Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 15, 2002,
between the investor or investors signatory hereto (each an "Investor" and
together the "Investors"), and Fibercore, Inc., a Nevada corporation (the
"Company").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Investors are purchasing from the Company, pursuant to the
Convertible Subordinated Debentures and Warrants Purchase Agreement, dated the
date hereof (the "Purchase Agreement") (CAPITALIZED TERMS NOT DEFINED HEREIN
SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE PURCHASE AGREEMENT), $6,000,000,
in the aggregate, principal amount of the Company's Convertible Subordinated
Debentures and Warrants; and
WHEREAS, the Company desires to grant to the Investors the
registration rights set forth herein with respect to the Conversion Shares of
Common Stock issuable upon conversion of, or as interest upon, the Convertible
Subordinated Debentures, shares of Common Stock issuable upon exercise of the
Warrants purchased pursuant to the Purchase Agreement and shares issuable in the
event of a registration default pursuant to Section 3(f) (the "Securities").
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. [INTENTIONALLY OMMITTED]
Section 2. Restrictions on Transfer. Each Investor acknowledges and
understands that prior to the registration of the Securities as provided herein,
the Securities are "restricted securities" as defined in Rule 144 promulgated
under the Securities Act. Each Investor understands that no disposition or
transfer of the Securities may be made by Investor in the absence of (i) an
opinion of counsel to the Investor, in form and substance reasonably
satisfactory to the Company, that such transfer may be made without registration
under the Securities Act or (ii) such registration.
With a view to making available to the Investors the benefits
of Rule 144 under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:
(a) comply with the provisions of paragraph (c)(1) of Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required to be filed with the SEC pursuant to Section 13 or
15(d) under the Exchange Act by companies subject to either of such
sections, irrespective of whether the Company is then subject to such
reporting requirements; and
(c) upon request by the Transfer Agent, the Company shall provide
the Transfer Agent an opinion of counsel, which opinion shall be
reasonably acceptable to the Transfer Agent, that the Investor has
complied with the applicable conditions of Rule 144 (or any similar
provision then in force) under the Securities Act.
Section 3. Registration Rights With Respect to the Securities.
(a) The Company agrees that it will prepare and file with the SEC,
within 30 calendar days after the First Closing Date, a registration
statement on Form S-3 (or such other appropriate registration statement
form) under the Securities Act at the sole expense of the Company (except
as provided in Section 3(c) hereof), in respect of the Investors, so as to
permit the resale of the Securities purchased on the First and Second
Closing Dates under the Act by the Investors as selling stockholders and
not as underwriters. The Company agrees that it will prepare and file with
the SEC, within 30 calendar days after any Subsequent Closing Date, a
registration statement on Form S-3 (or such other appropriate registration
statement form) under the Securities Act at the sole expense of the
Company (except as provided in Section 3(c) hereof), in respect of the
Investors, so as to permit the resale of the Securities purchased at such
Subsequent Closing Date under the Act by the Investors as selling
stockholders and not as underwriters.
(b) The Company shall cause the Registration Statement registering
the Securities purchased at the First and Second Closing to become
effective within 60 calendar days (90 calendar days in the event of a
review by the SEC) after the First Closing Date, or, if earlier, within 5
days of SEC clearance to request acceleration of effectiveness. The
Company shall cause the Registration Statement registering the Securities
purchased the applicable Subsequent Closing to become effective within 60
calendar days (90 calendar days in the event of a review by the SEC) after
such Subsequent Closing date, or, if earlier, within 5 days of SEC
clearance to request acceleration of effectiveness. The number of shares
designated in the Registration Statement to be registered shall include
all the applicable Warrant Shares, 100% of the already converted
applicable Conversion Shares, if any, held by any Investor on the filing
date and at least 200% of the greater of the number of shares which would
be issuable upon the conversion of the principal amount of the applicable
Convertible Subordinated Debentures issued and to be issued at the
Mandatory Conversion Price in effect (i) on the Closing Date the
applicable Registration Date is required to be filed, or (ii) on the date
of the filing of such Registration Statement, and such number of shares as
the Company deems prudent for the purpose of issuing shares of Common
Stock as interest on the Convertible Subordinated Debentures, and shall
include appropriate language regarding reliance upon Rule 416 to the
extent permitted by the SEC. The Company will notify the Investors and the
Company's transfer agent of the effectiveness of a Registration Statement
within 1 Trading Day of such event. After an Effective Date, within 30
days after the day on which the Holder gives notice to the Company that
the number of Securities registered for resale by the Holder relating to
such Effective Date, notwithstanding the limitation on conversion herein
and in the Purchase Agreement, is less than 100% of the number of the
Securities (calculated at the Mandatory Conversion Price on such date)
held by the Holder on such date (the "Further Registration Date"), the
Company shall file a further registration statement registering a number
of shares of Common Stock to the extent that at least 200% of the shares
which would be required to be issued upon the conversion of the remaining
applicable Convertible Subordinated Debentures at the Mandatory Conversion
Price on the date of the filing of such further registration statement are
registered and shall prosecute such additional registration statement to
effectiveness within 60 calendar days of the Further Registration Date (90
calendar days in the event of a review by the SEC). As to any Registration
Statement, each Investor shall have the right to convert all or any of its
applicable Convertible Subordinated Debenture into up to a number of
registered shares of Common Stock equal to such Investor's fraction of the
aggregate Purchase Price for such Convertible Subordinated Debenture
multiplied by the initially registered and, if applicable, subsequently
registered Securities; provided, however, in no event shall this provision
limit each Investor's right to convert its Convertible Subordinated
Debenture into unregistered shares of Common Stock.
(c) The Company will maintain each Registration Statement or
post-effective amendment filed under this Section 3 effective under the
Securities Act until the earlier of (i) the date that none of the
Securities covered by such Registration Statement are or may become issued
and outstanding, (ii) the date that all of the Securities registered
thereunder have been sold pursuant to such Registration Statement, (iii)
the date the Investors receive an opinion of counsel to the Company, which
counsel shall be reasonably acceptable to the Investors, that the
Securities registered thereunder may be sold under the provisions of Rule
144 without limitation as to volume, (iv) all Securities registered
thereunder have been otherwise transferred to persons who may trade such
shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend, or (v) three (3) years from
the applicable Effective Date.
(d) All fees, disbursements and out-of-pocket expenses and costs
incurred by the Company in connection with the preparation and filing of
the Registration Statements hereunder and in complying with applicable
securities and Blue Sky laws (including, without limitation, all
attorneys' fees of the Company) shall be borne by the Company. The
Investors shall bear the cost of underwriting and/or brokerage discounts,
fees and commissions, if any, applicable to the Securities being
registered and the fees and expenses of their counsel. Five Trading Days
prior to the Trading Day on which the Company intends to file a
Registration Statement or any amendment thereto (excluding amendments
deemed to result from the filing of documents incorporated by reference
therein), the Company shall deliver to the Investors and one firm of
counsel representing the Investors, copies of such Registration Statement
as proposed to be filed, which documents will be subject to review and
comment by the Investors and such counsel, provided, however, that if the
Investor or counsel to the Investor shall not within five Trading Days
following receipt of such Registration Statement deliver written comments
regarding such Registration Statement to the Company, the applicable time
periods set forth in Sections 3(a) and Section 3(b) shall be extended by
one Trading Day for each Trading Day on which the Investor or counsel to
the Investor fails to deliver such written comments to the company
following such initial five (5) Trading Day period. The Company shall
provide each Investor with copies of any comment letters received from the
SEC with respect thereto within 2 Trading Days of receipt thereof. The
Company shall qualify any of the securities for sale in such states as any
Investor reasonably designates and shall furnish indemnification in the
manner provided in Section 6 hereof. However, the Company shall not be
required to qualify in any state which will require an escrow or other
restriction relating to the Company and/or the sellers, or which will
require the Company to qualify to do business in such state or require the
Company to file therein any general consent to service of process. The
Company at its expense will supply the Investors with copies of the
applicable Registration Statement and the prospectus included therein and
other related documents in such quantities as may be reasonably requested
by the Investors.
(e) The Company shall not be required by this Section 3 to include
an Investor's Registrable Securities in any Registration Statement which
is to be filed if, in the opinion of counsel for both the Investor and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for the
Investor and the Company) the proposed offering or other transfer as to
which such registration is requested is exempt from applicable federal and
state securities laws and would result in all purchasers or transferees
obtaining securities which are not "restricted securities", as defined in
Rule 144 under the Securities Act.
(f) In the event that (i) a Registration Statement is not filed by
the Company in a timely manner as set forth in Section 3(a), (ii) a
Registration Statement is not declared effective by the SEC within the
period of time set forth in Section 3(b) herein, or within 5 days of
clearance by the SEC to request effectiveness, (iii) such Registration
Statements are not maintained as effective by the Company for the period
set forth in Section 3(c) above, or (iv) the additional registration
statement referred to in Section 3(b) is not filed within 30 calendar days
or declared effective within 60 calendar days (or, if applicable 90
calendar days) as set forth therein (each a "Registration Default") then
the Company will pay each Investor (pro-rata on a monthly basis), for each
Registration Default then in effect, as liquidated damages and not as a
penalty, during any period in which a Registration Default is occurring,
2% per month (pro-rated to the number of days of the month elapsed) of (i)
the then outstanding principal amount of the Convertible Subordinated
Debentures, (ii) the value of any Conversion Shares and Warrant Shares
already converted or exercised (valued at the average of all of the VWAPs
during the applicable month multiplied by the number of such shares), and
(iii) the value of any outstanding Warrants (valued at the difference
between the average VWAP during the applicable month and the Exercise
Price multiplied by the number of Warrant Shares the Warrants are
exercisable into), held by such Investor until such corresponding
Registration Default no longer exists ("Liquidated Damages"). Such payment
of the Liquidated Damages shall be made to the Investors in cash, or, at
the option of the Company, in registered shares of Common Stock (based on
the Mandatory Conversion Price) on the Trading Day prior to the date of
payment) on the last day of each month during which a Registration Default
occurred or was continuing, without demand therefor by the Investor;
provided, however, that the payment of the Liquidated Damages shall not
relieve the Company from its obligations to register the Securities
pursuant to this Section.
If the Company does not remit the payment to the Investors as set
forth above, the Company will pay the Investors reasonable costs of
collection, including attorneys' fees, in addition to the Liquidated
Damages and interest of 18% per annum on any liquidated damage payments
not made in a timely manner as set forth above. The registration of the
Securities pursuant to this provision shall not affect or limit the
Investors' other rights or remedies as set forth in this Agreement.
(g) Except as set forth on Schedule A hereto, the Company shall be
precluded from including in any registration statement which is required
to be filed pursuant to this Section 3 any other securities apart from the
Registrable Securities, without the prior written consent of a majority in
interest of the Investors. Until after the Effective Date of the
Registration Statement registering the Securities relating to the First
and Second Closing, the Company shall be precluded from filing any other
registration statements other than on Form S-8 or Form S-4. During the
periods beginning on any Subsequent Closing Date until the Effective Date
relating to such Subsequent Closing Date, the Company shall be precluded
from filing any other registration statements other than on Form S-8 or
Form S-4.
(h) If at any time or from time to time after the Effective Date of
any Registration Statement, the Company notifies the Investors in writing
of the existence of a Potential Material Event (as defined in Section 3(i)
below), the Investors shall not offer or sell any Securities or engage in
any other transaction involving or relating to Securities, from the time
of the giving of notice with respect to a Potential Material Event until
the Investors receive written notice from the Company that such Potential
Material Event either has been disclosed to the public or no longer
constitutes a Potential Material Event; provided, however, that the
Company may not so suspend the right to such holders of Securities for
more than twenty-two (22) Trading Days in the aggregate during any twelve
month period, during the period a Registration Statement is required to be
in effect, and if such period is exceeded, such event shall be a
Registration Default and subject to Liquidated Damages as set forth in
Section 3(f) hereof. THE COMPANY MUST GIVE THE INVESTORS NOTICE IN WRITING
PRIOR TO THE FIRST DAY OF THE BLACKOUT PERIOD IMMEDIATELY UPON KNOWLEDGE
THAT SUCH A BLACKOUT PERIOD (WITHOUT INDICATING THE NATURE OF SUCH
POTENTIAL MATERIAL EVENT) WILL OCCUR AND SUCH NOTICE MUST BE ACKNOWLEDGED
IN WRITING BY THE INVESTORS. FAILURE TO PROVIDE THE INVESTORS WITH SUCH
NOTICE SHALL CONSTITUTE A REGISTRATION DEFAULT DURING THE ENTIRE
APPLICABLE PERIOD THAT A REGISTRATION STATEMENT IS SUSPENDED. Compliance
by the Company with this Section 3(h) will not result in or be deemed a
breach of any of the Company's obligations set forth in the Purchase
Agreement not to disclose non-public information to the Investors.
(i) "Potential Material Event" means any of the following: (a) the
possession by the Company of material information not ripe for disclosure
in a registration statement, as determined in good faith by the Chief
Executive Officer or the Board of Directors of the Company that disclosure
of such information in a Registration Statement would be detrimental to
the business and affairs of the Company; or (b) any material engagement or
activity by the Company which would, in the good faith determination of
the Chief Executive Officer or the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at such time,
which determination shall be accompanied by a good faith determination by
the Chief Executive Officer or the Board of Directors of the Company that
the applicable Registration Statement would be materially misleading
absent the inclusion of such information.
Section 4. Cooperation with Company. The Investors will cooperate
with the Company in all respects in connection with this Agreement, including
timely supplying all information reasonably requested by the Company (which
shall include all information regarding the Investors and proposed manner of
sale of the Registrable Securities required to be disclosed in any Registration
Statement) and executing and returning all documents reasonably requested in
connection with the registration and sale of the Registrable Securities and
entering into and performing their obligations under any underwriting agreement,
if the offering is an underwritten offering, in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering. Nothing
in this Agreement shall obligate any Investor to consent to be named as an
underwriter in any Registration Statement unless the SEC or applicable law
requires the Investor to be named. The obligation of the Company to register the
Registrable Securities shall be absolute and unconditional as to those
Securities which the SEC will permit to be registered without naming the
Investors as underwriters. Any delay or delays caused by the Investors by
failure to cooperate as required hereunder shall not constitute a Registration
Default.
Section 5. Registration Procedures. If and whenever the Company is
required by any of the provisions of this Agreement to effect the registration
of any of the Registrable Securities under the Act, the Company shall (except as
otherwise provided in this Agreement), as expeditiously as possible, subject to
the Investors' assistance and cooperation as reasonably required with respect to
each Registration Statement:
(a) (i) prepare and file with the SEC such amendments and
supplements to the Registration Statements and the prospectus used in
connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Act with
respect to the sale or other disposition of all Registrable Securities
covered by such Registration Statement whenever the Investors shall desire
to sell or otherwise dispose of the same (including prospectus supplements
with respect to the sales of Registrable Securities from time to time in
connection with a registration statement pursuant to Rule 415 promulgated
under the Act) and (ii) take all lawful action such that each of (A) the
Registration Statements and any amendments thereto do not, when they
becomes effective, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading and (B) the prospectus forming part of the
Registration Statements, and any amendment or supplement thereto, does not
at any time during the Registration Period include an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(b) (i) prior to the filing with the SEC of any Registration
Statement (including any amendments thereto) and the distribution or
delivery of any prospectus (including any supplements thereto), provide
draft copies thereof to the Investors as required by Section 3(d) and
reflect in such documents all such comments as the Investors (and their
counsel) reasonably may propose respecting the Selling Shareholders and
Plan of Distribution sections (or equivalents); (ii) furnish to each
Investor such numbers of copies of a prospectus including a preliminary
prospectus or any amendment or supplement to any prospectus, as
applicable, in conformity with the requirements of the Act, and such other
documents, as such Investor may reasonably request in order to facilitate
the public sale or other disposition of the Registrable Securities owned
by such Investor; and (iii) provide to each Investor copies of any
comments and communications from the SEC relating to any Registration
Statement, if lawful to do so;
(c) register and qualify the Registrable Securities covered by any
Registration Statement under such other securities or blue sky laws of
such jurisdictions as the Investors shall reasonably request (subject to
the limitations set forth in Section 3(d) above), and do any and all other
acts and things which may be necessary or advisable to enable each
Investor to consummate the public sale or other disposition in such
jurisdiction of the Registrable Securities owned by such Investor;
(d) list such Registrable Securities on the Principal Market, if the
listing of such Registrable Securities is then permitted under the rules
of such Principal Market;
(e) notify each Investor at any time when a prospectus relating
thereto covered by any Registration Statement is required to be delivered
under the Act, of the happening of any event of which it has knowledge as
a result of which the prospectus included in any Registration Statement,
as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the
circumstances then existing, subject to Section 3(h), and the Company
shall prepare and file a curative amendment under Section 5(a) as quickly
as commercially possible and during such period, the Investors shall not
make any sales of Registrable Securities pursuant to a Registration
Statement and during such period; provided, however, any period during
which the Investors are precluded from making sales of the Registrable
Securities shall be included in the 20 calendar day period in Section 3(h)
and any such days herein which exceed, or cause the Company to exceed,
such 20 calendar day period shall be deemed a Registration Default and the
Company shall be subject to Liquidated Damages as set forth in Section
3(f).
(f) as promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in
the event of an underwritten offering, the managing underwriters) of the
issuance by the SEC of any stop order or other suspension of the
effectiveness of a Registration Statement at the earliest possible time
and take all lawful action to effect the withdrawal, recession or removal
of such stop order or other suspension;
(g) cooperate with the Investors to facilitate the timely
preparation and delivery of certificates for the Registrable Securities to
be offered pursuant to a Registration Statement and enable such
certificates for the Registrable Securities to be in such denominations or
amounts, as the case may be, as the Investors reasonably may request and
registered in such names as the Investors may request; and, within 4
Trading Days after a Registration Statement which includes Registrable
Securities is declared effective by the SEC, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Investors) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;
(h) take all such other lawful actions reasonably necessary to
expedite and facilitate the disposition by the Investors of their
Registrable Securities in accordance with the intended methods therefor
provided in the prospectus which are customary for issuers to perform
under the circumstances;
(i) in the event of an underwritten offering, promptly include or
incorporate in a prospectus supplement or post-effective amendment to a
Registration Statement such information as the managers reasonably agree
should be included therein and to which the Company does not reasonably
object and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable after it is notified of
the matters to be included or incorporated in such Prospectus supplement
or post-effective amendment; and
(j) maintain a transfer agent and registrar for its Common Stock.
Section 6. Indemnification.
(a) To the maximum extent permitted by law, the Company agrees to
indemnify and hold harmless the Investors and each person, if any, who
controls an Investor within the meaning of the Securities Act (each a
"Distributing Investor") against any losses, claims, damages or
liabilities, joint or several (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense
and investigation and all reasonable attorneys' fees and expenses), to
which the Distributing Investor may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in
any Registration Statement, or any related final prospectus or amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that the Company will not be liable in any such case to
the extent, and only to the extent, that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such Registration
Statement, preliminary prospectus, final prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Distributing Investor, its
counsel, affiliates or any underwriter, specifically for use in the
preparation thereof or by such Investor's failure to deliver to the
purchaser a copy of the most recent prospectus (including any amendments
or supplements thereto). This indemnity agreement will be in addition to
any liability, which the Company may otherwise have.
(b) To the maximum extent permitted by law, each Distributing
Investor agrees that it will indemnify and hold harmless the Company, and
each officer and director of the Company or person, if any, who controls
the Company within the meaning of the Securities Act, against any losses,
claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense
and investigation and all reasonable attorneys' fees and expenses) to
which the Company or any such officer, director or controlling person may
become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, or
any related final prospectus or amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in such Registration Statement, final prospectus
or amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by such Distributing
Investor, its counsel, affiliates or any underwriter, specifically for use
in the preparation thereof. This indemnity agreement will be in addition
to any liability, which the Distributing Investor may otherwise have.
Notwithstanding anything to the contrary herein, the Distributing Investor
shall be liable under this Section 6(b) for only that amount as does not
exceed the net proceeds to such Distributing Investor as a result of the
sale of Registrable Securities pursuant to any Registration Statement.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action against such
indemnified party, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified
party except to the extent the failure of the indemnified party to provide
such written notification actually prejudices the ability of the
indemnifying party to defend such action. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, unless the
indemnifying party shall not pursue the action to its final conclusion.
The indemnified parties as a group shall have the right to employ one
separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall not be at the
expense of the indemnifying party if the indemnifying party has assumed
the defense of the action with counsel reasonably satisfactory to the
indemnified party unless (i) the employment of such counsel has been
specifically authorized in writing by the indemnifying party, or (ii) the
named parties to any such action (including any impleaded parties) include
both the indemnified party and the indemnifying party and the indemnified
party shall have been advised by its counsel that there may be one or more
legal defenses available to the indemnifying party different from or in
conflict with any legal defenses which may be available to the indemnified
party or any other indemnified party (in which case the indemnifying party
shall not have the right to assume the defense of such action on behalf of
such indemnified party, it being understood, however, that the
indemnifying party shall, in connection with any one such action or
separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable only for the reasonable fees and expenses of one separate firm
of attorneys for the indemnified party, which firm shall be designated in
writing by the indemnified party). No settlement of any action against an
indemnified party shall be made without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld so
long as such settlement includes a full release of claims against the
indemnified party.
All fees and expenses of the indemnified party (including reasonable
costs of defense and investigation in a manner not inconsistent with this
Section and all reasonable attorneys' fees and expenses) shall be paid to
the indemnified party, as incurred, within ten (10) Trading Days of
written notice thereof to the indemnifying party; provided, that the
indemnifying party may require such indemnified party to undertake to
reimburse all such fees and expenses to the extent it is finally
judicially determined that such indemnified party is not entitled to
indemnification hereunder.
Section 7. Contribution. In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that the express provisions of Section 6 hereof provide
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any indemnified party, then the Company and the
applicable Distributing Investor shall contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (which shall, for
all purposes of this Agreement, include, but not be limited to, all reasonable
costs of defense and investigation and all reasonable attorneys' fees and
expenses), in either such case (after contribution from others) on the basis of
relative fault as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company on the one hand or the applicable Distributing Investor on the other
hand, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Distributing Investor agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 7. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Notwithstanding any other provision of this Section 7, in no event
shall any Investor be required to undertake liability to any person under this
Section 7 for any amounts in excess of the dollar amount of the proceeds
received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are registered under the Securities Act.
Section 8. Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) hand delivered,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by facsimile, addressed as set forth in the
Purchase Agreement or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of sending
by reputable courier service, fully prepaid, addressed to such address, or (c)
upon actual receipt of such mailing, if mailed. Either party hereto may from
time to time change its address or facsimile number for notices under this
Section 8 by giving at least ten (10) days' prior written notice of such changed
address or facsimile number to the other party hereto.
Section 9. Assignment. Neither this Agreement nor any rights of the
Company hereunder may be assigned by the Company to any other person. The
Investor's shall not assign this Agreement without the consent of the Company,
which consent shall not be unreasonably withheld. The provisions of this
Agreement shall inure to the benefit of, and be enforceable by, any permitted
transferee of any of the Convertible Subordinated Debentures and Warrants
purchased or acquired by any Investor hereunder with respect to the Convertible
Subordinated Debentures and Warrants held by such person. Notwithstanding
anything to the contrary herein, in no event shall an Investor assign this
Agreement to any persons, entity or company that, in the reasonable judgment of
the Company, are in direct competition with the Company, including but not
limited to, persons, entities or companies in the telecommunications industry,
data communications industry or the business of manufacturing optical fiber or
preform.
Section 10. Additional Covenants of the Company. The Company agrees
that, for so long as it shall be required to maintain the effectiveness of any
Registration Statement, it shall file all reports and information required to be
filed by it with the SEC in a timely manner and take all such other action so as
to maintain such eligibility for the use of such form.
Section 11. Counterparts/Facsimile. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original, but all
of which, when together shall constitute but one and the same instrument, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other parties. In lieu of the original, a
facsimile transmission or copy of the original shall be as effective and
enforceable as the original.
Section 12. Remedies. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their best efforts to find and
employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
Section 13. Conflicting Agreements. The Company shall not enter into
any agreement with respect to its securities that is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise prevents the Company from complying with all of its obligations
hereunder.
Section 14. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made in New York by persons domiciled in New York City and without
regard to its principles of conflicts of laws. The Company and each of the
Investors agree to submit themselves to the in personam jurisdiction of the
state and federal courts situated within the Southern District of the State of
New York with regard to any controversy arising out of or relating to this
Agreement. The non-prevailing party to any dispute hereunder shall pay the
expenses of the prevailing party, including reasonable attorneys' fees, in
connection with any such dispute.
***************************
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed, as of the date first set forth above.
FIBERCORE, INC.
By: ______________________________________
Xxxxxx X. Xxxxxx, CFO
INVESTORS:
RIVERVIEW GROUP, LLC
By: _____________________________________
Name:
Title:
LATERMAN & CO.
By: ____________________________________
Xxxxxxx Xxxxxxxx, Managing Partner
FOREVERGREEN PARTNERS
By: ____________________________________
Xxxxxxx Xxxxxxxx, Managing Partner
Schedule A
----------
1. Gruntal & Co., LLC (and its principals)1,108,292 shares of Common Stock
payable upon exercise of previously issued warrants Gruntal received as a
commission on the Crescent drawdowns.
2. Xxxx Xxxxxx - 16,558 shares - already issued shares of Common Stock
3. Guido Roennefahrt - 20,057 already issued shares of Common Stock.
4. Xxxxx Xxxxxxx - 16,557 already issued shares of Common Stock.
5. Crescent International Ltd. - 1,108,292 already issued shares of common
stock.
