PLEDGE AGREEMENT
This Pledge Agreement, dated as of December 30, 1998, is entered into by
and between SCNV Acquisition Corp., a corporation incorporated under the laws of
the State of Delaware, (together, the "Lender"); and Elecmatec Electro-Magnetic
Technologies Ltd., a company organized under the laws of the State of Israel
("Pledgor").
WHEREAS: The parties have entered into a Loan Agreement (the "Loan
Agreement"), whereby (I) the Lender and Pledgor acknowledged the advancement of
$42,000 to Pledgor by Lender and (ii) the Lender has agreed to advance to the
Pledgor the sum of $68,000 and to provide a guarantee on behalf of Pledgor in
the amount of $162,000.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. The Preamble and Appendices to this Pledge Agreement constitute an
integral part thereof.
2. To secure the performance of its obligations under the Loan Agreement
and the Future Loan Agreements, Pledgor hereby grants to the Lender a security
interest in all of its right, title and interest in all assets listed on the
Schedule to this Pledge Agreement (the "Collateral").
3. Pledgor shall use its best efforts to preserve the Collateral and shall
permit the Lender to inspect the Collateral at all reasonable times.
4. Pledgor shall not grant, create or suffer to exist any other pledge,
lien, encumbrance, or charge of any kind upon, or grant any security interest
in, any of its right, title and interest in the Collateral to any party without
the prior written consent of the Lender thereto.
5. The Lender shall be entitled to enforce the pledge against Pledgor and
the Collateral immediately upon the occurrence of any of the following events:
(a) Pledgor breaches any of its material obligations under the Loan
Agreement, or this Agreement;
(b) Pledgor begins any liquidation proceedings or if a winding up
resolution is issued against Pledgor by any court, or a receiver or trustee
is appointed over the whole or any part of Pledgor's assets, or if Pledgor
calls a meeting of creditors for the purpose of entering into a scheme or
arrangement with them, and any of the aforementioned actions or proceedings
is not canceled within 30 days of its initiation;
(c) an attachment is levied or execution proceedings are instituted
against the whole or a substantial part of Pledgor's assets and such
attachment or execution proceeding is not discharged within 30 days;
(d) a motion for execution and/or sale and/or any other action against
the Collateral or any part of them is instituted and is not discharged
within 30 days.
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6. The Pledgor shall cooperate with the Lender and execute all documents
as may be reasonably necessary to register this Pledge with the Registry of
Companies and/or Registry of Pledges. Pledgor shall pay upon demand, all
reasonable expenses, including reasonable attorney's fees, of enforcing the
Lender's rights and remedies hereunder in the event of a breach by Pledgor.
7. The pledge shall become void, and the Lender shall promptly execute all
documents necessary to release the pledge upon (i) repayment of the full
principal amount of the Loan and any interest thereon pursuant to the Loan
Agreement and the termination of the Guarantee, or (ii) upon the closing of a
private offering of shares of the Pledgor to the Lender as contemplated by the
term sheet among the Lender, the Pledgor and Messrs. Xxxxxx Xxxxxxxx, Xxxx
El-Xxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxxxxx and Xxxxx Xxxxxx, dated December 28,
1998.
8. This Pledge Agreement shall be governed by and construed in accordance
with the laws of the State of Israel.
IN WITNESS WHEREOF this Pledge Agreement has been executed by the parties
hereto as of the date first above written.
Elecmatec Electro-Magnetic Technologies SCNV Acquisition Corp.
Ltd.
By: /s/ Arik El-Boher By: /s/ Xxxxx Xxxxx
------------------------ -------------------------
Name: Arik El-Boher Name: Xxxxx Xxxxx
Title: E.V.P.
Title: CFO
Schedule of Assets
1. All Intellectual Property of the Pledgor. For these purposes "Intellectual
Property" means patents (including applications therefor), copyrights
(whether or not registered), trademarks, inventions, research records,
trade secrets, confidential information, product designs, engineering
specifications and drawings, technical information, formulae, computer
programs, and related flow-charts, programmer notes, updates and data,
whether in object source code form.
