, the Tenant shall
pay VAT as due.
This section is fundamental.
22. To guarantee payment of the rent, taxes and all the other
payments and sums that apply to the Tenant in accordance with this Agreement,
the Tenant undertakes to deposit with the Landlord an autonomous bank guarantee
in an amount that is the equivalent of 50,000 dollars that shall remain valid
until 90 days after the end of the Period of the Tenancy.
The Landlord may use the bank guarantee if the Tenant breaches any of the
provisions of the Agreement, only for the purpose of payment of a debt or damage
or compensation or a payment that applies to the Tenant and which he has not
paid, in accordance with the provisions of the Agreement or in accordance with
the provisions of any law.
A condition for the right of the Landlord to use the bank guarantee is that the
Landlord shall inform the Tenant in writing at least 10 days in advance of his
intention and he shall give details of the grounds for using all or part of the
bank guarantee.
Should the Tenant fulfill all his undertakings in pursuance of the Contract, the
Landlord shall return the security ▇▇▇▇ to him no later than at the end of 90
days from the end of the Period of the Agreement or before that, if the Tenant
provides the Landlord with copies of the confirmations that testify
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that he has made all the payments and paid all the taxes that apply to him in
pursuance of this Agreement.
23. In addition, and without derogating from that stated above, or
any right conferred on the Landlord in law, if the Tenant does not approach the
Landlord on the due date and does not deliver sole possession of the Rented
Premises to him in accordance with the provisions of this Agreement, then the
Landlord or any person authorized by him for that purpose shall be entitled to
enter the Rented Premises, to seize sole possession thereof, to forcibly evict
the Tenant and to remove all the chattels of the Tenant or those chattels that
do not belong to the Landlord, by force, to use for that purpose all reasonable
force including breaking open the doors of the Rented Premises. The Tenant
declares that in the case of any loss or damage that is caused to him or to the
property of a third party as a result of the Landlord's acts as stated in this
Section, he has no nor shall he have an claim or suit against the Landlord and
he hereby waives and waives finally and absolutely any claim or suit whatsoever
in this matter should he have any such claim or suit. The Tenant undertakes to
refrain from taking any step whatsoever in order to prevent the Landlord from
acting in accordance with that stated above. The signature of the Tenant on
this Agreement is as the grant of an irrevocable power of attorney to the
Landlord or those that represent him that enables them to act in accordance with
that stated above.
The Landlord may use the powers conferred above in this section only after he
has notified the Tenant at least 10 days in advance in writing.
24. In addition to any provision in law or in pursuance of this
Agreement, the Landlord may cancel the Agreement if an application is made for
the bankruptcy of the Tenant or an order is granted for the receipt of his
assets or if he is declared bankrupt, or, if the Tenant is a company, if an
application is made against him for receivership or liquidation or if a
liquidation order is granted or if a Liquidator is appointed, whether
temporarily or permanently, or any of the directors of the association are
declared bankrupt or an order for the receipt of his assets is issued and the
relevant order or request is not cancelled within 45 days of the date on which
it was made.
25. All that stated above in this Contract does not prevent and is
in addition to the right of the Party that fulfills the Contract to seek any
legal relief conferred on him in pursuance of the law including mandatory
injunctions and/or prohibitory injunctions and/or any claim to remove the Tenant
from the Rented Premises.
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26. Any alteration or addition to this Agreement must be made in
writing and signed by the Tenant and the Landlord and no alteration or addition
shall be valid which is not made in writing as aforesaid.
27. The addresses of the Parties for the purpose of sending notices
in pursuance of this Agreement and for the purpose of service of process of
court, are as stated in the Preamble to this Agreement and any letter or notice
that is sent to either one at the above address by registered mail shall be
deemed to be delivered to him within 5 days of the date of its dispatch.
28. The Tenant hereby declares that he is aware that the Law Office
of E. Dedikman, Adv. has prepared this Agreement for the Landlord alone and not
for him that he does not represent him in this Agreement or in its performance
and that he may be represented by another lawyer. The Tenant undertakes to
repay to the Landlord, on signing the Agreement, his legal costs in respect of
preparation of the Agreement in a sum that is equal to the full monthly payment
that the Tenant shall pay the Landlord, with the addition of Vat.
29. The Courts of Law in Tel Aviv - Jaffa shall have the sole local
jurisdiction to hear any claim or dispute that concerns this Agreement or that
results therefrom.
IN WITNESS WHEREOF THE SIGNATURES OF THE PARTIES
/s/ indecipherable /s/ indecipherable
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The Tenant The Landlord
(-) Stamped Verisity Ltd (-) Stamped Mifalei Locky
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▇▇ ▇▇'▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, l'Bniya Ltd
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POB 8429
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Yehud 56304
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APPENDIX
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1. The Rent for the Period of the Tenancy shall be in the sum of NIS
26,512 a month.
The Tenant shall pay the rent to the Landlord every four months with each
payment being in advance for a four monthly period. 30 days before the due date
for payment of the rent, the Tenant shall deliver to the Landlord a prepared
check payable on the due date for payment of the rent as stated in the
Agreement.
2. The following terms in the Agreement shall mean:
a. "The Index" - the Consumer Price Index published each month by
the Central Bureau of Statistics.
b. "The Base Index" - the Index known on the date recorded in the
heading to the Agreement on the date on which it is signed.
c. "The Determining Index" - the Index published for the month in
which the rent is to be paid.
3. a. Despite that stated above in section 1, if on the actual
date of payment of the rent, it becomes clear that the Determining Index has
risen compared to the Base Index, then the rent recorded in Section 1 above
shall be increased proportionately to the increase of the Determining Index
compared to the Base Index. In order to remove any doubt, it is hereby made
clear that should the Index decrease, it shall not be considered for the
purposes of calculating linkage differentials.
b. Should the Tenant exercise his right as stated in Section 20
of the Agreement and extend the period of the Agreement for the First
Period and/or the Second Period, then in such a case, the basic rent that
he is bound to pay the Landlord shall be the rent that he is bound to pay
him in respect of the last month of the Period of the Tenancy or the last
month of the First Period as is the case, with the addition of 10%. This
rent shall carry linkage differentials in accordance with that stated in
Section 6 of the Agreement and Section 2 above in this Appendix.
c. The linkage differentials above shall be paid within 5 days of
the date of publication of the Determining Index.
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/s/ indecipherable /s/ indecipherable
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The Tenant The Landlord
(-) Stamped Verisity Ltd (-) Stamped Mifalei Locky
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▇▇ ▇▇'▇▇▇▇▇▇▇ ▇▇▇▇▇▇ l' Bniya Ltd
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POB 8429
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Yehud 56304
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