AGREEMENT
This Agreement is entered into on the date set forth below to be effective
as of September 30, 1997, by and between Batei Sefer Limlacha located in
Brooklyn, New York ("BSL") and Solmecs Corporation, N.V., a Netherland Antilles
corporation with its principal office located at 7 Ben Zvi Rd., Beer Sheva,
Israel ("Solmecs").
WHEREAS, BSL has, through the date hereof, advanced the sum of $50,000 to
Solmecs for working capital purposes; and
WHEREAS, Solmecs seeks to obtain additional advances from BSL to be
used for working capital and other purposes; and
WHEREAS, BSL and Solmecs wish to memorialize the terms of such advances and
any additional advances by BSL to Solmecs;
NOW THEREFORE, the Parties hereto agree as follows:
1. Prior Loan. Solmecs hereby acknowledges receipt of the sum of $50,000 from
BSL during September 1997 and that such sum shall be treated as an unsecured
loan (the "First Loan") by BSL to Solmecs, which shall be repaid in accordance
with the terms set forth below.
2. Additional Loans. It is hereby acknowledged that BSL may, from time to time,
in its sole and absolute discretion, provide additional advances to Solmecs and
that each such advance shall be treated as an unsecured loan ("Additional
Loans"), to be evidenced by written confirmation of the amount being loaned,
signed by both parties. Any and all such loans will be subject to the terms of
repayment as set forth herein.
3. Representations and Warrants of SCNV.
Solmecs represents and warrants that:
(i) It is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority to own or lease its property and assets and to
carry out its business as currently conducted, and is duly qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which it conducts business.
(ii) It has the corporate power and authority to execute and deliver this
Agreement and to perform the obligations hereunder and such obligations
constitute the valid and binding obligations of Solmecs enforceable against
Solmecs in accordance with their terms.
(iii) Neither the execution and delivery of this Agreement, nor the
performance by Solmecs of its obligations hereunder will (a) contravene any
provision contained in its charter, bylaws or other organizational documents, as
amended, (b) violate or result in a breach of or constitute a default under any
contract, commitment, mortgage, indenture, lease, pledge, note, instrument or
other obligation or any judgment, order or decree, law, rule or regulation of
any government authority, (c) result in the creation or imposition of any lien,
claim, charge, mortgage, pledge, security interest or other encumbrance on any
of its assets or properties or (d) result in the acceleration of, or permit any
person to accelerate or declare due and payable prior to the maturity date, any
material obligation of Solmecs.
(iv) No notice to, filing with, or authorization or registration, consent
or approval of, any government authority is necessary for the execution,
delivery or performance of this Agreement.
4. Covenants of Solmecs. Solmecs hereby covenants that it has applied the
proceeds from the First Loan exclusively toward working capital purposes.
Solmecs further covenants that it will apply the proceeds of all Additional
Loans toward working capital purposes or other purposes approved by BSL. Solmecs
agrees that it will not apply the proceeds of Additional Loans to any other
corporate purpose unless such purpose and the amount of the proceeds to be
applied to such purpose have been disclosed in writing to BSL, and BSL has
provided written consent to such application of proceeds.
5. Terms of Repayment. The First Loan and any Additional Loans shall accrue
interest at the rate of eight (8%) percent per annum. The principal amount of
the First Loan and any Additional Loans shall be due and payable to BSL on the
earlier of (i) June 30, 1998, or (ii) the consummation of any merger or
acquisition transaction involving Solmecs or financing yielding $3 Million or
more in net proceeds to Solmecs, provided, however, that all such obligations
shall be automatically due and payable upon the occurrence of any event of
bankruptcy or similar proceeding, voluntary or involuntary, involving Solmecs,
or upon the dissolution of Solmecs.
6. Entire Agreement. The foregoing sets forth the entire agreement among the
Parties with respect to the matters covered hereby and supersedes all previously
written, oral or implied understandings among the Parties with respect to such
matters. Any further amendment to this Agreement shall only be made in writing
signed by both of the Parties hereto.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed on the 29th day of December 1997.
SOLMECS CORPORATION, N.V.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Executive Vice
President
BATEI SEFER LIMLACHA
By: /s/ Xxxxx Xxxxx
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Name:
Title:
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