Name of the customer:
Inspire M.D. Ltd.
   
Company no. 513679431
           
Date: 27th of January 2009
     
Address:
3 Menorat Hameor Tel Aviv
       
Account no.:
195242
 

 
To
Bank Mizrachi Tefacot Ltd.
 
Dear Sirs,
 
Re: Loans Framework Agreement
 
We are putting in writing the agreement between us in respect to loans which you
shall provide us, from time to time based on this agreement, and based on the
specific loans agreement the example of which is attached hereto as appendix A
and which shall be considered as a separate part of this letter, which shall be
submitted to you in the future, from time to time, based on this framework
agreement, and which shall be approved by you. All the loans which shall be
provided to us shall be in accordance and subject to the “application to open an
account” and/or “account changes” and “general account managing terms” and
“general credit activities terms” and all their appendixes and amendments
according to which we entered into a contractual engagement with the Bank, and
all in these abovementioned documents, and all of their terms shall apply and be
binding in respect to the loans that you will provide us.
 
1.
The Lender – Bank Mizrachi Tefachot Ltd. (hereinafter: the “Bank”).

 
2.
The Borrower – Inspire M.D. Ltd.

 
3.
The Framework of the Loan:

 
The total framework amount that the borrower may use according to this agreement
shall be up to $2,000,000 according to the details and conditions hereafter:
 
 
3.1
A loan in foreign currency in the amount of $750,000 may be used after
fulfilling all of the Prior Conditions as set forth in section 5 hereafter
(hereinafter – the “Prior Conditions”) and not later than the 15th of February
2009. The loan principal shall be paid in 8 quarterly equal consecutive payments
starting from a year from the date of actually providing the loan. The
performance commission for providing this loan shall be as set forth in the
price list of the Bank and it shall be collected when providing the loan.

 
 
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3.2
Another loan in foreign currency in the amount of $750,000 shall be provided to
the borrower not later than the 3rd of August 2009 after fulfilling all the
Prior Conditions and after it shall be proven to the Bank, to the Bank’s
satisfaction up to the 31st of July 2009 that:

 
 
(a)
The company actually performed sales of its products in the amount of at least 2
million $ at least in the first have of the year 2009; and also

 
(b)
The company has accumulated orders of at least 0.5 million $ to supply after the
1st of July 2009;

 
The loan principal shall be paid in 8 quarterly equal consecutive payments
starting from the actually date of providing the loan. The performance
commission for providing this loan shall be as set forth in the price list of
the Bank and it shall be collected when providing the loan.
 
 
3.3
Within the framework of the loans for financing export shipping (Export Shipping
Finance - ESF) in the amount of 0.5 million $ (hereinafter: the “ESF Framework”.
In this framework it shall be possible to finance also invoices to customers in
Israel.

 
 
3.3.1
Each loan from the ESF Framework shall be in the amount which is not more than
85% of the amount of invoices for payment that were issued to the borrower’s
customer and whose date of payment shall not exceed 120 days from the date of
issuing the invoices and it shall be provided after the invoices are presented
to the Bank and a “export documents presentation” form signed by the borrower
are presented to the Bank. The Bank will not be required to provide the loans
within this framework unless it approved the owing customers and the amounts of
the invoices, according to its sole discretion. It shall be clarified that an
adverse change in the situation of a customer may cause the Bank to cancel its
approval.

 
 
3.3.2
The performance commission for providing any loan from this framework shall be
at the rate of 10% of the performance commission set forth in section 3.1 and it
shall be collected when providing the loan.

 
 
3.3.3
The EFC Framework may be used up to the 31st of December 2009. Each loan out of
the EFC Framework shall be provided up to the date of payment of the financed
invoices and in any event it shall be paid no later than the 11th of January
2010. The amount that shall be paid as mentioned may be re-borrowed for a period
of the framework period, subject to the borrower fulfilling all of his
undertakings under this agreement and there is no reason to require its
immediate payment.

 
 
3.3.4
At the request of the Bank, all the agreements with the customers and/or their
orders and delivery certificates shall be presented.

 
 
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4.
Any withdrawal in accordance with this agreement shall be allowed as long as
there is not reason for immediate payment according to the Bank’s documents. The
borrower’s notice of his intention to withdraw the loan shall be given to the
Bank in writing at least 3 business days before the date for performing the loan
and it shall contain the requested date for providing the loan and its amount
and a declaration that that all the abovementioned terms in sections 5 and 7
hereafter have been fulfilled. The Bank will prepare a loan agreement which is
attached hereto as appendix A for the borrower to sign which includes all the
details of the loan and the relevant interest and the other documents customary
at the Bank such as: a credit application and protocol and the loan shall be
made deposited in the borrower’s account after furnishing all of these document
legally signed and certified.

 
5.
Prior Conditions for providing any loan according to this framework agreement
are:

 
 
5.1
The borrower opened a Bank account, signed all the credit documents acceptable
in the Bank and furnished all the protocols and attorney certificates as
acceptable in the Bank.

 
 
5.2
The borrower furnished to the Bank all the following securities, signed for this
purpose a bond in the version acceptable in the Bank and furnished the protocol
and attorney certificates as acceptable in the Bank:

 
 
5.2.1
A first degree floating charge, without any limitation in amount, on all the
property and assets of any type or kind whatsoever of the borrower and a fixed
charge on the reputation, documents and negotiable instruments.

 
 
5.2.2
A first degree fixed charge, without any limitation in amount, on the
intellectual property of the borrower.

 
 
5.2.3
A first degree fixed charge on all the rights, existing and future, to receive
money from all the company’s customers including those that shall be set forth
in the appendix for charging. The list of customers shall be updated each 6
months and an amendment of the charge shall be signed.

 
 
5.2.4
The borrower hereby assigns in favor of the Bank all of his rights, existing and
future, to receive money from it customers, including those set forth in the
abovementioned appendix.

 
 
5.3
The borrower shall issue to the Bank without any consideration, ordinary shares
at the rate of 0.7% of the issued and paid up share capital of the company on
the basis of full dilution and it shall furnish for this purpose all the
required certificates. The issue of shares shall be performed in the following
manner:

 
 
(a)
28,932 shares that constitute at the issue date an amount of 0.44% of the issued
and paid up share capital of the company on the basis of full dilution before
providing the loan described in section 4.1;

 
 
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(b)
Shares that constitute at the issue date the amount of 0.26% of the issued and
paid up share capital of the company on the basis of full dilution after
fulfilling the terms set forth in section 3.2.

 
6.
The interest rate for any loan according to this agreement shall be the libor
rate + 4%. In respect to the loans set forth in sections 3.1 and 3.2 the
interest shall be paid each quarter. Regarding the ESF Framework set forth in
section 3.3 the interest shall be paid upon receipt of all the consideration or
with the payment of the loan whichever is the earlier of the two.

 
7.
The borrower shall be entitled to execute early payment of the loan provided
that it gave a prior written notice of 30 days, that payment shall be made at
the payment date of the interest and the amount of payment is not less than 250
thousand $.

 
8.
Additional terms:

 
 
8.1
We hereby undertake to cause that all the customers will pay debt only to Bank
account no. 195242 at your branch and in each invoice which we shall issue we
shall mention this account as the account to credit.

 
 
8.2
The borrower shall hold at each time in account 195242 most of its cash balance
and in any event a balance of cash which is sufficient for 3 months of payment
based on the average net monthly cash flow for the previous 3 months. If the
balance of cash deposited in account 195242 exceeds the credit balance, then the
borrower shall be entitled to deposit the excess amount above the credit balance
in other Banks.

 
 
8.3
The borrower undertakes to pay to the Bank upon the Exit Transaction as defined
in appendix B hereafter, an amount of $250,000, if the amount of consideration
which shall be received in a Liquidity Event as defined in appendix B hereafter,
or the value of the company in an IPO as defined hereafter, shall be 100 million
$ or more than that.

 
 
8.4
It is hereby clarified that all the Prior Conditions set forth in section 5 must
be fulfilled no later than the 15th of February 2009 and the failure to fulfill
one or more of these conditions could cause the cancellation of this agreement.

 
9.
Upon the signing of the Framework Agreement we shall pay you a one time
commission for preparing the documents in the amount of $4,000 and this is
without derogating from any other commissions customary at the Bank.

 
 
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Sincerely,
 
Inspire M.D. Ltd.
 
Signature
 
Signature
           
Ophir Paz
 
Asher Holzer

 
 
We confirm the aforesaid
 

     
Bank Mizrachi Tefachot Ltd.
 
 

 
 
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Appendix B
 
“Exit Transaction” shall mean an IPO or a Liquidity Event.
 
“IPO” shall mean the closing of the first underwritten public offering of the
Company’s shares, pursuant to an effective registration statement under the
Securities Act of 19433, as amended (the “Securities Act”), or pursuant to the
corresponding securities laws of any other jurisdiction, or any other legal act
resulting in the public trading of the Company’s shares in any trade market.
 
“Liquidity Event” shall mean (a) the assignment, sale or other disposition of
ninety percent (90%) or more of the Company’s shares, property and/or assets,
(including, without limitation, by way of a share swap or the grant of an
extensive and exclusive license to a core technology of the Company outside the
ordinary course of business); (b) the merger, consolidation of the Company with
or into another Person (following which more than ninety percent (90%) of the
Company’s shares are held by Persons who, prior to the said transaction, held,
in the aggregate, less than fifty percent (50%) of the Company’s shares), of (c)
the acquisition or sale of a controlling interest in the shareholding of the
Company. A controlling interest shall mean 50% (fifty percent) or more of the
issued an outstanding share capital of the Company, and/or the right to appoint
a majority of the members of the board of directors of the Company.
 
 
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Secured Bond
 
Which was signed on the 27th of the month of January in the year of 2009.
 
By Inspire M.D. Ltd. co. no. 513679431 (hereinafter: the “Company”)
 
Address: 3 Menorat Hameor Tel Aviv
 
In favor of Bank Mizrachi Tefachot Ltd. (hereinafter: the “Bank”) in accordance
with the memorandum and articles of association of the company and all the other
provisions which give the company power in this matter and in accordance with
the decision of the board of directors of the company of the 20th of January
2009.
 
Whereas
The company received and is about to receive from time to time from the Bank,
credit, documentary credit, different loans, overdraft in a current account, in
a current loan account or in another account, indemnification letters, any
undertakings and guarantees for the company or for others according to the
company’s request, discounting of notes, providing different Banking extensions
and easements and different Bank Services (hereinafter: together and separately
referred to as the “Bank Services”) at the terms that were agreed and/or shall
be agreed upon each time regarding any Banking service.

 
And whereas
It was agreed between the company and the Bank that the company shall insure all
of its obligations and undertakings to the Bank of any type or kind whatsoever,
whether in Israeli currency or in any foreign currency of any type or kind, as
set forth hereafter – by this bond and this is in addition to all the securities
that were given and/or shall be given to the Bank.

 
Therefore this bond is evidence of the following:
 
1
(a)
This bond was issued for securing the full and accurate payment of all the
amounts, whether in Israeli shekels or in any foreign currency, that are due or
shall be due to the Bank from the company in any manner, form and for any
reason, whether these amounts are due from the company in respect to the Bank
services provided by the Bank and whether not in connection to them, whether
they are due from the company alone or together with others, whether the company
already undertook to pay them or shall undertake to pay them in the future, as a
debtor and/or as a guarantor and/or for any other reason (including the
company’s obligation according to notes that were given or that shall be given
to the Bank whether by the company or by third parties for discounting or as a
security, and/or according to any other obligation of the company towards the
Bank) that are due and/or that shall be due in the future, that must be paid
before realizing the securities hereby given or afterwards, that are due
absolutely or under a condition, that are due directly or indirectly, that are
due according to the original obligation of the company or that were established
in a judgment of the court or otherwise-

 
 
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    (- )
___________
signature
 
*without limitation of amount
 
 
With interest, commissions, all kinds of costs including realization costs,
legal fees, insurance fees, stamp duty and other payments according to this bond
with additional linkage differences of any other type that are due or shall be
due from the company to the Bank in any manner and way for the linked principal
and interest (all these amounts shall be referred to hereafter as: the “Secured
Amounts”).

 
 
b)
The secured amounts that are due and that shall be due from the company in any
foreign currency shall be considered as secured by this bond, only if and for
the transaction according to which an appropriate permit from the authorized
authorities which is due or shall be due, given or shall be given in advance or
retroactively, as long as such permit is required according to law.

 
2.
The company hereby undertakes to pay to the Bank any amount of the secured
amounts:

 
 
a)
At the date of the agreed payment, if it was agreed between the Bank and the
company that this amount shall be payable at a certain date.

 
 
b)
At the end of seven days from the date of sending the first demand of the Bank
in writing to the company, if such payment date was not agreed as mentioned in
paragraph (a) above.

 
3.
a)
The Bank is entitled to receive prior payment of the secured amounts or any part
of them before the date of their payment has arrived.
The company or anyone whose right could be harmed from giving this bond or its
realization, shall not have a right according to section 13 (b) of the Pledge
Law – 1967 or any other law.

 
 
b)
In any event that the Bank shall accept the company’s request of early payment
of any payment on account of the secured amounts, shall be entitled to charge
the company the amounts which shall express the damage which shall be caused to
the Bank as a result of the early payment.

 
4.
a)
The Bank shall be entitled to calculate interest on the secured amounts at the
rate that was agreed or shall be agreed upon from time to time between him and
the company. In cases in which the rate of interest was not agreed, the Bank is
entitled to determine the interest rate and to inform this to the company. The
company shall be required to pay such interest rates and the Bank is entitled to
add them to the principal at the end of each quarter year or at the end of any
other period, according to the Bank’s decision.

 
 
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b)
In any event of a delay in the payment of the secured amount all or in part, the
secured amounts shall bear delay interesting the amount which was agreed upon in
the Bank service agreement. Without a stipulation regarding delay interest in
these agreements, the secured amounts shall bear interest at the maximum rate
that is customary in the Bank regarding deviations and delays in a current loan
account and not less than 2% of the interest rate stipulated in the Bank service
agreement.

 
 
c)
In any case that confers the Bank the right to realize the securities according
to this bond, the Bank shall be entitled to raise the Bank rates on the secured
amounts up to the maximum rate that shall be customary at the Bank at that time
for deviations and delays in the current loan account.

 
5.
The company hereby pledges in favor of the Bank and its substitutes, for
securing the full and accurate payment of all the secured amounts –

 
 
a)
By a first degree floating charge the entire factory, equipment, assets, money,
property and rights including their proceeds, of any type or kind without any
exception that the company has now or that it shall have in the future at any
time in any manner and way including its insurance rights in respect to them,
the rights according to the Property Tax and Compensation Fund Law – 1961 and
any right for compensation or indemnification right that the company shall have
towards a third party due to the loss, damage or expropriation of its property
or any part of it (hereinafter: the “Pledged Assets”).

 
 
b)
By a first degree fixed charge and by a pledge on its reputation, as they are
today and as they shall be at any time (hereinafter: the “Pledged Reputation”).

 
 
c)
By a first degree fixed charge of all the rights, existing or future, to receive
money from the company’s customers set forth in this bond appendix.

 
 
d)
By a first degree fixed charge of all the rights, including intellectual
property rights, of the company as set forth in appendix A, including those set
forth in the list mentioned in section 7 (14) (hereinafter: the “Pledged
Intellectual Property Rights”).

 
 
e)
By a fixed charge as a pledge of the bills of lading – by sea or by air –
ownership rights of goods, storage certificates, delivery certificates, goods
and orders, letters of documentary credit, mail receipts or other documents that
are customary in international trade and that indicate ownership on the goods or
merchandise (hereinafter: the “Documents”), which shall be delivered if
delivered from time to time to the Bank, for collection, for custody, for
security or otherwise, including all the insurance rights of any type or kind
towards the Israeli Insurance Company of International Trade Risks Ltd. or any
other insurance company, and any right to compensation or indemnification that
the company shall have towards third parties due to loss, damage or
expropriation of the good or merchandise- upon their delivery to the Bank as
mentioned they shall be considered as pledged and charged to the Bank as a first
degree fixed charge and pledge according to the terms of the bond and its
provisions.

 
 
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f)
By a fixed charge as a pledge of those same securities, documents, notes of
others which the company gave or shall give from time to time to the Bank,
whether for collection, for custody, for security or otherwise (hereinafter the
“Pledged Documents”) and upon their delivery they shall be considered as pledged
and charged to the Bank as a pledge and first degree fixed charge according to
the terms of this bond, its provisions, mutatis mutandis, shall apply to their
pledge and charge.

 
The Bank shall be exempt from taking any action in respect with the charged
documents and they shall not be responsible for any damage which shall be caused
in respect to this, and the company undertakes to indemnify the Bank in any case
where the Bank shall be sued for such damage by others. The company hereby
waives in advance any claims in respect to the laws of limitations in respect to
the pledged documents.
 
 
g)
The “Pledged Assets”, the “Pledged Reputation” the “Pledged Intellectual
Property Rights” the “Documents” and the “Pledged Documents”, and any other
pledge mentioned in this section shall be hereinafter referred to as the
“Pledged Property”.

 
6.
The Company hereby declares as follows:

 
 
a)
That the Pledged Property is not pledged or charged to others nor is a lien
exist on them in any manner, except for the following:

 
A vehicle of the type – Chevrolet Uplander
 
-
 
 
b)
That the Pledged Property is exclusively owned by the company and is in its
possession, or in possession of the Bank.

 
 
c)
That there is no restriction or condition according to law or agreement or
otherwise, that apply to the transfer of the Pledged Property or to its pledging
or charging.

 
 
d)
That it is entitled to pledge or charge the Pledged Property in any manner or
way.

 
 
e)
That there was no assignment of a right or other action that diminishes the
value of the Pledged Property.

 
 
f)
That it received all the consents and/or waivers necessary (if necessary) from
the shareholders or the investors according to the company’s regulations or the
different investment agreements.

 
7.
The company hereby undertakes towards the Bank as follows:

 
 
a)
To hold the Pledged Property in its possession.

 
 
b)
To use and handle the Pledged Property with great caution and to inform the Bank
of any event of damage or defect that shall occur in them and to repair any
damage or defect or flaw which shall occur in the Pledged Property due to use
and/or for any other reason and to be responsible towards the Bank for any case
of a defect, damage, flaw or mishap, except for reasonable wear and tear.

 
 
c)
To allow the Bank’s accountant at all times to visit and check on site the
condition of the Pledged Property where it is located.

 
 
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d)
Not to sell, not to lease, not to transfer to another place, not to give the
Pledged Property or any part of it, in any manner or way, to others – except for
sales, the transfer and lease of the business inventory that is made during the
ordinary course of business of the company’s business – without receiving the
Bank’s prior written consent in advance.

 
 
e)
Not to sell, not to lease, not to transfer to another place, not to deliver to
others and not to give to others the right to use the Pledged Assets without the
prior written consent of the Bank for this.

 
 
f)
To immediately inform the Bank of any event of the imposition of a lien on the
Pledged Property and/or the Pledged Assets and/or any part of them and to
immediately inform the issuer of the lien of the pledge in favor of the Bank and
to take, immediately and without delay at the expense of the company, all means
for removing the lien. If the company will not take such steps as mentioned, the
Bank shall be entitled (but not required) to take all means to remove the lien
and the company must immediately pay the Bank all the reasonable costs involved
in this (including legal fees of the Bank).

 
 
g)
Not to pledge in any manner or way the Pledged Property or any part of it by
equal, previous or later rights to the rights of the Bank, and not to assign and
right that the company has in the Pledged Property without receiving the Bank’s
prior written consent for this.

 
 
h)
To be responsible to the correctness and authenticity of all the signatures,
assignments and the details on the notes, documents and securities delivered
and/or shall be delivered to the Bank as a security.

 
 
i)
To pay on time all the taxes, the municipal taxes, the levies and the other
obligatory payments that are imposed on the Pledged Property according to any
law and to furnish to the Bank according to his first demand the copy of all the
receipts for the payments as mentioned,  and if the company shall not pay such
payments as mentioned on time, the Bank shall be required to pay them at the
company’s expense and to charge it with the payments with costs and interest at
the maximum rate. These payments are secured by this bond.

 
 
j)
To manage accounting books and to allow the Bank or a representative on his
behalf, to check the books after coordinating this in advance. The company
undertakes to assist the Bank or its representatives to give them, at their
first request, balance statements, documents and any information that shall be
required by them, including explanations in respect to its financial situation
and the operative situation of the company and/or its business.

 
 
k)
That there shall not be any material change in the area of the company’s
engagement without the Bank’s prior written consent.

 
 
l)
The company is the owner and/or the owner of usage rights according to a license
or agreement, of all the intellectual property which the company needs for its
business.

 
 
m)
To the best of its knowledge, the company does not breach as of today and there
is not proceeding against it in respect to a breach of intellectual property
rights of any third party.

 
 
n)
The company attaches hereto a full list of its intellectual property and it
shall furnish to the Bank in writing any update, change that shall apply to the
list. Furthermore, the company shall update every 6 months the list of the owing
customers. Following the company’s reports as mentioned an update shall be
performed of the pledges in the relevant registries and the company shall sign
all of the documents which are customary in respect to this.

 
 
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8.
During the entire period in which this bond is in force the company undertakes
in respect to itself and in respect to its subsidiaries as follows:

 
 
a)
Deleted.

 
 
b)
Not to pay to its shareholders in any manner or form any loan or money that the
shareholders shall loan to the company or any money that they invested and/or
shall invest in the company. The aforesaid shall not apply to the loan which may
be convertible into company shares which shall be paid off by way of the issue
of shares.

 
 
c)
Not to give its shareholders any loan or credit without the Bank’s prior written
consent.

 
 
d)
To cause that its shareholders who lent and/or shall lend a shareholder’s loan
to the company, to undertake towards the Bank not to demand and not to sue any
such money from the company, and if for any reason they shall receive these
amounts from the company – to return these amounts to the Bank so that they
shall serve for paying off these amounts.

 
 
e)
Not to purchase its shares and not to pay any dividend without the Bank’s prior
written consent.

 
9.
a)
The company hereby undertakes to maintain the Pledged Property insured at its
full value at all times against those same risks which the Bank shall mention
from time to time at insurance companies and to transfer to the Bank at the
limit of the amount of this bond the rights that arise from the insurance
certificates, according to the version which the Bank shall approve, to pay any
insurance fees on time and to deliver to the Bank all the insurance certificates
and the receipts for the payment of insurance fees.

 
 
b)
Without derogating from the aforesaid and in addition to this, the company
hereby undertakes to give to the insurance company, through which it is insuring
the Pledged Property, irrevocable instructions to transfer money which shall
come to the company according to the insurance policy of the Pledged Property to
the lender’s Bank account only. The company further undertakes to furnish to the
Bank an undertaking of this insurance company and to inform the Bank of the date
of cancellation of the insurance policies insofar as they shall be issued by it,
at least 30 days before they shall expire.

 
 
c)
In each of the following cases hereafter the Bank shall be entitled, according
to its sole discretion, to insure the Pledged Property in the name of the Bank
and to charge the company’s account with the costs of the insurance fees:

 
 
(1)
If the Pledged Property shall not be pledged at the satisfaction of the Bank.

 
 
(2)
If the company shall not furnish to the Bank within 10 days from the date of
signing this bond, insurance certificates for the Pledged Property to sole
satisfaction of the Bank.

 
 
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(3)
If 30 days before the insurance policy of the Pledged Property expires, the
company shall not furnish to the Bank insurance certificates of the Pledged
Property, at those same terms and for the period which are at the Bank’s full
satisfaction. In the event the insurance shall be taken out by the Bank as
mentioned above, the Bank shall not be responsible for any defect or flaw which
shall be discovered in respect to the insurance. The amounts that shall be paid
as costs and as insurance fees are secured according to this bond.

 
 
d)
All the rights that arise from the insurance of property as mentioned above,
including rights according to the Property Tax and Compensation Fund Law – 1961
as shall be in force from time to time or according to any other law, whether
they were transferred to the Bank as mentioned above or not, are hereby pledged
to the Bank by first degree fixed charge as a pledge.

 
 
e)
In respect to the property insurance of the company the company hereby assigns
to the Bank as its sole authorized representative and it grants the Bank
exclusive rights to conduct negotiations in the name of the company to agree to
arrangements, to settle, to waive, to receive money from insurance companies and
to accredit them for the payment of the secured amounts, this power of attorney
is irrevocable since third party rights are dependant on it, the company shall
not have any claims in respect to arrangements, waivers and settlements that the
Bank will make with the insurance companies.

 
 
f)
The company undertakes to sign, at the Bank’s first demand, all the applications
the documents and the certificates required or advisable for performing the
company’s undertakings included in this section. Furthermore, the company
undertakes not to cancel or change in any manner any of the terms of this
insurance without the prior written consent of the Bank.

 
10.
a)
The securities that were given to the Bank according to his bond have a
continuous nature in spite of an arrangement of the account or any account of
the company which shall remain in force until the Bank approves in writing that
this bond has been cancelled.

 
 
b)
If securities or guarantees were given to the Bank for payment of the secured
amount all the securities and the guarantees shall be independent of one
another.

 
 
c)
The Bank shall settle or the Bank shall give an extension or easement to the
company, the Bank shall change the company’s undertakings in respect to the
secured amounts, shall release or waive the other securities or the guarantees –
these things shall not change the nature of the securities that were created
according to this bond and all the bonds and the undertakings of the company
according to this bond shall remain fully valid.

 
11.
The Bank has rights to hold, to detain and to offset all the amounts, assets and
right, including securities, currencies, gold, notes of money, documents of
merchandise, insurance policies, notes, checks, charges, deposits, securities
and their consideration, that shall be found in the Bank at any time in favor of
the company or for it, including those that were delivered for collection, for
custody or in any other manner. The Bank is entitled to detain these assets
until the full payment of the secured payments or to sell them and to use their
consideration, all or in part, for payment of the secured amounts.

 
 
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In the event the offset amounts are deposited in foreign currency the company
hereby gives the Bank permission and instructions in advance to sell the balance
in credit in foreign currency according to the rate that the Bank will obtain
for it.
 
12.
The Bank shall be entitled at all times to charge any account of the company
with any amount that is due or shall be due to him from the company and to
accredit any amount that it shall receive from the company or for it for
crediting the account that it shall see fit to transfer any amount that shall be
credited to the company in any account with the Bank and any other account with
the Bank as the Bank shall see fit.

 
13.
Taking into consideration that the amounts due and that shall be due to the Bank
from the company on account of the secured amounts could be also in Israel
currency and also in foreign currency it is hereby agreed and declared that the
Bank and the receiver – respectively – shall be entitled to convert Israeli
currency into the foreign currency that shall be available to the Bank and
needed for the full or partial payment of the secured amounts that are due to
the Bank in foreign currency, and to convert foreign currency which is available
to the Bank into Israeli currency and this is according to the official exchange
rates that shall exist in Israel during performance of these conversions in
practice by each of them.

 
The term “exchange rate” means:
 
 
a)
Regarding the time when a restriction is in place according to the Israeli law
regarding the free use of foreign currency in Israel – the highest amount in
Israeli currency which an Israeli resident shall be required to pay for a unit
of currency of such debt at whoever is lawfully authorized to trade in foreign
currency in Israel with the Bank commission for such transaction.

 
 
b)
Regarding the time when there is no such restriction in place – the highest rate
of a unit of currency of such debt that shall exist in an Israeli Bank regarding
telegraphic Bank withdrawals of a city which is known at that time as one of the
financial centers of the country in which the currency of a debt is a legal
tender or New York according to the Bank’s choice with additional Bank
commission for such transaction.

 
14.
Without derogating from other provisions agreed with the company in respect to
immediate payment of the secured amounts, the Bank shall be entitled in each of
the cases set forth hereafter to demand immediate payment of the secured amounts
or any part of them without any prior notice to the company and these are the
cases:

 
 
a)
If the company shall not pay to the Bank on time or at the payment dates any
amount that shall be due to the Bank out of the secured amounts.

 
 
b)
If a decision of voluntary liquidation shall be adopted by the company or if a
liquidation order shall be issued against it by the court or if the company
shall summons a meeting of creditors for finding a settlement with them, or if
the name of the company shall be removed or is about to be removed from any
registry that is managed according to law.

 
 
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c)
If a receiver (temporary or permanent) shall be appointed or a receiver and
manager (temporary or permanent) or a liquidator temporary or permanent) on the
company’s property or any part of it.

 
 
d)
If any lien shall be imposed on the company’s property, all or in party, or on
any security of the securities which were delivered by the company to the Bank,
or if an execution act shall be performed against it.

 
 
e)
If the company shall stop paying its debts or managing its business.

 
 
f)
If the work shall stop, or any part of it, for two months or more.

 
 
g)
If a material part of the company’s property, shall be burnt or damaged in
another manner.

 
 
h)
If the Bank shall see, according to its sole discretion, that any change in the
company’s control occurred- regarding the existing situation at the date of
signing this bond – by the willful transfer of shares or in another manner
(except for transfers in good faith to the transferee who was also a shareholder
of the company’s shares at the date of this bond, and except for the transfer of
shares by inheritance), or by the decision of members that make up the company,
without the Bank’s prior written consent.

 
 
i)
If a receivership order was rendered or a Bankruptcy order against one of the
company’s guarantors (in the event that the secured amounts are secured inter
alia also according to guarantees) or in the event of the death of a guarantor
or in the event of the appointment of a guardian over a guarantor’s body or
property and the company shall not furnish to the Bank within seven days after
the occurrence of one or more of these cases a signed guarantee and undertaking
by a person or body which the Bank agreed to in advance and in the version
determined by the Bank, according to which this person or body shall guarantee
the full and exact payment of all these amounts. The provisions of this sub-
section shall apply mutatis mutandis respectively, also to this same person or
body as if this same person or body was the original guarantor and to anyone
that shall take their place.

 
 
j)
If the number of shareholders of the company and/or the number of members that
make up the company shall be less than the minimal required amount.

 
 
k)
If the Bank shall see, according to its sole discretion, that a material
occurrence has occurred that could harm the financial ability of the company.

 
 
l)
If according to the absolute discretion of the Bank and according to its
exclusive assessment a material event occurred that could harm the financial
ability of the company.

 
 
m)
If the company shall be required to pay the debts of the company early to other
creditors.

 
 
n)
If the company shall breach or shall not fulfill any of the undertaking included
in this bond and/or according to any agreement and/or any document and/or
agreement that was made in the past and/or that shall be made in the future
between the company and the Bank.

 
 
o)
If it shall turn out that any declaration of the company in this bond and/or in
any contract that was made in the past and/or that shall be made in the future
between the company and the Bank – is not correct and/or is not accurate.

 
 
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p)
If the company change its articles of association or part of it and it did not
notify this to the Bank within 48 hours.

 
 
q)
If the company adopted a decision regarding the merger with another company,
whether as an absorbing company or as a target company, as defined in the
Companies Law – 1999, or a motion to merge or a motion to approve an arrangement
and re- organization the result of which are the merger of companies.

 
 
r)
If a license, authorization, approval or registration of any of the intellectual
property rights of the company shall be denied, cancelled, suspended, or
materially harmed, and the result of this shall materially affect the company.

 
15.
a)
In each of the cases set forth in the previous section, the Bank shall be
entitled to use any means that it shall see fit in order to collect all the
secured amounts, to realize the guarantees in any manner that the law shall
permit and to realize all of its rights according to this bond, including the
realization of the Pledged Property, in full or in part, and to use their
payment for paying off the secured property and this is without the Bank having
to realize guarantees or other securities if the Bank will have such securities.

 
 
b)
The Bank is entitled to realize the securities that were given to him according
to this bond or other by the appointment of a receiver or a receiver and manager
on behalf of the Bank (and the company agrees in advance to any person or legal
entity that the Bank will appoint or offer to appoint as a receiver and manager
as mentioned) and who shall be authorized inter alia to:

 
 
1)
Receive to his possession the Pledged Property, all or in party.

 
 
2)
To manage the company’s business or to participate in their management as he
shall see fit.

 
 
3)
To sell or to lease and/or to agree to the sale or lease of the Pledged Property
in full or in part or to transfer them in any other manner according to the
terms as he shall see fit.

 
 
4)
To make any other arrangement in respect to the Pledged Property all or in part.

 
16.
All the income that shall be received by the receiver and the manger of the
Pledged Property and any consideration that shall be received by the Bank and/or
by the receiver and the manager from selling the Pledged Property or part of it
shall be accredited to:

 
 
a)
First for paying all the costs that shall be incurred in respect with the
collection of the secured amounts including the costs of the receivers or the
receivers and the manager and his salary in the amount that shall be determined
by the Bank.

 
 
b)
Second, for paying the other amounts that shall be due to the Bank as a result
of the linkage terms, the interest, the damage, the commission and the costs
that are still due to the Bank according to this bond.

 
 
c)
Third, for paying the principal of the secured amounts or in any other
accrediting order that shall be determined by the Bank.

 
17.
In the event that at the time of realizing the Pledged Property the payment day
of the secured amounts has not yet arrived, or that the secured amounts shall be
due to the Bank only under condition, the Bank shall be entitle to collect from
the payment of the realization a sufficient amount to cover the secured amounts
and the amount that it shall collect shall be pledged to the Bank as a security
for the secured amounts and it shall remain with the Bank until they are paid.

 
 
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18.
Without derogating from the other provisions of this bond, any waiver,
extension, reduction, silence, avoidance of action (hereinafter: “Waiver”) by
the Bank regarding the partial failure to fulfill or the incorrect fulfillment
of any undertaking of the undertakings according to this bond, shall not be
considered as a waiver by the Bank of any right, rather as a consent limited to
the special opportunity in which it was given.

 
19.
a)
If the company shall guarantee (hereinafter the “Guaranteeing Company”) the
company hereby agrtees that the Bank shall be entitled:

 
 
(1)
To institute proceedings according to the law for realizing the securities
and/or for collecting these amounts without the Bank having to first turn to the
debtors who are the guarantors in a demand to pay of these amounts that are due
from them to the Bank.

 
 
(2)
To stop, to change, to increase, to decrease or to renew any credit or any other
Bank service that shall be given and/or that shall be given to debtors.

 
 
(3)
To give an extension of time and/or similar concession in respect to the payment
of these amounts.

 
 
(4)
To replace, to renew, to release, to amend, to avoid realizing or to realize
other securities or guarantees that the Bank holds or shall hold whether it
received them or shall receive them from the debtors – the guarantors or from
others.

 
 
(5)
To settle with the debtors the guarantors or with others.
The company - guarantor hereby agrees that making any action of the actions
mentioned by the Bank shall not confer upon them any right to change or to
cancel its undertakings towards the Bank.

 
 
b)
Deleted.

 
20.
The company confirms that the Bank’s books and its account are trustworthy,
shall be considered as correct and shall serve as prima facie evidence against
it in respect to all of their details and inter alia in respect to the
calculation of the secured amounts, the details of the other notes, guarantees
and securities, and any other matter that is connected to this bond.

 
The term “Bank books” means – any page of the account or a copy of a page of the
account and any loan agreement or note signed by the company and the term “its
accounts” means – any registration or copy of registration whether it was
registered or copied by hand or by a typewriter and whether it was registered or
copied by way of printing, copying, photographing or by way of any electrical or
electronic technical machine including microfilm.
 
 
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21.
The Bank is entitled at any time, according to his discretion, and without
needing the company’s consent, to transfer this bond and the rights under it, to
others, including the securities, in full or in party, and any transferee shall
be entitled also to transfer these rights without needing additional consent
from the company. The transfer may be made by assigning at the margins of this
bond or on it or by any other way as the Bank shall see fit and provided that
this shall not expand and/or change the company’s undertakings.

 
22.
The Bank is entitled to deposit the securities that were given or that shall be
given according to this bond or part of them in the hands of a bailee according
to its discretion at the expense of the company and to replace the bailee from
time to time, the Bank shall be entitled to keep these securities, all or in
part, at any authorized authority according to any law.

 
23.
a)
This bond cannot derogate from the right of the Bank to collect the secured
amounts not by the realization of this bond.

 
 
b)
Nothing in the realization of this bond can derogate from the Bank’s right to
collect from the company the balance of the secured amounts that were not paid
by the realization of this bond.

 
24.
All the costs and the fees in respect to this bond, its stamp duty,
registration, realization of the securities (including the legal fees of the
Bank) and insurance, safeguarding, holding, and repairing the Pledged Property
shall be paid by the company to the Bank at its first demand, if it was spend by
the Bank or by anyone on its behalf including the receiver, with additional
interest at the maximum rate that shall be customary at the Bank at that time
for deviations and delays in the current loan account, from the date of demand
until they are fully paid. Until they are fully paid all these costs are secured
by this bond.

 
25.
In this bond:

 
 
a)
“Bank” – means – Bank Mizrachi Tefachot Ltd. and any of its existing branches at
the date of this bond and/or that shall be opened in any place in the future,
and those by virtue of the Bank or in its place.

 
 
b)
“Notes” – means – promissory notes, bills of exchange, checks, undertakings,
guarantees, securities, bills of lading, deposit notes and any other negotiable
instruments.

 
 
c)
The preamble of this bond constitutes an inseparable part hereof.

 
 
d)
If this bond was signed by two or more, they shall be signed jointly and
separately for the fulfillment of all the undertakings according to this bond.

 
26.
Any notice that shall be sent by mail according to the Bank to the company by
registered mail or by ordinary mail according to the address mentioned above of
which the company shall notify the Bank in writing, shall be considered a legal
notice that was received by the company within 48 hours from the time the letter
was sent which includes the notice.

 
27.
The authorized court in Tel Aviv has jurisdiction in respect with this bond,
however the Bank is also entitled to take legal steps in any other authorized
court.

 
 
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28.
Special terms:

 
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
In witness whereof I have signed hereafter
 

     
 
     
The Company
 

 
 
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Appendix A
 
The pledge shall apply also to any rights including intellectual property
rights, of the company whether existing today or whether they shall exist in the
future, whether they are registered in the name of the company or not, including
if registration applications were submitted in respect to them and also to:
 
(a)
Any know- how, inventions, patents, trademarks, designs, models, trade names,
copyrights and technical processes and applications.

 
(b)
The names of internet domains, licenses, franchise agreements, usage rights
agreements, diagrams, computer programs, commercial secrets and lists of
customers.

 
Whether the rights of the company were registered in its name or whether they
were not and whether these rights exist today or shall exist in the future.
 
In respect to these intellectual property rights or any part of them the company
and any of its subsidiaries undertakes to:
 
(a)
Perform all of the appropriate registrations and shall pay all the costs and the
fees required in order to keep and protect the intellectual property rights of
the company and/or of its subsidiaries and/or their registration.

 
(b)
Take all necessary steps, including legal proceedings, in order to prevent from
any third party from harming these same intellectual property rights.

 
(c)
Not sell, transfer, lease or give a usage license except for the license
arrangements with a third party which is not an associated party which was made
during the ordinary course of business and for acceptable consideration.

 
(d)
Register the pledge, at its expense, at the Registrar of Patents and they shall
furnish the Bank the appropriate certificates regarding the registration of the
pledge within 45 days after the signing of this bond.

 

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