Principals in Contact Drafting Group J Moshe Wallace Kazin Nir Abudraham

Summary of Scenario A High-Tec company is searching for new funding for R&D The Company was founded by 5 scientists and 2 capital investors The founders were responsible for the devolvement of a new technology The company's income is based on patents, they have no manufacturing capability CellCo has a full team of scientists and researchers Any product must be manufactured through a third party CellCo has used up its initial capital raised by the venture capital entities All personal are important part of the business Extra Details: There are no other outstanding loans from other banks The offices of CellCo are fully paid for The venture capital entities do not a want a quick return on their investment but do have the right under contract to sell there shares with approval of the rest of the shareholders

Definitions: The following words shall have the stated meaning in regarding to the contract: 1. “BANKRUPTCY”- means i) the filing by the company of protection from creditors both voluntary or involuntary ii) the company's inability to pay back its creditors 2. “BORROWER”- the company CellCo and its GUARANTORS 3.“BUSINESS DAY”: All days except for Saturday, Sunday or national holiday declared by the State. 4. “DEFAULT": means any condition, act of event which with notice of lapse of time or both would constitute an EVENT OF DEFAULT 5.“EVENT OF DEFAULT": meaning as set in the terms in the following agreement. 6. “GUARANTOR”: means the individuals for established the company 7.“GUARINTY”: means the unconditional guaranty given by the GUARANTOR to the LENDER 8.“LEANDER”: BankCO 9.”PATENT”: means license given to BORROWER by the Patent office of the US Government. 10.“INVESTMENTS”- means buying property, stock, or inventory which for future capital gain 11. “ACCELERATION”: means the return of the full outstanding amount of the loan within 3 BUISNESS DAYS after receiving written notification from the LEANDER (unless otherwise stated differently in the DEFAULTS SECTION of the contract)

Goals of the Contract To give the loan and receive the full amount in return + principle To have personal guaranties on the money from the founders of the Cellco as a group and as individuals That CellCo will pay the loan back in full and on time so that they will take more loans in future The loan is a way that the bank can show companies in same field that the bank is willing to give a chance to new developing hi-tech companies To accompany CellCo in the whole process and create a level of trust between the sides

Rep & Warranties Percentage of each partner All shareholders approved the loan All other outstanding Loans Number of Personal Notification of any open legal proceedings Notification of any and all leans All Patents are approved

Covenants Negative Covenants: No sell of any share to persons who are not already shareholder without the approval of the bank There can be no leans on any property of CellCo that was used as a guaranty for the loan No taking of new debts, investment No changing of character of business

Defaults Events of Default: 1.Payment default :a) BankCo was the right to Accelerate the loan if the payment is delayed by 3 Business Day. b) if the loan is not repaid within 6 days of the Default BankCO was the right to call in the Guaranties

Material Defaults: a) If there is no Patent BankCo was the right to Accelerate the Loan b) If loan is not approved by all shareholders there will be a grace period of 10 Business Days before any action is taken c)

3)Negative Covents Defaults: a) selling of shares to an outside person gives BankCo the right to Accelerate the loan b) A lean on any guaranteed property by another bank will give BankCo the right to sell the property c) if CellCo takes a any new debt without the approval of BankCo, BankCo has the right to Accelerate the loan imideaitly d) Any change of buiesnes will give BankCo the right to Accelerate the loan

4) Small Infractions: If there are any small infractions of the contract by CellCo, BankCo will receive indemnification with a basket of 5%-10% of the monthly payment depending on the type of infraction

5)Bankrupcy- If CellCo declare Bankruptcy, voluntary or involuntary, BankCo will accelerate the loan immediately

6)Judgement Defaults: Any judgment given against CellCo must be explained to BankCo the meaning the judgment will have to the possibility of CellCo to pay the loan back in full and on time. Any explanation that is not acceptable will give BankCo the right to Accelerate the loan

7) Acceleration Default: If the is an acceleration of debt by any other contract it will start an immediate Acceleration by BankCo