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 SCNV Acquisition Corp., a Delaware corporation
with its principal office located at 7 Ben Zvi Rd., Beer Sheva, Israel ("SCNV").
WHEREAS, BSL has, through the date hereof, advanced the sum of $17,408 to
SCNV for working capital purposes; and
WHEREAS, SCNV seeks to obtain additional advances from BSL to be used for
working capital and other purposes; and
WHEREAS, BSL and SCNV wish to memorialize the terms of such advances and
any additional advances by BSL to SCNV;
NOW THEREFORE, the Parties hereto agree as follows:
1. Prior Loan. SCNV hereby acknowledges receipt of the sum of $17,408 from BSL
through September 30, 1997 and that such sum shall be treated as an unsecured
loan (the "First Loan") by BSL to SCNV, 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 SCNV 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.
SCNV 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 SCNV enforceable against SCNV in
accordance with their terms.
(iii) Neither the execution and delivery of this Agreement, nor the
performance by SCNV 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 SCNV.
(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 SCNV. SCNV hereby covenants that it has applied the proceeds
from the First Loan exclusively toward working capital purposes. SCNV further
covenants that it will apply the proceeds of all Additional Loans toward working
capital purposes or other purposes approved by BSL. SCNV 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. No interest shall accrue on the First Loan or any
Additional Loans until payment of the principal amount thereof becomes due and
payable. Thereafter, and until payment in full is made, interest shall accrue on
the unpaid portion of the First Loan and/or any Additional Loans that are past
due 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) December 31, 1998, or (ii) the consummation of any merger or
acquisition transaction involving SCNV or financing yielding $3 Million or more
in net proceeds to SCNV, 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 SCNV, or upon the
dissolution of SCNV.
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.
SCNV ACQUISITION CORP.
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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