<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>5
<FILENAME>fi1421066-ex99_3.txt
<DESCRIPTION>SECURITY AGREEMENT
<TEXT>
EXHIBIT 99.3
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "AGREEMENT") is dated as of December
20, 2002 and entered into by and among FIBERCORE USA, INC., a Delaware
corporation ("GRANTOR") and TYCO INTERNATIONAL FINANCE ALPHA GMBH, a Swiss
limited liability company ("SECURED PARTY").
PRELIMINARY STATEMENTS
A. Grantor has issued to Secured Party a promissory note dated as of
December 20, 2002 (said promissory note, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "NOTE", the
terms defined therein and not otherwise defined herein being used herein as
therein defined).
B. It is a condition subsequent to the making of the loan by Secured
Party the repayment of which is evidenced by the Note that Grantor grant the
security interests and undertake the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to
induce Secured Party to make the loan the repayment of which is evidenced by the
Note and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Grantor hereby agrees with Secured Party as
follows:
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing, whether
tangible or intangible, or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located (the "COLLATERAL"):
(a) all equipment listed on Schedule 1(a) and any replacements and
substitutions made in respect of any of such equipment, all parts thereof and
all accessions thereto (any and all such equipment, parts and accessions being
the "EQUIPMENT");
(b) the agreements listed in Schedule 1(b), as each such agreement
may be amended, restated, supplemented or otherwise modified from time to time
(said agreements, as so amended, restated, supplemented or otherwise modified,
being referred to herein individually as an "ASSIGNED AGREEMENT" and
collectively as the "ASSIGNED AGREEMENTS"), including, without limitation, (i)
all rights of Grantor to receive title to or otherwise possess the Equipment
pursuant to the Assigned Agreement, (ii) all rights of Grantor to receive moneys
due or to become due under or pursuant to the Assigned Agreements, (iii) all
rights of Grantor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (iv) all claims of Grantor for
damages arising out of any breach of or default under the Assigned Agreements
and (v) all rights of Grantor to terminate, amend, supplement, modify or
exercise rights or options under the Assigned Agreements, to perform thereunder
and to compel performance and otherwise exercise all remedies thereunder;
(c) any other rights that Grantor may have to receive title to or
otherwise possess the Equipment, all rights of Grantor to receive moneys due or
to become due in connection with such rights, all claims of Grantor for damages
arising in connection with such rights and all rights of Grantor to assign,
transfer, terminate or otherwise modify such rights or to compel transfer of the
Equipment to Grantor;
(d) to the extent not included in any other paragraph of this
Section 1, all general intangibles related to or arising out of the Equipment or
the Assigned Agreements, including, without limitation, tax refunds, payment
intangibles, other rights to payment or performance, choses in action, software
and judgments taken on any rights or claims included in such Collateral;
(e) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(f) all proceeds, products, rents and profits of or from any and all
of the foregoing Collateral and, to the extent not otherwise included, all
payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "PROCEEDS" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
Each item of Collateral listed in this Section 1 that is defined in
Articles 8 or 9 of the Uniform Commercial Code, as it exists on the date of this
Agreement or as it may hereafter be amended, in the State of New York (the
"UCC") shall, unless it is otherwise defined herein, have the meaning set forth
in the UCC, as it exists on the date of this Agreement or as it may hereafter be
amended.
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral assigned by Grantor is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code), of all obligations and liabilities of every
nature of Grantor now or hereafter existing under or arising out of or in
connection with the Note together with all extensions or renewals thereof,
whether for principal, interest (including without limitation interest that, but
for the filing of a petition in bankruptcy with respect to Grantor, would accrue
on such obligations, whether or not a claim is allowed against Grantor for such
interest in the related bankruptcy proceeding), fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Secured Party as a preference,
fraudulent transfer or otherwise (all such obligations and liabilities being the
"UNDERLYING DEBT"), and all obligations of every nature of Grantor now or
hereafter existing under this Agreement (all such obligations of Grantor,
together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a)
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) Secured Party shall not have
any obligation or liability under any contracts, licenses, and agreements
included in the Collateral by reason of this Agreement, nor shall Secured Party
be obligated to perform any of the obligations or duties of Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
Grantor represents and warrants as follows:
(a) OWNERSHIP OF COLLATERAL. For the security interest created by
this Agreement, Grantor owns the Collateral free and clear of any Lien. Except
any financing statement that may have been filed in favor of Secured Party
relating to this Agreement, no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
filing or recording office.
(b) LOCATIONS OF EQUIPMENT. All of the Equipment is, as of the date
hereof, located at the places specified in Schedule 4(b).
(c) OFFICE LOCATIONS; TYPE AND JURISDICTION OF ORGANIZATION. The
chief place of business and the chief executive office have been for the four
month period preceding the date hereof, located at the locations set forth on
Schedule 4(c); Grantor's type of organization (i.e., corporation, limited
partnership, etc.), jurisdiction of organization and organization number
provided by the applicable Government Authority of the jurisdiction of
organization are listed on Schedule 4(c).
(d) NAMES. Grantor (including any predecessor by merger or
otherwise) has not, within the four-month period preceding the date hereof, had
a different name from the name of Grantor listed on the signature pages hereof.
(e) PERFECTION. The security interests in the Collateral granted to
Secured Party constitute valid security interests in the Collateral, securing
the payment of the Secured Obligations. Upon the filing of UCC financing
statements naming Grantor as "debtor", naming Secured Party as "secured party"
and describing the Collateral in the filing offices with respect to Grantor set
forth on Schedule 4(e), the security interests in the Collateral granted to
Secured Party will constitute perfected security interests therein prior to all
other Liens (except for Liens permitted by this Agreement and the Note), and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly made or taken.
SECTION 5. FURTHER ASSURANCES.
(a) GENERALLY. Grantor agrees that from time to time, at the expense
of Grantor, it will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, Grantor will:
(i) execute and file such financing or continuation statements, or amendments
thereto, agreements establishing that Secured Party has control of specified
items of Collateral, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (ii) furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(iii) promptly after the acquisition by Grantor of any item of Equipment that is
covered by a certificate of title under a statute of any jurisdiction under the
law of which indication of a security interest on such certificate is required
as a condition of perfection thereof, execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the
security interest created hereunder on such certificate of title, (iv) within 30
days after the end of each calendar quarter, deliver to Secured Party copies of
all such applications or other documents filed during such calendar quarter and
copies of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby, (v) at any reasonable time, upon request by Secured Party,
exhibit the Collateral to and allow inspection of the Collateral by Secured
Party, or persons designated by Secured Party, (vi) at Secured Party's request,
appear in and defend any action or proceeding that may affect Grantor's title to
or Secured Party's security interest in all or any part of the Collateral, and
(vii) use commercially reasonable efforts to obtain any necessary consents of
third parties to the assignment and perfection of a security interest to Secured
Party with respect to any Collateral. Grantor hereby authorizes Secured Party to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of Grantor.
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by Grantor shall be sufficient as a
financing statement and may be filed as a financing statement in any and all
jurisdictions.
SECTION 6. CERTAIN COVENANTS OF GRANTOR.
Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's name, identity
or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any change
in Grantor's chief place of business, chief executive office or residence or a
reincorporation, reorganization or other action that results in a change of the
jurisdiction of organization of Grantor;
(d) if Secured Party gives value to enable Grantor to acquire rights
in or the use of any Collateral, use such value for such purposes;
(e) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, services, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith;
provided that Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against
Grantor or any of the Collateral as a result of the failure to make such
payment.
(f) keep the Equipment at the places therefor specified on Schedule
4(b) or, upon 30 days' prior written notice to Secured Party, at such other
places in jurisdictions where all action that may be necessary or desirable, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Equipment shall have been taken;
(g) cause the Equipment owned by Grantor to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, forthwith make or cause to be made all repairs,
replacements and other improvements in connection therewith that are necessary
or desirable to such end and promptly furnish to Secured Party a statement
respecting any loss or damage to any of the Equipment;
(h) upon Grantor's receipt of title to the Collateral, at its own
expense, maintain insurance with respect to the Equipment in such amounts,
against such risks, in such form and with such insurers as shall be satisfactory
to Secured Party from time to time; such insurance shall include, without
limitation, property damage insurance and liability insurance; each policy for
property damage insurance shall provide for all losses to be paid directly to
Secured Party (all such insurance payments in respect of such Equipment shall be
applied by Secured Party as specified in Section 13); each policy shall in
addition name Grantor and Secured Party as insured parties thereunder (without
any representation or warranty by or obligation upon Secured Party) as their
interests may appear and have attached thereto a loss payable clause acceptable
to Secured Party that shall (i) contain an agreement by the insurer that any
loss payable thereunder shall be paid to Secured Party notwithstanding any
action, inaction or breach of representation or warranty by Grantor, (ii)
provide that there shall be no recourse against Secured Party for payment of
premiums or other amounts with respect thereto, and (iii) provide that at least
30 days' prior written notice of cancellation, material amendment, reduction in
scope or limits of coverage or of lapse shall be given to Secured Party by the
insurer; Grantor shall, if so requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often as Secured
Party may reasonably request, a report of a reputable insurance broker with
respect to such insurance; and
(i) shall not, and shall not permit any of its Subsidiaries to,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of the Collateral, whether now owned or hereafter
acquired; provided, that, Grantor may sell all or any part of the Equipment, so
long as (a) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof; (b) the sole consideration
received shall be cash; (c) any such Equipment shall be sold on terms and
pursuant to documentation in form and substance satisfactory to Secured Party;
and (d) the Net Cash Proceeds of any such sale shall be delivered by and
purchaser of such Equipment directly to Secured Party and shall be applied as a
mandatory prepayment of the Secured Obligations in accordance with Section 3 of
the Note. "NET CASH PROCEEDS" means cash payments (including any cash received
by way of deferred payment but only as and when so received) received from a
sale of Equipment, net of any bona fide direct costs approved by Secured Party
that are incurred in connection with such sale, including income taxes
reasonably estimated to be actually payable within two years of the date of such
sale as a result of any gain recognized in connection with such sale.
SECTION 7. SPECIAL PROVISIONS WITH RESPECT TO THE ASSIGNED AGREEMENTS.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions of the
Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time requested by Secured Party; and
(ii) furnish to Secured Party, promptly upon receipt thereof,
copies of all notices, requests and other documents received by Grantor
under or pursuant to the Assigned Agreements, and from time to time (A)
furnish to Secured Party such information and reports regarding the
Assigned Agreements as Secured Party may reasonably request and (B) upon
request of Secured Party make to the parties to such Assigned Agreements
such demands and requests for information and reports or for action as
Grantor is entitled to make under the Assigned Agreements.
(b) Grantor shall not:
(i) cancel or terminate any of the Assigned Agreements or
consent to or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreements; or
(iv) take any other action in connection with the Assigned
Agreements that could reasonably be expected to materially impair the
value of the interest or rights of Grantor thereunder or that could
reasonably be expected to materially impair the interest or rights of
Secured Party.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT.
Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to obtain and adjust insurance required to be maintained by Grantor or
paid to Secured Party pursuant to Section 6;
(b) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clauses (a) and (b) above;
(d) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens permitted
under this Agreement or the Note) levied or placed upon or threatened against
the Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its sole discretion, any
such payments made by Secured Party to become obligations of Grantor to Secured
Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event of
Default, to sign and endorse any storage or warehouse receipts, assignments,
verifications and notices in connection with any documents relating to the
Collateral; and
(g) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantor's expense, at any time or from time to time,
all acts and things that Secured Party deems necessary to protect, preserve or
realize upon the Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as
Grantor might do.
SECTION 9. SECURED PARTY MAY PERFORM.
If Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
reasonable expenses of Secured Party incurred in connection therewith shall be
payable by Grantor under Section 14(b).
SECTION 10. STANDARD OF CARE.
The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 11. REMEDIES.
(a) GENERALLY. If any Event of Default (as defined in the Note)
(such occurrence being an "EVENT OF DEFAULT" for purposes of this Agreement)
shall have occurred and be continuing, Secured Party may exercise in respect of
the Collateral, in addition to all other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured party on
default under the UCC (whether or not the UCC applies to the affected
Collateral), and also may (i) require Grantor to, and Grantor hereby agrees that
it will at its expense and upon request of Secured Party forthwith, assemble all
or part of the Collateral as directed by Secured Party and make it available to
Secured Party at a place to be designated by Secured Party that is reasonably
convenient to both parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process, (iii)
prior to the disposition of the Collateral, store, process, repair or
recondition the Collateral or otherwise prepare the Collateral for disposition
in any manner to the extent Secured Party deems appropriate, (iv) enter into and
remain on Grantor's premises or place custodians on such premises and use the
same and any of Grantor's equipment for the purpose of taking any actions
described in the preceding clause (iii) and collecting any Secured Obligation
and (iv) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of Secured
Party's offices or elsewhere, for cash, on credit or for future delivery, at
such time or times and at such price or prices and upon such other terms as
Secured Party may deem commercially reasonable. Secured Party may be the
purchaser of any or all of the Collateral at any such sale and Secured Party
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Secured Party at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable for
the deficiency and the fees of any attorneys employed by Secured Party to
collect such deficiency. Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to Secured
Party, that Secured Party has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against Grantor, and Grantor hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no default has occurred
giving rise to the Secured Obligations becoming due and payable prior to their
stated maturities.
SECTION 12. APPLICATION OF PROCEEDS.
Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied in
the following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in connection
therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder
for the account of Grantor, and to the payment of all costs and expenses
paid or incurred by Secured Party in connection with the exercise of any
right or remedy hereunder;
SECOND: To the payment of all other Secured Obligations; and
THIRD: To the payment to or upon the order of Company, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party from and against any
and all claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.
(b) Grantor agrees to pay to Secured Party upon demand the amount of
any and all reasonable costs and expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, that Secured Party may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of Secured Party hereunder, or (iv) the failure by Grantor
to perform or observe any of the provisions hereof.
(c) The obligations of Grantor in this Section 13 shall survive (i)
the termination of this Agreement and the discharge of Grantor's other
obligations under this Agreement and the Note.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS; TERMINATION AND
RELEASE.
(a) This Agreement shall create a continuing security interest in
the Collateral and shall (i) remain in full force and effect until the payment
in full of the Secured Obligations, (ii) be binding upon Grantor and its
successors and assigns, and (iii) inure, together with the rights and remedies
of Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), Secured Party may assign or otherwise transfer any Loans held by it to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to Secured Party herein or otherwise.
(b) So long as no Event of Default has occurred and is continuing,
if the Grantor has repaid in cash (i) at least $750,000 of the principal under
the Note, (ii) on the date of such repayment, all outstanding accrued and unpaid
interest under the Note and other Secured Obligations that are due and payable
and (iii) all other conditions set forth in Section 3 of the Notes have been
satisfied, upon the written request of the Grantor, Secured Party shall release
its security interest in one of the Systems.
(c) Upon the payment in cash in full of all Secured Obligations, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Grantor. Upon any such termination Secured Party
will, at Grantor's expense, execute and deliver to Grantor such documents as
Grantor shall reasonably request to evidence such termination.
SECTION 15. AMENDMENTS; ETC.
No amendment, modification, termination or waiver of any provision
of this Agreement, and no consent to any departure by Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 16. NOTICES.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three business days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices to
Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as set forth under such party's name
on the signature pages hereof or such other address as shall be designated by
such party in a written notice delivered to the other parties hereto.
SECTION 17. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 18. SEVERABILITY.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 20. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise
defined herein or in the Note, terms used in Articles 8 and 9 of the UCC are
used herein as therein defined.
SECTION 21. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY
OF NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, GRANTOR, FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO GRANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 17; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND (VI) AGREES THAT
THE PROVISIONS OF THIS SECTION 20 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
SECTION 22. WAIVER OF JURY TRIAL.
GRANTOR AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Grantor and Secured Party acknowledge that this waiver is a
material inducement for Grantor and Secured Party to enter into a business
relationship, that Grantor and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 22 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 23. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
<PAGE>
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FIBERCORE USA, INC ., as Grantor
By:_________________________________
Name:____________________________
Title:___________________________
Notice Address:
TYCO INTERNATIONAL FINANCE ALPHA
GMBH, as Secured Party
By:_________________________________
Name:____________________________
Title:___________________________
<PAGE>
SCHEDULE 1(A)
EQUIPMENT
---------
Atmospherical Chemical Vapor Deposition System ACVD 18 and
Sintering System CVA 90 manufactured by ASI/Silica Machinery, LLC
Unit #1
-------
Deposition Unit Serial Number A055A03B06D
Sintering Unit Serial Number A055A03B06DS
Unit #2
-------
Deposition Unit Serial Number A055A04B07D
Sintering Unit Serial Number A055A04B07S
<PAGE>
SCHEDULE 1(B)
ASSIGNED AGREEMENTS
-------------------
<PAGE>
SCHEDULE 4(B)
TO
SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT
----------------------
<PAGE>
SCHEDULE 4(C)
TO
SECURITY AGREEMENT
OFFICE LOCATIONS, TYPE AND JURISDICTION OF ORGANIZATION
-------------------------------------------------------
<TABLE>
<CAPTION>
TYPE OF JURISDICTION ORGANIZATION
NAME OF GRANTOR ORGANIZATION OFFICE LOCATIONS OF ORGANIZATION NUMBER
--------------- ------------ ---------------- --------------- ------
<S> <C> <C> <C> <C>
FiberCore USA, Inc. Corporation 253 Worcester Delaware
Road, Charlton,
MA 01507
</TABLE>
<PAGE>
SCHEDULE 4(E)
TO
SECURITY AGREEMENT
LOCATION OF EQUIPMENT
---------------------
Nevada
</TEXT>
</DOCUMENT>