EXH10-31
A G R E E M E N T
between
FiberCore, Inc.
000 Xxxxxxxx Xxxx, X.X. Xxx 000
Xxxxxxxxxx, XX 00000
and
FiberCore Xxxx XxxX
Xxxxxxxxxx Xxxx(xxxx)x 00
00000 Xxxx-Xxxxxx
FiberCore Inc. participates, with effect from July 1, 1994, in accordance with
the provisions below, in the business of FiberCore Jena GmbH, with a capital
contribution of DM 5775200 ("Capital contribution") in exchange for special
profit participation rights.
1
The capital contribution is payable to FiberCore Jena GmbH through 5/30/95.
2
1. FiberCore Inc. will receive an annual profit share, prior to the
determination of retained earnings available to the shareholders of
FiberCore Jena GmbH. The profit share will comprise
a. a basic profit share amounting to 7% of the nominal amount of the
capital contribution, and
b. a bonus profit share in the same percentage amount as the dividend
resolved and distributed.
If retained earnings are insufficient to cover payment of the basic
distribution amount, this will be correspondingly reduced. There is no
claim for later payment of the amount of the reduction.
2. FiberCore Inc. is entitled to the profit share from July 1, 1997.
3. The distribution of the profit share on the capital contribution is due on
the first bank working day after the general meeting of FiberCore Jena
GmbH's shareholders in which the annual financial statements for the
financial year just ended are approved and a resolution on the
appropriation of the profit is passed, unless the resolution approving the
financial statements stipulates a different due date.
3
1. FiberCore Inc. participates in full in a current loss (net loss for the
year) of FiberCore GmbH in that its right of repayment is reduced. The loss
is allocated in the proportions of the capital contribution to nominal
share capital.
2. If thereafter net profits are earned in later years covered by this
agreement, the rights of repayment will be increased out of these profits
until they equal the nominal amount of the capital contribution, before any
other appropriations of the net profits for the years are resolved.
4
1. FiberCore Inc. does not receive any shareholders' rights from its profit
participation rights, in particular, no rights to attend, participate in,
and vote at, meetings of FiberCore Jena GmbH shareholders.
2. FiberCore Jena GmbH is entitled, and, if FiberCore Inc. demands, obliged,
to prepare documents on the special profit participation rights in
accordance with this agreement. The parties to this agreement will agree on
the form and contents of these documents if these are not obvious from this
agreement.
5
1. This agreement is concluded for an indefinite period. Either party to
the agreement can give notice of termination of at least two years
effective at the end of a financial year of FiberCore Jena GmbH, but at
the earliest with effect from 2001.
2. If notice of termination is given, FiberCore Inc.'s capital
contribution will be repaid to that company, if appropriate less its
shares of losses. The amount to be repaid is payable at December 31 of
that year in which the shareholders resolved the approval of the
financial statements for the financial year at the end of which
termination became effective. It bears interest at 7% p.a. from the
effective termination date until repayment date.
6
FiberCore Inc. hereby agrees to subordinate its repayment rights to liabilities
to all other creditors of FiberCore Jena GmbH. If FiberCore Jena GmbH should be
liquidated, the capital contribution can only be repaid after the liabilities to
all other creditors have been settled in full. FiberCore Inc. has no right to
participate in proceeds of liquidation.
7
The participation in losses (ss. 3) and the subordination of the right of
repayment (ss. 6) can not be retroactively restricted, nor can the period of the
agreement and the notice of termination (ss. 6} be reduced retroactively.
FiberCore Jena GmbH will be entitled to receive a refund of a premature
repayment of the capital contribution, without account being taken of
contradicting provisions.
8
FiberCore Inc. can dispose of its claims and rights - by assignment or otherwise
- only after obtaining FiberCore Jena GmbH's prior approval.
9
1. Only the laws of the Federal Republic of Germany apply in respect of the
rights and obligations arising from this agreement. The place of
performance is Jena.
2. The place of jurisdiction for all disputes arising from, or connected with,
this agreement is Jena.
10
If one of the provisions of this agreement should be, or should become, partly
or wholly invalid,. the validity of the agreement as a whole is not otherwise
affected. A rule which fulfills the economic intention of the agreement as
nearly as possible, in a legally acceptable manner, is held to be agreed to
replace the invalid provisions.
Jena, (date)
___/s/____________________
Xxxx X. Xxxxxx, President
___/s/____________________
