SECURITY AGREEMENT FLOATING CHARGE TO SECURE ALL DEBTS OF THE COMPANY WITHOUT LIMITATION IN AMOUNT DEBENTURE
FLOATING
CHARGE TO SECURE ALL DEBTS OF THE COMPANY
WITHOUT
LIMITATION IN AMOUNT
DEBENTURE
That
was
issued and signed in_________on the date November ___, 2006.
By:
Company
Name: Inrob Ltd Co. No___________________________
Address_______________________________________________-
ZiPcode ______(hereinaner:"
the Company")
In
favor
of: the
Subscribers detailed in Annex A to this Agreement
(hereinafter:"Subscribers")
In
accordance with the organizational documents of the Company, its Articles and
all the other provisions that give the Company authority and power in this
matter.
This
debenture gives witness to the following matters:
| 1. |
Nature
of the debenture, its scope and the secured
debts.
|
| A. |
This
debenture is given to secure the full and exact payment of each and
every
one of the debts and obligations (hereinafter: "Debts")
of the Company towards the Subscribers under the Subscription Agreement
executed between Company and Subscribers dated November ____, 2006,
without exception, including and without derogating from the generality
of
the aforesaid, and including all of the following (but without being
exclusionary), an existing or future debt, renewable or conditional,
in a
fixed sum or not in a fixed sum, whether it is direct or indirect,
whether
the debt is denominated and/or calculated in Israeli currency and
whether
the debt is denominated and/or calculated in any other currency and
without derogating from the generality of the aforesaid, there will
be
included in every such debt as well debts in connection with any
principal, interest, differentials for linkage to any index whatsoever,
any rate/currency differentials whatsoever, commissions, fees, taxes,
surcharges, required payments of any type, expenses for attorneys'
fees
and damages, as well as all debts that are owed or that are liable
to be
owed by the Company due to and/or in connection with any obligations,
guarantees and debts of various types of the Company towards the
Subscribers and/or in favor of the Subscribers (the aforesaid debts,
in
whole or in part, and any part of them, will be called hereinafter:
the
"Secured
Debts").
|
|
B.
|
1)
This debenture is continuous, constant and may not be diminished
and/or
changed or cancelled or removed except according to express approval
that
must be given in advance and in writing by the Subscribers - for
the
removal of doubt it is hereby clarified: any extension, payment,
discount,
compromise arrangement, waiver/forgiveness on the part of the Subscribers
in any connection whatsoever with the secured debts and/or in connection
with the business of the Subscribers with the Company, shall not
in and of
itself serve to diminish and/or change this debenture and/or cancel
it in
whole or in part.
|
|
|
2)
The meeting by the Company of its current and/or other obligations
under
the Subscription Agreement and/or the Secured Convertible Notes shall
result in the termination of this debenture in
whole.
|
3)
This
debenture is intended to add to and not to detract from any additional and/or
other security held by the Subscribers, whether it exists today or whether
it
will be given in the future and in any case all the securities as well as this
debenture itself - shall be independent of each other and will be realizable
by
the Subscribers, whether in an alternative or in a cumulative manner, all
according to the determination of the Subscribers.
1
|
C.
|
This
debenture, the secured debts as well as the amounts that the Company
will
be obligated to pay to the Subscribers in accordance therewith, are
and
will be unlimited in amount.
|
| 2. |
The
Charged Property
|
|
A.
|
As
security for the full and exact discharge of the secured debts, the
Company hereby charges in favor of the Subscribers and their
successors:
|
1)
By
first degree floating charge, all of the property, assets (movable, real and
other), money, securities, bills, notes, documents, rights and all other
property, of any type and kind whatsoever without exception, of the Company,
all
of their profits and additions it will have at any time whatsoever in the future
throughout the whole period of the validity of this debenture.
2)
By
fixed charge and by first degree pledge its share capital that has net yet
been
demanded and/or paid-up and its rights to good-will as all these exist on the
date of signing this debenture and as may exist at any time.
3)
By
fixed charge and by first degree pledge as well as by assignment by way of
charge, all of its rights to receive money and/or other rights that arise from
insurance, including all its rights according to the Property Tax and
Compensation Fund Law, 5721-1961, and/or according to any other law, as will
be
in effect from time to time. (The charged assets and any part of them will
be
called in this debenture: the “Charged
Property").
|
B.
|
For
the removal of doubt, it is hereby clarified that the charge and
the
pledge that are created according to this debenture will apply, inter
alia, also to every right to compensation and/or indemnification
and/or to
participation in a risk that the Company will have due to any loss,
deficiency, damage, expropriation, seizure, confiscation, conscription
or
destruction of the charged property and/or due to any other
reason.
|
|
C.
|
The
Subscribers will be entitled to deposit the charged property that
will be
delivered to it or any part of it with a Collateral Agent on its
behalf,
in its discretion, and to replace the Collateral Agent from time
to
time.
|
|
D.
|
Without
derogating from the duty of the Company to register the debenture
within
the prescribed period, as well as any charge involved in and/or arising
therefrom, in whole or in part, with any competent authority according
to
any law and with every registry required for the matter - the
Subscribers will
be entitled to perform by themselves all of the activities listed
above or
some of them and the Company undertakes to fully cooperate with the
Subscribers in
this regard and without derogating from the generality of the aforesaid
-
to sign every document necessary for such purpose and to appear before
every person and/or body and/or competent
authority.
|
| 3. |
Non-redemption
of the charged property
|
The
Company and any person whose rights are liable to be harmed from the giving
of
this debenture or from its realization, will not have the right, according
to
paragraph 13(B) of the Pledges Law, 5727-1967, or according to any other
provision that may replace such paragraph to redeem the charged property in
whole or in part by the fulfillment of the secured debts and/or any part of
them
before the date for their fulfillment has arrived, unless the
Subscribers will
consent in advance and in writing to prepayment for the redemption and/or return
of the charged property, all subject to and according to that consent including
all of its conditions
| 4. |
Declarations
of the Company regarding the charged
property
|
The
Company hereby declares that:
| A. |
The
charged property in whole is under the exclusive ownership and possession
of the Company and/or under its
control.
|
2
| B. |
Its
rights in connection with the charged property are free and clean
of any
third party rights and that on the charged property and on its rights
therein and thereto there does not exist any attachment, charge,
pledge,
mortgage and other third party rights of any type and kind whatsoever
(excluding the charge specified in the notice of the Company attached
to
this debenture as an inseparable part hereof, inasmuch as such a
signed
notice is attached to his
debenture).
|
| C. |
It
is entitled to charge the property that is charged according to this
debenture according to its conditions, and there is no restriction,
condition or impediment by law and/or by agreement and/or in any
other way
to the charging of the charged property, to the undertaking according
to
this debenture, not even in connection with the rights to transfer
the
ownership of the charged property, and also no right in the charged
property and/or in connection with it was given or assigned, and
no other
activity was done that is liable to derogate from the value of the
charged
property and/or from the value of any charge according to this
debenture.
|
| D. |
It
is liable towards the Subscribers for
any defect and/or discrepancy in connection with its rights in the
charged
property as well as to the truth, validity and correctness of all
the
signatures, endorsements and the particulars of all the bills, documents
and securities that were and/or that will be delivered to the
Subscribers as
security.
|
| 5. |
Obligations
of the Company regarding the charged
property
|
The
Company hereby adds and undertakes as follows:
| A. |
To
make use of and also to act in connection with every matter and thing
connected with or arising from the charged property, subject to this
debenture.
|
| B. |
To
protect the charged property and also to hold it and maintain it
in good
condition and suitable for use, to use carefully, to notify the
Subscribers of
any occurrence of damage, harm, breakage or defect that will occur
to it
and to immediately and property repair any damage, harm, breakage
or
defect that will so occur to it for any reason whatsoever and to
be
responsible towards the Subscribers for
any such occurrence of damage, harm, breakage or defect. All the
aforesaid
will be performed by the Company and on its
account.
|
| C. |
To
enable, at any time, the Subscribers and/or
their collateral agent and/or anyone that will be appointed by them,
to
visit and examine the charged property in the place it is located
and also
to receive details in connection with
it.
|
| D. |
To
deliver to the Subscribers or
to a collateral agent that will be appointed on their behalf, upon
the
first demand of the Subscribers and under the conditions detailed
in the
Subscription Agreement and the Secured Convertible Note, the charged
property in whole or in part. It is hereby agreed that if the Company
will
not fulfill the provisions of this demand, the Subscribers will
be entitled from time to time, without the need for the additional
consent
of the Company, to remove the charged property in whole or in part,
from
its possession, and to hold it in any place that it will deem fit,
and
also to deliver it to a Collateral Agent that will be so appointed
on its
behalf, and to replace the Collateral Agent from time to
time.
|
| E. |
To
pay on time and in accordance with every law all of the taxes, fees,
surcharges and obligatory payments of any type and kind that are
imposed
and also that will be imposed upon and/or in connection with the
charged
property and/or on any of the income that arises from it, and also
to pay
on time all of the payments that apply to the Company according to
this
debenture and without derogating from the generality of the aforesaid
-
payments according to paragraph 6 below, and to provide to the
Subscribers, upon its first demand, all of the receipts that provide
evidence of the making of such payments. It is hereby clarified and
agreed
that if the Company will not make such payments, on time, the
Subscribers will
be authorized (but not obligated) to pay them on the account of the
Company and to debit it for the aforesaid
payments.
|
3
| F. |
Not
to empty the Company of its property, not to smuggle, not to conceal,
and
not to hide the charged property subject to the case of a transaction
in
the ordinary course of business of the Company and for value: not
to sell,
not to lease, not to rent, not to deliver, not to remove from its
possession, not to renounce, not to waive, not to transfer in any
other
manner whatsoever the charged property, and without derogating from
that
stated, any asset,
claim or right of the Company, in whole or in part, that belongs
to it now
or that will belong to it in the future, in whole or in part, to
another
or to others, not to transfer them from place to place and not to
allow
another or others to do any of the aforesaid actions without the
prior
written consent of the Subscribers, all subject to the case of a
transaction in the ordinary course of business of the Company for
value.
|
| G. |
Not
to create any other charge or pledge of any type or kind whatsoever
and of
any degree whatsoever over the charged property, with rights that
will be
prior or equal or subsequent to the rights given to the
Subscribers by
this debenture and not to assign any right whatsoever that the Company
has
in the charged property, without the express consent of the
Subscribers that
must be given in writing and in
advance.
|
| H. |
Not
to take any proceedings whatsoever on account of the charged property
and/or on account of the secured debts that are liable to cause any
harm
to and/or diminishment of the ability of the Subscribers to
realize this debenture.
|
| I. |
To
notify the Subscribers within
10 business days:
|
| 1) |
Of
any incident of loss, deficiency, damage, expropriation, attachment,
seizure, confiscation, conscription
of the charged property, the taking of any execution action and/or
other
realization steps, the submission of a petition for the liquidation
of the
Company and/or for receivership and/or for the appointment of a receiver
and/or for the appointment of a receiver and manager and/or of the
taking
of an action for the appointment
of a special director and also regarding all proceedings and/or petitions,
orders and appointments, temporary or permanent, regarding all of
these
and of the said type. The Company also undertakes to notify regarding
the
charge that is in favor of the Subscribers to
any body and/or person that took actions as aforesaid or some of
them and
also to any third party and to any authority that may be connected
to the
maker, that initiated and/or requested the taking of such actions
or some
of them and also to immediately take the measures necessary, on the
account of the Company, for the purpose of the immediate cancellation
of
each one of the activities listed
above.
|
| 2) |
Of
any incident of the claim of any right whatsoever with respect to
the
charged property or with respect to any of the securities that were
delivered to the Subscribers by
the Company and/or in connection with them in a manner that may harm
and/or diminish them and/or their value and/or the ability of the
Subscribers to
be paid from them.
|
| 3) |
Of
any significant decrease in value of the charged property, in whole
or in
part and/or of any security whatsoever
that was given to the
Subscribers.
|
| 6. |
Insurance
|
| A. |
The
Company hereby undertakes:
|
| 1) |
To
hold the charged property insured at all times at its full value
against
all risks of loss or damage that may occur to it including insurance
for
the event of fire, flood, earthquake and against all other risks,
with an
insurance company or companies (hereinafter: 'the insurance company")
and
also insured according to the Property Tax and Compensation Fund
Law,
5721-1961, as it will be in effect from time to time or according
to any
other law that will replace it (hereinafter: 'the aforesaid law")
for any
occurrence that will be possible to insure and/or to which there
applies a
duty to insure according thereto in the manner and on the conditions
to
which the Subscribers will
agree, and to transfer to the Subscribers all
the rights that arise from all such insurance in the form that the
Subscribers will
approve, with the right of the Subscribers to
transfer these rights to whomever the Subscribers will
transfer its rights under this
debenture.
|
4
| 2) |
To
pay the insurance premiums to the insurance company and also to pay
the
insurance premiums according to the aforesaid law (hereinafter jointly
and
severally: 'the insurance premiums") on time and also to pay all
the
property tax payments that are owed and/or that will be owed by it,
if
indeed the duty to pay them will apply to
it.
|
| 3) |
Not
to cancel and not to change in any form whatsoever any condition
or
conditions of the aforesaid insurance, without the prior written
consent
of the Subscribers.
|
| 4) |
To
fulfill and maintain every condition of the insurance policy and
without
derogating from the generality of the aforesaid, to give immediate
notice
to the insurance company when the Company becomes aware of the occurrence
of an event that is liable to be a cause for a claim according to
the
insurance policy.
|
| 5) |
A)
To notify the Subscribers of
any event that can serve as a cause for the demand of money from
the
insurance company and/or according to the aforesaid
law.
|
|
B)
Without derogating from that stated in subparagraph (A) above, to
transfer
to the Subscribers, even without its demand, all amounts that will
be paid
to it directly by the insurance company and/or according to the aforesaid
law - if they will be paid, so that they will serve as payment on
account
of the secured debts.
|
| 6) |
To
pledge in favor of the Subscribers all its rights to receive monies
and/or
other rights arising out of the
Insurance.
|
| B. |
It
is possible for the insurance company to be replaced by the Company
but
this is only subject to and in accordance with what is stated in
paragraph
6 above and below, and in a manner that will ensure the rights of
the
Subscribers.
|
| C. |
It
is hereby clarified that the mere performance and existence of the
insurance and its conditions will not release the Company from liability
for the wholeness and good condition of the charged property and
to all of
its other obligations according to this debenture and to all of its
undertakings for the payment of the secured
debts.
|
| 7. |
General
obligations of the Company
|
The
Company hereby adds and undertakes as follows:
| A. |
Giving
of notices - The Company will notify the Subscribers within 3 business
days of the occurrence of any:
|
| 1) |
Change
of address of the Company.
|
| 2) |
An
event that constitutes a cause for accelerated payment whether according
to this debenture or according to any obligation of the Company and/or
agreement and/or document by which the Company is obligated towards
the
Subscribers.
|
| 3) |
An
event that requires notice according to this debenture in general
and
paragraphs 5(1) and 6 above in
particular.
|
| B |
Signature
on documents - The Company
undertakes:
|
To
sign
upon the first demand of the Subscribers every document and every form required
in the discretion of the Subscribers in this manner, for the purpose of
performing its obligations included in this debenture including and without
derogating from generality of the aforesaid, for the purpose of collecting
money, for the purpose of any insurance payments whatsoever according to
paragraph 6 above, and/or in any case that according to the laws of the State
of
Israel, there is or will be a need in the exclusive discretion of the
Subscribers for the signature of the Company on any document or form whatsoever
in order to give or maintain complete validly to this debenture, with all of
its
provisions, and also with regard to every matter and thing required for its
realization.
5
| C. |
The
Company undertakes not to pass a resolution for liquidation of the
Company without
receipt of the prior and written approval of the Subscribers.
|
| 8. |
Acceleration
for immediate payment and realization of the
debenture
|
Without
derogating from the rights of the Subscribers according to the conditions of
this debenture and/or according the Subscription Agreement and/or the Secured
Convertible Note, the Company is and/or will be obligated towards the
Subscribers and/or according to any law and in addition thereto, the Subscribers
will be entitled in each one of the following instances to demand of the Company
the immediate payment of the secured debts in whole or in part (whether their
maturity date has arrived or not) -upon such first demand, the secured debts
will become immediately due, and these are the instances:
| A. |
If
an event or condition will occur that is a cause for immediate payment
according to the conditions of the Subscription Agreement and/or
Secured
Convertible Note by which the Company is obligated and/or will be
obligated towards the Subscribers.
|
| B. |
If
a petition for a compromise or for an arrangement or for the giving
of an
order for a stay of proceedings against the Company according to
the
Companies Ordinance (New Version), 5743-1983, or according to any
additional or other law that will replace it will be
submitted.
|
| C. |
If
the charged property or any material part of it will be seized,
confiscated, expropriated, conscripted, destroyed, burned, loses
its value
or become lost, without appropriate insurance/ compensation being
awarded.
|
| 9. |
Collection
of the secured debts
|
| A. |
Without
derogating from the rights of the Subscribers according to the conditions
of this debenture and/or according to the Subscription Agreement
and/or
document and/or undertaking by which the Company is and/or will be
obligated towards the Subscribers and/or according to any law, it
is
expressly declared and clarified that in every one of the instances
set
forth in paragraph 8 above the Subscribers will be entitled to notify
the
Company of the immediate (or on a date set by the Subscribers)
crystallization of the floating charge or part of it, to use all
of the
means that it will deem fit in order to collect the secured debts
whether
their maturity date or of any part of them has arrived or not, and
also to
use its rights according to this debenture, in whole or in part,
including
and without derogating from the generality of the aforesaid, to realize
the charged property in whole or in part and to make use of its proceeds
for payment of the secured debts in whole or in part without the
Subscribers being required to first realize any other security in
as much
as such will be held by the
Subscribers.
|
| B. |
1) In
any event in which the Subscribers will be required to give notice
as a
condition for any realization whatsoever of this debenture or any
part of
it, notice of 7 (seven) business days in advance regarding the steps
that
the Subscribers is about to take will be considered as given at a
reasonable time.
|
2) For
the
avoidance of doubt it is hereby expressly clarified that nothing with respect
to
the said 7 (seven) business day period shall derogate from the right of the
Subscribers to take immediate action in any event in which any delay whatsoever
is liable to cause a worsening of its condition and/or the condition of the
securities standing to its benefit and/or the possibilities of their
realization.
| C. |
The
Subscribers will be entitled to realize the charged property (or
any other
property), in whole or in part, by the court and/or by the execution
office and/or by itself and/or in any other way, inter alia, by way
of
appointing a receiver and/or appointing a receiver and manager of
behalf
of the Subscribers and whose authority will be, inter alia, as set
forth
below (this without the Subscribers being required beforehand to
take any
other legal measures whatsoever in order to execute and perform any
of its
rights against the Company and/or against others or to realize other
securities that exist or that will exist with the
Subscribers):
|
| 1) |
To
receive into its possession the charged property in whole or in
part
|
| 2) |
To
manage the business of the Company or to participate in its management
as
it deems appropriate.
|
| 3) |
To
sell or agree to sell the charged property in whole or in part, or
to
transfer it or agree to transfer it in any other manner, all on the
conditions and in the manner that it will deem
fit.
|
| 4) |
To
make any other arrangement regarding the charged property in whole
or in
part, as it will deem fit.
|
| D. |
For
the purpose of collecting the secured debts whose amounts are set
in
Israeli currency and/or in foreign currency, as the case may be,
the
Subscribers and/or the resolvers and/or the receivers and managers
and/or
the liquidators and/or the trustees of the Company - as the case
may be -
will be entitled to convert amounts denominated in the type of currency
in
its possession into the type of currency necessary in their opinion
for
the complete or partial discharge of the secured
debts.
|
| E. |
In
the event that at the time of selling the charged property the maturity
date of the secured debts or any part of them has not yet arrived
or the
secured debts or part of them will be owed to the Subscribers
conditionally only, the Subscribers will be entitled to deduct from
the
proceeds of such sale the amount sufficient to cover all of the amounts
of
the secured debts and the amount that will be collected will be pledged
and charged to the Subscribers to secure them and will remain in
the
possession of the Subscribers until their complete
discharge.
|
| 10. |
Crediting
of amounts
|
All
the
amounts that will be received by the Subscribers from the Company and/or that
will be received by the Subscribers on behalf of the Company and/or that will
be
collected by the Subscribers, whether by itself or by a receiver or by a
receiver and manager or otherwise, whether they will be received in the manner
of the realization of a security or collateral or whether they will be received
in any other manner or form (whether before the maturity date of the secured
debts, in whole or in part, whether on the maturity date, or whether
afterwards), including and without derogating from the generality of that
stated, amounts that will be received from income from the charged property,
the
proceeds of its sale, amounts that will be paid to the Subscribers will be
posted by the Bank to the credit of the account and on the date that the
Subscribers will deem fit according to its exclusive determination of account
of
the secured debts according to the following order, or according to any other
order that the Subscribers will choose (this is even it another notice was
given
by the Company or by any third party whatsoever):
| A. |
To
discharge all the expenses that were and/or will be caused in connection
with the collection of the secured debts including expenses connected
with
the appointment and fees of a receiver and/or receiver and manager
at the
rate that will be set by the Subscribers or that will be approved
by the
court or the execution office.
|
| B. |
To
discharge all the secured debts that will be owed to the Subscribers
due
to a condition of linkage, interest, damages, commission and expenses
that
are and/or will be owed to the Subscribers according to this
debenture.
|
| C. |
To
discharge all the amounts that are owed to the Subscribers as principal
of
account of the secured debts including additional amounts arising
from the
linkage of the principal.
|
| 11. |
Delay
in exercise of the rights of the
Bank
|
| A. |
No
waiver on the part of the Subscribers, compromise or arrangement
whatsoever with the Subscribers will be binding upon the Subscribers
unless it was done expressly and in
writing.
|
| B. |
The
Company agrees that in every instance when the Subscribers will not
exercise its tights or will delay in the exercise of its rights,
whether
they arise from this debenture or are connected to it, whether they
arise
from any law or otherwise and/or if it will give an extension or
concession or waiver, this fact will not be considered as a waiver
of
these rights or as any admission whatsoever of the part of the Subscribers
or to any precedent whatsoever, both with regard to the incident
in
connection with which the Subscribers had the opportunity to exercise
that
right and with regard to any other incident, and the Subscribers
is
entitled to exercise the rights that arise from this debenture and/or
that
are connected with it and/or that arise from the law at any time
that it
will deem fit.
|
| 12. |
Address
of the Company and the sending of
notices
|
| A. |
The
address of the Company will be considered for the purpose of this
debenture the address that is indicated at the beginning of this
debenture
or any other address in Israel regarding which the Company will notify
the
Subscribers by registered mail and whose receipt the Subscribers
will
confirm in writing.
|
| B. |
The
Subscribers will be entitled to send and/or deliver to the Company
a
notice, letter or other document of any kind whatsoever whether by
regular
mail, by registered mail, by mechanized means, by means of telephone,
by
means of facsimile, by means of computer, or by any other reasonable
means
at the choice of the Bank
|
| 13. |
Jurisdiction
|
| A. |
This
debenture will be interpreted by and in accordance with the laws
of the
State of Israel.
|
| B. |
The
exclusive place of territorial jurisdiction is hereby agreed upon
between
the parties to be filed solely in the courts of Tel Aviv- Jaffa,
Israel.
|
| 14. |
General
provisions and
Interpretation
|
In
this
debenture:
| A. |
The
preamble to this debenture constitutes an inseparable part
hereof.
|
| B. |
The
paragraph headings in this debenture are intended for convenience
and
reference only and not for the purpose of
interpretation.
|
IN
WITNESS WHEREOF WE HAVE SIGNED HERETO
6
