LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of September 23, 2005 (this "Agreement"), is
entered into by and between CELL POWER TECHNOLOGIES, INC., a Florida corporation
(the "Company"), and YESHIVA RABBI XXXXXXX XXXXXX, a New York not-for-profit
corporation (the "Lender").
WITNESSETH:
WHEREAS, the Lender wishes to lend funds to the Company and the Company
wishes to borrow funds from the Lender on the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, the Company and the Lender are entering into this Agreement in
reliance upon the exemption from securities registration for offers and sales to
accredited investors afforded, inter alia, by Rule 506 under Regulation D
("Regulation D") as promulgated by the United States Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "1933
Act"), and/or Section 4(2) of the 1933 Act.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO LEND.
a. Initial Loan. Subject to the terms and conditions of this Agreement
and the other Transaction Agreements (as defined below), the Lender hereby
agrees to loan to the Company the initial principal amount of US $60,000.00 (the
"Initial Loan"). The Company's obligation to repay the Initial Loan shall be
evidenced by the Company's issuance to the Lender of a promissory note in the
form attached hereto as Exhibit A (the "Initial Note").
b. Issuance of Warrant. In consideration of the Lender's agreement to
make the Initial Loan to the Company, the Company agrees to issue to the Lender
a warrant to purchase 500,000 shares of the common stock, no par value ("Common
Stock"), of the Company in the form attached hereto as Exhibit B (the "Initial
Warrant").
c. Additional Loans. At any time and from time to time prior to the
time at which the Initial Loan first becomes due and payable, the Lender may
loan the Company additional funds in such amounts as the Lender and the Company
may agree (any such loan an "Additional Loan"). The Company's obligation to
repay any Additional Loan shall be evidenced by the Company's issuance to the
Lender of a promissory note (each an "Additional Note") in the principal amount
of that Additional Loan and otherwise having terms and conditional identical to
the Initial Note. In consideration of the Lender's agreement to make any
Additional Loan, the Company agrees to issue to the Lender a warrant (each an
"Additional Warrant") to purchase the number of shares of Common Stock equal to
ten times the principal amount of that Additional Loan and otherwise having
terms and conditional identical to the Initial Warrant.
d. Certain Definitions. As used herein, each of the following terms
has the meaning set forth below, unless the context otherwise requires:
"Affiliate" means, with respect to a specific Person referred to in the
relevant provision, another Person who or which controls or is controlled by or
is under common control with such specified Person.
"Closing" means the Initial Closing or any Subsequent Closing as
applicable.
"Material Adverse Effect" means an event or combination of events, which
individually or in the aggregate, would reasonably be expected to (w) adversely
affect the legality, validity or enforceability of the Securities or any of the
Transaction Agreements, (x) have or result in a material adverse effect on the
results of operations, assets, or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, or (y) adversely impair the
Company's ability to perform fully on a timely basis its obligations under any
of the Transaction Agreements or the transactions contemplated thereby.
"Notes" means the Initial Note and the Additional Notes, if any.
"Securities" means the Notes and the Warrants.
"Transaction Agreements" means this Agreement, the Notes, the Warrants and
any ancillary documents referred to in those agreements.
"Warrants" means the Initial Warrant, the Additional Warrants, if any, and
the Delinquent Warrants, if any.
2. LENDER REPRESENTATIONS, WARRANTIES. The Lender represents and
warrants to, and covenants and agrees with, the Company as follows:
a. Status. The Lender is a not-for-profit corporation duly organized,
validly existing and in good standing under the laws of New York and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Lender is duly qualified as a foreign corporation to do
business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect.
b. Transaction Agreements. This Agreement and the transactions
contemplated hereby have been duly and validly authorized by the Lender, this
Agreement has been duly executed and delivered by the Lender and this Agreement
is a valid and binding obligation of the Company enforceable in accordance with
its terms.
c. Non-contravention. The execution and delivery of this Agreement and
the consummation by the Lender of the other transactions contemplated by this
Agreement do not and will not conflict with or result in a breach by the Lender
of any of the terms or provisions of, or constitute a default under (i) the
certificate of incorporation or by-laws of the Lender, each as currently in
effect, (ii) any indenture, mortgage, deed of trust, or other material agreement
or instrument to which the Lender is a party or by which it or any of its
properties or assets are bound, or (iii) to its knowledge, any existing
applicable law, rule, or regulation or any applicable decree, judgment, or order
of any court, United States federal or state regulatory body, administrative
agency, or other governmental body having jurisdiction over the Lender or any of
its properties or assets, except such conflict, breach or default which would
not have or result in a Material Adverse Effect.
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d. Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, or members of the Lender is required to be
obtained by the Lender for the issuance and sale of the Securities to the Lender
as contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
e. Without limiting Lender's right to sell the Securities pursuant to
an effective registration statement or otherwise in compliance with the 1933
Act, the Lender is acquiring the Securities for its own account for investment
only and not with a view towards the public sale or distribution thereof and not
with a view to or for sale in connection with any distribution thereof.
f. The Lender is (i) an "accredited investor" as that term is defined
in Rule 501 promulgated under the 1933 Act, (ii) experienced in making
investments of the kind described in this Agreement and the related documents,
(iii) able, by reason of the business and financial experience of its officers
and professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its Affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and to evaluate the merits and risks of an investment in
the Securities, and (iv) able to afford the entire loss of its investment in the
Securities.
g. All subsequent offers and sales of the Securities by the Lender
shall be made pursuant to registration of the relevant Securities under the 1933
Act or pursuant to an exemption from registration.
h. The Lender understands that the Securities are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of the 1933 Act and state securities laws and that the Company is relying upon
the truth and accuracy of, and the Lender's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Lender set forth herein in order to determine the availability of such
exemptions and the eligibility of the Lender to acquire the Securities.
i. The Lender and its advisors, if any, have been furnished with or
have been given access to all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Note which have been requested by the Lender. The Lender and its advisors, if
any, have been afforded the opportunity to ask questions of the Company and its
management and have received complete and satisfactory answers to any such
inquiries. Without limiting the generality of the foregoing, the Lender has also
had the opportunity to obtain and to review the Company's filings on XXXXX
(collectively, the "Company's SEC Documents").
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j. The Lender understands that its investment in the Securities
involves a high degree of risk.
k. The Lender hereby represents that, in connection with its purchase
of the Securities, it has not relied on any statement or representation by the
Company or any of their respective officers, directors and employees or any of
their respective attorneys or agents, except as specifically set forth herein.
l. The Lender understands that no United States federal or state agency
or any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities.
3. COMPANY REPRESENTATIONS, ETC. The Company represents and warrants to
the Lender as of the date hereof and as of the Closing that, except as otherwise
provided in the Company's SEC Documents:
a. Status. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify would not have
or result in a Material Adverse Effect.
b. Transaction Agreements. This Agreement and each of the other
Transaction Agreements, and the transactions contemplated thereby, have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the Securities
and each of the other Transaction Agreements, when executed and delivered by the
Company, will be, valid and binding agreements of the Company enforceable in
accordance with their respective terms.
c. Non-contravention. The execution and delivery of this Agreement and
each of the other Transaction Agreements by the Company, the issuance of the
Securities, and the consummation by the Company of the other transactions
contemplated by this Agreement, the Note, and the other Transaction Agreements
do not and will not conflict with or result in a breach by the Company of any of
the terms or provisions of, or constitute a default under (i) the certificate of
incorporation or by-laws of the Company, each as currently in effect, (ii) any
indenture, mortgage, deed of trust, or other material agreement or instrument to
which the Company is a party or by which it or any of its properties or assets
are bound, including any listing agreement for the Common Stock except as herein
set forth, or (iii) to its knowledge, any existing applicable law, rule, or
regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of its properties
or assets, except such conflict, breach or default which would not have or
result in a Material Adverse Effect.
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d. Approvals. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the shareholders of the Company is required to be obtained
by the Company for the issuance and sale of the Securities to the Lender as
contemplated by this Agreement, except such authorizations, approvals and
consents that have been obtained.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a. Transfer Restrictions. The Lender acknowledges that (i) the
Securities have not been and are not being registered under the provisions of
the 1933 Act and may not be transferred unless (A) subsequently registered
thereunder or (B) sold or transferred pursuant to an exemption from such
registration; and (ii) except as otherwise expressly provided therein, neither
the Company nor any other Person is under any obligation to register the
Securities under the 1933 Act or to comply with the terms and conditions of any
exemption thereunder.
b. Restrictive Legend. The Lender acknowledges and agrees that, until
such time as the relevant Securities have been registered under the 1933 Act and
sold in accordance with an effective registration statement, the certificates
and other instruments representing any of the Securities shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of any such Securities):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OFFERED FOR
SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR
OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
c. Use of Proceeds. The Company will use the net proceeds received
hereunder for general corporate purposes.
d. Delinquent Warrants. If the Company fails to repay in full any Loan
when it comes due, then (in addition to any other remedies available to the
Lender under the terms of the applicable Note or at law) on the last day of each
30 day period until the Company has repaid in full the delinquent Loan the
Company shall issue to the Lender a warrant (each a "Delinquent Warrant") to
purchase the number of shares of Common Stock equal to the principal amount of
the delinquent Loan and otherwise having terms and conditional identical to the
Initial Warrant.
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5. CLOSINGS.
a. Initial Closing. The initial closing under this Agreement (the "Initial
Closing") shall occur on September 23, 2005 or such other date as agreed to by
the Company and the Lender. At the Initial Closing, the Lender shall deliver to
the Company the principal amount of the Initial Loan by wire transfer of
immediately available funds to an account designated in writing by the Company
for such purpose and the Company shall deliver to the Lender the Note and the
Warrant, in each case duly executed by the Company.
b. Subsequent Closings. The closing of any Additional Loan under this
Agreement (each a "Subsequent Closing") shall occur on such date as agreed to by
the Company and the Lender. At any Subsequent Closing, the Lender shall deliver
to the Company the principal amount of the Additional Loan to be consummated at
such closing by wire transfer of immediately available funds to an account
designated in writing by the Company for such purpose and the Company shall
deliver to the Lender the Additional Note evidencing such Additional Loan and
the Additional Warrant to be issued in consideration of such Additional Loan.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO ISSUE SECURITIES. The
Lender understands that the Company's obligation to issue the Note and the
Warrant to the Lender pursuant to this Agreement at the Closing of any Loan is
conditioned upon:
a. The execution and delivery of this Agreement by the Lender;
b. Delivery by the Lender of the principal amount of the Loan in
accordance with this Agreement;
c. The accuracy at the Closing of the representations and warranties of
the Lender contained in this Agreement, each as if made on such date; and
d. There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
7. CONDITIONS TO THE LENDER'S OBLIGATION TO LOAN FUNDS. The Company
understands that the Lender's obligation to make any Loan to the Company at the
Closing of such Loan is conditioned upon:
a. The execution and delivery of this Agreement and the other
Transaction Agreements by the Company;
b. The accuracy at the Closing of the representations and warranties of
the Company contained in this Agreement, each as if made on such date; and
d. There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent or
approval which shall not have been obtained.
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8. MISCELLANEOUS.
a. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York without giving effect to the conflict of
laws principles thereof. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
County of New York or the state courts of the State of New York sitting in the
County of New York in connection with any dispute arising under this Agreement
or any of the other Transaction Agreements and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions. To
the extent determined by such court, the Company shall reimburse the Lender for
any reasonable legal fees and disbursements incurred by the Lender in
enforcement of or protection of any of its rights under any of the Transaction
Agreements.
b. The Company and the Lender hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the Parties hereto
against the other in respect of any matter arising out or in connection with the
Transaction Agreements.
c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
d. The Company's and the Lender's representations and warranties herein
shall survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby and shall inure to the benefit of the
Lender and the Company and their respective successors and assigns.
e. This Agreement shall inure to the benefit of and be binding upon t
he successors and assigns of each of the parties hereto.
f. A facsimile transmission of this signed Agreement shall be legal and
binding on all parties hereto.
g. This Agreement may be signed in one or more counterparts, each of
which shall be deemed an original.
h. The headings of this Agreement are for convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.
i. Any notice required or permitted hereunder shall be given in writing
(unless otherwise specified herein) and shall be deemed effectively given on the
earliest of (a) the date delivered, if delivered by personal delivery as against
written receipt therefor or by confirmed facsimile transmission, (b) the fifth
business day after deposit, postage prepaid, in the United States Postal Service
by registered or certified mail, or (c) the third business day after mailing by
domestic or international express courier, with delivery costs and fees prepaid,
in each case, addressed to the other party at the following addresses (or at
such other addresses as such party may designate in notice delivered accordance
with this paragraph):
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COMPANY: Cell Power Technologies, Inc.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attn: President
Telephone No.: (000) 000-0000
with a copy to:
Aboudi & Xxxxxxxxxx
Attn: Xxxxx Xxxxxx, Esq.
Gavish 3, POB 2432
Kfar Xxxx Xxxxxxxxxx Xxxx 00000 Xxxxxx
Telephone No.: (000-000-0) 000-0000
Telecopier No.: (000-000-0) 000-0000
LENDER: Yeshiva Rabbi Xxxxxxx Xxxxxx
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Rabbi Xxxxxxxxx Xxxxx
j. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
k. This Agreement may be amended only by an instrument in writing
signed by the party to be charged with enforcement thereof.
l. This Agreement supersedes all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Lender
and the Company as of the date set first above written.
YESHIVA RABBI XXXXXXX XXXXXX
By: /s/ Xxxxxxxxx Xxxxx
-----------------------
Name: Rabbi Xxxxxxxxx Xxxxx
CELL POWER TECHNOLOGIES, INC.
By: /s/ Xxxxx Xxxxxxxxxx
------------------------
Name: Xxxxx Xxxxxxxxxx
Title: President
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