Common use of Guarantees and Collateral Clause in Contracts

Guarantees and Collateral. 13.1 The Lessee undertakes to furnish to the JIZMD collateral for the performance of each of the terms of this Agreement including collateral for payment of all those payments which the Lessee is liable to pay according to this Agreement, including rent and all of its undertakings hereunder. The furnishing of the following collateral is a condition for conveying possession: The Lessee will deposit an autonomous and unconditional bank guarantee in the form attached hereto as Appendix “C”, linked to the CPI of the month of January 2013, that stands at 100.3 points according to the 2012 base, to the order of the Jerusalem Industrial Regional Management and Development Administration Ltd., and/or the Hebrew University of Jerusalem, in an amount equal to 3 months’ rent (plus VAT) i.e. the sum of NIS 37,326 (thirty seven thousand and three hundred and twenty six shekels), to be in force until the expiration of 60 days after the expiration of the Lease Term (hereinafter: “the Collateral”), to secure the full performance of the Lessee’s undertakings and the JIZMD and/or the University may exercise the same in such manner as it deems fit, in order to fulfil the Lessee’s obligations. 13.2 It is agreed that JIZMD and/or the University may realize the collateral at any time in order to cover any payment and any debt that will be passed due and outstanding by the Lessee within 30 days of the date it will have been required to do so, by the JIZMD, by written notice. It is hereby declared that the realization of the Collateral by JIZMD and/or the University in order to cover payment of the rent on the dates specified in clause 9.2 above will be made immediately, and without prior notice. The JIZMD and/or the University may realize the Collateral by way of deduction out of the guarantee monies. 13.3 If the JIZMD or the University will have realized the Collateral or any part thereof, the Lessee will then be bound to make up, immediately upon the JIZMD’s or the University’s demand, any shortfall amount of the Collateral, following the realization. 13.4 Without derogating from the generality of the foregoing, the Lessee undertakes that throughout the entire Lease Term, Collateral in the amount as set in this Agreement will be available for the benefit of the JIZMD or the University. 13.5 The realization of the Collateral or part thereof by JIZMD or the University will be at the discretion of the JIZMD or the University only, after giving 14 days’ written notice and the Lessee neither has nor shall have any right to impute the collateral to any sum that it is bound to pay or demand that the JIZMD or the University will realize the collateral or any part thereof. 13.6 Upon the expiration of the Lease Term, and not prior to it having become clear to the JIZMD that the Lessee has fulfilled all of its undertakings under this Agreement, the JIZMD will return to the JIZMD the Collateral, or any sum that will be remaining thereof. 13.7 The realization of the Collateral or part thereof shall not be deemed to be payment or fulfilment of the Lessee’s undertakings according to the Agreement, and such realization shall not be deemed to be any waiver on the part of JIZMD or the University of any breach whatsoever that has been committed by the Lessee, nor will it prejudice any right that will be available to the JIZMD or the University according to the Agreement and by law, including any claim for an additional payment if it transpires that the collateral will be insufficient to cover all of the Lessee’s debts, monies and cover any other obligation.