EXHIBIT 10.61
NOTE PURCHASE AND WARRANT AGREEMENT
THIS AGREEMENT made as of this 16th day of April 1997 between Techman
International Corp. ("the Purchaser") and FIBERCORE, INC. ("the Company") a
Nevada Corporation.
WHEREAS, the Purchaser and the Company have agreed to purchase and sale
of the Company's $250,000 note (the "Note"); and
NOW THEREFORE, in consideration of the premises and mutual covenants
and agreements herein contained, the parties agree as follows:
1. Offer
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1.1 The Purchaser hereby agrees to purchase the Note subject to the
conditions hereinafter set forth;
1.2 Upon execution and delivery of this Agreement by both parties and
the execution and delivery of the Note (Exhibit A) by the Company to the
Purchaser, the Purchaser will pay to the Company the sum of $250,000.
1.3 In addition to the foregoing, the Company grants the Purchaser
warrants (the "Warrant") granting the Purchaser the right to purchase 115,220
common shares of the Company for a purchase price of $0.78 per share exercisable
in whole or in part at any time within a five-year period to April 16, 2002.
2. Acceptance
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2.1 The Company agrees to sell to the Purchaser the Note subject to the
terms and conditions of this Agreement and to grant the Warrants referred to in
clause 1.3.
3. Delivery of Warrants
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3.1 Upon payment of the purchase price for the Note, this agreement
shall constitute the Warrants registered in Purchaser's name.
4. Representations and Warranties of the Company
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4.1 The Company hereby represents and warrants to, and covenants with
the Purchaser as follows:
(a) Organization and Standing of the Company. The Company is a
corporation duly organized and validly existing under the laws of the State of
Nevada and is in good standing
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under such laws. The Company is not in violation of its Certificate of
Incorporation or Bylaws. The Company has all requisite corporate power and
authority for the ownership and operation of its properties and assets, and to
carry on its business as presently conducted or now proposed to be conducted.
(b) Corporate Action. The Company has all the necessary corporate power
and has taken the corporate action required to enter into this Agreement and to
consummate the transactions contemplated hereby. All corporate action on the
part of the Company for the authorization, execution, delivery and performance
of this Agreement by the Company, the authorization, sale, issuance, and
delivery of the Note and Warrants and the performance of the Company's
obligations hereunder has been taken. This Agreement has been duly executed and
delivered by the Company and constitutes a legal, valid and biding obligations
of the Company enforceable in accordance with its terms. The issuance of the
Note and Warrant does not require any further corporate action, will not be
subject to preemptive rights or other preferential rights in any present
stockholders of the Company and will not conflict with any provisions of any
agreement to which the Company is a part or by which it is bound.
(c) Government Approvals. No authorization, consent, approval, license,
exemption, from or filing of registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic, or
foreign, is or will be necessary for the execution and delivery by the Company
of this Agreement, and except for certain filings under state securities laws,
the offer and sale of the shares will be exempt from the registration
requirements of applicable federal and state securities laws.
(d) Compliance with Other Instruments. Neither the execution, issuance
and delivery of this Agreement or the Note, nor the consummation by the Company
of any transaction contemplated hereby or thereby, constitutes or results in or
will constitute or result in a default or violation of any term or provision of
the charter and By-laws of the Company, as amended and in effect, and the terms
and provisions of the mortgages, indentures, leases, agreements and other
instruments and of all judgments, decrees, governmental orders, statutes, rules
or regulations by which the Company or its properties are bound.
5. Purchaser Representations
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5.1 In connection with this subjection, the Purchaser hereby makes the
following acknowledgment and representations:
(a) The execution of this Agreement has been duly authorized by all
necessary action on the part of the Purchaser, has been duly executed and
delivered, and constitutes a valid, legal, binding, and enforceable agreement of
the Purchaser;
(b) The Purchaser is acquiring the Note and the Warrants for its own
account, for investment, and not with a view to any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Act");
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(c) The Purchaser understands that because the Note and the Warrants
have not been registered under the Act, it cannot dispose of any of the Note and
Warrants unless such Note and the Warrants are subsequently registered under the
Act or exemptions from such registration are available. The Purchase
acknowledges, and understands that, it has no right to require the Company to
register under the Act or exemptions from such registration are available. The
Purchase acknowledges, and understands that, it has no right to require the
Company to register the Note, the Warrants or any shares obtained through the
conversion or exercise of the foregoing. The Purchaser further understands that
the Company may, as a condition to the transfer of any of the Note or Warrants,
require that the request for transfer by accompanied by an opinion of counsel,
in form and substance satisfactory to the Company, to the effect that the
proposed transfer does not result in a violation of the Act, unless such
transfer is covered by an effective registration statement under the Act. The
Purchaser understands that each certificate representing the shares will bear
the following legend or one substantially similar thereto:
The securities represented by this certificate have not been registered
under the Securities Act of 1933. These securities have been acquired
by 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, any offering materials have not been subject to review and comment
by the staff of the commission or by any state or foreign securities commission.
(e) The Purchaser acknowledges that during the course of this
transaction and prior to sale, it has had the opportunity to ask questions of
any receive answers from the Company concerning the terms and conditions of its
investment, and to obtain any additional information of the same kind that is
specified in part I of a registration Statement on Form SB-2 under the Act. The
Purchaser or its purchaser representative has examined the information furnished
by the Company and, through discussions and examination of such materials as the
Purchaser has requested, has obtained sufficient information upon which to make
an investment decision. The Purchaser is familiar with the type of investment
which the shares constitutes, 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 risk of investing in the shares, and
acknowledges that it is able to hear the economic risks of this investment.
Further, the Purchaser understands all matters in the Agreement.
(f) The investment in the Company by the Purchaser does not constitute
a principal portion of the Purchaser's total assets and the Purchaser is able to
afford a complete loss of the investment contemplated herein.
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6. Covenants of the Company
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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 use its best efforts to
deliver to the Purchaser as soon as practicable after the end of each of the
first three quarterly fiscal periods in each fiscal year and in any event within
60 days thereafter, a consolidated balance sheet of the Company as at the end of
such period, a consolidated statement of operations and a consolidated statement
of Cash Flow of the Company for such period, in each case prepared in accordance
with generally accepted accounting principles consistently applied and setting
forth in comparative form the figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified; subject to changes
resulting from audit adjustments, by the principal financial or accounting
officer of the Company.
6.3 Inspection. The Company agrees to permit any authorized
representative of the purchaser to visit the Company to discuss its affair and
finances with its officers, all upon reasonable notice to the Company, at such
reasonable times and as often as may be reasonable requested.
6.4 Purchaser's Right to Receive Reports. The Company shall deliver the
reports or give the rights specified in Paragraph 6.1., 6.2., and 6.3. to the
Purchaser until the earlier of (I) the closing date of the Company's first
underwritten public offering pursuant to an effective registration statement
filed under the Act; or (ii) until the Purchaser no longer holds the Note or any
Warrants.
7. No Waiver
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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
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Notwithstanding any investigation made by any party to this Agreements,
all covenants, agreements representations, and warranties made by the Company
and the Purchaser herein shall survive the execution of this Agreement, the
delivery to the Purchaser of the shares being purchased and the payment
therefore.
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9. Transferability
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9.1 The purchaser agrees not to transfer or assign this Agreement, or
any of its interest herein, and further agrees that nay assignment or transfer
of the shares shall be made only in accordance with applicable securities laws
and that an appropriate legend with respect thereto may be placed by the Company
on any certificate evidencing such shares.
10. Miscellaneous
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10.1 Notices. All notices or other communications given or made
hereunder shall be in writing and shall be delivered to the Purchaser at:
000 Xxxxxxxxxx Xxxx
Xxx 000
Xxxxxxxx Xxxx, XX 00000-0000
and to the Company:
000 Xxxxxxxxx Xxxx
P. O. Xxx 000
Xxxxxxxx, XX 00000
10.2 Governing Law. This Agreement shall be construed in accordance
with the laws of the Commonwealth of Massachusetts without giving effect to the
conflict of laws.
10.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
10.4 Changes. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and by the Purchaser.
10.5 Heading. 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.
10.6 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.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other party.
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10.8 Pronouns. All pronouns shall be deemed to refer to the masculine,
feminine neuter, singular or plural, as the identity of the person or persons,
firm or other entity may require in the context thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives the day and year first above
written.
Techman International Corp. FIBERCORE, INC.
BY:/s/ M. Xxxxxx Xxxx BY:/s/ Xxxxxxx X. Xxxxxxx
--------------------------------- ----------------------------------------
Xx. X. Xxxxxx Xxxx
President TITLE: Chief Financial Officer & Treasurer
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EXHIBIT A - TO THE NOTE PURCHASE AND WARRANT AGREEMENT
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PROMISSORY NOTE
$250,000 STURBRIDGE, MA
DUE: APRIL 16, 2000 DATED: APRIL 16, 1997
FOR VALUE RECEIVED, FiberCore, Inc., a Nevada corporation ("Payor"), hereby
unconditionally promises to pay to the order of Techman International Corp.
("Payee") 000 Xxxxxxxxxx Xx., Xxxxxxxx Xxxx, XX 00000-0000, the principal sum of
TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) together with any unpaid interest
thereon, on April 16, 2000.
This Note shall bear interest at the initial rate of 9.50% for the
period April 16, 1997 to June 30, 1997. Thereafter the note will bear interest
for each 3-month period beginning July 1, 1997, at the rate of the prime
interest rate as published in the Wall Street Journal on the business day
immediately preceding the 3-month period plus one-percent (1%). Interest will be
payable quarterly on the 1st day of the month following the 3-month interest
period (July1, October 1, January 1 and April 1) during the term hereof.
In the event the Payor is unable to make the interest payments when due
the Payor agrees to pay an additional amount equal to 1/2 of 1% (.5%) on the
then outstanding principal as a late payment fee. In no event, however, shall
the failure of the Payor to make an interest payment when due be an event of
default. All principal and unpaid interest shall be due at maturity, April 16,
2000.
This Promissory Note may be prepaid in whole or in part at any time or
from time to time without penalty or premium, together with interest accrued on
the amount so prepaid.
The principal amount of this Promissory Note and interest accrued
thereon shall become immediately due and payable, without presentation, protest,
notice or further demand, all of which are expressly waived, in the event of the
filing by or against the Payor of a petition in bankruptcy or reorganization or
insolvency. No event of default shall occur until Payor receives written notice
of an alleged default and, after 30 days, such default has not been remedied or
cured.
IN WITNESS WHEREOF, the undersigned has caused the Promissory Note to
be duly executed and delivered as of the date set forth above.
FiberCore, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Chief Financial Officer and Treasurer
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