exhibit10_1.htm


    
      
         


      

      
        Execution Copy  

        
          

        

      

      
         


      

    


    Loan
Agreement

    


    Dated
as of May 12, 2009

    


    
      	
              By
      and between:

            	
              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”);

            


    

    


    
      	
              And:

            	
              Avraham Bahry, of 1 Gan
      HaShikmim Street, Ganei-Yehuda - Savyon 56905, Israel (the “Lender”);

            


    

    


    
      	
              Whereas:

            	
              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 which was approved by Borrower’s Board
      of Directors on March 26, 2009 and which Borrower expects to proceed as
      soon as an appropriate SEC Registration Statement becomes effective (forms
      are currently being drafted by Borrower’s US Legal Counsel) (the “Rights Offering”);
      and

            


    

     

    
      	
              Whereas:

            	
              Borrower
      has requested that Lender, who holds office as Chairman 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

            


    

     

    
      	
              Whereas:

            	
              Lender
      is willing to make a loan to Borrower, all subject to and in accordance
      with the terms of this Agreement;

            


    

     

     

    Therefore,
the parties have made condition and agreed as follows:

     

    
      	
              1.  

            	
              The
      Loan

            


    

     

     

    
      	
              1.1  

            	
              Upon
      the terms and conditions set forth in this Agreement, Lender agrees to
      loan to Borrower the principal amount of $200,000.- (two hundred thousand
      US Dollars) (the “Loan”).

            


    

     

    
      	
              1.2  

            	
              The
      Loan will be made available to Borrower within 3 business days of the date
      hereof (hereinafter: the “Loan Date”), by means
      of:

            


    

     

    
      	
              a.  

            	
              one
      or more bank transfers in the total aggregate amount of $125,000, to
      Borrower’s account No. 703200/66 at Bank Leumi, branch No. 809 in
      Tel-Aviv, Israel;

            


    

     

    
      	
              b.  

            	
              one
      or more bank transfers in New Israeli Shekels in a total aggregate amount
      equal to $75,000 according to the Dollar/Shekel Representative Rate of
      Exchange last published prior to the transfer directions being given by
      Lender, to Borrower’s account No. 703200/66 at Bank Leumi, branch No. 809
      in Tel-Aviv, Israel.

            


    

     

    
      	
              2.  

            	
              Interest

            


    

     

     

    
      	
              2.1  

            	
              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”).

            


    

     

    
      	
              2.2  

            	
              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.

            


    

     

    
      	
              3.  

            	
              Repayment

            


    

     

     

    
      	
              3.1  

            	
              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”).

            


    

     

    
      
        
          2

           

        

      

      
        
          
            Loan
Agreement: HOMI - Bahry

            Execution
Copy

          

        

        
          

        

      

      
         

      

      
         

      

    

    
      	
              3.2  

            	
              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 $204,000, then the issue,
      on that date, of 5,100,000 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.

            


    

     

    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.

     

    
      	
              3.3  

            	
              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.

            


    

     

    
      	
              3.4  

            	
              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.

            


    

     

    
      	
              3.5  

            	
              Borrower
      may at any time prepay to Lender any part of the outstanding balance of
      the Loan and accrued Interest, by any of the methods set forth in Section
      3.4 above.

            


    

     

    
      	
              3.6  

            	
              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.

            


    

     

    
      	
              4.  

            	
              Late
      Payment

            


    

     

     

    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.

     

    
      	
              5.  

            	
              Specified Purpose of
      Loan

            


    

     

     

    
      	
              5.1  

            	
              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
      or more of its subsidiaries, to finance their activity in the ordinary
      course of business (the “Specified
      Purpose”).

            


    

     

    
      
        
          3

           

        

      

      
        
          
            Loan
Agreement: HOMI - Bahry

            Execution
Copy

          

        

        
          

        

      

      
         

      

       

    

    
      	
              5.2  

            	
              Borrower
      hereby undertakes to use the Loan solely for the Specified Purpose and not
      to use any part of the Loan for any purpose other than the Specified
      Purpose.

            


    

     

    
      	
              5.3  

            	
              Borrower
      hereby recognizes and acknowledges that Lender’s consent to make the Loan
      to Borrower in accordance with the terms hereof is inter alia subject to
      and in reliance upon Borrower’s undertaking as set forth in Section 5.2
      above, which is a fundamental condition of this
  Agreement.

            


    

     

    
      	
              6.  

            	
              Borrower’s General
      Covenants

            


    

     

     

    
      	
              6.1  

            	
              Borrower
      shall keep proper records and books of account in accordance with
      generally accepted accounting principles consistently applied, and shall
      maintain, preserve and keep all of its properties and assets in good
      working order and condition, subject to ordinary wear and
      tear.

            


    

     

    
      	
              6.2  

            	
              Borrower
      shall conduct its affairs in such manner as is appropriate for a public
      company whose shares are traded on the New York OTCBB, and in accordance
      with all laws and regulations by which it is
  bound.

            


    

     

    
      	
              6.3  

            	
              Other
      than in the ordinary course of business or otherwise as agreed to in
      writing by the Lender, on a case by case basis, Borrower shall not create,
      incur, or assume any indebtedness, nor shall it create incur, assume or
      suffer any mortgage, pledge, lien, security interest, charge or
      encumbrance of any kind or nature in or upon any of its property or
      assets, whether now owned or hereafter acquired, nor shall it sell, lease,
      assign, transfer or otherwise dispose of any of its assets, including its
      accounts receivable.

            


    

     

    
      	
              7.  

            	
              Representations and
      Warranties

            


    

     

     

    Borrower
hereby represents and warrants to Lender as follows:

     

    
      	
              7.1  

            	
              that
      it is duly organized and existing under the laws of the jurisdiction in
      which it was incorporated, with the requisite corporate or other power to
      own and operate its properties and assets, and to carry on its business as
      presently conducted and to execute and perform its obligations under this
      Agreement;

            


    

     

    
      	
              7.2  

            	
              that
      this Agreement is valid and binding upon it and it is bound by it and
      obliged to act in accordance with its terms; and that the execution and
      performance by it of this Agreement, and compliance therewith, and the
      consummation of the transactions contemplated by this Agreement will not
      result in any violation of and will not conflict with, or result in a
      breach of any of the terms of, or constitute a default under, any
      document, other obligation, law, regulation or order to which it is or
      will be party or by which it is or will be
  bound;

            


    

     

    
      	
              7.3  

            	
              that
      all actions on its part and on the part of its directors, required for the
      authorization, execution, and performance by it, of this Agreement, and
      the consummation of all the transactions contemplated herein, have been
      obtained, or that they will be obtained within 30 days of the date hereof
      and until such time as they are obtained no use will be made of the Loan,
      which will, until such time, be deemed held in trust for Lender by
      Borrower;

            


    

     

    
      	
              7.4  

            	
              that
      this Agreement and the entire contents thereof do not require that any
      notice be made to any authorities, other than
      notice which has already been made by Borrower or which will be made by
      Borrower in a timely manner (such as a Form 8-K), in accordance with all
      laws and regulations by which Borrower is bound, in accordance with
      directions which Borrower will receive from its US Legal
      Counsel.

            


    

     

    
      	
              8.  

            	
              Events of
      Default

            


    

     

     

    The
occurrence and continuation of any of the following events shall be considered
an Event of Default upon the occurrence of which the entire unpaid balance of
the Loan and Interest, and all reasonable costs of collection, including
reasonable attorney fees and expenses, shall become immediately due and
payable:

     

    
      	
              8.1  

            	
              Borrower
      shall fail to make any payment which it is obliged to make under the terms
      of this Agreement and such failure is not fully remedied within thirty
      (30) days after the occurrence
thereof;

            


    

     

    
      
        
          4

           

        

      

      
        
          
            Loan
Agreement: HOMI - Bahry

            Execution
Copy

          

        

        
          

        

      

      
         

      

       

    

    
      	
              8.2  

            	
              for the avoidance of doubt it
      is hereby stipulated and emphasized that it is the fundamental obligation
      and undertaking of Borrower to repay the Loan and pay the Interest, in
      their entirety, on the Repayment Date, and that failure by Borrower to
      repay the Loan and pay the Interest, in their entirety, on the Repayment
      Date, shall be considered an Event of Default, regardless of the reason
      for such failure, and without Lender being required to deliver any kind of
      notice to Borrower;

            


    

     

    
      	
              8.3  

            	
              Borrower
      shall default in the performance of any material covenant or obligation
      contained herein or in any other agreement, debenture, pledge, promissory
      note or other instrument of indebtedness with Lender and such default is
      not remedied within thirty (30) days after the occurrence
      thereof;

            


    

     

    
      	
              8.4  

            	
              Borrower
      uses and/or attempts and/or permits use of the Loan, or any part thereof,
      for any purpose other than the Specified
  Purpose;

            


    

     

    
      	
              8.5  

            	
              any
      representation or warranty made by or on behalf of Borrower to Lender,
      howsoever in connection with the Loan and/or this Agreement, shall at any
      time prove to have been incorrect or
misleading;

            


    

     

    
      	
              8.6  

            	
              any
      judgment materially affecting the ability of Borrower to repay the Loan
      and pay the Interest shall be entered against Borrower or any attachment,
      levy or execution against a substantial portion of its properties shall
      remain unpaid, or shall not be released, discharged, dismissed, suspended
      or stayed for a period of thirty (30) days or more after its entry, issue
      or levy, as the case may be;

            


    

     

    
      	
              8.7  

            	
              any
      proceedings seeking to declare Borrower bankrupt, or insolvent, or seeking
      liquidation, winding up, reorganization, arrangement with creditors,
      composition of debts or any other similar proceedings shall be initiated
      against Borrower, and such proceeding shall not be dismissed within thirty
      (30) days;

            


    

     

    
      	
              8.8  

            	
              any
      event shall occur materially affecting the ability of Borrower to repay
      the Loan and pay the Interest under the terms of this
      Agreement.

            


    

     

    
      	
              9.  

            	
              Miscellaneous

            


    

     

     

    
      	
              9.1  

            	
              In
      view of the fact that Lender is a shareholder in Borrower and is currently
      the Chairman of Borrower’s Board of Directors, Lender hereby agrees that,
      so long as he owns more than 1% of Borrower’s issued and outstanding share
      capital or is a member of Borrower’s Board of Directors, he will not
      participate in any vote taken by any of the organs within Borrower’s
      corporate structure in connection with this Agreement. This clause is in
      addition to, and without derogating from, the provisions of applicable law
      that may apply to this Agreement in connection with its being an agreement
      between a corporation and individuals who are shareholders and directors
      of that corporation.

            


    

     

    
      	
              9.2  

            	
              Lender
      shall be entitled, at any time and without requiring the consent of
      Borrower or any other individual, to assign all or any part of his rights
      under this Agreement, to any other entity. Borrower shall not be entitled
      to assign all or any part of its rights and/or obligations under this
      Agreement, without Lender’s advance written
  consent.

            


    

     

    
      	
              9.3  

            	
              No
      Amendment to this Agreement, or any part thereof, shall be valid or
      binding upon the Parties unless drawn up in writing and signed by both
      Parties.

            


    

     

    
      	
              9.4  

            	
              As
      used in this Agreement, the term “including”, and all derivations thereof,
      shall mean “including, without limitation”, unless expressly stipulated to
      the contrary. Where the context permits, use of the singular number
      includes the plural and vice versa and words denoting any gender shall
      include all genders. The Preamble, and any Appendices, Exhibits or
      Schedules to this Agreement, constitute an integral part hereof. Section
      headings are for convenience purposes only, and may not be used in the
      construction or interpretation of this
  Agreement.

            


    

     

    
      	
              9.5  

            	
              No
      failure or delay on the part of any party in exercising any right and/or
      remedy to which it may be entitled hereunder and/or by law shall operate
      as a waiver by that party of any right whatsoever. No waiver of any right
      under this Agreement shall be deemed as a waiver of any further or future
      right hereunder, whether or not such right is the same kind of right as
      was waived in a previous instance.

            


    

     

    
      
        
          5

           

        

      

      
        
          
            Loan
Agreement: HOMI - Bahry

            Execution
Copy

          

        

        
          

        

      

      
         

      

       

    

    
      	
              9.6  

            	
              In
      case any provision of the Agreement shall be declared invalid, illegal or
      unenforceable, the validity, legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby and shall
      continue in full force and effect.

            


    

     

    
      	
              9.7  

            	
              This
      Agreement constitutes the entire agreement between the parties with
      respect to the subject matter hereof and replaces any previous agreements
      between the parties, if at all, whether written or verbal, pertaining to
      any of the subject-matter hereof.

            


    

     

    
      	
              9.8  

            	
              This
      Agreement shall be governed by and construed in accordance with the laws
      of Israel, without regard to its rules of conflict of laws. The parties
      hereby agree and submit to the exclusive jurisdiction of the competent
      courts in the city of Tel-Aviv, with respect to any claim or dispute
      arising out of and/or in connection with this Agreement. For this purpose,
      Borrower hereby gives notice that an address for service of court papers
      in any action relating to this Agreement shall be c/o HOMI Israel Ltd.,
      Gav-Yam Center, Building #3, 3rd Floor, 9 Shenkar Street, Herzliya Pituach
      46725, Israel.

            


    

     

    
      	
              9.9  

            	
              Notices
      sent by one party to the other under this Agreement will be sent by
      registered mail to the addresses specified herein, delivered by hand, or
      transmitted by fax and will be deemed to have reached their destination
      within 5 days of being deposited with the Post Office for dispatch as
      registered mail (10 days in the case of air mail), upon actual delivery
      when delivered by hand, and upon receipt of the recipient’s confirmation
      of receipt when sent by fax.

            


    

     

    
      	
              9.10  

            	
              This
      Agreement may be executed in any number of counterparts, in original or by
      facsimile, and each such counterpart hereof shall be deemed to be an
      original instrument, but all such counterparts together shall constitute
      one and the same agreement.

            


    

     

    In witness whereof the
parties have executed this

     

    Loan Agreement on the date
first above written:

     

    


     

    SIGNED
for and on behalf
of                                                                       
)

    Hotel Outsource Management
International,
Inc.                                 
 )

                      
)

    By:  Daniel
Cohen; Jacob
Ronnel                                                              )

    


     

    SIGNED
by:                                                                                                )

    Avraham
Bahry                                                                                         )