EXH10-26
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of this 13th day of April, 1995 between MIDDLE
EAST SPECIALIZED CABLES CO. ("the Purchaser") and FIBERCORE, INCORPORATED ("the
Company") a Nevada Corporation.
WHEREAS the Purchaser with others entered into a Joint Venture
Agreement Term Sheet dated March 14th, 1995 (the "JV Term Sheet") for the
formation of Middle East Fiber Cables Co. ("MEFC") in the Kingdom of Saudi
Arabia to engage in the manufacture and sale of fiber optic cable products and
to sell and distribute such products throughout the Middle East, Africa and
Turkey; and
WHEREAS pursuant to the JV Term Sheet MEF is required to confirm the
purchase of shares of the Company's common stock (the "Shares") and the
Purchaser and MEF desire that the Purchaser acquire such Shares pursuant to the
terms and conditions of this agreement;
NOW THEREFORE in consideration of the premises and the mutual covenants
and agreements herein contained the parties agree as follows:
1. Offer.
1.1 The Purchaser hereby agrees to subscribe for and purchase 200,000 shares of
the Company at the purchase price of $5.00 per share in two blocks of 100,000
shares subject to the conditions hereinafter set forth;
1.2 Upon execution and delivery of this agreement by both parties the Purchaser
will pay to the Company the sum of $500,000 against delivery of the first block
of 100,000 shares of the Company subject to the terms and conditions of this
offer (the "first closing").
1.3 Upon acceptance of the offer and in addition to the delivery of the 100,000
shares of FiberCore to the Purchaser, the Company shall:
a) deliver into escrow 85,000 shares of FiberCore in
consideration of the Purchaser and its partners agreeing to
enter into a contract for the exclusive supply of FiberCore
products to the MEFC Joint Venture. The escrowed shares are to
be released to the Purchaser upon the completion and execution
of the product supply contract between the Company and MEFC.
b) deliver into escrow 150,000 warrants, granting the Purchaser
the right to purchase 150,000 common shares of FiberCore for a
purchase price of $6.00 per share exercisable in whole or in
part at any time within a 2 year period. The escrowed warrants
to be delivered as further consideration for the purchaser and
its partners agreeing to enter into the contract for the
exclusive supply of FiberCore products to the MEFC Joint
Venture. The warrants are to be delivered to the Purchaser
immediately following execution of the product supply
agreement by the MEFC Joint Venture.
c) deliver into escrow 65,000 shares of FiberCore to be released
to the purchaser immediately upon the Purchaser exercising its
rights to purchase shares pursuant to the terms of the
warrants referred to in clause 1.3 (b).
1.4 The offer for the second block of shares is conditional upon the parties
hereto reaching an agreement as to the terms of a joint venture company, Middle
East Fiber Cables Co. ("MEFC") to be formed in the Kingdom of Saudi Arabia to
engage in the manufacture and sale of fiber optic products and to sell and
distribute such products throughout the Middle East, Africa and Turkey.
1.5 Upon execution by all of the partners of MEFC of all of the documents
required to complete the formation MEFC and to define the respective interests,
obligation and restrictions on each of the joint venture partners including the
exclusive product supply agreement with the Company, Purchaser will pay to the
Company the further sum of $500,000 against delivery of the second block of
100,000 shares subject to the terms and conditions of this offer (the "second
closing") and the Vendor shall cause to be delivered to the Purchaser:
a) the 85,000 shares of the Company referred to in clause 1.3
(a);
b) the 150,000 warrants referred to in clause 1.3 (b);
c) confirmation by the escrow agent that the 65,000 shares of the
Company are being held for release to the purchaser pending
exercise of the warrants referred to in clause 1.3 (b).
2. Acceptance.
2.1 The Company agrees to sell to the Purchaser 200,000 Shares at the
subscription price of $5.00 per Share in two blocks of 100,000 Shares each
subject to the terms and conditions of this offer and to deliver the 150,000
shares of the Company and the 150,000 warrants referred to in clause 1.3 (a) (b)
and (c) to an escrow agent approved by the purchaser. The Company further agrees
that upon receipt of the purchase price of the second block of 100,000 shares
the entire amount of the said purchase price ($500,000.00) for the said block of
shares shall be invested in MEFC as a capital contribution to the joint venture
by Company or its wholly owned subsidiary and the company or its subsidiary
shall acquire a 20% interest in MEFC upon payment of the said funds.
3. Delivery of Shares and Warrants.
3.1 At the first closing upon payment of the purchase price for the first block
of 100,000 shares, the Company shall deliver to the Purchaser one or more stock
certificates registered in the name of the Purchaser, an executed escrow
agreement and a confirmation from the escrow agent that the shares and the
warrants referred to in clause 1.3 have been delivered to the escrow agent for
release pursuant to the terms of this Agreement. Within two business days prior
to the first closing, the Purchaser shall notify the Company in writing of the
names in which all shares and warrants are to be registered.
3.2 At the second closing and upon payment of the purchase price for the second
block of Shares, the Company shall deliver to the Purchaser one or more stock
certificates registered in the name of the Purchaser or in such name or names as
may be designated by the Purchaser and delivery of the shares referred to in
clause 1.3 (a) and the warrants referred to in clause 1.3 (b) registered in the
name of the Purchaser or in such name or names as may be designated by the
Purchaser.
4. Representations and Warranties of the Company.
4.l 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. The Company is duly qualified as a foreign corporation in each
jurisdiction in which ownership of its property or the nature of its business
requires such qualification and where the failure to be so qualified would be
material to the Company.
(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, its Director and Stockholders necessary for the
authorization, execution, delivery, and performance of this Agreement by the
Company, the authorization, sale, issuance, and delivery of the Shares 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 obligation of the Company enforceable in accordance
with its terms. The issuance of the securities 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) Capitalization, Status of Capital Stock. The Company has a total
authorized capitalization consisting of 20,000,000 shares of Common Stock, $.01
par value, of which 6,594,264 shares are issued and outstanding. All outstanding
shares of Common Stock have been duly and validly authorized and issued, are
fully paid and nonassessable and were not issued in violation of or subject to
any preemptive or other similar rights to subscribe for or purchase any
securities. The Shares, when issued and delivered in accordance with the terms
hereof will be duly authorized, validly issued, fully-paid and non-assessable.
The Company will reserve 400,000 shares of its common stock for issuance under a
Stock Option Plan. All issued and
outstanding warrants options or other agreements to acquire shares of the
Company are set forth in Schedules "A" and "B" hereof and these shares, when
issued and delivered in accordance with the terms of the warrants, options or
other agreements will be duly authorized, validly issued, fully paid and
non-assessable. AMP Incorporated is lending $5,000,000 to the Company and has
the right to convert the loan into common stock pursuant to the term sheet
attached hereto as Schedule "B" subject to the approval of the Board of
Directors of the both companies. Except as provided or described in this Stock
Purchase Agreement, there is no other option, warrant, conversion privilege, or
other contractual rights presently outstanding to purchase or otherwise acquire
any authorized but unissued shares of the company's capital stock or other
securities of the Company.
(d) Disclosure. To the Company's knowledge and belief, neither this
Agreement, the Private Placement Memorandum dated October 12th, 1994 (the
"Memorandum") as supplemented by this Agreement nor any other agreement,
document, certificate or written statement furnished to the Purchaser by or on
behalf of the Company in connection with the transaction contemplated hereby
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. There is no material fact within the special knowledge of any of the
executive officers of the Company which has not been disclosed herein or in
writing by them to the Purchaser and which materially adversely affects the
business, properties, assets or condition of the Company.
(e) Government Approvals. No authorization, consent, approval, license,
exemption, from or filing of registration with any court of 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, for the offer, issue, sale and delivery of the shares, or for
the performance by the Company of its obligations under this Agreement, except
for certain filing 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.
(f) Litigation. There is no material litigation or governmental
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company affecting any of its properties or assets, or
against any officer, key employee or the Company, nor, to the knowledge of the
Company, has there occurred any event or does there exist any condition on the
basis of which any litigation, proceeding or investigation might properly be
instituted. The Company is not in default with respect to any order, writ,
injunction, decree, ruling or decision of any court, commission, board or other
government agency applicable to it. There are no actions or proceedings pending
or threatened or any basis therefore known to the Company which might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or condition of the Company or in any of its
properties or assets, or which might call into question the ability of the
Company to consummate the transactions contemplated by this Agreement.
(g) Compliance with Other Instruments. Neither the execution, issuance
and delivery of this Agreement or the shares, 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.
(h) Taxes. The Company has prepared and timely filed all federal, state
and other tax return required by law to be filed by it, has paid or made
provisions for the payment of all taxes known to be due and all additional
assessments, and adequate provision has been made for all current taxes and
other charges to which the Company is subject.
(i) Indebtedness. Except for the accrued expenses of this offering,
patent reviews and filing, or expenses incurred in the ordinary course of
business since December 31, 1994, the Company has no outstanding indebtedness
and it is not in default of any contract or agreement of the Company.
(j) Financial Statements. The audited financial statements for the
period ending December 31, 1993 attached to the Memorandum and the related
statements of shareholders equity and cash flows and notes thereto, all of which
are accompanied by the related audit opinion of the Company's independent
certified public accountants, Mottle, XxXxxxx & Company and unaudited Balance
Sheet, Income Statement, Cash Flow and Administrative Expenses for period ending
December 31st, 1994 have been prepared in accordance with generally accepted
accounting principals applied on a consistent basis throughout the period
covered by such statements and present fairly the Company's financial condition
and results of operations and statements of cash flows as of the dates
indicated. Except as otherwise disclosed herein, since December 31st, 1994 there
has not been:
(i) any change in the assets, liabilities, financial
condition, or operations of the Company from that
reflected in the Financial Statements except changes
in the ordinary course of business which have not
been, either in any individual case or in the
aggregate, materially adverse;
(ii) any change, except in the ordinary course of
business, in the contingent obligations of the
Company, whether by way of guaranty, endorsement,
indemnity, warranty, or otherwise;
(iii) any damage, destruction, or loss, whether or note
covered by insurance, materially and adversely
affecting the properties or business of the Company;
(iv) any declaration or payment of any dividend or other
distribution of the assets of the Company;
(v) any labor organization activity; or
(vi) to the best of the Company's knowledge, any other
event or condition of any character which has
materially and adversely affected the Company's
assets, liabilities, financial condition, or
operations.
(k) Patents and Other Intangible Rights. The Company owns, or is
licensed to use, rights to all patents, trade names, service marks, trademarks,
copyrights, and other intellectual property necessary to carry on its business
as currently conducted or proposed to be conducted as described in the
Memorandum, with any such licensed rights being adequate both in scope and
duration for such purposes. Except as may be disclosed in the Memorandum, to the
best of its knowledge the Company is not infringing upon or otherwise acting
adversely to any right or claimed right of any person under or with respect to
any patents, patent rights, trademarks, service marks, copyrights, trade names,
or any other third-party rights except for such infringement or other adverse
action which would not, individually or in the aggregate, have a material
adverse effect on the financial condition or business of the Company.
5. Purchaser Representations
5.1 In connection with this subscription, the Purchaser hereby makes the
following acknowledgment and representations:
(a) The execution of this Share Purchase 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 Shares for it 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 Shares have not been
registered under the Act, it cannot dispose of any of the Shares unless such
Shares are subsequently registered under the Act or exemptions from such
registration are available. The Purchaser acknowledges, and understand that, it
has no right to require the Company to register the Shares. The Purchaser
further understands that the Company may, as a condition to the transfer of any
of the Shares, require that the request for transfer be 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 Securities
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 Purchaser 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, the memorandum and related 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, or
that is necessary to verify the accuracy of the other information obtained. The
Purchaser or its purchaser representative has examined the Memorandum and other
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
Agreements.
(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
Purchaser, 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 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 any shares.
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 Agreement,
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
therefor.
9. Conditions to Obligations of Purchaser
The obligation of the Purchaser to purchase the Shares on the dates of
the first closing and the second closing is subject to the fulfillment on or
prior to each such closing of the following conditions, any or all of which may
be waived at the option of the Purchaser:
9.1 Representations and Warranties Correct. The representations and warranties
made by the Company in Section 4 hereof shall be true and correct in all
material respects on the date of the first closing and the second closing with
the same force and affect as if they had been made on and as of the said dates.
9.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the date of the first
closing and second closing shall have been performed or complied with in all
material respects.
9.3 Opinion of Company's Counsel. The Purchaser shall have received from
Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Company, an opinion addressed to
it, dated the date of each closing substantially to the effect that:
(a) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, and has all
requisite corporate power and authority to own its properties and conduct its
business;
(b) The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $0.01 per value per share;
(c) The certificates evidencing the Shares to be delivered hereunder
are in due and proper form under Nevada law, and when duly authorized and
delivered to the Purchaser or upon the Purchaser's order against payment of the
agreed consideration therefor in accordance with the provision of this
Agreement, the Shares represented thereby will be duly authorized and validly
issued, fully paid and nonassessable, will not have been issued in violation of
or subject to any preemptive rights or, to such counsel's knowledge, in
violation of any other rights to subscribe for or purchase securities;
(d) Assuming compliance by the Company and by the Purchaser with this
Agreement, the offer, sale and issuance of the Shares in conformity with the
terms of the Agreement will not require registration under the U.S. Securities
Act of 1933 as amended;
(e) The Company has the requisite corporate power and authority to
enter into this Agreement and to sell and deliver the Shares to be sold by it;
this Agreement has been duly and validly authorized by all necessary corporate
action by the Company, has been duly and validly executed and delivered by and
on behalf of the Company, and is a valid and binding agreement of the Company,
enforceable in accordance with its terms;
(f) The execution and performance of this Agreement and the
consummation of the transactions herein contemplated will not violate any
statute, rule or regulation, or, to such counsel's knowledge, any judgment,
decree or order of any court or governmental body having jurisdiction over the
Company or any of its property;
9.4 No Order Pending. There shall not then be in affect any order enjoining or
restraining the transactions contemplated by this Agreement.
9.5 No Law Prohibiting or Restricting Such Sale. There shall not be in effect
any law, rule or regulation prohibiting or restricting such sale, or requiring
any consent or approval of any person which shall not have been obtained to
issue the Shares.
9.6 Certificate Regarding Corporate Authority. The Company shall have delivered
to the Purchaser the resolutions of the company's Board of Directors authorizing
the execution and performance of this Agreement, in each case certified to be a
true and correct copy by the Secretary of the Company, together with the
certification that each resolution and actions have not been modified or amended
and remain in full force and effect.
9.7 Compliance Certificate. The Company shall have delivered to the Purchaser a
certificate executed on behalf of the Company by the Chairman of the Board and
Chief Executive Officer and Chief Financial Officer of the Company on each
closing date certifying to the fulfillment of the conditions specified in
Sections 9.1 and 9.2.
10. Conditions to Obligations of the Company.
The Company's obligation to sell and issue the shares at each Closing
is subject to the fulfillment on or prior to such closing of the following
conditions, any or all of which may be waived at the option of the Company:
10.1 Representations and Warranties Correct. The representations and warranties
made by the Purchaser in Section 5 hereof shall be true and correct in all
material respects on the date of such closing with the same force and affect as
if they had been made on and as of that date.
10.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the date of such
closing shall have been performed or complied with in all material respects.
10.3 No Order Pending. There shall not then be in affect any order enjoining or
restraining the transactions contemplated by this Agreement.
10.4 No Law Prohibiting or Restricting Such Sale. There shall not be in effect
any law, rule or regulation prohibiting or restricting such sale, or requiring
any consent or approval of any person which shall not have been obtained to
issue the Shares.
11. Transferability
11.1 The Purchaser agrees not to transfer or assign this Share Purchase
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 there to may be
placed by the Company on any certificate evidencing such Shares.
12. Miscellaneous
12.1 Notices. All notices or other communications given or made hereunder shall
be in writing and shall be delivered to the Purchaser at:
Middle East Specialized Cables Co.,
X.X. Xxx 00000
Xxxxxx 00000, Xxxxx Xxxxxx
or sent by facsimile transmission to #966-1-493-5818
and to the Company at:
000 Xxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
or sent by facsimile transmission to (000) 000-0000
12.2 Governing Law. This Share Purchase Agreement shall be construed in
accordance with the governed by the laws of the Commonwealth of Massachusetts
without giving effect to the conflict of laws.
12.3 Entire Agreement. This Share Purchase 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.
12.4 Changes. This Agreement may not be modified or amended except pursuant to
an instrument in writing signed by the Company and by the Purchaser.
12.5 Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
12.6 Severability. In case any provision contained in this Agreement should be
invalid, illegal, or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
12.7 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.
12.8 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 that parties hereto have caused this Agreement to be
executed by their duly authorized representatives the day and year first above
written.
MIDDLE EAST SPECIALIZED CABLES CO.
per:___/s/___________________________
FIBERCORE, INC.
per:___/s/___________________________
Witness: ___/s/_______________________
Xxxxxxx XxXxxx
