Exhibit 10.1
LOANAGREEMENT
Dated: September 12, 2018
Between: ShlomiPalasIsraeli ID. 057313579 residing at 17 Etrog Street Rosh Ha'ayin, ISRAEL {Hereinafter: the "lender") and
Blue Sphere Corporation a U.S. company incorporated under the Nevada U.S. law and / orEastern Sphere Ltd. a private fully owned subsidiary of Blue Sphere Corp. Israeliincorporation number 514415702 and /or eachand any affiliate and subsidiary of Blue Sphere Corp. and / or Eastern Sphere Ltd. (Hereinafter jointly and severally: the "company")
WHEREAS: The lender has agreed to grant a loan to the company based on the company's declarations and undertakings in thisagreement, all inaccordance and subject to the terms and conditions of this agreement;
Therefore, it is agreed between the parties asfollows:
1. Introduction and Interpretation
1.1 The Preamble to this Agreement constitutes an integral part of the Agreement.
1.2 This Agreement constitutes a private loan between the lender and the company.
1.3 No change, addition or derogation from this Agreement shall be valid afterthe date of its signature unless it has been made in writing and signed by the parties to this Agreement.
1.4The section headings in this Agreement are provided for convenience only and are not part of this Agreement or a means of its interpretation.
2. Loan amount and repayment date.
2.1The lender will make theloanto the Company in NewIsraeli Shekels in an amount equivalent to about up to US$ 150,000 (one hundred and fifty thousand$) {hereinafter: "loan/loan amount") for a periodof up to 60 days from the date of granting the loan and in any case no later than 5.11.2018 whicheveris earlier {Hereinafter: the"loan period"and the "repaymentdate"). The loan will not bear interest.
2.2 Purpose of the loan: The loan money will be used by the Company forworking capital, including payment of salaries and amounts owed to third-party service providers.
2.3.In the case of payment of salaries or amounts owed to third-party service providers, the lender may transfer funds directly to persons in one ormore tranches to whom salary payments are owed and/or third-party service providers and the funds so transferred will be considered part of the loan money.
2.4 The actual date of transfer of any part of the loan to the Company orto any persons to whom salary paymentsare owed or third-party service providers shall be considered for allpurposes as the date of providing the loan ("date of provision of the loan").
2.5 Subject to thefollowingsentence,the Company hereby undertakesan irrevocableundertaking that theprincipalamountofthe loanwillberepaid in full to the lender up to and nolaterthanthe repayment date. Insatisfaction ofthe Company'sobligation in theprevious sentence,theparties agreethatthe Company will transfer back tothe lenderthe same amountthat the lenderloanedtothe Company in NewIsraeli Shekels (i.e.,evenifexchangerates have changedand, thus,the amount repaidtothe lender ismore or less than U.S. $150,000). The loan shall be a seniorsecured obligation ofthecompany, withpriorityover allIndebtednessof thecompany (unlesssuch indebtedness isasenior securedobligation ofthecompanyor contains a covenant against issuing senior securedindebtedness, inwhichcase this loan shall bejuniortosuchindebtedness). The obligationsofthe companyunder this agreementaresecured pursuant to the terms ofthisagreementandsuch security interest includes but is notlimited to all of the assets of the company and its subsidiaries.So longasthecompany shall haveanyobligation under this agreement, the company shallnot(directlyorindirectly through any subsidiary oraffiliate) incur orsuffer toexistorguaranteeany Indebtednessthat is senior to or pari passu with (inpriorityofpaymentandperformance)the company's obligations hereunder.
The company hereby grants, pledges,and assignsfor the benefit oflender, and there is herebycreatedin favor of the lender,a securityinterestinand to allofthecompany'sright,title, and interest in,to,and under all assets and all personal property of the companyanditssubsidiaries, whethernow or hereafter existing,ornow owned or hereafter acquired, includingbut not limited tothe following(collectively,"Collateral"):
2.5.1 All accounts, chattel paper, contracts, contractrights,accounts receivable,tax refunds, Notes receivable,documents, other choses inactionandgeneralintangibles, including,butnot limitedto, proceedsofinventoryand returned goods andproceeds fromthe saleof goodsandservices, and allrights, liens, securities, guaranties,remedies andprivileges related thereto,includingthe rightof stoppageintransitandrights and propertyofany kindformingthesubjectmatter ofanyofthe foregoing ("Accounts Receivable");
2.5.2 Alltime,savings,demand,certificate ofdeposit orother accountsinthename of thecompany or in which the company has anyright,titleorinterestincluding butnotlimitedtoall sumsnowor at anytime hereafter on deposit,andanyrenewals, extensions orreplacements ofandallotherproperty whichmay from time totimebe acquired directly or indirectly using theproceedsof any of the foregoing;
2.5.3 All inventory and equipment of everytypeor descriptionwhereverlocated,including,but not limitedtoall raw materials, parts,containers,work in process,finishedgoods, goods in transit, wares, merchandisefurniture, fixtures, hardware, machinery, tools,part s,supplies, automobiles,trucks,other intangibleproperty of whatever kind and wherever located associated with the company's business, tools andgoods returned for credit, repossessed, reclaimed or otherwisereacquiredby the company;
2.5.4 Alldocumentsof titleandotherpropertyfromtime totime received, receivable or otherwisedistributed inrespect of,exchange orsubstitutionfor oradditiontoanyof the foregoing including,but notlimitedto,anydocumentsof title;
2.5.5 All know-how, information, permits,patents, copyrights, goodwill, trademarks,trade names,licenses and approvalsheld bythecompany,including allotherintangible propertyofthecompany;
2.5.6 All assets of any type or description that may at any time be assigned or delivered to or comeintopossession ofthecompany forany purpose forthe account of the company orasto which the company may have any right, title, interest or power, and property in thepossessionor custody of or in transit to anyonefortheaccount of the company,aswellasall proceedsand products thereofandaccessions and annexations thereto; and
2.5.7 All proceeds (including but notlimitedto insuranceproceeds)andproductsofandaccessions and annexations to any of the foregoing.
2.6.The Company herebyauthorizes the lendertotakeanyactionsitdeems necessary orhelpfulto perfect or record such securityinterestand will cooperate with lender in suchrecordingorperfectionby signing any agreements or instruments or taking any actions required by the lender in a timely manner.
2.7 The Company will repay theprincipalofthe loan in one payment onthedate of repayment oftheloan.If the dateofrepayment of theloanfalls onaday that isnota business day, the payment date will be postponed tothenext businessday.Inthisagreement, "businessday"means thedayonwhich mostofthecommercial banks inIsraelareopen forbusiness and execute transactions in Israeli currency.
2.8.The loanwillberepaidbythe Company through a transfer to thelender's bank account(aswillbe given to the Companybythelender)or any other account in Israel in accordance with the notice ofthe lender.
3. Righttoearly repayment
3.1.TheCompany may, atitsoption, repay theloanahead of time.
4. Declarations and obligations of the Company
4.1.TheCompanydeclares through its authorized signatory andundertakesthat as of the date of signing this Agreement:
4.1.2. The Company has duly authorized its entryintothis Agreement, the transactions contemplated hereby and theexecution of allofits undertakings pursuantto theprovisionsof thisAgreement.
4.1.3. No application has been filed for the liquidation and / or appointment of areceiver/trustee in bankruptcy/ specialadministratororanyother similar functionary by law.
5. Repayment of the loan and special terms
5.1. Without derogating from any relief that will be provided to the lender pursuant to this agreement and/ or under anylaw, intheevent thatthe loanisnot fully repaid on the date ofrepaymentoftheloan and/ or the date ofrepaymentof the early loan in the event of one of the events enumerated in section 6 below, from the said date (hereinafter:"default").
5.2.Inthe event of default, the Company willpaythelenderan agreed compensation of $200 per each day of paymentdelay,(hereinafter:the"agreedcompensation").Such agreedcompensationwillbeadded tothe loanamount.
6. Providing the loan for immediate repayment
6.1. Intheevent ofanyoftheevents specified in the following section, thelender will beentitled to demand the immediate and fullrepaymentof the loan that has not been repaid by that date,itis hereby clarified thattheright todemand immediate repaymentand/orthedemandforimmediate repaymentdoesnotderogate from any other relief available tothelender.
Thesecases are:
6.1.1. Aliquidationorder, receivership and / or stay of proceedings and / or an orderto executean arrangementorcompromisewith its creditors {oritsshareholders) arising fromits inabilityto repayits debtsand/or appointmentofa liquidatorand/or receiverandorifan application is submitted by the company oranythirdpartyto issueanorder as stated above orto appoint anofficeholderas stated above, and the said proceedingshavenot been canceled within 10 days from the date oftheirappointment.
6.1.2. IftheCompany hasbeen declared limited bylaworaforeclosure has been imposed on itsbankaccount at Bank Leumi or JPMorgan, a foreclosure thathasnotbeen removedwithin 10 days ortheCompany's economiccondition has deteriorated insuch a way thatin theopinion of thelender thiswould endanger therepaymentof the loan. If payments of the loan have not been repaid on time or inanyeventwhere the lender is entitled to make the loan available for immediate repayment as detailed above, the lender may actasitsees fit andinits sole discretion as follows:
6.1.3. Lendermaytakemeasuresagainst theCompany byanymeanslenderelects whichareavailableto him under the agreement and / or by law, for collectingtheamounts due to it under this agreement, all at once or in installments. To exercise one or all themeasuresspecified above,in full or in part, inorder to collectthesumsdueto itunder thisAgreement,allat once orininstallments.Thelender shall be entitled, as it sees fit,tosplititsclaim for therepaymentof all or any of the said amounts, and any part oftheamountsclaimed bythelender shall serveasa separate cause ofactionandindependent ofanyotherpart of the said amounts.
6.4.TheCompanywill reimburse lenderfor all reasonableexpensesand payments tobe paid by it,including fees of counsel and other expenses to be directly incurred for thepurposeof enforcing this agreement.
7. Transfer of rights
7.1. The Company shall notbeentitled to transfer orassignits rights underthis Agreement, inwhole orinpart. Thelender may transferany of its rights under thisagreementwithout seeking the company's consent.
8. Remedies
8.1 The company acknowledges that abreachby it ofitsobligations hereunder will cause irreparableharmto thelender,by vitiating the intent and purpose of the transaction contemplated hereby.Accordingly, thecompanyacknowledgesthat theremedy at law forabreachofitsobligations under this agreement will be inadequate and agrees,in the event of a breach or threatened breach bythecompany of the provisions of this agreement,that thelender shall beentitled, inaddition toallother available remediesat law or under this agreement, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this agreement and to enforce specifically the termsandprovisions thereof, without the necessity of showing economic loss and withoutanybond or other security being required.
9. Conflict ofInterest
9.1. The company and the lender eachhereby(i) acknowledge the inherent conflict of interest inthetransactions contemplated hereby,(ii)waives any claims orrightsit mayhave inrespect of such conflict of interest and (iii) accepts any decision to pre-pay the loan.
10. Statements by Parties
10.1. Anychange oraddition tothis Agreement shallhave noeffectunless it has been madeinwritingand signed by all parties.
10.2. Noconductby either partyshallbeconstruedasawaiverofanyofits rights under this Agreementor under any law, or as a waiver or consent onitspart to any breach or non-fulfillment of any condition,unless the waiver or consenthasbeenmade expresslyand in writing.
10.3 The addresses of the partiesareas stated in the Preamble to this Agreement. Notices under this Agreement shall be made inwriting anddelivered byregisteredmail, facsimile or e-mail ordelivered byhand,atthe addresses of the parties to this Agreement or other addresses to be notified by the Parties in accordance with the provisions of this Article. Any notice sent by registered mail shall be deemed to have reached the recipientswithin3 days of its delivery to the post office, a notice delivered by personal delivery by 17:00 on any business day shall be deemed delivered upon delivery, andifdelivered after 17:00 on anybusinessday then it shall be deemeddelivered onthenextbusinessday. Messagesentbyfacsimile or email shall be deemed received one business day after fromthedate of dispatch as approvedbythenotificationofthe instrumentfrom which it was transmitted.
Inwitness whereof, the parties have signed today, September 06, 2018:
Signatures | ||
For the Company | For the lender | |
/s/ Yossi Keret | /s/ Shlomi Palas | |
Name: Yossi Keret | Shlomi Palas | |
Title: Chief Financial Officer | ||