Exhibit 10.1

AGREEMENT FOR THE PROVISION OF A LOAN FACILITY

OF UP TO US$ 12,000,000

Dated July 16, 2021

Between

KREOS CAPITAL VI (EXPERT FUND) LP, a limited partnership incorporated in Jersey whose registered office is at 47 Esplanade, St Helier, Jersey (the “Lender”, which expression shall include its successors and assigns);

and

MOTUS GI HOLDINGS, INC. (the “Parent”), a Delaware corporation, MOTUS GI, LLC, (the “US Subsidiary”), a Delaware limited liability company, and MOTUS GI MEDICAL TECHNOLOGIES LTD., (the “IL Subsidiary”) a company registered in the State of Israel (The Parent, The US Subsidiary and the IL Subsidiary jointly, the “Borrower”).

WHEREAS:

In this Loan Agreement, including the recitals set out above, unless otherwise defined:

In this Loan Agreement (unless the context requires otherwise) any reference to:

The payment by the Lender to the account specified in the Drawdown Notice shall constitute the making of the Loan (or the relevant part thereof) and the Borrower shall thereupon become indebted, as principal and direct obligor, to the Lender in an amount equal to the Loan (or the relevant part thereof). For avoidance of doubt, following the payment by the Lender to the account specified in the Drawdown Notice - notwithstanding the actual owner of such account – the Borrower shall thereupon become indebted, as principal and direct obligor to the Lender, for the entire amount of the Loan transferred.

The Lender’s commitment to advance each Tranche of the Loan Facility in accordance with the terms of this Loan Agreement is limited in aggregate to the amount of the Total Loan Facility; provided, however, that the Lender, acting in its sole discretion, may terminate or modify its funding commitment pursuant to this Loan Agreement at any time if Lender determines that:

If the Lender advances all or any part of the Loan to the Borrower prior to the satisfaction of all or any of the conditions referred to in Clause ‎3.5 (which the Lender has no obligation to do) the Borrower shall satisfy or procure the satisfaction of such condition or conditions which have not been satisfied within twenty (20) Business Days of the Drawdown Date, as applicable (or within such longer period as the Lender may agree or specify in writing), provided, that the Lender at its sole discretion may waive the satisfaction of any condition.

The existing Equipment of the Borrower as listed in Schedule B (as may be amended from time to time with the consent of the Borrower and the Lender) shall be part of the Security Interest of the Lender and be included in the Fixed Charge and/or the US Security Interest, as applicable. Future purchases of Equipment purchased until (and including) the last day of the Security Period (“New Equipment”) shall, in addition be made subject to the provisions of this Loan Agreement and form part of the Security Interest and shall be charged by way of either listing such New Equipment to the relevant schedule in the Debenture - Fixed Charge and/or US Security Interest, as applicable, to be amended accordingly, or, at the Lender's election, as a separate supplemental Fixed Charge (which shall be part of the Security Documents hereunder), and submitted to and registered with the Companies Registrar and/or any equivalent in a foreign jurisdiction, as applicable, (at the Lender’s request, Schedule B hereto shall be replaced or supplemented from time to time to reflect any addition of such New Equipment as aforesaid); it being agreed that, at any time until the end of the Security Period, the Borrower shall be obliged to register any additional Fixed Charge and/or US Security Interest in favor of the Lender only at such time as the aggregate value of the New Equipment exceeds US$300,000. For the avoidance of doubt, in addition, the Equipment is subject to the Floating Charge and any New Equipment shall become subject to the Floating Charge as soon as an interest therein is acquired by Borrower (without any further action being required to effect the same).

The accounts receivables of the IL Subsidiary (excluding all intercompany accounts receivables) as of the creation of the Fixed Charge are listed in Schedule C1 and such accounts receivables (excluding all intercompany accounts receivables) shall be part of the Security Interest of the Lender and be included in the Fixed Charge. The list of accounts receivables shall be updated, within thirty (30) days following the last Business Day of each calendar year in which there is an outstanding account receivable (excluding all intercompany accounts receivables) of IL Subsidiary in excess of US$300,000 per customer until (and including) the last day of the Security Period (“New AR”). Each New AR shall, in addition, be made subject to the provisions of this Loan Agreement and form part of the Security Interest and shall be charged by way of either listing such New AR to the relevant schedule in the Fixed Charge, to be amended accordingly, or, at the Lender’s election, as a separate supplemental Fixed Charge (which shall be part of the Security Documents hereunder), and, at Lender’s request, submitted to and registered with the Companies Registrar. For the avoidance of doubt, in addition, the accounts receivables are subject to the Floating Charge and any New AR shall become subject to the Floating Charge as soon as an interest therein is acquired by IL Subsidiary (without any further action being required to effect the same).

The IL Subsidiary's list of active customers is listed in Schedule C2 (as may be amended from time with the consent of the Borrower and the Lender) shall be part of the Security Interest of the Lender and be included in the Fixed Charge. The list of customers set forth in Schedule C2 shall be updated with the addition of new customers which have placed orders in excess of US$300,000 (“New Customers”), so that the right to receive payments from such New Customers shall also be made subject to the Fixed Charge subject to Permitted Security Interests, by way of either listing such New Customers to the relevant schedule in the Fixed Charge, to be amended accordingly, or, as a separate supplemental Fixed Charge (which shall be part of the Security Documents hereunder), and submitted to and registered with the Companies Registrar; it being agreed that such update of Schedule C2 and the registration thereof shall be carried out within thirty (30) days following the last Business Day of each calendar year throughout the Security Period.

For the avoidance of doubt, any Company's right to receive payment from its customers shall, subject to the Permitted Security Interests, be subject to the Floating Charge and any right to receive payment from New Customers shall become subject to the Floating Charge as soon as an interest therein is acquired by IL Subsidiary (without any further action being required to effect the same).

The registered Intellectual Property of the Borrower as of the date hereof is listed in Schedule E (as may be amended from time to time with the consent of the Borrower and the Lender) and is covered by the Fixed Charge.

Future applications for registration of Intellectual Property of the Borrower shall in addition, be made subject to the provisions of this Loan Agreement and form part of the Security Interest of the Lender and be charged by way of either listing such new Intellectual Property on the relevant schedule in the Fixed Charge and/or US Security Interest, as applicable, to be amended accordingly at the Lender's election, not to exceed once annually, as a separate supplemental Fixed Charge and/or US Security Interest (and, at the Lender’s request, Schedule E hereto shall be replaced or supplemented from time to time, to reflect any addition of such new Intellectual Property as aforesaid), and, in either case, submitted to and registered with the Companies Registrar and/or any equivalent in a foreign jurisdiction, as applicable, and with respect to applications for registration of Intellectual Property submitted to the Companies Registrar or any equivalent in a foreign jurisdiction, until (and including) the last day of the Security Period (“New Registered Intellectual Property”) shall, in addition, be submitted to and registered with the Israeli Patent Office and/or the United States Patent and Trademark Office and/or Copyright Office, as applicable; it being agreed that, at any time until the end of the Security Period, the Borrower shall be obliged to create and register any such additional Fixed Charge in favor of the Lender, as follows:

For the avoidance of doubt, in addition, the Intellectual Property of the Borrower is subject to the Floating Charge and any New Intellectual Property of the Borrower shall become subject to the Floating Charge as soon as an interest therein is acquired by Borrower (without any further action being required to effect the same).

On the Closing Date with respect to the Amount B Loan and on the Drawdown Date with respect to the Trance C Loan the Borrower shall pay to the Lender (by way of deduction by Lender from the amount of the Tranche actually then advanced to the Borrower) the advance payment specified above in the Loan Facility Terms with respect to the applicable Tranche (the “Advance Payment”) which shall be held by the Lender and applied in or towards payment of the last payment in respect of that particular Tranche.

With respect to the Bullet Loan:

With respect to any Tranche out of the Term Loan:

Subject to Clause ‎5.2.2.4, each payment received by the Lender in respect of any Tranche shall be applied as follows:

Repayment of the Loan and payment of all other amounts owed to the Lender will be paid in US Dollar ($) (the “Contractual Currency”).

The Borrower shall be entitled to prepay a Tranche out of the Term Loan in whole but not in part, subject to the following conditions:

For the avoidance of doubt, assuming that the Amount C Loan is drawn down, the prepayment timeframes and percentages indicated above are applicable to each Tranche of the Term Loan as of the Closing Date notwithstanding the Drawdown Date of the Amount C Loan.

The Lender may elect at any time, and from time to time, until the full indefeasible repayment and/or conversion thereof, to convert all or part of the then outstanding part of Bullet Loan in accordance with the provisions of Schedule ‎5.5 (the “Bullet Loan Conversion”).

The Borrower undertakes to the Lender to comply with the following provisions of this Clause ‎8 at all times during the Security Period, except as the Lender may otherwise permit:

and the Borrower will, and will procure that each Group Company will, comply with the terms of all such consents;

and will thereafter keep the Lender fully up to date with all developments;

On or at any time following the occurrence of any Event of Default the Lender may:

On the service of a notice under Clause ‎9.2.1 and/or Clause ‎9.2.2, all the obligations of the Lender to the Borrower under this Loan Agreement shall terminate.

The Lender, at its sole and absolute discretion, may waive any Event of Default hereunder, prior to or after the event or events giving rise thereto, provided that such waiver may be effected only by written notice provided by the Lender to each of the Borrower to that effect (and subject further to Clause ‎15.3 below); it being understood and acknowledged, that if and so long as no notice of waiver of an Event of Default was so provided, such Event of Default shall be deemed as having occurred and in effect for all purposes hereunder.

The Parties hereby agree and acknowledge that the Transaction Fee and other expenses shall be paid by the Borrower to the Lender as follows:

upon the execution of this Loan Agreement and the funding of the Bullet Loan and the Amount B Loan (i) the Transaction Fee in an amount of US $150,000; and (ii) all reasonable out-of-pocket expenses related to registration of the Security Interest; and (iii) all reasonable out-of-pocket expenses of Lender in connection with the negotiation and execution of this Loan Agreement, including, without limitation, reasonable costs of due diligence and reasonable fees of attorneys, appraisers, examiners and consultants up to an aggregate amount of US$ 50,000 plus applicable VAT.

The Borrower shall promptly pay to the Lender on the Lender’s demand, the reasonable legal expenses and actual disbursements incurred by the Lender in connection with the following, plus VAT, to the extent applicable;

The Borrower shall promptly pay any documentary, stamp or other equivalent tax or duty payable on or by reference to this Loan Agreement or the Security Documents, and shall, on the Lender’s demand, fully indemnify the Lender against any costs, losses, liabilities and expenses resulting from any failure or delay by any of the Borrower to pay such a tax.

Without prejudice to any other provisions of this Loan Agreement, the Lender shall be entitled (and the Borrower hereby irrevocably authorizes the Lender), at any time and from time to time, to apply any credit balance to which any of the Borrower are then entitled on any account with the Lender in satisfaction of the sum or sums from time to time owing by such Borrower to the Lender under and/or pursuant to this Clause ‎10. The Lender shall give notice to the Borrower of any such application promptly thereafter.

Without derogating from Clause ‎9 above, the Borrower shall indemnify the Lender fully on its demand in respect of all expenses, liabilities and losses which are suffered or incurred by the Lender, as a result of or in connection with:

The Borrower shall indemnify the Lender fully on its demand in respect of claims, demands, proceedings, liabilities, taxes, losses and expenses of every kind, including without limitation reasonable legal fees and out-of-pocket expenses which were brought against, or incurred by, the Lender, in any country, in relation to any of the following:

In in each case other than to the extent solely as a result of the bad faith, gross negligence or willful misconduct of Lender.

provided that in each case where delivery by regular mail, fax, by email or by hand occurs after 5pm on a Business Day (local time in the place of receipt) or on a day which is not a Business Day, service shall be deemed to occur at 9am on the next following Business Day (local time in the place of receipt).

References to time in this Clause 14 are to local time in the country of the addressee.

Kreos Capital VI (Expert Fund) LP

47 Esplanade, Saint Helier, Jersey

Fax: +44 1534 889 884

Attn: Raoul Stein

E-mail: raoul@kreoscapital.com

with a copy (which shall not constitute a notice) to:

Kadouch & Co., Law Offices,

11 Ha’Sadna’ot Street

P.O.B. 12695

4673300 Herzliya

Israel

Attn: Emmanuel Kadouch, Adv.
Fax: +972-9-9525450

Email: emmanuel@kadouchlaw.com

Borrower:

Parent:
Motus GI Holdings Inc

Address: 1301 East Broward Boulevard, 3rd Floor

Fort Lauderdale, Florida 33301

Attn: Andrew Taylor

E-mail: andrew@motusgi.com

US Subsidiary:

Motus GI LLC.

Address: 1301 East Broward Boulevard, 3rd Floor

Fort Lauderdale, Florida 33301

Attn: Andrew Taylor

E-mail: andrew@motusgi.com

IL Subsidiary:

Motus GI Medical Technologies Ltd.

Address: 22 Keren ha-Yesod Street,
Tirat Carmel, Israel

Attn: Andrew Taylor

E-mail: andrew@motusgi.com

With a copy (which shall not constitute a notice) to:

With a copy (which shall constitute a notice) to:

Lowenstein Sandler LLP

One Lowenstein Drive

Roseland, New Jersey 07068

Attn: Steven Skolnick

Email: sskolnick@lowenstein.com

As used in this Section 16, the term “IIA Funded Know-How” means, all of the Company’s know-how resulting from research and development according to an IIA-approved plan, not being the product developed within the framework of such approved plan, and any right deriving therefrom.

SCHEDULE A

FORM OF DRAWDOWN NOTICE

DRAWDOWN NOTICE

Drawdown

No. [   ]

dated

between

This Drawdown Notice forms a Schedule to a Loan Agreement between the Lender and the Borrower dated [                                  ] 2021 (the “Loan Agreement”)

The Lender has granted the Borrower a loan facility pursuant to the terms and conditions set out in the Loan Agreement and attached Schedules.

Words and expressions in this Drawdown Notice shall have the same meanings as in the Loan Agreement.

We confirm that:

for and on behalf of

[       ]

Authorized Signatory………………

Name ………………………………….

Dated [                     ] 202[ ]

SCHEDULE B

LIST OF EQUIPMENT

SCHEDULE C1

ACCOUNT RECEIVABLES

SCHEDULE C2

CUSTOMERS LIST

SCHEDULE D

INITIAL SECURITY DOCUMENTS

SCHEDULE E

LIST OF INTELLECTUAL PROPERTY

SCHEDULE 1.34

PERMITTED INDEBTEDNESS

“Permitted Indebtedness” is:

SCHEDULE 1.35

PERMITTED SECURITY INTERESTS

“Permitted Security Interests” are

SCHEDULE 1.37

PERMITTED TRANSFERS

“Permitted Transfers” are

As used herein the term “Permitted Investments” shall mean investments: (1) (including, without limitation, Subsidiaries) existing on the date of this Loan Agreement which are shown on the MOTS/KREOS – DUE DILIGENCE REQUESTS and the DD Questionnaire; (2) consisting of cash equivalents; (3) consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower; (4) accepted in connection with Permitted Transfers; (5) consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by the board of directors; (6) (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlements of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; and (7) consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (g) shall not apply to investments of Borrower in any Subsidiary.

SCHEDULE 1.55

WARRANT

SCHEDULE ‎5.5

BULLET LOAN CONVERSION

then and in each such case, the Conversion Price and the number of Conversion Shares to be obtained upon conversion of the Bullet Loan shall be adjusted proportionately, and the Lender shall, upon the conversion of the Bullet Loan, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property (including cash in the cases referred to above) that the Lender would hold on the date of such conversion had the Lender been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Conversion Price and the Conversion Shares, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section ‎9‎(b).

Each certificate for Conversion Shares initially issued upon the conversion of the Bullet Loan, and each certificate for Conversion Shares issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with a legend in substantially the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS.”

“Closing Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market or any other national securities exchange, the closing price per share of the Common Stock for such date (or the nearest preceding date) on the primary eligible market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board or any tier of the OTC Markets, the closing bid price per share of the Common Stock for such date (or the nearest preceding date) so quoted; or (c) if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent closing bid price per share of the Common Stock so reported.

EXHIBIT A

NOTICE OF CONVERSION

To Motus GI Holdings, Inc.:

Reference is made to the loan agreement entered into on ________ 2021, among Motus GI Holdings, Inc. (the “Parent”)), Motus GI, LLC., Motus GI Medical Technologies Ltd and Kreos Capital VI (Expert Fund) LP for the provision of a Loan Facility of up to US $12,000,000 (as may be amended from time to time, the “Loan Agreement”).

Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

The undersigned hereby irrevocably elects to convert an amount of ______________ out of the currently outstanding principal of the Bullet Loan and to purchase pursuant to the Loan Agreement, ___________________ shares of Motus GI Holdings, Inc. Common Stock.

The undersigned requests that certificates for such shares be issued in the name of:

(Please print name, address and social security or federal employer
identification number (if applicable))

The undersigned hereby affirms that the undersigned is an accredited investor as defined under Rule 501 of Regulation D of the Securities Act of 1933. If the undersigned cannot make the foregoing affirmation because it is factually incorrect, it shall be a condition to the conversion of the Bullet Loan that the Parent receives such other representations as the Parent considers necessary, acting reasonably, to assure the Parent that the issuance of securities upon conversion of the Bullet Loan shall not violate any United States or other applicable securities laws.

Duly executed by the parties on the date first set out on the first page of this Loan Agreement.

BORROWER

Parent:

MOTUS GI HOLDINGS INC

Date: July 16, 2021

US Subsidiary:

MOTUS GI LLC

By: Motus GI Holdings, Inc., its Sole Member

Date: July 16, 2021

IL Subsidiary:

MOTUS GI MEDICAL TECHNOLOGIES LTD

Date: July 16, 2021

For and on behalf of

KREOS CAPITAL VI (EXPERT FUND) LP

Date: July 16, 2021

50

Exhibit 10.2

SECURITY AGREEMENT

This SECURITY AGREEMENT is entered into as of July 16, 2021, by and among KREOS CAPITAL VI (EXPERT FUND) LP, a limited partnership incorporated in Jersey under registered number 2770 whose registered office is at 47 Esplanade, St. Helier, Jersey (referred hereinafter as the “Lender” which expression shall include its respective successors and assigns); and MOTUS GI HOLDINGS, INC., a Delaware corporation whose registered office is at 850 New Burton Road, Suite 201, Dover, DE 19904, Kent County, Delaware (“Debtor”).

RECITALS

Debtor, MOTUS GI, LLC., the Debtor's US subsidiary company, a Delaware limited liability company, MOTUS GI MEDICAL TECHNOLOGIES LTD the Debtor's Israeli subsidiary whose registered office is at 22 Keren ha-Yesod Street, Tirat Carmel, Israel, (each a “Borrower” and together “Borrowers”) and the Lender have entered into a certain Agreement for the provision of a Loan Facility of up to US $12,000,000 dated as of July 16, 2021 (as may be amended from time to time, the “Loan Agreement”). All references in this Security Agreement to the Loan Agreement shall include all agreements, documents and instruments annexed thereto, as applicable.

As a condition to the Lender entering into the Loan Agreement, the Debtor is entering into this Security Agreement, to secure the payment and performance of the Loan and other obligations of the Borrowers under the Loan Agreement by the Borrowers, respectively, in accordance with the terms of this Security Agreement. Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement or, as applicable, in the Code.

The parties agree as follows:

1 CREATION OF SECURITY INTEREST

1.1 Grant of Security Interest. Debtor hereby grants Lender, to secure the payment and performance in full of all of the obligations of the Borrowers under the Loan Agreement, a continuing security interest in, and pledges and assigns to the Lender, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Debtor warrants and represents that the security interest granted herein shall at all times be a first priority security interest in the Collateral (all, subject to the Permitted Security Interests).

Lender’s lien and security interest in the Collateral shall continue until the Loan Agreement is terminated pursuant and subject to the terms set forth therein. Following such termination, the Lender shall execute any additional documents as shall reasonably be requested by the Debtor in order to remove any lien or security interest created for the benefit thereof hereunder. If Debtor shall at any time, acquire a commercial tort claim valued more than $300,000, Debtor shall promptly send a written notification signed by Debtor to the Lender of the brief details thereof and grant to the Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Security Agreement, with such writing to be in form and substance reasonably satisfactory to the Lender.

1.2 Authorization to File Financing Statements. Debtor hereby authorizes the Lender to file financing statements with all appropriate jurisdictions in order to perfect or protect Lender’s interest or rights in the Collateral, including a notice that any disposition of the Collateral, other than with respect to licenses to use Debtor’s Intellectual Property in the ordinary course of business or in connection with a Permitted Security Interest, by either the Debtor or any other Person, shall be deemed to violate the rights of the Lender under the Code.

2 REPRESENTATIONS AND WARRANTIES. Except as previously disclosed to Lender, Debtor represents and warrants that none of the tangible components of the Collateral shall be maintained at locations other than in the address as stated above or otherwise leased by Debtor. In the event that Debtor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Debtor will first receive the written consent of the Lender and such bailee must acknowledge in writing that the bailee is holding such Collateral for the benefit of the Lender. The entire inventory of the Debtor is in all material respects of good and marketable quality, free from material defects.

3 AFFIRMATIVE COVENANTS

3.1 Debtor shall comply with the affirmative covenants set forth in the Loan Agreement.

3.2 Operating Accounts. Debtor shall:

(i) Maintain all of its Collateral Accounts located in the United States within accounts which are subject to a Control Agreement in favor of the Lender. As of the date hereof, the identity and location of each such Collateral Account is listed on Schedule A attached hereto.

(ii) Debtor shall provide the Lender five (5) days’ prior written notice before Debtor or any Obligor (as defined below) establishes any Collateral Account at or with any Person located in the United States. In addition, for each Collateral Account located in the United States that Debtor or any Obligor, at any time maintains, Debtor or such Obligor shall cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Lender’s Lien in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be terminated, without prior written consent of the Lender (such consent not be unreasonably withheld, delayed or conditioned). Without Lender’s consent (such consent not be unreasonably withheld, delayed or conditioned), none of the Borrowers shall maintain any Collateral Accounts located in the United States, except Collateral Accounts maintained in accordance with this Section ‎3.2.

3.3 Registration of Intellectual Property Rights.

Debtor and any Obligor shall promptly give the Lender written notice of any such applications or registrations of its material intellectual property rights filed with the United States Patent and Trademark Office and the United States Copyright Office, including the date of such filing and the registration or application numbers, if any. At any time and from time to time the Borrowers shall execute and deliver such further instruments and take such further action as may reasonably be requested by the Lender to effect the purposes of this Security Agreement. Notwithstanding anything contained herein to the contrary, all references to “intellectual property” contained in this Security Agreement expressly exclude all Immaterial Intellectual Property.

4 EVENTS OF DEFAULT

The occurrence of an Event of Default under the Loan Agreement shall be an Event of Default hereunder.

5 LENDER’S RIGHTS AND REMEDIES

5.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default beyond any applicable notice and cure period, the Lender may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Debtor:

(a) set off any and all (i) balances of Debtor held by the Lender, or (ii) indebtedness at any time owing to or for the credit or the account of Debtor held by the Lender;

(b) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places as the Lender determines is commercially reasonable. The Lender shall give to Debtor such notice of any public or private sale as may be required by the Code or other applicable law. Solely upon the occurrence and during the continuance of an Even of Default beyond any applicable notice and cure period, the Lender is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Debtor’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral, and solely in connection with Lender’s exercise of its rights under this Section, Debtor’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit;

(c) declare the Loan immediately due and payable as set forth in the Loan Agreement;

(d) stop advancing money or extending credit for benefit of the Borrowers under the Loan Agreement or under any other agreement between the Borrowers and the Lender;

(e) settle or adjust disputes and claims directly with Account debtors for amounts on terms and in any order that the Lender considers advisable, notify any person owing Debtor money of Lender’s security interest in such funds, and verify the amount of such account;

(f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Debtor shall assemble the Collateral if the Lender requests and make it available as the Lender designate. The Lender may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any lien which appears to be prior or superior to its security interest and pay all expenses incurred. Debtor grants the Lender a license to enter and occupy any of its premises, without charge, to exercise any of Lender’s rights or remedies;

(g) (i) place a “hold” on any account maintained with the Lender and/or (ii) deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral (provided that such right pursuant to a Control Agreement shall terminate upon the Lender providing a notice of termination of exclusive control in accordance therewith);

(h) demand and receive possession of Debtor’s Books; and

(i) exercise all rights and remedies available to the Lender under the Loan Documents, or at law or equity, including all remedies provided under the Code or applicable law (including disposal of the Collateral pursuant to the terms thereof).

The Lender acknowledges and agrees that, notwithstanding the language of any particular Control Agreement or similar agreement providing control of any Collateral, it shall not be entitled to deliver any notice of exclusive control, any entitlement order or any other direction or instruction pursuant thereto with respect to any Collateral Account or other Collateral unless an Event of Default shall have occurred and be continuing. The Lender shall endeavor to provide to Debtor a copy of any notice of exclusive control delivered by the Lender under a Control Agreement or similar agreement providing control of any Collateral, provided that the failure to timely provide any such copy shall not impact any right or remedy to which the Lender may be entitled (including, without limitation, any right to give a notice of exclusive control and exercise the rights as the result thereof).

5.2 Remedies Cumulative. The Lender's rights and remedies under this Security Agreement and all other agreements shall be cumulative. The Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender of one right or remedy shall be deemed an election, and no waiver by the Lender of any Event of Default on the part of any Borrower shall be deemed a continuing waiver. No delay by the Lender shall constitute a waiver, election, or acquiescence by it.

5.3 Demand; Protest. Unless otherwise provided in the Loan Documents or required by applicable law, Debtor waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by the Lender on which Debtor may in any way be liable, other than as afforded herein.

5.4 Power of Attorney. Debtor hereby irrevocably appoints the Lender as its lawful attorney-in-fact, exercisable solely upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Debtor’s name on any checks or other forms of payment or security; (b) sign Debtor’s name on any invoice or bill of lading for any Account or drafts against Account debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account debtors, for amounts and on terms the Lender determines reasonable; (d) make, settle, and adjust all claims under Debtor’s insurance policies; (e) pay, contest or settle any lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of the Lender or a third party as the Code permits. Debtor shall perfect or continue the perfection of Lender's security interest in the Collateral regardless of whether an Event of Default has occurred until the Loan has been paid and satisfied in full and the Lender is under no further obligation to make Loans under the Loan Agreement. Lender's foregoing appointment as Debtor’s attorney in fact, and all of rights and powers, coupled with an interest, upon and during an Event of Default, are irrevocable until the Loan has been fully repaid and performed and Lender’s obligation to provide Loans terminates.

6 NOTICES

All notices or demands by any party to this Security Agreement or any other related agreement must be in writing and be personally delivered or sent by an overnight delivery service, by certified mail, postage prepaid, return receipt requested, or by email or delivering it by hand at the addresses listed below. The Lender or Debtor may change its notice address by giving the other party written notice.

1301 East Broward Boulevard, 3^rd Floor

Fort Lauderdale, Florida 33301

Email: andrew@motusgi.com

For the attention of: Andrew Taylor

With a copy (which shall not constitute a notice) to:

Lowenstein Sandler LLP

One Lowenstein Drive

Roseland, New Jersey 07068

Email: sskolnick@lowenstein.com

For the attention of: Steven Skolnick

47 Esplanade St. Helier, Jersey

Attn: Mr. Raoul Stein

E-mail: Raoul@Kreoscapital.com

With a copy (which shall not constitute a notice) to:

Kadouch & Co., Law Offices

11 Ha' Sadnaot St.

Herzliya 4673300, Israel

Attn: Emmanuel Kadouch, Adv.

E-mail: Emmanuel@kadouchlaw.com

7 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

DELAWARE LAW GOVERNS THIS SECURITY AGREEMENT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. DEBTOR ACCEPTS JURISDICTION OF THE COURTS AND VENUE IN DELAWARE. NOTWITHSTANDING THE FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST DEBTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE LENDER’S RIGHTS AGAINST DEBTOR OR ITS PROPERTY, INCLUDING THE COURTS OF THE STATE OF NEW YORK. DEBTOR AND THE LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS SECURITY AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS SECURITY AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

8 GENERAL PROVISIONS

8.1 Successors and Assigns. This Security Agreement binds and is for the benefit of the successors and permitted assignees of each party. Debtor may not assign this Security Agreement or any rights under it without Lender's prior written consent which may be granted or withheld in Lender's discretion. The Lender shall have the right, without the consent of or notice to Debtor, to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Lender's obligations, rights and benefits under this Security Agreement, all in accordance with Clause 14.4 of the Loan Agreement.

8.2 Indemnification. Debtor hereby indemnifies, defends and holds the Lender, and its directors, officers, employees and agents harmless against all losses or expenses incurred, or paid by the Lender consequential to enforcement of its rights in the Collateral pursuant to this Security Agreement (including reasonable attorneys’ fees and expenses), except for losses caused solely by the gross negligence, fraud or willful misconduct of the Lender, or its directors, officers, employees or agents, all subject to the terms on Section 11 of the Loan Agreement.

8.3 Right of Set-Off. Debtor hereby grants to the Lender a lien, security interest and right of setoff as security to the Lender, whether now existing or hereafter arising upon and against all credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of the Lender or any entity under the control of the Lender or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, the Lender may set off the same or any part thereof and apply the same to any liability or obligation of the Borrowers then due and payable and regardless of the adequacy of any other collateral securing the Loan. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LIABILITIES, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH CREDITS OR OTHER PROPERTY OF THE DEBTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

8.4 Severability of Provisions. Each provision of this Security Agreement is severable from every other provision in determining the enforceability of any provision.

8.5 Amendments in Writing; Integration. All amendments to this Security Agreement must be in writing signed by the Lender and Debtor. This Security Agreement and the Loan Agreement represent the entire agreement about this subject matter, and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Security Agreement and the Loan Agreement and the other loan documents merge into this Security Agreement and the Loan Agreement.

8.6 Counterparts. This Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Agreement.

8.7 Survival. All covenants, representations and warranties made in this Security Agreement continue in full force while the Loan remains outstanding. The obligation of Debtor in Section ‎8.2 above to indemnify the Lender shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

8.8 Security for Loans; Amendment of the Loan Agreement. Upon and during the continuance of an Event of Default beyond any applicable notice and cure period, Lender may: (a) take and hold security for the payment of the Loan, and exchange, enforce, waive and release any such security; and (b) apply such security and direct the order or manner of sale thereof as the Lender in its sole discretion may determine.

8.9 Debtor Waivers. Debtor waives any right to require the Lender to (a) proceed against Debtor any other Obligor, any other guarantor or any other person; (b) proceed against or exhaust any security held from the Debtor or any other Obligor; (c) marshal any assets of the Debtor or any other Obligor; or (d) pursue any other remedy in Lender's power whatsoever. The Lender may, at its election, exercise or decline or fail to exercise any right or remedy it may have against the Debtor or any other Obligor or any security held by the Lender, including without limitation the right to foreclose upon any such security by judicial or non-judicial sale, without affecting or impairing in any way the liability of Debtor hereunder. Debtor waives any defense arising by reason of any disability or other defense of the Debtor or any other Obligor or by reason of the cessation from any cause whatsoever of the liability of the Debtor or any other Obligor. Debtor waives any setoff, defense or counterclaim that Debtor or any other Obligor may have against the Lender. Debtor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against the Debtor or any other Obligor. Until the Loan Agreement is terminated, Debtor shall not exercise any right of subrogation or reimbursement, contribution or other rights against any other Obligor, and, until the Loan Agreement is terminated, Debtor waives any right to enforce any remedy that the Debtor now has or may hereafter have against any other Obligor. Until the Loan Agreement is terminated, Debtor waives all rights to participate in any security now or hereafter held by the Lender. Debtor assumes the responsibility for being and keeping itself informed of the financial condition of the other Obligors and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of the other Obligors, warrants to the Lender that it will keep so informed, and agrees that absent a request for particular information by Debtor, the Lender shall have no duty to advise Debtor of information known to the Lender regarding such condition or any such circumstances.

8.10 Insolvency. If the Parent becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code and/or the Israeli Bankruptcy Law, or if such a petition is filed against the Parent, and in any such proceeding some or all of any indebtedness or obligations under the Loan Agreement is terminated or rejected or any obligation of the Parent is modified or abrogated, or if the Parent's obligations are otherwise avoided for insolvency, bankruptcy or any similar reason, Debtor agrees that Debtor’s liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if no such action or proceeding had occurred. This Security Agreement shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by the Lender upon the insolvency, bankruptcy or reorganization of the Parent or Debtor, any other person, or otherwise, as though such payment had not been made.

9 DEFINITIONS

9.1 Definitions. In this Security Agreement:

“Accounts” shall mean any “account”, as such term is defined in section 9-102(a)(2) of the Code, now owned or hereafter acquired by the Debtor and, in any event, shall include, without limitation, all accounts receivable, book debts, and other forms of obligations now owned or hereafter received or acquired by or belonging or owing to the Debtor (including, without limitation, under any trade names, styles, or divisions thereof) whether arising out of goods sold or services rendered by the Debtor or from any other transaction, whether or not the same involves the sale of goods or services by the Debtor (including, without limitation, any such obligation that might be characterized as an account or contract right under the Code) and all of the Debtor’s rights in, to, and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of the Debtor’s rights to any goods represented by any of the foregoing (including, without limitation, unpaid seller’s rights of rescission, replevin, reclamation, and stoppage in transit, and rights to returned, reclaimed, or repossessed goods), and all moneys due or to become due to the Debtor under all contracts for the sale of goods or the performance of services or both by the Debtor (whether or not yet earned by performance on the part of the Debtor or in connection with any other transaction), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of such purchase orders and contracts, and all collateral security and guaranties of any kind given by any person or entity with respect to any of the foregoing.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of Delaware; provided, that, to the extent that the Code is used to define any term herein or in any security documents and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in the Code shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Lender’s lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of Delaware, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” means all of the rights, title and interest in and to the following: the Debtor’s assets, Contract Rights or rights to payment of money, leases, license agreements, franchise agreements, Intellectual Property, Equipment and Inventory (including as set forth on Schedule B attached hereto), Goods, cash and cash equivalents, Deposit Accounts, Accounts, all certificates of deposit, Chattel Paper, Fixtures, Letter of Credit Rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, General Intangibles, documents, Instruments (including any promissory notes) and Investment Property (including without limitation all capital stock of subsidiaries of Debtor), supporting obligations and financial assets, whether now owned or hereafter acquired, wherever located. All Debtor's Books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. For the avoidance of doubt, the Collateral does not include any Immaterial Intellectual Property nor does it include any of Debtor’s capital shares.

“Control Agreement” is any control agreement entered into among the depository institution at which Debtor or any Obligor maintains a Deposit Account or the securities intermediary or commodity intermediary at which Debtor or any Obligor maintains a Securities Account or a Commodity Account, Debtor, such Obligor, and Lender pursuant to which Lender obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

“Debtor’s Books” are all Debtor’s books and records including ledgers, records regarding Debtor’s assets or liabilities, the Collateral, business operations or financial condition and all computer programs or storage or any equipment containing the information.

“Intellectual Property” is the “Intellectual Property” as defined in the Loan Agreement.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

“Loan” refers to the loan under the Loan Agreement.

“Loan Documents” is the Loan Agreement, and all ancillary documents thereof.

“Obligor” is the Debtor or any Group Company (as defined in the Loan Agreement).

“Proceeds” shall mean “proceeds”, as such term is defined in section 9-102(a)(64) of the Code and, in any event, shall include, without limitation, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Debtor from time to time with respect to any of the Collateral; (ii) any and all payments (in any form whatsoever) made or due and payable to the Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Collateral by any governmental body, authority, bureau, or agency (or any person acting under color of governmental authority); and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

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IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be executed as a sealed instrument under the laws of the State of Delaware as of the date first above written.

DEBTOR:

LENDER:

SCHEDULE A

Details of Collateral Accounts

Exhibit 10.3

SECURITY AGREEMENT

This SECURITY AGREEMENT is entered into as of July 16, 2021, by and among KREOS CAPITAL VI (EXPERT FUND) LP, a limited partnership incorporated in Jersey under registered number 2770 whose registered office is at 47 Esplanade, St. Helier, Jersey (referred hereinafter as the “Lender” which expression shall include its respective successors and assigns); and MOTUS GI, LLC, a Delaware limited liability company whose principal office is located at 1301 East Broward Boulevard, 3^rd Floor, Fort Lauderdale, Florida 33301 (“Debtor”).

RECITALS

Debtor, MOTUS GI HOLDINGS, INC., the Debtor’s parent company, a corporation incorporated in Delaware whose registered office is at 850 New Burton Road, Suite 201, Dover, DE 19904, Kent County, Delaware (the “Parent”), MOTUS GI MEDICAL TECHNOLOGIES LTD the Parent’s Israeli subsidiary whose registered office is at 22 Keren ha-Yesod Street, Tirat Carmel, Israel, (each a “Borrower” and together “Borrowers”) and the Lender have entered into a certain Agreement for the provision of a Loan Facility of up to US $12,000,000 dated as of July 16, 2021 (as may be amended from time to time, the “Loan Agreement”). All references in this Security Agreement to the Loan Agreement shall include all agreements, documents and instruments annexed thereto, as applicable.

As a condition to the Lender entering into the Loan Agreement, the Debtor is entering into this Security Agreement, to secure the payment and performance of the Loan and other obligations of the Borrowers under the Loan Agreement by the Borrowers, respectively, in accordance with the terms of this Security Agreement. Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement or, as applicable, in the Code.

The parties agree as follows:

1 CREATION OF SECURITY INTEREST

1.1 Grant of Security Interest. Debtor hereby grants Lender, to secure the payment and performance in full of all of the obligations of the Borrowers under the Loan Agreement, a continuing security interest in, and pledges and assigns to the Lender, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Debtor warrants and represents that the security interest granted herein shall at all times be a first priority security interest in the Collateral (all, subject to the Permitted Security Interests).

Lender’s lien and security interest in the Collateral shall continue until the Loan Agreement is terminated pursuant and subject to the terms set forth therein. Following such termination, the Lender shall execute any additional documents as shall reasonably be requested by the Debtor in order to remove any lien or security interest created for the benefit thereof hereunder. If Debtor shall at any time, acquire a commercial tort claim valued more than $300,000, Debtor shall promptly send a written notification signed by Debtor to the Lender of the brief details thereof and grant to the Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Security Agreement, with such writing to be in form and substance reasonably satisfactory to the Lender.

1.2 Authorization to File Financing Statements. Debtor hereby authorizes the Lender to file financing statements with all appropriate jurisdictions in order to perfect or protect Lender’s interest or rights in the Collateral, including a notice that any disposition of the Collateral, other than with respect to licenses to use Debtor’s Intellectual Property in the ordinary course of business or in connection with a Permitted Security Interest, by either the Debtor or any other Person, shall be deemed to violate the rights of the Lender under the Code.

2 REPRESENTATIONS AND WARRANTIES. Except as previously disclosed to Lender, Debtor represents and warrants that none of the tangible components of the Collateral shall be maintained at locations other than in the address as stated above or otherwise leased by Debtor. In the event that Debtor, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Debtor will first receive the written consent of the Lender and such bailee must acknowledge in writing that the bailee is holding such Collateral for the benefit of the Lender. The entire inventory of the Debtor is in all material respects of good and marketable quality, free from material defects.

3 AFFIRMATIVE COVENANTS

3.1 Debtor shall comply with the affirmative covenants set forth in the Loan Agreement.

3.2 Operating Accounts. Debtor shall:

(i) Maintain all of its Collateral Accounts located in the United States within accounts which are subject to a Control Agreement in favor of the Lender. As of the date hereof, the identity and location of each such Collateral Account is listed on Schedule A attached hereto.

(ii) Debtor shall provide the Lender five (5) days’ prior written notice before Debtor or any Obligor (as defined below) establishes any Collateral Account at or with any Person located in the United States. In addition, for each Collateral Account located in the United States that Debtor or any Obligor, at any time maintains, Debtor or such Obligor shall cause the applicable bank or financial institution at or with which such Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Lender’s Lien in such Collateral Account in accordance with the terms hereunder prior to the establishment of such Collateral Account, which Control Agreement may not be terminated, without prior written consent of the Lender (such consent not be unreasonably withheld, delayed or conditioned). Without Lender’s consent (such consent not be unreasonably withheld, delayed or conditioned), none of the Borrowers shall maintain any Collateral Accounts located in the United States, except Collateral Accounts maintained in accordance with this Section ‎3.2.

3.3 Registration of Intellectual Property Rights.

Debtor and any Obligor shall promptly give the Lender written notice of any such applications or registrations of its material intellectual property rights filed with the United States Patent and Trademark Office and the United States Copyright Office, including the date of such filing and the registration or application numbers, if any. At any time and from time to time the Borrowers shall execute and deliver such further instruments and take such further action as may reasonably be requested by the Lender to effect the purposes of this Security Agreement. Notwithstanding anything contained herein to the contrary, all references to “intellectual property” contained in this Security Agreement expressly exclude all Immaterial Intellectual Property.

4 EVENTS OF DEFAULT

The occurrence of an Event of Default under the Loan Agreement shall be an Event of Default hereunder.

5 LENDER’S RIGHTS AND REMEDIES

5.1 Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default beyond any applicable notice and cure period, the Lender may, at its election, without notice of its election and without demand, do any one or more of the following, all of which are authorized by Debtor:

(a) set off any and all (i) balances of Debtor held by the Lender, or (ii) indebtedness at any time owing to or for the credit or the account of Debtor held by the Lender;

(b) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places as the Lender determines is commercially reasonable. The Lender shall give to Debtor such notice of any public or private sale as may be required by the Code or other applicable law. Solely upon the occurrence and during the continuance of an Even of Default beyond any applicable notice and cure period, the Lender is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Debtor’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral, and solely in connection with Lender’s exercise of its rights under this Section, Debtor’s rights under all licenses and all franchise agreements shall inure to Lender’s benefit;

(c) declare the Loan immediately due and payable as set forth in the Loan Agreement;

(d) stop advancing money or extending credit for benefit of the Borrowers under the Loan Agreement or under any other agreement between the Borrowers and the Lender;

(e) settle or adjust disputes and claims directly with Account debtors for amounts on terms and in any order that the Lender considers advisable, notify any person owing Debtor money of Lender’s security interest in such funds, and verify the amount of such account;

(f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Debtor shall assemble the Collateral if the Lender requests and make it available as the Lender designate. The Lender may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any lien which appears to be prior or superior to its security interest and pay all expenses incurred. Debtor grants the Lender a license to enter and occupy any of its premises, without charge, to exercise any of Lender’s rights or remedies;

(g) (i) place a “hold” on any account maintained with the Lender and/or (ii) deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral (provided that such right pursuant to a Control Agreement shall terminate upon the Lender providing a notice of termination of exclusive control in accordance therewith);

(h) demand and receive possession of Debtor’s Books; and

(i) exercise all rights and remedies available to the Lender under the Loan Documents, or at law or equity, including all remedies provided under the Code or applicable law (including disposal of the Collateral pursuant to the terms thereof).

The Lender acknowledges and agrees that, notwithstanding the language of any particular Control Agreement or similar agreement providing control of any Collateral, it shall not be entitled to deliver any notice of exclusive control, any entitlement order or any other direction or instruction pursuant thereto with respect to any Collateral Account or other Collateral unless an Event of Default shall have occurred and be continuing. The Lender shall endeavor to provide to Debtor a copy of any notice of exclusive control delivered by the Lender under a Control Agreement or similar agreement providing control of any Collateral, provided that the failure to timely provide any such copy shall not impact any right or remedy to which the Lender may be entitled (including, without limitation, any right to give a notice of exclusive control and exercise the rights as the result thereof).

5.2 Remedies Cumulative. The Lender’s rights and remedies under this Security Agreement and all other agreements shall be cumulative. The Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender of one right or remedy shall be deemed an election, and no waiver by the Lender of any Event of Default on the part of any Borrower shall be deemed a continuing waiver. No delay by the Lender shall constitute a waiver, election, or acquiescence by it.

5.3 Demand; Protest. Unless otherwise provided in the Loan Documents or required by applicable law, Debtor waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees at any time held by the Lender on which Debtor may in any way be liable, other than as afforded herein.

5.4 Power of Attorney. Debtor hereby irrevocably appoints the Lender as its lawful attorney-in-fact, exercisable solely upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Debtor’s name on any checks or other forms of payment or security; (b) sign Debtor’s name on any invoice or bill of lading for any Account or drafts against Account debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account debtors, for amounts and on terms the Lender determines reasonable; (d) make, settle, and adjust all claims under Debtor’s insurance policies; (e) pay, contest or settle any lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of the Lender or a third party as the Code permits. Debtor shall perfect or continue the perfection of Lender’s security interest in the Collateral regardless of whether an Event of Default has occurred until the Loan has been paid and satisfied in full and the Lender is under no further obligation to make Loans under the Loan Agreement. Lender’s foregoing appointment as Debtor’s attorney in fact, and all of rights and powers, coupled with an interest, upon and during an Event of Default, are irrevocable until the Loan has been fully repaid and performed and Lender’s obligation to provide Loans terminates.

6 NOTICES

All notices or demands by any party to this Security Agreement or any other related agreement must be in writing and be personally delivered or sent by an overnight delivery service, by certified mail, postage prepaid, return receipt requested, or by email or delivering it by hand at the addresses listed below. The Lender or Debtor may change its notice address by giving the other party written notice.

7 CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER

DELAWARE LAW GOVERNS THIS SECURITY AGREEMENT WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. DEBTOR ACCEPTS JURISDICTION OF THE COURTS AND VENUE IN DELAWARE. NOTWITHSTANDING THE FOREGOING, THE LENDER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST DEBTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE LENDER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE LENDER’S RIGHTS AGAINST DEBTOR OR ITS PROPERTY, INCLUDING THE COURTS OF THE STATE OF NEW YORK. DEBTOR AND THE LENDER EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS SECURITY AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS SECURITY AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

8 GENERAL PROVISIONS

8.1 Successors and Assigns. This Security Agreement binds and is for the benefit of the successors and permitted assignees of each party. Debtor may not assign this Security Agreement or any rights under it without Lender’s prior written consent which may be granted or withheld in Lender’s discretion. The Lender shall have the right, without the consent of or notice to Debtor, to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Lender’s obligations, rights and benefits under this Security Agreement, all in accordance with Clause 14.4 of the Loan Agreement.

8.2 Indemnification. Debtor hereby indemnifies, defends and holds the Lender, and its directors, officers, employees and agents harmless against all losses or expenses incurred, or paid by the Lender consequential to enforcement of its rights in the Collateral pursuant to this Security Agreement (including reasonable attorneys’ fees and expenses), except for losses caused solely by the gross negligence, fraud or willful misconduct of the Lender, or its directors, officers, employees or agents, all subject to the terms on Section 11 of the Loan Agreement.

8.3 Right of Set-Off. Debtor hereby grants to the Lender a lien, security interest and right of setoff as security to the Lender, whether now existing or hereafter arising upon and against all credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of the Lender or any entity under the control of the Lender or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, the Lender may set off the same or any part thereof and apply the same to any liability or obligation of the Borrowers then due and payable and regardless of the adequacy of any other collateral securing the Loan. ANY AND ALL RIGHTS TO REQUIRE THE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LIABILITIES, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH CREDITS OR OTHER PROPERTY OF THE DEBTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

8.4 Severability of Provisions. Each provision of this Security Agreement is severable from every other provision in determining the enforceability of any provision.

8.5 Amendments in Writing; Integration. All amendments to this Security Agreement must be in writing signed by the Lender and Debtor. This Security Agreement and the Loan Agreement represent the entire agreement about this subject matter, and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Security Agreement and the Loan Agreement and the other loan documents merge into this Security Agreement and the Loan Agreement.

8.6 Counterparts. This Security Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Agreement.

8.7 Survival. All covenants, representations and warranties made in this Security Agreement continue in full force while the Loan remains outstanding. The obligation of Debtor in Section ‎8.2 above to indemnify the Lender shall survive until the statute of limitations with respect to such claim or cause of action shall have run.

8.8 Security for Loans; Amendment of the Loan Agreement. Upon and during the continuance of an Event of Default beyond any applicable notice and cure period, Lender may: (a) take and hold security for the payment of the Loan, and exchange, enforce, waive and release any such security; and (b) apply such security and direct the order or manner of sale thereof as the Lender in its sole discretion may determine.

8.9 Debtor Waivers. Debtor waives any right to require the Lender to (a) proceed against Debtor any other Obligor, any other guarantor or any other person; (b) proceed against or exhaust any security held from the Debtor or any other Obligor; (c) marshal any assets of the Debtor or any other Obligor; or (d) pursue any other remedy in Lender’s power whatsoever. The Lender may, at its election, exercise or decline or fail to exercise any right or remedy it may have against the Debtor or any other Obligor or any security held by the Lender, including without limitation the right to foreclose upon any such security by judicial or non-judicial sale, without affecting or impairing in any way the liability of Debtor hereunder. Debtor waives any defense arising by reason of any disability or other defense of the Debtor or any other Obligor or by reason of the cessation from any cause whatsoever of the liability of the Debtor or any other Obligor. Debtor waives any setoff, defense or counterclaim that Debtor or any other Obligor may have against the Lender. Debtor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against the Debtor or any other Obligor. Until the Loan Agreement is terminated, Debtor shall not exercise any right of subrogation or reimbursement, contribution or other rights against any other Obligor, and, until the Loan Agreement is terminated, Debtor waives any right to enforce any remedy that the Debtor now has or may hereafter have against any other Obligor. Until the Loan Agreement is terminated, Debtor waives all rights to participate in any security now or hereafter held by the Lender. Debtor assumes the responsibility for being and keeping itself informed of the financial condition of the other Obligors and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of the other Obligors, warrants to the Lender that it will keep so informed, and agrees that absent a request for particular information by Debtor, the Lender shall have no duty to advise Debtor of information known to the Lender regarding such condition or any such circumstances.

8.10 Insolvency. If the Parent becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code and/or the Israeli Bankruptcy Law, or if such a petition is filed against the Parent, and in any such proceeding some or all of any indebtedness or obligations under the Loan Agreement is terminated or rejected or any obligation of the Parent is modified or abrogated, or if the Parent’s obligations are otherwise avoided for insolvency, bankruptcy or any similar reason, Debtor agrees that Debtor’s liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if no such action or proceeding had occurred. This Security Agreement shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by the Lender upon the insolvency, bankruptcy or reorganization of the Parent or Debtor, any other person, or otherwise, as though such payment had not been made.

9 DEFINITIONS

9.1 Definitions. In this Security Agreement:

“Accounts” shall mean any “account”, as such term is defined in section 9-102(a)(2) of the Code, now owned or hereafter acquired by the Debtor and, in any event, shall include, without limitation, all accounts receivable, book debts, and other forms of obligations now owned or hereafter received or acquired by or belonging or owing to the Debtor (including, without limitation, under any trade names, styles, or divisions thereof) whether arising out of goods sold or services rendered by the Debtor or from any other transaction, whether or not the same involves the sale of goods or services by the Debtor (including, without limitation, any such obligation that might be characterized as an account or contract right under the Code) and all of the Debtor’s rights in, to, and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of the Debtor’s rights to any goods represented by any of the foregoing (including, without limitation, unpaid seller’s rights of rescission, replevin, reclamation, and stoppage in transit, and rights to returned, reclaimed, or repossessed goods), and all moneys due or to become due to the Debtor under all contracts for the sale of goods or the performance of services or both by the Debtor (whether or not yet earned by performance on the part of the Debtor or in connection with any other transaction), now in existence or hereafter occurring, including, without limitation, the right to receive the proceeds of such purchase orders and contracts, and all collateral security and guaranties of any kind given by any person or entity with respect to any of the foregoing.

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of Delaware; provided, that, to the extent that the Code is used to define any term herein or in any security documents and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in the Code shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Lender’s lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of Delaware, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” means all of the rights, title and interest in and to the following: the Debtor’s assets, Contract Rights or rights to payment of money, leases, license agreements, franchise agreements, Intellectual Property, Equipment and Inventory (including as set forth on Schedule B attached hereto), Goods, cash and cash equivalents, Deposit Accounts, Accounts, all certificates of deposit, Chattel Paper, Fixtures, Letter of Credit Rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, General Intangibles, documents, Instruments (including any promissory notes) and Investment Property (including without limitation all capital stock of subsidiaries of Debtor), supporting obligations and financial assets, whether now owned or hereafter acquired, wherever located. All Debtor’s Books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. For the avoidance of doubt, the Collateral does not include any Immaterial Intellectual Property.

“Control Agreement” is any control agreement entered into among the depository institution at which Debtor or any Obligor maintains a Deposit Account or the securities intermediary or commodity intermediary at which Debtor or any Obligor maintains a Securities Account or a Commodity Account, Debtor, such Obligor, and Lender pursuant to which Lender obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.

“Debtor’s Books” are all Debtor’s books and records including ledgers, records regarding Debtor’s assets or liabilities, the Collateral, business operations or financial condition and all computer programs or storage or any equipment containing the information.

“Intellectual Property” is the “Intellectual Property” as defined in the Loan Agreement.

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.

“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.

“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.

“Loan” refers to the loan under the Loan Agreement.

“Loan Documents” is the Loan Agreement, and all ancillary documents thereof.

“Obligor” is the Debtor or any Group Company (as defined in the Loan Agreement).

“Proceeds” shall mean “proceeds”, as such term is defined in section 9-102(a)(64) of the Code and, in any event, shall include, without limitation, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Debtor from time to time with respect to any of the Collateral; (ii) any and all payments (in any form whatsoever) made or due and payable to the Debtor from time to time in connection with any requisition, confiscation, condemnation, seizure, or forfeiture of all or any part of the Collateral by any governmental body, authority, bureau, or agency (or any person acting under color of governmental authority); and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

[Remainder of this page is intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be executed as a sealed instrument under the laws of the State of Delaware as of the date first above written.

SCHEDULE A

Details of Collateral Accounts

Exhibit 10.4

DEBENTURE - FIXED CHARGE

UNLIMITED IN AMOUNT

BETWEEN

MOTUS GI MEDICAL TECHNOLOGIES LTD.

as Company

AND

KREOS CAPITAL VI (EXPERT FUND) LP

as Creditor

DATED

July 16, 2021

DEBENTURE – FIXED CHARGE

THIS DEBENTURE – FIXED CHARGE is dated July 16, 2021 between:

WHEREAS:

NOW THEREFORE, the parties agree as follows:

The Security Interests created by this Debenture are created to secure the full and punctual payment and performance of all the obligations of the Company and the Co-Borrowers pursuant to the Loan Agreement, or to any amendment thereof with all expenses and other amounts due or to become due from the Company and the Co-Borrowers under the terms of this Debenture including, without limitation, reasonable legal fees, fees and out-of-pocket costs of any Receiver and any other reasonable, necessary and actual costs incurred in realizing the Security Interests granted hereunder (all such amounts, the “Secured Liabilities”).

Except as expressly set forth in the Loan Agreement: (i) the Company and the Co-Borrowers shall not be entitled to discharge any amount of the Secured Liabilities prior to the agreed date for payment thereof; and (ii) neither the Company nor any third party having a right liable to be affected by the charges hereby created or the realisation thereof shall have any right under Section 13(b) of the Pledges Law, 5727-1967 or any other statutory provisions in substitution therefor.

As security for the full and punctual payment or performance when due (whether at stated maturity, acceleration or otherwise) of the Secured Liabilities by the Company and the Co-Borrowers, the Company hereby, absolutely and unconditionally, charges and pledges in favour of the Creditor by way of first ranking fixed charge and pledge:

It is hereby agreed and acknowledged that the description of the Charged Assets, including without limitations, the assets listed in Sections ‎3.1‎(a)‎(d) above, shall be amended and updated from time to time by the Company, in accordance with the provisions of the Loan Agreement.

The Company shall have the right to receive and use all payments pursuant to the Pledged Accounts, subject to, and as specifically permitted under, the terms and provisions of the Loan Agreement.

In addition, to the extent required by applicable law to create and perfect a first ranking fixed charge over the Charged Assets specified in paragraph ‎3.1‎(d) above, the Company also assigns such Charged Assets to the Creditor by way of first ranking fixed charge and pledge.

In particular, the Company hereby assigns to and in favour of the Creditor by way of first ranking fixed charge and pledge (and each of the following shall be deemed to be expressly included in paragraph ‎3.1‎(d) above):

With respect to insurance proceeds, so long as no Event of Default has occurred and is continuing, (i) the Company may commence, appear in, defend or prosecute any claim or action, and may adjust, compromise, settle and collect all claims and awards; provided however, that no settlements shall be made without the consent of Creditor which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) all proceeds of insurance shall be made available to the Company to repair or restore the Charged Assets, as applicable.

Nothing in this Debenture in any way limits the Company from entering into any transactions with regard to its Intellectual Property in the Ordinary Course of Business and making any Permitted Transfers.

The Company specifically acknowledges that all of the Security Interests created by the Company under Section ‎3 (Security) of this Debenture shall rank in priority to any other Security Interests created by the Company subject to the Creditor Floating Charge and the Permitted Security Interests.

The Company declares and agrees that:

All Security Interests that have been or may be created in favour of the Creditor for payment and performance of the Secured Liabilities shall be independent of one another.

For the avoidance of doubt, it is hereby clarified that this Debenture is in addition to the Debenture - Floating Charge (and in no manner in lieu thereof or replacement thereto), and each of this Debenture and the Debenture - Floating Charge shall independently serve as aforesaid to secure the Secured Liabilities in their entirety. Without derogating from the generality of the foregoing or from any other right of the Creditor, the Creditor shall have the right to act on this Debenture, on the Debenture - Floating Charge or on both, in each case in connection with the Security Interest created by each (including, without limitation, with respect to any and all assets, properties and rights subject to both this Debenture and the Debenture - Floating Charge); and no action or omission relating to any such Security Interest shall prevent or estop the Creditor from invoking such other Security Interest, at the same time or subsequently.

To the extent that the Company and/or subsidiaries of the Company or any third party on behalf of the Company makes a payment or payments to the Creditor, or the Creditor enforces any Security Interest or exercises any right of set-off and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently avoided or set aside, declared to be fraudulent or preferential or required to be repaid or refunded or reduced by virtue of any applicable law relating to bankruptcy, insolvency, administration, receivership, liquidation or similar proceedings, the Secured Liabilities or any part thereof originally intended to be satisfied, and this Debenture and all Security Interests, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or set-off had not occurred.

The Company hereby represents and warrants as follows as of the date hereof:

The Company hereby undertakes as follows:

The Company shall keep the Charged Assets insured at all times and shall comply with the terms of such insurance policies.

Without derogating from the rights of the Creditor to realize the Security Interests granted hereunder, if the Company for any reason whatsoever fails to duly and punctually observe or perform or comply with any of its obligations under this Debenture, including under Section ‎6, the Creditor shall, after giving five (5) Business Days written notice to the Company, have the power, on behalf of or in the name of the Company or otherwise, to perform the obligations and to take any steps which the Creditor may, in its absolute discretion, consider appropriate with a view to remedying, or mitigating the consequences of the failure, but without in any way becoming liable therefor and provided that the exercise of this power, or the failure to exercise it, shall in no circumstances prejudice the Creditor’s rights hereunder.

The Creditor may set off any sum, in the Contractual Currency, as the case may be, due or owing to the Company from the Creditor in any account, manner or circumstance whatsoever, against the Secured Liabilities, in whole or in part. In no event and under no circumstances may the Company set off any sum that may be due or owing to the Company from the Creditor in any account, manner or circumstance whatsoever, against the Secured Liabilities, in whole or in part.

The occurrence of any of the following events shall constitute an Event of Default:

All moneys and other assets arising from the exercise of the powers of the Receiver or the Creditor or otherwise received by the Creditor or the Receiver from the realisation of any Charged Asset shall be applied as follows:

The Company further covenants with the Creditor from time to time upon reasonable demand to execute, at the Company’s own cost and within reasonable time, any document or do any act or thing which:

assignment or Security Interest created or intended to be created by this Debenture;

failing which the Creditor may, and the Company hereby appoints the Creditor as its attorney-in-fact to, execute, at the Company’s reasonable expense, any such document or do any such act or thing, in the name and on behalf of the Company.

All notices or other communications hereunder shall be in writing and shall be given in person, by registered mail (registered international air mail if mailed internationally), by an overnight courier service which obtains a receipt to evidence delivery, by email (provided that no notification of failure was received) or by facsimile transmission (provided that written confirmation of receipt is provided) with a copy, addressed as set forth below:

or such other address as any party may designate to the other in accordance with the aforesaid procedure. All communications delivered in person or by courier service shall be deemed to have been given upon delivery, those given by email shall be deemed given on the business day following transmission, those given by facsimile transmission shall be deemed given on the business day following transmission with confirmed answer back, and all notices and other communications sent by registered mail (or air mail if the posting is international) shall be deemed given ten (10) days after posting.

The rights of the Creditor may be waived only in writing and specifically; the conduct of the Creditor shall not be deemed a waiver of any of its rights pursuant to this Debenture and/or as a waiver or consent on its part as to any breach or failure to meet any of the terms of this Debenture or as an amendment hereto. A waiver by the Creditor in respect of a breach by the Company of its obligations shall not be construed as a justification or excuse for a further breach of its obligations.

No delay or omission to exercise any right, power, or remedy accruing to the Creditor upon any breach or default by the Company shall impair any such right or remedy nor shall it be construed to be a waiver of any such breach or default, or any acquiescence therein or in any similar breach or default thereafter occurring.

The rights of the Creditor hereunder may be exercised as often as necessary and are cumulative and not exclusive of its rights under applicable law.

Any term of this Debenture may be amended or modified only by a written document signed by the Company and the Creditor.

It is hereby agreed that:

As used herein, the term “IIA Funded Know-How” shall mean all of the Company’s know-how resulting from research and development according to an IIA-approved plan, not being the product developed within the framework of such approved plan, and any right deriving therefrom.

This Debenture together with the Debenture Floating Charge, and the Loan Agreement, all as may be amended and/or supplemented from time to time, contain the entire understanding of the parties with respect to their subject matter and all prior negotiations, discussions, agreements, commitments and understandings between them with respect thereto not expressly contained herein shall be null and void in their entirety, effective immediately with no further action required.

If a provision of this Debenture is or becomes illegal, invalid or unenforceable in any jurisdiction, that shall not affect the validity or enforceability in that jurisdiction of any other provision hereof or the validity or enforceability in other jurisdictions of that or any other provision hereof.

Where provisions of any applicable law resulting in such illegality, invalidity or unenforceability may be waived, they are hereby waived by each party to the full extent permitted so that this Debenture shall be deemed valid and binding agreements, in each case enforceable in accordance with its terms.

This Debenture may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Debenture. A signed Debenture received by a party hereto via facsimile, email (or scanned and sent by other electronic means) will be deemed an original, and binding upon the party who signed it.

This Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the principles thereof relating to conflict of laws. The Company and the Creditor, each irrevocably submits to the jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, dispute proceeding or judgment relating to or arising out of this Debenture. Notwithstanding the aforementioned, the enforcement of this Debenture in the State of Israel shall be subject to the applicable mandatory provisions of the laws of the State of Israel.

Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably be necessary to carry out and give full effect to the provisions of this Debenture and the intentions of the parties as reflected thereby.

Nothing in this Debenture shall create or confer upon any person or entity, other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities, except as expressly provided herein.

To the extent that any amount payable under this Debenture is subject to VAT by law, the party paying such amount shall pay the VAT against receipt of a duly issued VAT invoice.

To the extent required, this Debenture may be translated into Hebrew for the sole purpose of the registration and filing of this Debenture with the Israeli Registrar of Companies and/or any other relevant Israeli official registration. Notwithstanding the aforesaid, the executed English version of this Debenture shall prevail and supersede for all purposes and for all respects, in the event of any discrepancy or inconsistency between the English version and the translation.

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[Signature Page of Debenture– Fixed Charge]

IN WITNESS WHEREOF this Debenture has been executed by the Parties, on the day and year first above written.

SCHEDULE 1

List of Equipment

SCHEDULE 2

Intellectual Property

SCHEDULE 3

Pledged Accounts

A. List of Customers

B. List of Accounts Receivables

Schedule 4

Form of Notice of Assignment

To: [Insurer]

Date: [         ]

Dear Sirs,

We hereby give you notice (the “Notice”) that we have assigned by way of security (the “Assignment”) all of our right, title and interest in and to [insurance policy no. ______and the proceeds thereof] (the “Relevant Documents”) to Kreos Capital VI (Expert Fund) LP (the “Creditor”), pursuant to a Debenture entered into by us in favour of the Creditor dated the date hereof, in relation to the Equipment as set out in the attached Appendix.

Notwithstanding the Assignment, we remain liable to perform all our obligations under the Relevant Documents, if any, and the Creditor will have no liability in respect of those obligations.

We hereby irrevocably instruct and authorise you to:

Name:

Number:

Branch:

Please also note that these instructions are not to be revoked or amended without the prior written consent of the Creditor.

This letter shall be governed by and construed in accordance with Israeli law.

SCHEDULE 5

Acknowledgement of assignment of Insurances

To: (1) Kreos Capital VI (Expert Fund) LP

    (2) Motus GI Medical Technologies Ltd.

[Date]

Dear Sirs,

We acknowledge receipt of the attached notice of assignment (the “Notice”) and we irrevocably and unconditionally consent to the assignment set out in it and we undertake to be bound by its terms.

We confirm that we have not received notice of any other assignment of the Relevant Document. This Acknowledgement will be governed by and construed in accordance with Israeli law.

SCHEDULE 6

Notice of assignment of Compensation Proceeds

To: [                ]

[Date]

Re: The equipment set out in the attached schedule (the “Equipment”)

We hereby give you notice (the “Notice”) that we have assigned by way of security (the “Assignment”) to Kreos Capital VI (Expert Fund) LP (the “Creditor”), all of our right, title and interest, present and future, to all amounts that are payable under the Property Tax and Compensation Fund Law, 5721-1961, and under any other applicable law, arising in connection with the Equipment (“Compensation Proceeds”).

Please acknowledge that you have received this Notice by signing and returning to each of the Creditor and ourselves a copy of the attached Acknowledgement.

This Notice will be governed by and construed in accordance with Israeli law.

Schedule 7

Acknowledgement of assignment of Compensation Proceeds

Re: The equipment set out in the attached schedule (the “Equipment”)

To:

(1) Kreos Capital VI (Expert Fund) LP

(2) Motus GI Medical Technologies Ltd.

[Date]

Dear Sirs,

We acknowledge receipt of the attached notice of assignment (the “Notice”) and we irrevocably and unconditionally consent to the assignment set out in it and we undertake to be bound by its terms.

We confirm that we have not received notice of any other assignment of the Compensation Proceeds.

This Acknowledgement will be governed by and construed in accordance with Israeli law.

24 

Exhibit 10.5

DEBENTURE FLOATING CHARGE

UNLIMITED IN AMOUNT

BETWEEN

MOTUS GI MEDICAL TECHNOLOGIES LTD.

as Company

AND

KREOS CAPITAL VI (EXPERT FUND) LP

as Creditor

DATED

July 16, 2021

DEBENTURE – FLOATING CHARGE

THIS DEBENTURE – FLOATING CHARGE is dated July 16, 2021 between:

WHEREAS:

NOW THEREFORE, the parties agree as follows:

The Security Interests created by this Debenture are created to secure the full and punctual payment and performance of all the obligations of the Company and the Co-Borrowers pursuant to the Loan Agreement, or to any amendment thereof with all expenses and other amounts due or to become due from the Company and the Co-Borrowers under the terms of this Debenture including, without limitation, reasonable legal fees, fees and out-of-pocket costs of any Receiver and any other reasonable, necessary and actual costs incurred in realizing the Security Interests granted hereunder (all such amounts, the “Secured Liabilities”).

Except as expressly set forth in the Loan Agreement: (i) the Company and the Co-Borrowers shall not be entitled to discharge any amount of the Secured Liabilities prior to the agreed date for payment thereof; and (ii) neither the Company nor any third party having a right liable to be affected by the charges hereby created or the realisation thereof shall have any right under Section 13(b) of the Pledges Law, 5727-1967 or any other statutory provisions in substitution therefor.

As security for the full and punctual payment or performance when due (whether at stated maturity, acceleration or otherwise) of the Secured Liabilities by the Company and the Co-Borrowers, the Company hereby, absolutely and unconditionally, charges and pledges in favour of the Creditor by way of first ranking floating charge and pledge:

In addition, to the extent required by applicable law to create and perfect a first ranking floating charge over the Charged Assets specified in paragraph (b) above, the Company also assigns such Charged Assets to the Creditor by way of first ranking floating charge and pledge.

In particular, the Company hereby assigns to and in favour of the Creditor by way of first ranking floating charge and pledge (and each of the following shall be deemed to be expressly included in paragraph (b) above):

With respect to insurance proceeds, so long as no Event of Default has occurred and is continuing, (i) the Company may commence, appear in, defend or prosecute any claim or action, and may adjust, compromise, settle and collect all claims and awards; provided however, that no settlements shall be made without the consent of Creditor which consent shall not be unreasonably withheld, conditioned or delayed, and (ii) all proceeds of insurance shall be made available to the Company to repair or restore the Charged Assets, as applicable. Nothing in this Debenture in any way limits the Company from entering into any transactions with regard to its Intellectual Property in the Ordinary Course of Business and making any Permitted Transfers.

The Company specifically acknowledges that all of the Security Interests created by the Company under Section ‎3 (Security) of this Debenture shall rank in priority to any other Security Interests created by the Company subject to the Creditor Fixed Charge and the Permitted Security Interests.

The Company declares and agrees that:

All Security Interests that have been or may be created in favour of the Creditor for payment and performance of the Secured Liabilities shall be independent of one another.

For the avoidance of doubt, it is hereby clarified that this Debenture is in addition to the Debenture - Fixed Charge (and in no manner in lieu thereof or replacement thereto), and each of this Debenture and the Debenture - Fixed Charge shall independently serve as aforesaid to secure the Secured Liabilities in their entirety. Without derogating from the generality of the foregoing or from any other right of the Creditor, the Creditor shall have the right to act on this Debenture, on the Debenture - Fixed Charge or on both, in each case in connection with the Security Interest created by each (including, without limitation, with respect to any and all assets, properties and rights subject to both this Debenture and the Debenture- Fixed Charge); and no action or omission relating to any such Security Interest shall prevent or estop the Creditor from invoking such other Security Interest, at the same time or subsequently.

To the extent that the Company and/or subsidiaries of the Company or any third party on behalf of the Company makes a payment or payments to the Creditor, or the Creditor enforces any Security Interest or exercises any right of set-off and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently avoided or set aside, declared to be fraudulent or preferential or required to be repaid or refunded or reduced by virtue of any applicable law relating to bankruptcy, insolvency, administration, receivership, liquidation or similar proceedings, the Secured Liabilities or any part thereof originally intended to be satisfied, and this Debenture and all Security Interests, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or set-off had not occurred.

The Company hereby represents and warrants as follows as of the date hereof: