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4 December 2013 

 

Asnat Drouianov 

Israel

 

Re:provision of letter of credit to Duke Energy in respect of our 5.2MW project
in North Carolina

  

Shalom Asnat:

 

 

Set forth below and subject to the other terms and conditions in this letter are
the terms on which you will provide Bluesphere or any of its subsidiaries or
affiliates ("BSC"), upon BSC's sole discretion, with a collateral (the
"Collateral") enabling it to obtain a Letter of Credit (the “LC”) from a bank
agreed upon by the parties (the "Issuing Bank") in form and substance acceptable
to Duke Energy Carolinas, LLC in respect of our 5.2MW biogas plant to be
constructed and operated in North Carolina (the “Project”), which BSC will be
responsible for issuing and activating at its own expense:

 

1.Amount: The amount of the Collateral to be provided by Asnat is Euro 353,200
equal to $480,000 as at the date on which the Collateral was provided to BSC by
Asnat.

2.Bank fees: Any and all fees charged by both the Issuing Bank and Asnat's bank
shall be fully borne and paid by BSC, including bank fees necessary for
creating, registering, perfecting and maintaining any pledges or liens as deemed
necessary by the Issuing Bank.

3.Exchange rate: The Collateral to be provided by Asnat is denominated in Euros.
As a result all exchange rate differentials or hedging costs required by the
Issuing Bank to facilitate this transaction shall be borne by BSC.

4.Interest: For so long as the Collateral has not been fully repaid to Asnat
along with any Interest due hereunder, Asnat shall be paid interest (the
"Interest") in an amount, equal to 1% (one percent) of the outstanding face
value of the Collateral. The Interest hereunder shall be paid to Asnat for each
calendar month (or any part thereof) in advance, within the first two business
days of each calendar month. All payments of principal and Interest hereunder
shall be made by way of a transfer to Asnat’s bank account (details of which are
set forth below) by a swift bank transfer, net of any bank charges or exchange
rate differentials. Details of Asnat's bank account are as follows:

a.Bank Leumi Branch Trumpeldor, Tel Aviv, Branch: 807

b.Account number: 29405345

c.Iban: IL720108070000029405345

d.Beneficiary: Asnat Drouianov

 

 

 

35 Asuta St. Even Yehuda, Israel 40500 | Tel: +972-9-8917438, Fax:
+972-9-8998615

London Office: Pall Mall 100 St. James London, SW1Y 5NQ UK | Tel:
+44-020-73213716

www.bluespherecorporate.com

 

 

 

 

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5.On a date that is no later than the expiration of 90 days following the date
on which the Collateral was provided by Asnat to the Issuing Bank (the "Release
Date"), BSC shall cause the Collateral to be released by the Issuing Bank and
repaid to Asnat, by providing it with a substitute security/ies that is/are
fully satisfactory to the Issuing Bank.

 

BSC is committed to have any and all liens, pledges and encumbrances removed or
vacated from the Collateral no later than by the Release Date, so that, by the
Release Date, the Collateral is immediately available to Asnat free and clear of
all liens, pledges and encumbrances.

 

6.In consideration for her agreement to provide the Collateral to BSC hereunder,
Asnat shall receive as soon as practicable from BSC an ownership stake in
Charlottesphere, LLC, which will be equivalent to a four percent (4%) ownership
stake in Orbit Energy Charlotte LLC and Tipping, LLC, the Project operative
companies.

 

7.To secure Asnat’s rights under this letter-agreement:

 

a.BSC shall issue and deliver to Asnat a convertible note in the amount of Euro
353,200 granting Asnat the right to convert the outstanding principal and
accrued, but unpaid, interest into whatever number of shares of common stock of
BSC (the “Shares”) as will allow Asnat to receive Euro 353,200 plus any interest
owed to her based on the then applicable market price of the Shares.

 

b.BSC shall further prepare and deliver to Asnat a letter addressed to BSC’s
transfer agent authorizing it to issue the Shares to the direction of Asnat in
accordance with the terms hereof. If Asnat sells the Shares delivered to her
based on her first request to receive Shares and receives less than the full
amount owed to her, then Asnat shall be entitled to receive additional Shares
until she fully recoups the amount owed to her.

 

c.In this connection and notwithstanding anything else to the contrary, Asnat
shall not be entitled to convert the convertible note into Shares until after
three months from the date hereof and, then, only if BSC has not delivered to
her the Collateral plus any accrued, but unpaid, interest under the convertible
note.

 

8.BSC hereby agrees to issue to your order within 10 days of the date of this
letter 5,000,000 of shares of its common stock to be adjusted for any stock
splits or similar transactions.

 

[signature page to follow]

 

 

 

35 Asuta St. Even Yehuda, Israel 40500 | Tel: +972-9-8917438, Fax:
+972-9-8998615

London Office: Pall Mall 100 St. James London, SW1Y 5NQ UK | Tel:
+44-020-73213716

www.bluespherecorporate.com

 

 

 

 

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This letter agreement is governed by the laws of the State of Israel
irrespective of its conflicts of laws principles.

 

Yours truly,       /s/ Shlomi Palas   Shlomi Palas   Chief Executive Officer  

 

Shlomi Palas, in his personal capacity, guarantees that Bluesphere will perform
the actions required of it in a timely manner pursuant to this letter agreement.

 

Signed: /s/ Shlomi Palas     Shomi Palas  

 

Agreed to:

 

    Asnat Drouianov  

 

Date: 4 December 2013

 

 

 

35 Asuta St. Even Yehuda, Israel 40500 | Tel: +972-9-8917438, Fax:
+972-9-8998615

London Office: Pall Mall 100 St. James London, SW1Y 5NQ UK | Tel:
+44-020-73213716

www.bluespherecorporate.com