LOAN AGREEMENT
This Loan Agreement (the "Agreement"), dated as of June 20, 2000, is
entered into by and between:
(i) XXXXX X.X. - EMPREENDIMENTOS E PARTICIPACOES, a company duly organized and
validly existing in accordance with the laws of the Federative Republic of
Brazil, with its head office at Xxxxxxx Xxxxxxxxxxx Xxxxxx, 0000, Distrito
Industrial, in the City of Uberlandia, State of Minas Gerais, enrolled
before the National Registry of Legal Entities of the Ministry of Finance
(CNPJ/MF) under No 17.835.026-0001-52 here represented by its duly
authorized representative (hereinafter referred to as the "Lender");
and
(ii) FIBERCORE, INC., a company duly organized and validly existing in
accordance with the laws of the state of Nevada, United States of America,
with its head office at 000, Xxxxxxxxx Xxxx, Xxxxxxxx, XX, here
represented by its duly authorized representative(s) (hereinafter referred
to as the "Borrower");
and as Intervening and Consenting party:
(iii) FIBERCORE LTDA., a corporation duly organized and validly existing under
the laws of the Federal Republic of Brazil, with head offices in the City
of Sao Paulo, State of Sao Paulo, at Xxx Xxxxxx Xxxxxx, 000, enrolled
before the National Registry of Legal Entities of the Ministry of Finance
(CNPJ/MF) under No. 03.767.078/0001-24, herein represented by its duly
authorized representative (hereinafter referred to as "FCI Brazil")
WHEREAS the Lender proposes to lend to the Borrower, and the Borrower proposes
to borrow from the Lender, the aggregate principal amount of US$ 10,000,000.00
(ten million United States dollars) (the "Principal Amount").
NOW, THEREFORE, the parties hereto agree as follows:
1. THE LOAN AND DISBURSEMENT PROCEDURE
1.1. The Lender hereby lends to the Borrower, and the Borrower hereby
borrows from the Lender, the amount of US$ 10,000,000.00 (ten million United
States dollars) (the "Loan").
1.2. The disbursement of the Loan shall be made within one business day
from the date hereof (the "Disbursement Date") upon execution and delivery of
the Note (as defined in Section 4.1. below). The Loan shall be disbursed in
Reais, calculated in accordance with the commercial exchange market valid for
the day immediately prior to the date of the disbursement, as published by the
Central Bank of Brazil through the SISBACEN system under PTAX 800 rate, option
5, or any other rate publicly available that may replace the PTAX 800 rate. The
Borrower hereby gives irrevocable instructions to the Lender to disburse the
proceeds of the Loan, as provided herein, in the account no. 00000000, held in
Bank Boston Banco Multiplo S.A. (the "Bank") by FCI Brazil.
1.2.1. The Borrower hereby agrees and confirms that deposit confirmation
issued by the Bank in name of FCI Brazil shall constitute evidence of the
disbursement of the Loan provided for in this Agreement.
1.3. It is hereby agreed and understood that the Borrower shall apply the
proceeds of the Loan in the acquisition Mamore Participacoes S.A., a company
duly organized and validly existing in accordance with the laws of the
Federative Republic of Brazil, with its head office at Xxxxxxx Xxxxxxxxxxx
Xxxxxx, 0000, Suite 7, room A, Distrito Industrial, in the City of Uberlandia,
State of Minas Gerais, as provided for in the Investment Agreement dated of June
1st, 2000, entered into between the Lender and the Borrower.
2. PAYMENT OF THE LOAN
2.1. The Borrower promises to repay the Loan in one installment, in the
amount of US$ 10,000,000.00 (ten million United States dollars), on December 31,
2000 (the "Maturity Date").
2.2. The Borrower further promises to pay interest to the Lender on the
unpaid Principal Amount of the Loan at the rate per annum equal to 6% (six per
cent), calculated pro rata tempore, from the Disbursement Date until the date on
which the Loan is paid in full. Interest on the Loan shall also be paid by the
Borrower to the Lender at the Maturity Date.
2.3. Any and all payments to be made by the Borrower hereunder, including
principal of and interest on the Loan, shall be made in immediately available
funds, at the account no. 49.964-1, held by the Lender at Banco Bradesco S.A.,
Branch 0265-8, of the amount in Reais of the United State dollars amount then
due and payable converted at the PTAX 800 rate, option 5, issued by the Central
Bank of Brazil through the SISBACEN system, obtained in the day immediately
prior to the date of the respective payment, or any other rate publicly
available that may replace the PTAX 800 rate.
2.4. The parties hereby agree that the Principal Amount shall be reduced
to US$ 9,000,000.00 (nine million United State dollars) in the event that the
Borrower makes all payments due thereunder on or before August 31, 2000. In the
event that the Principal Amount is reduced as provided for herein, interest
shall be applicable to the reduced Principal Amount.
2.5. If the Borrower shall fail to make any payment due hereunder on the
Maturity Date, the Maturity Date shall be extended to March 31, 2001 (the
"Extended Maturity Date"). In this case, in addition to the original interest
rate of 6% (six percent) per annum, the Borrower shall pay to the Lender a
contractual damage in the amount equal to US$ 300,000.00 (three hundred thousand
United State dollars) per month for each month the payment is delayed beyond
December 31, 2000. The contractual damage shall be prorated for the number of
days actually elapsed if payment occurs prior to the end of a month.
2.6. Whenever any payment under this Agreement shall be stated to be due
on a day which is not a business day (a business day shall be any day on which
dealings in currencies and exchange between banks may be carried on in the City
of Sao Paulo, Brazil, and Boston, Massachusetts, such payment shall be made on
the next succeeding business day, unless such a day shall fall in the first day
of the next succeeding calendar month, in which event such payment shall be made
on the preceding business day.
2.7. All payments to be made under this Agreement by the Borrower shall be
made free and clear of any cost (for instance, exchange or other bank fees), as
well as of any deduction for any present or future taxes or similar charges
imposed by Federative Republic of Brazil or United States of America or any
other jurisdiction through which payments are made (or any political subdivision
or taxing authority thereof or therein).
2.8. If any applicable law, regulation or directive, or any change therein
or in the interpretation thereof, or compliance by the Lender with any request
(whether or not having the force of law) of any relevant Central Bank or other
comparable agency, subjects the Lender to any tax of any kind whatsoever with
respect to this Agreement or changes the basis of taxation of payments to the
Lender of principal, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of the Lender imposed in
Brazil) or imposes, modifies or deems applicable any reserve, special deposit or
similar requirement against foreign assets held by, or deposits in or for the
account of, or advances or loans by, or any other acquisition of funds by, any
office of the Lender or to this Agreement or the Loan made hereunder, and the
result of any of the foregoing is to increase the cost to the Lender of
maintaining the Loan or to reduce any amount receivable in respect thereof, then
the Borrower shall pay to the Lender, upon its demand, additional amounts which
will compensate the Lender for such increased cost or reduced amount receivable,
as determined by the Lender with respect to this Agreement. A certificate as to
any additional amounts payable pursuant to the preceding sentence submitted by
the Lender to the Borrower shall be conclusive, absent manifest error.
2.9. If the Borrower shall fail to make any payment due hereunder on the
Extended Maturity Date, the Borrower shall pay to the Lender an additional
interest of 1% (one per cent) per month, calculated from the date of the failure
until the date the respective outstanding amount is paid in full plus a penalty
equivalent to 10% (ten per cent) of the due amount.
2.10 It is hereby expressly agreed by the parties that the Borrower may
indicate any of its subsidiaries duly organized and validly existing in
accordance with the laws of the Federative Republic of Brazil to effectuate the
payment of the Loan.
3. REPRESENTATIONS AND WARRANTS
3.1. The Borrower hereby represents and warrants that: (a) the Borrower is
a corporation duly organized, validly existing and in good standing under the
laws of the state of Nevada, United States of America and has full power,
authority and legal right to own its assets and to transact its business and to
execute, deliver and perform this Agreement and the Note, and has taken all
necessary corporate and legal action to authorize the execution, delivery and
performance of this Agreement and the Note and the borrowing hereunder on the
terms and conditions hereof; (b) this Agreement and the Note constitute legal,
valid and binding obligations of the Borrower enforceable against it in
accordance with its terms; (c) the execution, delivery and performance by the
Borrower of this Agreement and the Note will not violate the charter, by-laws or
other corporate rules of the Borrower or any provision of law or regulation or
any judgment, order or decree of any court, arbitrator or governmental authority
or of any agreement of any nature whatsoever, binding upon the Borrower and its
assets; (d) all consents and exemptions required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
and the Note have been obtained and are in full force and effect; and (e) the
execution, delivery and performance by the Borrower of this Agreement and the
Note constitute private and commercial acts rather than governmental and public
acts.
3.2. If: (a) the Borrower fails to pay when due any amount due by it under
this Agreement or the Note; or (b) the Borrower fails to make any payment on any
pecuniary obligation (other than this Agreement) of any nature whatsoever
(including contingent obligations), or defaults in the performance of any
agreement under which any such obligation is created if the effect of such
default is to cause such obligation or to permit the holder or holders of such
obligation or a trustee or trustees on behalf of the holder or holders to
declare such obligation, due prior to its normal maturity; or (c) the Borrower
becomes insolvent or unable to pay its debts as they mature, or consents to the
appointment of a trustee, intervener or receiver for it or for all or a
substantial part of its property, or any such trustee, intervener or receiver is
appointed; or (d) bankruptcy, dissolution, reorganization, intervention,
arrangement or liquidation proceedings (or similar proceedings analogous in
purpose or effect) are instituted by or against the Borrower; or (e) a warrant
of attachment or execution or similar process against any substantial part of
the assets of the Borrower is issued; or (f) any representation or warranty made
by the Borrower in this Agreement proves to have been incorrect; or (g) any
consent or exemption referred to in this Agreement is revoked or terminated or
fails to be issued or ceases to be in full force and effect; or (h) in the
opinion of the Lender, there occurs an impairment of the financial condition of
the Borrower, then, and in any such event, the Lender may, by notice of default
given to the Borrower, declare the outstanding amount under this Agreement and
the Note to be immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Borrower.
4. NOTE
4.1. Prior to and as a condition precedent to the making of the Loan
hereunder and to evidence further the obligation of the Borrower to pay the
Loan, the Borrower shall execute and deliver to the Lender a promissory note of
the Borrower ("Note"), such Note to be in the form of Exhibit A hereto,
appropriately completed, dated the date of the Loan and in the aggregate amount
(including the Principal Amount and interest) of the Loan.
4.2. In the event the Maturity Date is extended, as provided for in
Section 2.5. herein, the Borrower shall issue a new promissory note to be in the
form of Exhibit A hereto, appropriately completed, in the aggregate amount of
the outstanding debt (including the Principal Amount, interest and applicable
penalties) of the Loan.
5. MISCELLANEOUS
5.1. The Borrower shall indemnify the Lender for, and hold the Lender
harmless from, any present or future claim or liability for any registration
charge or any stamp, excise or other similar taxes and any penalties or interest
with respect thereto, which may be imposed by any jurisdiction in connection
with this Agreement or any modification or enforcement hereof.
5.2. No action or omission by the Lender shall constitute a waiver of any
rights or remedies of the Lender hereunder. Such rights and remedies are
cumulative and not exclusive of any rights or remedies provided by law. Payment
of the Principal Amount of and interest on this Agreement and the Note shall not
discharge the Borrower's obligation with respect to any other amounts payable
hereunder.
5.3. The Borrower agrees to indemnify the Lender and to hold the Lender
harmless from any loss or expense which the Lender may sustain or incur as a
consequence of the default by the Borrower in payment of any amount due under
this Agreement, including any reasonable legal and court fees incurred by Lender
in the process of enforcing its rights provided for in this Agreement, the Note
or other related documents. This covenant shall survive payment of this
Agreement.
5.4. This Agreement and the Note shall be governed by, and construed in
accordance with, the laws of the Federative Republic of Brazil. The Borrower
hereby irrevocably submits in any legal proceeding relating to this Agreement to
the non-exclusive in personam jurisdiction of the Courts of the City of Sao
Paulo, State of Sao Paulo, Brazil.
5.5. The Lender may at any time assign its rights and obligations under
this Agreement to any party of its choice, provided that the Borrower is
notified of such assignment. The Borrower is prohibited from assigning any of
its rights and obligations under this Agreement without prior written approval
of the Lender.
In witness hereof the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
XXXXX X.X. - EMPREENDIMENTOS E PARTICIPACOES
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By: Xxxxxx Xxxxxxxx Xxxx
Title: Attorney-in-fact
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By: Xxxx Xxxxx Xxxx Costa
Title: Chief Executive Officer
FIBERCORE, INC.
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By: Xxxx X Xxxxxx
Title: President Chief Executive Officer
As Intervening and Consenting Party
FIBERCORE LTDA.
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By: Xxxxxx Xxxxx Xxxx de Assumpcao Ribeiro do Xxxxx
Title: Delegate Manager
WITNESSES:
1. ___________________
Name: Giseli Xxxxxxxxx Xxxxx Xxxxxx
XX: 16.978.964
CPF: 000.000.000-00
2. ___________________
Name: Xxxxxx Xxxxxxx Mari
RG: 8.690.203
CPF: 000.000.000-00
PROMISSORY NOTE
US$ 10,000,000.00 Date: June 20, 2000.
FOR VALUE RECEIVED, FIBERCORE, INC. a company duly organized and validly
existing in accordance with the laws of the state of Nevada, United States of
America, with its head office at 000, Xxxxxxxxx Xxxx, Xxxxxxxx, XX, by this
promissory note hereby unconditionally promises to pay to the order of XXXXX
X.X. - EMPREENDIMENTOS E PARTICIPACOES ("ALGAR"), a company duly organized and
validly existing in accordance with the laws of the Federative Republic of
Brazil, with its head office at Xxxxxxx Xxxxxxxxxxx Xxxxxx, 0000, Distrito
Industrial, in the City of Uberlandia, State of Minas Gerais (the "Payee"), on
December 31, 2000, at the bank account no. 49.964-1, held by Algar at Banco
Bradesco S.A., Branch 0265-8,, the correspondent amount, in Reais, of US$
10,000,000.00, free and clear of any taxes and/or withholdings whatsoever, in
immediately available funds.
The exchange rate to be used in order to exchange the above-referred amount in
Reais shall be the PTAX 800 rate, option 5, issued by the Central Bank of Brazil
through the SISBACEN system, obtained in the day immediately prior to the date
of the respective exchange, or any other rate publicly available that may
replace the PTAX 800 rate.
This promissory note is issued in accordance with the Loan Agreement dated June
20, 2000, between FIBERCORE, INC. and XXXXX X.X. - EMPREENDIMENTOS E
PARTICIPACOES.
FIBERCORE, INC.
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By: Xxxx X Xxxxxx
Title: President Chief Executive Officer
