LOAN AGREEMENT
THIS LOAN AGREEMENT entered into this __day of __________, 2000 by and
between Advanced Technology Industries, Inc., a Delaware corporation,
("Borrower") and_____________________("Lender") provides as follows:
RECITALS
A. Borrower desires to borrow funds from Lender and Lender desires to
lend said funds to Borrower.
B. This Agreement sets forth the terms on which Lender will lend funds
to Borrower and Borrower will repay said funds.
NOW THEREFORE, in consideration for the mutual covenants and agreements
contained herein and for other good and valuable consideration the receipt of
which is hereby acknowledged the parties hereto agree as follows:
1. LOAN
Lender shall loan Borrower USD_____________. The loan shall be deemed
to have been made when Borrower receives good and sufficient funds in the form
of a cashiers check, wire transfer, or other means (the "Loan Date"). The funds
shall be payable either in U. S. Dollars or German Deutsch Marks at the option
of Lender. However, all repayments of principal and interest shall be in U. S.
Dollars. The loan shall be evidenced by a promissory note ("Note") in the form
attached hereto as Exhibit "A".
2. INTEREST
The Note shall bear interest at the rate of 1% per month commencing on
the Loan Date which shall be prorated based upon the number of days in the month
if said loan is made on other than the first day of the calender month. Interest
shall be accrued and paid on the Maturity Date as defined in Paragraph 3 below.
At the option of the Borrower interest shall be paid in cash or in $.0001 par
value common stock of Borrower ("Stock"). The number of shares to be delivered
to Lender in payment of the interest shall be determined by multiplying (i) the
average closing bid price of the Stock for the five (5) trading days prior to
the Maturity Date by (ii) 85% and dividing the interest due at the Maturity Date
by the resulting multiple (the "Interest Shares"). By way of example if the
interest due at the Maturity Date is $36,000 and the average of the closing bid
price as determined above is $1.00 the number of Interest Shares would be 42,353
determined as follows: $36,000 divided by ($1.00 x .85)= 42,353. All Interest
Shares shall be restricted shares subject to the provisions of Paragraph 9
below.
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3. MATURITY DATE
The Maturity Date shall be the earlier of (i) 180 days from the Loan
Date (ii) the sale by Borrower subsequent to November 1, 2000 of shares of
Eurotech, Ltd, a D.C. corporation, ("Eurotech Shares") owned by the Borrower
aggregating at least $1,500,000 after sales commissions and related expenses or
(iii) the closing of a loan to Borrower in an amount net to Borrower of not less
than 1,500,000 secured by the Eurotech Shares.
4. EQUITY INCENTIVE
Lender will receive one share of $.0001 par value common stock of
Borrower for each $1.00 loaned to Borrower ("Incentive Shares"). Said shares
shall be restricted shares subject to the provisions of Paragraph 9 below.
5. PREPAYMENT RIGHT
Borrower shall have the right, without penalty, to pay the Note in full
together with any unpaid interest at any time after 30 days from the Loan Date
upon the giving of 10 days written notice.
6. REGISTRATION RIGHTS
Lender shall have the right to have the Incentive Shares and the
Interest Shares, if any, registered under the Securities Act of 1933 pursuant to
the Registration Rights Agreement attached hereto as Exhibit "B" and made a part
hereof as though fully set forth herein. The execution of this Agreement shall
be deemed to be the execution of the Registration Rights Agreement in the form
set forth in Exhibit "B".
7. WARRANTIES AND REPRESENTATIONS OF LENDER.
Lender hereby makes the following representations and warranties to
Borrower:
7.01. Lender is an "accredited investor" because Lender is
(initial appropriate item):
_____A natural person whose individual net worth, or joint net
worth with that person's spouse, at the time of his purchase, exceeds
$1,000,000, or
_____A natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year, or
____A trust, with total assets are in excess of $5,000,000,
not formed for the specific purpose of acquiring the securities offered hereby,
whose purchase is directed by a sophisticated person, as described below; or
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____An entity in which all of the equity owners are accredited
investors.
7.02. Lender has significant prior investment experience,
including investments in unsecured loans and unregistered securities and
recognizes the speculative nature of this investment. Lender is knowledgeable,
sophisticated and experienced in making and is qualified to make decisions with
respect to investments of the nature evidenced by this Agreement and has
requested, received, reviewed and considered all information Lender deems
relevant in making a decision to execute this Agreement. Lender is capable of
evaluating the merits and risks of entering into this Agreement and consummating
the transactions contemplated thereby.
7.03. Lender has relied upon Borrower's filings with the
Securities and Exchange Commission under Section 13 of the Securities Exchange
Act of 1934, this Agreement, and independent investigations of Borrower made by
Lender and has been given access and the opportunity to examine all material
books and records of Borrower, all material contracts and has had the
opportunity to ask questions of and to receive answers from Borrower or any
person acting on its behalf concerning the terms and conditions of the
transaction contemplated by this Agreement. Lender has been furnished with all
material relating to the business, finances, and operations of Borrower and
materials relating to the transactions under this Agreement which have been
requested by such person and such person has received complete and satisfactory
answers to any such inquiries.
7.04. Lender hereby agrees to take any further action or
execute such further instruments as may be necessary to effectuate the terms of
this Agreement.
8. WARRANTIES AND REPRESENTATIONS OF BORROWER.
Borrower hereby makes the following representations and warranties to
Lender:
8.01 Borrower is a Delaware corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware
and has full corporate power and authority to enter into this Agreement and to
carry out the transactions contemplated hereby. The Board of Directors of
Borrower has taken all action required by law, Borrower's corporate charter, its
By- Laws, or otherwise, to be taken by it to authorize the execution and
delivery of this Agreement, the issuance of the Note and the shares which are
the subject of this Agreement, and the consummation of the transactions
contemplated hereby.
8.02 The Incentive Share and the Interest Shares, if any,
delivered hereunder shall be validly issued and outstanding and fully paid and
non-assessable.
8.03. The Note when issued shall be a validly issued and
binding obligation of the Borrower.
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8.04 Borrower has the full right and power to issue the Note,
the Incentive Shares and the Interest Shares, if any, free and clear of any
statutory, contractual, or other limitation, and none of said shares are subject
to any lien, pledge, hypothecation, or any encumbrance whatsoever. The issuance
of the Note, the Incentive Shares, and the Interest Shares, if any, as provided
for herein will vest directly in Lender title to said instruments and securities
free and clear of any and all encumbrances, liens, restrictions, options,
agreements, and conditions except as set forth in Paragraph 9 hereof.
8.05 The person or persons executing this agreement on behalf
of Borrower have the requisite power authority to do so and to make, execute,
and deliver all instruments and documents to be executed in connection herewith.
9. INVESTMENT RESTRICTIONS.
The Incentive Shares and Interest Shares, if any, to be issued to
Lender hereunder have not been registered under the Securities Act of 1933
("Securities Act") or any state securities laws and are issued in reliance upon
certain exemptions included in federal and state securities laws from such
registration. There are substantial restrictions on the sale of the shares and
the shares may be transferred only in accordance with the provisions of this
paragraph. Each certificate representing the shares issuable hereunder and any
other securities issued in respect of the shares issuable hereunder and any
other securities issued in respect of the shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, will (unless
otherwise permitted or unless the shares of Borrower's stock evidenced by such
certificate shall have been registered under the Securities Act) will be stamped
or otherwise imprinted with a legend substantially in the following form (in
addition to any legend required under applicable state securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY
MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
The shares may be transferred only upon (i) registration under the Securities
Act, (ii) the receipt by Borrower of an opinion of counsel acceptable to
Borrower (including then counsel to Borrower) that such transfer is exempt from
the registration provisions of the Securities Act and state securities laws), or
(iii) the receipt by Borrower of a "no-action" letter from the Securities and
Exchange Commission to the effect that any transfer by such holder of the
securities evidenced by such certificate will not violate the Securities Act and
applicable state securities laws.
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10. MISCELLANEOUS
10.01 NOTICES
All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of computer transmission)
to the parties at the following addresses (or at another address for a party as
shall be specified by like notice):
To: Borrower: Advanced Technology Industries Inc.
Xxxxxxxxxxxxx 00
Xxxxxx, Xxxxxxx D-10117
Telephone No.: (0000) 000-0000
Facsimile No.: __________________
With copy to: H. Xxx Xxxxxxx
Law Offices of H. Xxx Xxxxxxx
11900 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
To: Lender __________________________________
__________________________________
__________________________________
Telephone No.: ___________________
Facsimile No.: ___________________
10.02 INTERPRETATION
The words "include", "includes" and "including", when used
herein, shall be deemed in each case to be followed by the words "without
limitation". The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. As used herein, references to the singular include the plural and the
plural include the singular, except where the context requires otherwise. As
used herein, references to person includes individuals and entities.
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10.03 COUNTERPARTS AND FACSIMILE SIGNATURES
This Agreement may be executed in one or more counterparts and
by facsimile signature, all which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each party delivered to the other party, it being understood that all parties
need not sign the same counterpart.
10.04 ENTIRE AGREEMENT
This Agreement and the exhibits hereto, and the documents and
instruments and other agreements among the parties hereto referenced herein
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
10.05 SEVERABILITY
In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void, or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provisions to
persons or circumstances will be interpreted reasonably so as to give effect to
the intent of the parties hereto. The parties further agree to replace such void
or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes intended by the void or unenforceable provision.
10.06 OTHER REMEDIES
Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a party will be deemed cumulative with, and not
exclusive of, any other remedy conferred hereby, or by law or equity, upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.07 GOVERNING LAW; VENUE
This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Germany, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
The parties irrevocably consent to the jurisdiction and venue of the courts of
the Republic of Germany concerning any action relating to this Agreement
including, but not limited to, any action related to the Note, the Incentive
Shares, and the Interest Shares, if any.
10.08 RULES OF CONSTRUCTION
The parties hereto agree that they have been represented by
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law, regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the party drafting such agreement or document.
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10.09 SPECIFIC PERFORMANCE
The parties hereto agree that irreparable damages would occur
in the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court having proper venue hereunder, this
being in addition to any other remedy to which they are entitled at law or in
equity.
10.10 ATTORNEYS' FEES AND COST
In the event of any action at law or in equity between the
parties hereto to enforce any of the provisions hereof, the unsuccessful party
or parties to such litigation shall pay to the successful party or parties all
costs and expenses, including actual attorneys' fees, incurred therein by such
successful party or parties and if such successful party or parties shall
recover judgment in any such action or proceeding, such costs, expenses and
attorneys' fees shall be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his or its costs
of suit, whether or not the suit proceeds to final judgment. A party not
entitled to recover his or its costs shall not recover attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"Borrower" Advanced Technology Industries, Inc.
By
---------------------------------
X. X. Xxxxxxxxx, President
"Lender" __________________________
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EXHIBIT "A"
PROMISSORY NOTE
$____________________ _________,2000
On the Maturity Date as defined in that certain Loan Agreement by and
between Advanced Technology Industries, Inc. as Borrower and
___________________as Lender dated as of __________, 2000 ("Loan Agreement")
Borrower promises to pay to, or order, the sum of $_______________________
together with interest as provided in the Loan Agreement.
Borrower has certain rights of prepayment, without penalty, as set
forth in the Loan Agreement.
This Promissory Note is governed by and subject to the provisions of
the Loan Agreement. A copy of the Loan Agreement may be obtained from the
corporate office of the Borrower whose address and telephone number are as
follows: Advanced Technology Industries Xxx.,Xxxxxxxxxxxxx 00, Xxxxxx, Xxxxxxx
D-10117, Telephone No.: (0000) 000-0000
Advanced Technology Industries, Inc.
By
--------------------------------
X. X. Xxxxxxxxx, President.
