EXH10-52
NOTE PURCHASE AND WARRANT AGREEMENT
THIS AGREEMENT made as of this 31st day of July, 1996 between Xxxxxxxxx
XxXxxx ("the Purchaser") and FIBERCORE, INC. ("the Company") a Nevada
Corporation.
WHEREAS, the Purchaser and the Company executed a Term Sheet dated July
15 1996 for the purchase and sale of the Company's $250,000 note (the "Note"");
and
WHEREAS, pursuant to the Term Sheet, the Purchaser and the Company are
required to document such purchase and sale;
NOW, THEREFORE in consideration of the premises and mutual covenants
and agreements herein contained, the parties agree as follows:
1. Offer
1.1 The Purchaser hereby agrees to purchase the Note subject to the conditions
hereinafter set forth;
1.2 Upon execution and delivery of this Agreement by both parties and the
execution and delivery of the Note (Exhibit A) by the Company to the
Purchaser, the Purchaser will pay to the Company the sum of $250,000;
1.3 In addition to the foregoing, the Company grants the Purchaser warrants
(the "Warrant") granting the Purchaser the right to purchase 1 15,220
common shares of the Company for a purchase price of 1.81 per share
exercisable in whole or in part at any time within a 5-year period to July
31, 2001.
2. Acceptance
2.1 The Company agrees to sell to the Purchaser the Note subject to the terms
and conditions of this Agreement and to grant the Warrants referred to in
clause 1 O3.
3. Delivery of Warrants
3.1 Upon payment of the purchase price for the Note, this agreement shall
constitute the Warrants registered in Purchaser's name.
4. Representations and Warranties of the Company
4.1 The Company hereby represents and warrants to, and covenants with the
Purchaser as follows:
(a) Organization and Standing of the Company. The Company is a
corporation duly organized and validly existing under the laws of the State of
Nevada and is in good standing under such laws. The Company is not in violation
of its Certificate of Incorporation or Bylaws. The Company has all requisite
corporate power and authority for the ownership and operation of its properties
and assets, and to carry on its business as presently conducted or now proposed
to be conducted.
(b) Corporate Action. The Company has all the necessary corporate power
and has taken the corporate action required to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate action on the
part of the Company for the authorization, execution, delivery and performance
of this Agreement by the Company, the authorization, sale, issuance, and
delivery of the Note and Warrants and the performance of the Company's
obligations hereunder has been taken. This Agreement has been duly executed and
delivered by the Company and constitutes a legal valid and binding obligations
of the Company enforceable in accordance with its terms. The issuance of the
Note and Warrant does not require any further corporate action, will not be
subject to preemptive rights or other preferential rights in any present
stockholders of the Company and will not conflict with any provisions of any
agreement to which the Company is a party or by which it is bound.
(c) Government Approvals. No authorization, consent, approval, license,
exemption, from or filing of registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic, or
foreign, is or will be necessary for the execution and delivery by the Company
of this Agreement, and except for certain filings under state securities laws,
the offer and sale of the shares will be exempt from the registration
requirements of applicable federal and state securities laws.
(d) Compliance with Other Instruments. Neither the execution issuance
and delivery of this Agreement or the Note, nor the consummation by the Company
of any transaction contemplated hereby or thereby, constitutes or results in or
will constitute or result in a default or violation of any term or provision of
the charter and By-laws of the Company, as amended and in effect, and the terms
and provisions of the mortgages, indentures, leases, agreements and other
instruments and of all judgments decrees, governmental orders, statutes, rules
or regulations by which the Company or its properties are bound.
5. Purchaser Representations
5.1 In connection with this subjection the Purchaser hereby makes the following
acknowledgment and representations:
(a) The execution of this Agreement has been duly authorized by all
necessary action on the part of the Purchaser, has been duly executed and
delivered and constitutes a valid, legal, binding, and enforceable agreement of
the Purchaser;
(b) The Purchaser is acquiring the Note and the Warrants for its own
account, for investment, and not with a view to any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Act");
(c) The Purchaser understands that because the Note and the Warrants
have not been registered under the Act, it cannot dispose of any of the Note and
Warrants unless such Note and the Warrants are subsequently registered under the
Act or exemptions from such registration are available. The Purchase
acknowledges, and understands that, it has no right to require the Company to
register the Note, the Warrants or any shares obtained through the conversion or
exercise of the foregoing. The Purchaser further understands that the Company
may, as a condition to the transfer of any of the Note or Warrants, require that
the request for transfer by accompanied by an opinion of counsel, in form and
substance satisfactory to the Company, to the effect that the proposed transfer
does not result in a violation of the Act unless such transfer is covered by an
effective registration statement under the Act. The Purchaser understands that
each certificate representing the shares will bear the following legend or one
substantially similar thereto:
The securities represented by this certificate have not been
registered under the Securities Act of 1933. These securities
have been acquired for investment and not with a view to
distribution or resale, and may not be sold, mortgaged,
pledged, hypothecated or otherwise transferred without an
effective registration statement for such shares under the
Securities Act of 1933, or an opinion of counsel satisfactory
to the corporation that registration is not required under
such Act.
(d) The Purchase understands the offering is being made pursuant to the
exemption from registration with the Securities and Exchange Commission (the
"Commission") afforded by Section 4(2) of the Act and/or Regulation D adopted by
the Commission relating to transactions by an issuer not involving any public
offering, and similar federal, state, and foreign laws or policies.
Consequently, any offering materials have not been subject to review and comment
by the staff of the commission or by any state or foreign securities commission.
(e) The Purchaser acknowledges that during the course of this
transaction and prior to sale, it has had the opportunity to ask questions of
and receive answers from the Company concerning the terms and conditions of its
investment, and to obtain any additional information of the same kind that is
specified in Part I of a registration Statement on Form SB-2 under the Act. The
Purchaser or its purchaser representative has examined the information furnished
by the Company and, through discussions and examination of such materials as the
Purchaser has requested, has obtained sufficient information upon which to make
an investment decision. The Purchaser is familiar with the type of investment
which the shares constitute, and has reviewed the merit and risks of this
investment to the extent deemed advisable by the Purchaser. The Purchaser has
such knowledge and experience in financial and business affairs that it is
capable of evaluation the merits and risks of investing in the shares and
acknowledges that it is able to bear the economic risks of this investment.
Further, the Purchaser understands all matters in this Agreement.
(f) The investment in the Company by the Purchaser does not constitute
a principal portion of the Purchaser's total assets and the Purchaser is able to
afford a complete loss of the investment contemplated herein.
6. Covenants of the Company
6.1 Annual Reports. The Company agrees to use its best efforts to deliver to
the purchasers as soon as practicable after the end of each fiscal year and
in any event within 120 days thereafter, a consolidated balance sheet of
the Company as at the end of such fiscal year, a consolidated Statement of
Cash Flow of the Company for such year, prepared in accordance with
generally accepted accounting principles consistently applied and setting
forth in each case in comparative form the figures for the previous fiscal
year, all in reasonable detail and certified by independent public
accountants selected by the Company.
6.2 Quarterly Reports. The Company agrees to use its best efforts to deliver to
the Purchaser as soon as practicable after the end of each of the first
three quarterly fiscal periods in each fiscal year and in any event within
60 days thereafter, a consolidated balance sheet of the Company as at the
end of such period, a consolidated statement of operations and a
consolidated statement of Cash Flow of the Company for such period, in each
case prepared in accordance with generally accepted accounting principles
consistently applied and setting forth in comparative form the figures for
the corresponding periods of the previous fiscal year, all in reasonable
detail and certified; subject to changes resulting from audit adjustments,
by the principal financial or accounting officer of the Company.
6.3 Inspection. The Company agrees to permit any authorized representative of
the purchaser to visit the Company to discuss its affairs and finances with
its officers, all upon reasonable notice to the Company, at such reasonable
times and as often as may be reasonably requested.
6.4 Purchaser's Right to Receive Reports. The Company shall deliver the reports
or give the rights specified in Paragraph 6.1, 6.2, and 6.3 to the
Purchaser until the earlier of (i) the closing date of the Company's first
underwritten public offering pursuant to an effective registration
statement filed under the Act; or (ii) until the Purchaser no longer holds
the Note or any Warrants.
7. No Waiver
7.1. Notwithstanding any of the representations, warranties, acknowledgments or
agreements made herein by the Purchaser, the Purchaser does not thereby or
in any other manner waive any rights granted to it under federal and state
securities laws.
8. Survival of Representation Warranties and Agreements
Notwithstanding any investigation made by any party to this Agreements,
all covenants, agreements, representations, and warranties made by the Company
and the Purchaser herein shall survive the execution of this Agreement, the
delivery to the Purchaser of the shares being purchased and the payment
therefore.
9. Transferability
9.1 The purchaser agrees not to transfer or assign this Agreement, or any of
its interest herein, and further agrees that any assignment or transfer of
the shares shall be made only in accordance with applicable securities laws
and that an appropriate legend with respect thereto may be placed by the
Company on any certificate evidencing such shares.
10. Miscellaneous
10.1 Notices. All notices or other communications given or made hereunder shall
be in writing and shall be delivered to the Purchaser at:
Xxxxxxxxx XxXxxx
000 Xxxxxx Xxxxxx
X. Xxxxxxx, XX 00000
and to the Company:
000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
10.2 Governing Law. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts without giving effect to the
conflict of laws.
10.3 Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties
10.4 Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company and by the Purchaser.
10.5 Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall hot be deemed to be
part of this Agreement.
l0.6 Severability. In case any provision contained in this Agreement should be
invalid, illegal, enforceable in any respect, the validity, legality, and
enforceability of the remaining provisions contained herein shall not in
any way be affected or impaired thereby.
10.7 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which when taken
together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party.
10.8 Pronouns. All pronouns shall be deemed to refer to the masculine, feminine,
neuter, singular or plural, as the identity of the person or persons, firm
or other entity may require in the context thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives the day and year first above
written.
XXXXXXXXX XXXXXX FIBERCORE, INC.
BY:___/S/___________________ BY:___/S/________________
Date: November 22, 1996 Title: Chief Financial Officer
EXHIBIT A
PROMISSORY NOTE
$250,000 Sturbridge, MA
Due July 31, 1999 July 31, 1996
FOR VALUE RECEIVED, FiberCore, Inc., a Nevada corporation ("Payor"),
hereby unconditionally promises to pay to the order of Xxxxxxxxx XxXxxx
("Payee"), at 000 Xxxxxx Xxxxxx, X. Xxxxxxx, XX 00000, the principal sum of Two
Hundred Fifty Thousand Dollars ($250,000) together with any unpaid interest
thereon, on July 31, 1999.
This Note shall bear interest at the initial rate of 9.25% for the
period July 31, 1996 to September 30, 1996. Thereafter the note will bear
interest for each 3-month period beginning October 1, 1996 at the rate of the
prime interest rate as published in the Wall Street Journal on the business day
immediately preceding the 3-month period plus one-percent (1%). Interest will be
payable quarterly on the 1 st day of the month following the 3-month interest
period (October 1, January 1, April 1 and July 1) during the term hereof.
In the event the Payor is unable to make the interest payments when due
the Payor agrees to pay an additional amount equal to 1/2 of 1% (.5%) on the
then outstanding principal as a late payment fee. In no event however, shall the
failure of the Payor to make an interest payment when due be an event of
default. All principal and unpaid interest shall be due at maturity, July 31,
1999.
This Promissory Note may be prepaid in whole or in part at any time or
from time to time without penalty or premium, together with interest accrued on
the amount so prepaid.
The principal amount of this Promissory Note and interest accrued
thereon shall become immediately due and payable, without presentation, protest,
notice or further demand, all of which are expressly waived, in the event of the
filing by or against the Payor of a petition in bankruptcy or reorganization or
insolvency. No event of default shall occur until Payor receives written notice
of an alleged default and, after 30 days, such default has not been remedied or
cured.
IN WITNESS WHEREOF, the undersigned has caused this Promissory Note to
be duly executed and delivered as of the date set forth above.
FiberCore, Inc.
By:___/s/___________________
Xxxxxxx X. Xxxxxxx
Financial Officer and Treasurer
