Loan
Agreement
Dated as
of August ___, 2009
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Hotel
Outsource Management International, Inc., a Delaware corporation whose address for the
purposes of notices sent under this Agreement shall be One
Embarcadero Center, Suite 500, San Francisco CA 94111, Fax:
+1-415-433 5994, e-mail: jackronnel@my-homi.com ; with a
copy to Reif & Reif Law Offices, 17-4 Yitzchak Rabin Rd., Bet
Shemesh 99585, Israel, Fax: +972-2-999-7993, e-mail:
Mail@ReifLaw.com (the “ Borrower ”)
;
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Daniel
Cohen , of 10 Iris
Street, PO Box 4591, Caesarea 30889, Israel (the “
Lender ”);
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Borrower
requires immediate funds, which, in the current economic climate,
it has not been able to obtain in a timely manner from banking
institutions, as interim financing until receipt of the proceeds
which it anticipates receiving from the rights offering pursuant to
the S-1 Registration Statement which was declared effective by SEC
as of June 25, 2009 (the “ Rights Offering ”);
and
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Borrower has
requested that Lender, who holds office as President of Borrower,
assist Borrower by agreeing to loan such funds to Borrower in the
amount and under the terms set forth in this Agreement below;
and
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Lender is
willing to make a loan to Borrower, all subject to and in
accordance with the terms of this Agreement;
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Therefore, the parties
have made condition and agreed as follows:
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Upon the terms
and conditions set forth in this Agreement, Lender agrees to loan
to Borrower the principal amount of $25,000.- (twenty five thousand
US Dollars) (the “ Loan ”).
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The Loan will
be made available to Borrower within 3 business days of the date
hereof (hereinafter: the “ Loan Date ”), by
means of SWIFT wire transfer to Borrower’s account No.
0605079633 at HSBC Republic Bank, a division of HSBC Bank USA, in
the branch located at 452, Fifth Avenue, New York, NY
10018.
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Borrower shall
pay interest on the entire outstanding balance of the Loan,
commencing as of the Loan Date, at the rate of 6% per annum (the
“ Interest ”).
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On the
Repayment Date (as defined below), Borrower shall pay to Lender all
of the Interest that has accrued and is outstanding on the Loan up
until that date.
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Borrower shall
repay the entire Loan, with all accrued Interest, in a single, cash
payment to Lender, no later than the 4 month anniversary of the
Loan Date (the “ Repayment Date ”).
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Notwithstanding
the foregoing, and notwithstanding Lender’s declaration that,
as at the date hereof, he would prefer for the Loan to be repaid in
cash, Lender nevertheless agrees that Borrower may elect to effect
repayment of any part, or all, of the Loan and/or accrued Interest,
to Lender, no later than the Repayment Date, by means of the issue
to Lender of shares of Borrower’s common stock. The purchase
price of each share so issued shall be deemed to be the same price
per share as in the Rights Offering (the “ Price Per
Share ”), such that the outstanding balance of the Loan
plus accrued Interest shall be reduced, at the time of issue of
such shares, by the quantity of shares so issued multiplied by the
Price Per Share. If, for example, the Price Per Share is $0.04 and
if the Repayment Date falls exactly on the 4 month anniversary of
the Loan Date, and the outstanding balance of the Loan plus the
accrued Interest is $25,500, then the issue, on that date, of
637,500 shares of Borrower’s common stock, to Lender’s
order, as set forth herein, would constitute full repayment of the
Loan and all accrued Interest.
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For any sums
that may be payable by Lender in the Rights Offering, in respect of
shares which Lender may subscribe for in such Rights Offering, up
to the total amount then owed by Borrower to Lender under this
Agreement, Lender, or Borrower, may elect, by written notice to the
other, that such sums be offset against the outstanding balance of
the Loan and accrued Interest then owed to Lender.
Loan
Agreement: HOMI - Cohen
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If Borrower
elects to repay any part of the Loan and/or accrued Interest by
means of the issue of shares as set forth in Section 3.2 above,
then the shares must be duly issued in Lender’s name, or to
his order, and registered in Lender’s name, or to his order,
in Borrower’s share register, and duly executed share
certificates must be delivered to Lender, or to his order, all no
later than the Repayment Date.
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For avoidance
of any doubt, Borrower undertakes to fully repay the Loan and all
accrued Interest, no later than the Repayment Date, either by means
of a cash payment as set forth in Section 3.1 above, or by means of
a share issue, as set forth in Sections 3.2 and 3.3 above, or by
means of a combination of such cash payment and such share
issue.
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Borrower may at
any time prepay to Lender, pari passu, any part of the outstanding
balance of the Loan and accrued Interest, by any of the methods set
forth in Section 3.4 above.
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Without
derogating from any statutory remedies and/or other remedies
available under the terms of this Agreement, if Borrower is in
default under this Agreement and does not fully repay the Loan and
accrued Interest in the manner set forth above, no later than the
Repayment Date, then Lender shall be entitled to elect, by means of
written notice to Borrower, whether repayment of the outstanding
balance of the Loan and accrued Interest must be made by means of
cash payment, or by means of share issue under the principles
outlined above, or by a combination of these methods, and Borrower
undertakes to comply with such election by Lender.
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Without
derogating from any statutory remedies and/or other remedies
available under the terms of this Agreement, any sums not paid by
Borrower at the appointed time under this Agreement shall
be subject to interest at the highest rate of interest
then charged by Bank Leumi of Israel in respect of Dollar sums
overdrawn beyond an agreed credit facility, such interest to accrue
from the date payment was originally due until the date of actual
payment; this interest rate shall initially be determined on the
date payment was originally due, and thereafter monthly until the
date of actual payment. Nothing in this Section 4 may be construed in any way as derogating
from Borrower’s undertaking and obligation to repay the Loan
and pay the Interest as set forth above. Arrears interest accruing
pursuant to the terms of this Section 4 shall, for all intents and purposes, be
deemed part of the Interest, as defined herein.
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Specified
Purpose of Loan
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The Parties
hereby confirm and agree that Borrower requested the Loan for the
sole purpose of using all of said Loan to finance its activity in
the ordinary course of business, including making financing
available to one o
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