Document:

Unassociated Document

 

	
 

	
BANK LEUMI USA

	
 

	
MEMBER FDIC

 

 

DEPOSIT ACCOUNT CONTROL AGREEMENT

 

PARTIES

 

	
Creditors executing on attached signature pages

	
("Creditor")

	
InspireMD, Inc.

	
("Customer")

	
Bank Leumi USA

	
("Bank")

	
564 Fifth Avenue

	
("Banking Office")

	
New York, NY 10036

	  

 

BACKGROUND

 

Customer hereby grants Creditor a security interest in a deposit account maintained by Bank for Customer and in all funds heretofore or hereafter deposited into that account, including any interest earned thereon. The Parties are entering into this agreement to perfect Creditor's security interest in that account.

 

AGREEMENT

 

1. The Account

 

Bank represents and warrants to Creditor that Bank maintains deposit account no. __________ (the "Account") for Customer at the Banking Office and that, as of the date hereof, Bank does not know of any claim to or interest in the Account, except for claims and interests of the parties referred to in this agreement.

 

2. Control of Account by Creditor

 

a. Bank shall execute transactions in the Account at the direction of Customer unless and until Bank receives from Creditor a written Notice of Exclusive Control in substantially the form of Exhibit A hereto (a "Notice of Exclusive Control',); provided, that in the event that Bank at any time receives conflicting instructions from Customer and Creditor, Bank shall only execute the instructions originated by Creditor. Upon receipt of a Notice of Exclusive Control, Bank will immediately cease complying with instructions or other directions concerning the Account originated by Customer, shall neither accept nor comply with any instructions from Customer withdrawing or transferring any funds or other property from the Account nor deliver any property in the Account to Customer nor pay any free credit balance or other amount owing from Bank to Customer with respect to the Account without the specific prior written consent of Creditor.

 

b. Bank may rely on a Notice of Exclusive Control purportedly signed by Creditor and shall have no duty to investigate or make any determination as to the validity, genuineness or propriety thereof, or the facts giving rise thereto. This Agreement does not create or impose any obligation or duty upon Bank other than those expressly set forth herein.

 

3. Priority of Creditor's Security Interest; Rights Reserved by the Bank

 

a. Bank agrees that all of its present and future rights against the Account are subordinate to Creditor's security interest therein; provided, however, that Creditor agrees that nothing herein subordinates or waives, and that Bank expressly reserves, all of its present and future rights (whether described as rights of setoff, banker's lien, chargeback or otherwise, and whether available to Bank under the law or under any other agreement between Bank and Customer concerning the Account, or otherwise) with respect to: (i) items deposited to the Account and returned unpaid, whether for insufficient funds or for any other reason, and without regard to the timeliness of return of any such items; (ii) checks paid, or other payment orders executed in good faith against uncollected funds in the Account provided Bank does not have reasonable cause to doubt the collectibility of such uncollected funds; (iii) claims of breach of the transfer or presentment warranties arising under the applicable Uniform Commercial Code made against Bank in connection with items deposited to the Account; and (iv) Bank's usual and customary charges for services rendered in connection with the Account and customary fees and expenses for the routine maintenance and operation of the Collateral Agreement (which include an up-front fee of $5,000 and a $2,500 fee payable in advance each quarter.

 

  

1

  

 

b. Except as otherwise required by law, Bank will not agree with any third party that Bank will comply with Orders originated by such third party.

 

4. Statements; Notices of Adverse Claims

 

Bank may disclose to Creditor such information concerning the Account as Creditor may from time to time reasonably request; provided, however, that Bank shall have no obligation to disclose to Creditor any information which Bank does not ordinarily make available to its depositors. Bank will use reasonable efforts promptly to notify Creditor and Customer if any other person claims that it has a property interest in the Account.

 

5. Bank's Responsibility

 

a. Except for permitting a withdrawal in violation of section 2, above, Bank will not be liable to Creditor for complying with Orders from Customer that are received by Bank before Bank receives and has had a reasonable opportunity to act on a contrary Order from Creditor.

 

b. Bank will not be liable to Customer for complying with Orders originated by Creditor, even if Customer notifies Bank that Creditor is not legally entitled to issue Orders, unless Bank takes the action after it is served with an injunction, restraining order or other legal process enjoining it from doing so, issued by a court of competent jurisdiction, and has had a reasonable opportunity to act on the injunction, restraining order or other legal process.

 

c. This agreement does not create any obligation of Bank except for those expressly set forth in this agreement. In particular, Bank need not investigate whether Creditor is entitled under Creditor's agreements with Customer to give Orders. Bank may rely on notices and communications it believes are given by the appropriate party.

 

6. Indemnity

 

Creditor and Customer will indemnify Bank, its officers, directors, employees, and agents against claims, liabilities, and expenses arising out of this agreement (including reasonable attorneys' fees and disbursements), except to the extent the claims, liabilities, or expenses are caused by Bank's gross negligence or willful misconduct. Creditor's and Customer's liability under this section is joint and several.

 

7. Termination; Survival

 

a. Creditor may terminate this agreement by notice to the Banking Office and Customer. Bank may terminate this agreement on 30 day's notice to Creditor and Customer.

 

b. If Creditor notifies Bank that Creditor's security interest in the Account has terminated, this agreement will immediately terminate.

 

c. Sections 5, "Bank's Responsibility," and 6, "Indemnity," will survive termination of this agreement.

 

8. Governing Law

 

This agreement and the Account will be governed by the laws of the State of New York. Bank may not change the law governing the Account without Creditor's express written agreement, which consent shall not be unreasonably withheld.

 

  

2

  

 

9. Entire Agreement

 

This agreement is the entire agreement and supersedes any prior agreements and contemporaneous oral agreements of the parties concerning its subject matter.

 

10. Amendments

 

No amendment of, or waiver of a right under, this agreement will be binding unless it is in writing and signed by the party to be charged.

 

11. Severability

 

To the extent a provision of this agreement is unenforceable, this agreement will be construed as if the unenforceable provision were omitted.

 

12. Other Agreements

 

For so long as this agreement remains in effect, transactions involving the Account shall be subject, except to the extent inconsistent herewith, to the provisions of such deposit account agreements, disclosures, and fee schedules as are in effect from time to time for accounts like the Account.

 

13. Successors and Assigns

 

The provisions of this agreement shall be binding upon and inure to the benefit of Bank, Creditor and Customer and their respective successors and assigns.

 

14. Notices

 

A notice or other communication to a party under this agreement will be in writing and will be sent to the party's address set forth below or to such other address as the party may notify the other parties, and will be effective on receipt.

 

15. Counterparts

 

This agreement may be executed in counterparts, each of which shall be an original, and all of which shall constitute but one and the same instrument. The foregoing is hereby acknowledged and agreed to, effective as of the last of the dates set forth below.

 

InspireMD, Inc.              

(Customer)

 

/s/ Ofir Paz

(Customer)

 

	
Address:

	
3 Menorat Hamaor 

Tel Aviv, Israel 67448

 

Facsimile: __________ 

 

Telephone: 972-3-691-7691

 

Date: April 5, 2012

 

  

3

  

 

HUG Funding LLC             

(Creditor)

 

By: /s/ Daniel Saks

 

Name: Daniel Saks

 

Title: Managing Member

 

	
Address:

	

61 Paine Avenue

New Rochelle, NY 10804

 

Facsimile: ___________

 

Telephone: __________

 

Date: April 5, 2012

 

 

Bank Leumi USA               

(Bank)

 

By: /s/ Ester Segev

 

Name: Ester Segev

 

Title: _______________

 

	
Address: 

(Banking office)

	
564 Fifth Ave 

New York, NY 10036

 

Facsimile: 212-646-1072        

(Banking office)

 

Telephone: 212-646-1089    

(Banking office) 

 

Date: __________, 20__

 

[SIGNATURE PAGES OF ADDITIONAL CREDITORS FOLLOWS]

 

  

4

  

 

[SIGNATURE PAGE OF ADDITIONAL CREDITORS]

Name of Holder: Genesis Opportunity Fund LP

Signature of Authorized Signatory of Holder: /s/ Daniel Saks

Name of Authorized Signatory: Daniel Saks

Title of Authorized Signatory: Managing Member

[SIGNATURE PAGES CONTINUE]

[Investor Signature Page – Security Agreement]

 

  

  

  

 

[SIGNATURE PAGE OF ADDITIONAL CREDITORS]

Name of Holder: Genesis Asset Opportunity Fund LP

Signature of Authorized Signatory of Holder: /s/ Daniel Saks

Name of Authorized Signatory: Daniel Saks

Title of Authorized Signatory: Managing Member

[SIGNATURE PAGES CONTINUE]

[Investor Signature Page – Security Agreement]

 

  

  

  

 

[SIGNATURE PAGE OF ADDITIONAL CREDITORS]

Name of Holder: Ayer Capital Partners Master Fund, L.P.

Signature of Authorized Signatory of Holder: /s/ Jay Venkatesan

Name of Authorized Signatory: Jay Venkatesan

Title of Authorized Signatory: Managing Member

[SIGNATURE PAGES CONTINUE]

[Investor Signature Page – Security Agreement]

 

  

  

  

 

[SIGNATURE PAGE OF ADDITIONAL CREDITORS]

Name of Holder: Ayer Capital Partners Kestrel Fund, LP

Signature of Authorized Signatory of Holder: /s/ Jay Venkatesan

Name of Authorized Signatory: Jay Venkatesan

Title of Authorized Signatory: Managing Member

[SIGNATURE PAGES CONTINUE]

[Investor Signature Page – Security Agreement]

 

  

  

  

 

[SIGNATURE PAGE OF ADDITIONAL CREDITORS]

Name of Holder: Epworth – Ayer Capital

Signature of Authorized Signatory of Holder: /s/ Jay Venkatesan

Name of Authorized Signatory: Jay Venkatesan

Title of Authorized Signatory: Managing Member

[Investor Signature Page – Security Agreement]

 

  

 

  

 

Exhibit A

 

Notice of Exclusive Control

 

Dear:

 

Reference is made to the Deposit Account Control Agreement dated as of ______________, 20__ (the "Control Agreement") by and among you, the undersigned, and __________________ ("Customer"). Terms defined in the Control Agreement and used without other definition herein shall have the respective meanings herein assigned to such terms in the Control Agreement.

 

Pursuant to Section 2 of the Control Agreement, you are hereby directed, from and after the date hereof, to execute only instructions originated by Creditor, and not to accept for execution any further entitlement orders originated by Customer.

 

Very truly yours,

 

________________________________

 

By: _____________________________

 

Title:____________________________Unassociated Document

 

SUBSIDIARY GUARANTEE

 

SUBSIDIARY GUARANTEE, dated as of April 5, 2012 (this “Guarantee”), made by each of the signatories hereto (together with any other entity that may become a party hereto as provided herein, the “Guarantors”), in favor of the purchasers signatory (together with their permitted assigns, the “Purchasers”) to that certain Securities Purchase Agreement, dated as of the date hereof, between InspireMD, Inc., a Delaware corporation (the “Company”) and the Purchasers (the “Purchase Agreement”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to sell and issue to the Purchasers, and the Purchasers have agreed to purchase from the Company the Debentures, subject to the terms and conditions set forth therein; and

 

WHEREAS, each Guarantor will directly benefit from the extension of credit to the Company represented by the issuance of the Debentures; and

 

NOW, THEREFORE, in consideration of the premises and to induce the Purchasers to enter into the Purchase Agreement and to carry out the transactions contemplated thereby, each Guarantor hereby agrees with the Purchasers as follows:

 

1.           Definitions. Unless otherwise defined herein, terms defined in the Purchase Agreement and used herein shall have the meanings given to them in the Purchase Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this Guarantee, and Section and Schedule references are to this Guarantee unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.  The following terms shall have the following meanings:

 

“Guarantee” means this Subsidiary Guarantee, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Material Adverse Effect” means any event or series of events that, could reasonably be expected to (a) adversely affect the legality, validity or enforceability of any of the Transaction Documents in any material respect, (b) have a material adverse effect on the results of operations, assets, or financial condition of any Guarantor or (z) adversely impair in any material respect any Guarantor's ability to perform in all material respects on a timely basis its obligations under this Guaranty and any other Transaction Document to which it is a party.

 

 

 “Obligations” means: (i) principal of, and interest on the Debentures and the loans extended pursuant thereto; (ii) any and all other fees, indemnities, costs, obligations and liabilities (primary, secondary, direct, contingent, sole, joint or several, due or to become due, or that are now or may be hereafter contracted or acquired, or owing) of the Company or any Guarantor from time to time under or in connection with this Guarantee, the Debentures, the other Transaction Documents and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company or any Guarantor, in each case whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred.

 

2.           Guarantee.

 

(a)           Guarantee.

 

(i)           The Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantee to the Purchasers and their respective successors, indorsees, transferees and assigns, the prompt and complete payment when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations.

 

(ii)           Anything herein or in any other Transaction Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Transaction Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws, including laws relating to the insolvency of debtors, fraudulent conveyance or transfer or laws affecting the rights of creditors generally (after giving effect to the right of contribution established in Section 2(b)).

 

(iii)           Each Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Section 2 or affecting the rights and remedies of the Purchasers hereunder.

 

(iv)           The guarantee contained in this Section 2 shall remain in full force and effect until all the Obligations and the obligations of each Guarantor under the guarantee contained in this Section 2 shall have been satisfied by payment in full (other than contingent obligations against which no claim has been asserted).

 

  

  

  

 

(v)           No payment made by the Company, any of the Guarantors, any other guarantor or any other Person or received or collected by the Purchasers from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Obligations or any payment received or collected from such Guarantor in respect of the Obligations), remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations are paid in full (other than contingent obligations against which no claim has been asserted).

 

(vi)           Notwithstanding anything to the contrary in this Guarantee, with respect to any defaulted non-monetary Obligations the specific performance of which by the Guarantors is not reasonably possible (e.g. the issuance of the Company's Common Stock), the Guarantors shall only be liable for making the Purchasers whole on a monetary basis for the Company's failure to perform such Obligations in accordance with the Transaction Documents.

 

(b)           Right of Contribution. Subject to Section 2(c), each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 2(c). The provisions of this Section 2(b) shall in no respect limit the obligations and liabilities of any Guarantor to the Purchasers and each Guarantor shall remain liable to the Purchasers for the full amount guaranteed by such Guarantor hereunder.

 

(c)           No Subrogation.  Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Purchasers, no Guarantor shall be entitled to be subrogated to any of the rights of the Purchasers against the Company or any other Guarantor or any collateral security or guarantee or right of offset held by the Purchasers for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Purchasers by the Company on account of the Obligations are paid in full (other than contingent obligations against which no claim has been asserted). If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Purchasers, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Purchasers in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Purchasers, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Purchasers may determine.

 

  

  

  

 

(d)           Amendments, Etc. With Respect to the Obligations. Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Obligations made by the Purchasers may be rescinded by the Purchasers and any of the Obligations continued, and the Obligations, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Purchasers, and the Purchase Agreement and the other Transaction Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Purchasers may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Purchasers for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. The Purchasers shall have no obligation to protect, secure, perfect or insure any Lien at any time held by them as security for the Obligations or for the guarantee contained in this Section 2 or any property subject thereto.

 

  

  

  

 

(e)           Guarantee Absolute and Unconditional. Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by the Purchasers upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; the Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Section 2; and all dealings between the Company and any of the Guarantors, on the one hand, and the Purchasers, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Section 2. Each Guarantor waives to the extent permitted by law diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Company or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and performance without regard to (a) the validity or enforceability of the Purchase Agreement or any other Transaction Document, any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Purchasers, (b) any defense, set-off or counterclaim (other than a defense of payment or performance or fraud by Purchasers) which may at any time be available to or be asserted by the Company or any other Person against the Purchasers, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Company or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Company for the Obligations, or of such Guarantor under the guarantee contained in this Section 2, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Purchasers may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as they may have against the Company, any other Guarantor or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Purchasers to make any such demand, to pursue such other rights or remedies or to collect any payments from the Company, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Company, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Purchasers against any Guarantor. For the purposes hereof, “demand” shall include the commencement and continuance of any legal proceedings.

 

(f)           Reinstatement. The guarantee contained in this Section 2 shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Purchasers upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Company or any Guarantor, or upon or as a result of the appointment of a receiver, administrator, intervenor or conservator of, or trustee or similar officer for, the Company or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

 

(g)           Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Purchasers without set-off or counterclaim in U.S. dollars at the address set forth or referred to in the Signature Pages to the Purchase Agreement.

 

3.           Representations and Warranties. Each Guarantor hereby makes the following representations and warranties to Purchasers as of the date hereof:

 

(a)           Organization and Qualification. The Guarantor is a corporation, duly incorporated, validly existing and, to the extent the concept of good standing exists in such jurisdiction, in good standing under the laws of the applicable jurisdiction set forth on Schedule 1, with the requisite corporate power and authority to own and use its properties and assets and to carry on its business as currently conducted..

 

  

  

  

 

(b)           Purchase Agreement. The representations and warranties of the Company set forth in the Purchase Agreement as they relate to such Guarantor, each of which is hereby incorporated herein by reference, are true and correct as of each time such representations are deemed to be made pursuant to such Purchase Agreement, and the Purchasers shall be entitled to rely on each of them as if they were fully set forth herein, provided that each reference in each such representation and warranty to the Company's knowledge shall, for the purposes of this Section 3, be deemed to be a reference to such Guarantor's knowledge.

 

(c)           Foreign Law.  Each Guarantor has consulted, or has had the opportunity to consult, with appropriate foreign legal counsel with respect to any of the above representations for which non-U.S. law is applicable. Such foreign counsel (if any) have advised each applicable Guarantor that such counsel knows of no reason why any of the above representations would not be true and accurate. Such foreign counsel (if any) were provided with copies of this Subsidiary Guarantee and the Transaction Documents prior to rendering their advice.

 

4.           Covenants.

 

(a)         Each Guarantor covenants and agrees with the Purchasers that, from and after the date of this Guarantee until the Obligations shall have been paid in full (other than contingent obligations against which no claim has been asserted), such Guarantor shall take, and/or shall refrain from taking, as the case may be, each commercially reasonable action that is necessary to be taken or not taken, as the case may be, so that no Event of Default (as defined in the Debentures) is caused by the failure to take such action or to refrain from taking such action by such Guarantor. Each Guarantor further covenants and agrees that until full and final payment of the Obligations, it will comply with each of the covenants (except to the extent applicable only to a public company) which are set forth in Section 4 of the Purchase Agreement as if the Guarantor were a party thereto.

 

(b)         So long as any of the Obligations are outstanding, unless Purchasers holding at least 60% of the aggregate principal amount of the then outstanding Debentures shall otherwise consent in writing, each Guarantor will not directly or indirectly on or after the date of this Guarantee:

 

i.           Other than for Permitted Indebtedness (as defined in the Debentures), enter into, create, incur, assume or suffer to exist any indebtedness for borrowed money of any kind, including but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;

 

  

  

  

 

ii.           Other than for Permitted Liens (as defined in the Debentures, enter into, create, incur, assume or suffer to exist any liens or pledges of any kind, on or with respect to any of its property or assets now owned, whether tangible or intangible, or hereafter acquired or any interest therein or any income or profits therefrom;

 

iii.           amend its articles of association, certificate of incorporation, bylaws or other charter documents in any manner that materially and adversely affects any rights of any Purchaser;

 

iv.           issue or grant any securities evidencing an ownership interest in such Guarantor, or any securities convertible into or exercisable for any ownership interest in such Guarantor, other than to the Company or any of its wholly-owned Subsidiaries

 

v.           prepay, repurchase or offer to prepay, repurchase or otherwise acquire more than a de minimis number of shares of its securities or debt obligations, other than payments on the Debenture or on the scheduled payments days for Permitted Indebtedness;

 

vi.           enter into any transaction with any Affiliate of such Guarantor which would be required to be disclosed in any public filing of the Company with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or

 

vii.           enter into any agreement with respect to any of the foregoing.

 

5.           Taxes.

 

(a)         All payments made by each Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms of the Purchase Agreement and shall be made without set-off, counterclaim, deduction or other defense.  All such payments shall be made free and clear of and without deduction or withholding for any present or future income, excise, stamp, documentary, property or franchise taxes and other taxes, levies, fees, duties, withholdings or other charges of any nature whatsoever ("Taxes"), whether of any governmental agency or authority in Israel or any other material jurisdiction of the applicable Guarantor’s business.  For purposes herein, Taxes shall not include any taxes on the income of the Guarantors.  If a Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document,

 

  

  

  

 

(i)           the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings (including Taxes on amounts payable to the Purchasers pursuant to this sentence) the Purchasers receive an amount equal to the sum they would have received had no such deduction or withholding been made,

 

(ii)           such Guarantor shall make such deduction or withholding,

 

(iii)           such Guarantor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable law, and

 

(iv)           as promptly as possible thereafter, such Guarantor shall send the Purchasers an official receipt (or, if an official receipt is not available, such other documentation as shall be satisfactory to the Purchasers) showing payment.  In addition, such Guarantor agrees to pay any present or future Taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery, performance, recordation or filing of, or otherwise with respect to, this Agreement or any other Transaction Document other than any present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Transaction Document ("Other Taxes").

 

(b)         Each Guarantor hereby indemnifies and agrees to hold the Purchasers harmless from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 5) paid by the Purchasers and any liability (including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted.  This indemnification shall be paid within 30 days from the date on which the Purchsaer makes written demand therefor, which demand shall identify the nature and amount of Taxes or Other Taxes.

 

(c)         If a Guarantor fails to perform any of its obligations under this Section 5, such Guarantor shall indemnify the Purchaser for any taxes, interest or penalties that may become payable as a result of any such failure.

 

6.           Miscellaneous.

 

(a)           Amendments in Writing. None of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except in writing by the Purchasers.

 

  

  

  

 

(b)           Notices. All notices, requests and demands to or upon the Purchasers or any Guarantor hereunder shall be effected in the manner provided for in the Purchase Agreement, provided that any such notice, request or demand to or upon any Guarantor shall be addressed to such Guarantor at its notice address set forth on Schedule 6(b).

 

(c)           No Waiver By Course Of Conduct; Cumulative Remedies. The Purchasers shall not by any act (except by a written instrument pursuant to Section 6(a)), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any default under the Transaction Documents or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Purchasers, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Purchasers of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Purchasers would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.

 

(d)           Enforcement Expenses; Indemnification.

 

(i)           Each Guarantor agrees to pay, or reimburse the Purchasers for, all its costs and expenses incurred in collecting against such Guarantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Guarantee and the other Transaction Documents to which such Guarantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Purchasers.

 

(ii)           Each Guarantor agrees to pay, and to save the Purchasers harmless from, any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Guarantee to the extent the Company would be required to do so pursuant to the Purchase Agreement.

 

(iii)           The agreements in this Section shall survive repayment of the Obligations and all other amounts payable under the Purchase Agreement and the other Transaction Documents.

 

(e)           Successor and Assigns. This Guarantee shall be binding upon the successors and assigns of each Guarantor and shall inure to the benefit of the Purchasers and their respective successors and assigns; provided that no Guarantor may assign, transfer or delegate any of its rights or obligations under this Guarantee without the prior written consent of the Purchasers.

 

  

  

  

 

(f)           Set-Off. Each Guarantor hereby irrevocably authorizes the Purchasers at any time and from time to time while an Event of Default under any of the Transaction Documents shall have occurred and be continuing, without notice to such Guarantor or any other Guarantor, any such notice being expressly waived by each Guarantor, to set-off and appropriate and apply any and all deposits, credits, indebtedness or claims, in any currency that are , absolute, and matured, at any time held or owing by the Purchasers to or for the credit or the account of such Guarantor, or any part thereof in such amounts as the Purchasers may elect, against and on account of the obligations and liabilities of such Guarantor to the Purchasers hereunder and claims of every nature and description of the Purchasers against such Guarantor, in any currency, whether arising hereunder, under the Purchase Agreement, any other Transaction Document or otherwise, as the Purchasers may elect, whether or not the Purchasers have made any demand for payment and although such obligations, liabilities and claims may be contingent or unmatured. The Purchasers shall notify such Guarantor promptly of any such set-off and the application made by the Purchasers of the proceeds thereof, provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Purchasers under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Purchasers may have.

 

(g)           Counterparts. This Guarantee may be executed by one or more of the parties to this Guarantee on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

(h)           Severability. Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(i)           Section Headings. The Section headings used in this Guarantee are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.

 

(j)           Integration. This Guarantee and the other Transaction Documents represent the agreement of the Guarantors and the Purchasers with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Purchasers relative to subject matter hereof and thereof not expressly set forth or referred to herein or in the other Transaction Documents.

 

  

  

  

 

(k)           Governing Laws. All questions concerning the construction, validity, enforcement and interpretation of this Guarantee shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each of the Company and the Guarantors agree that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Guarantee (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan. Each of the Company and the Guarantors hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Guarantee and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Guarantee or the transactions contemplated hereby.

 

(l)           Acknowledgements.  Each Guarantor hereby acknowledges that:

 

(i)           it has been advised by counsel in the negotiation, execution and delivery of this Guarantee and the other Transaction Documents to which it is a party;

 

(ii)           the Purchasers have no fiduciary relationship with or duty to any Guarantor arising out of or in connection with this Guarantee or any of the other Transaction Documents, and the relationship between the Guarantors, on the one hand, and the Purchasers, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and

 

(iii)           no joint venture is created hereby or by the other Transaction Documents or otherwise exists by virtue of the transactions contemplated hereby among the Guarantors and the Purchasers.

 

  

  

  

 

(m)           Additional Guarantors.  The Company shall cause each of its subsidiaries formed or acquired on or subsequent to the date hereof to become a Guarantor for all purposes of this Guarantee by executing and delivering an Assumption Agreement in the form of Annex 1 hereto within 15 days after such formation or acquisition.

 

(n)           Release of Guarantors. Each Guarantor will be released from all liability hereunder concurrently with respect to each Purchaser, upon the repayment in full of all amounts owed to such Purchaser under the Transaction Documents.

 

(o)           Seniority. The Obligations of each of the Guarantors hereunder rank senior in priority to any other Indebtedness (as defined in the Purchase Agreement) of such Guarantor, subject only to Permitted Liens and Permitted Indebtedness.

 

(p)           WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.

 

*********************

 

(Signature Pages Follow)

 

  

  

  

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly executed and delivered as of the date first above written.

 

                         INSPIRE M.D LTD

 

                         By: /s/ Ofir Paz

                                   Name: Ofir Paz

                                   Title: Chief Executive Officer

 

                         INSPIRE MD GMBH

 

                         By: /s/ Ofir Paz

                                   Name: Ofir Paz

                                   Title: Chief Executive Officer

 

 

 

[Signature Page – Subsidiary Guarantee]

 

  

  

  

 

SCHEDULE 1

 

GUARANTORS

 

                  The following are the names, notice addresses and jurisdiction of organization of each Guarantor.

 

	  	  	
COMPANY

	  	
JURISDICTION OF

	
OWNED BY

	  	
INCORPORATION

	
PERCENTAGE

	  	
-------------

	
----------

	
Inspire M.D Ltd

	
Israel

	
100% owned by InspireMD,

	
4 Menorat Hamaor

	  	
Inc.

	
Tel Aviv, Israel 67448

	  	  
	
Inspire MD GmbH

	
Germany

	
100% owned by Inspire M.D,

	
Boschstraße 16

	  	
Ltd

	
21423 Winsen, Germany

	  	  

 

  

  

  

 

Annex 1 to

SUBSIDIARY GUARANTEE

 

ASSUMPTION AGREEMENT, dated as of ____ __, ______ made by ______________________________, a ______________ corporation (the “Additional Guarantor”), in favor of the Purchasers pursuant to the Purchase Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Purchase Agreement.

 

W I T N E S S E T H :

 

           WHEREAS, InspireMD, Inc., a Delaware corporation (the “Company”) and the Purchasers have entered into a Securities Purchase Agreement, dated as of March ___, 2012 (as amended, supplemented or otherwise modified from time to time, the “Purchase Agreement”);

 

           WHEREAS, in connection with the Purchase Agreement, the Subsidiaries of the Company (other than the Additional Guarantor) have entered into the Subsidiary Guarantee, dated as of March____, 2012 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”) in favor of the Purchasers;

 

           WHEREAS, the Purchase Agreement requires the Additional Guarantor to become a party to the Guarantee; and

 

           WHEREAS, the Additional Guarantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee;

 

NOW, THEREFORE, IT IS AGREED:

 

1.           Guarantee. By executing and delivering this Assumption Agreement, the Additional Guarantor, as provided in Section 6(m) of the Guarantee, hereby becomes a party to the Guarantee as a Guarantor thereunder with the same force and effect as if originally named therein as a Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor thereunder. The information set forth in Annex 1 hereto is hereby added to the information set forth in Schedule 1 to the Guarantee. The Additional Guarantor hereby represents and warrants that each of the representations and warranties contained in Section 3 of the Guarantee is true and correct on and as the date hereof as to such Additional Guarantor (after giving effect to this Assumption Agreement) as if made on and as of such date.

 

2.           Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

  

  

  

 

                  IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

 

                                           [ADDITIONAL GUARANTOR]

 

                                            By: ________________________

                                            Name:

                                            Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00202-of-00352.parquet"}]]