EXHIBIT 10.17
EXECUTION VERSION
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is made by and between AstroPower, Inc., a Delaware
corporation (the "Company"), and Corning Incorporated, a New York corporation
("Corning").
1. Creation of Security Interest. The Company, to secure the payment
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of the indebtedness hereinafter referred to, and in consideration of good
and valuable consideration paid by Corning to the Company, the receipt of
which is hereby acknowledged, does hereby create in favor of Corning, its
successors and assigns a security interest in all of the physical plant,
leasehold interests and improvements, equipment, machinery, tooling, other
physical assets and working capital of the Company wherever located and
acquired or leased for the use described in Section 3 below with proceeds
received by the Company from the issuance of the Note to Corning. Such
plant, equipment, machinery, tooling and other physical assets and all
additions and accessions thereto, are hereinafter collectively referred to
as the Goods.
2. Obligation to Pay. The Company shall pay to Corning, its
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successors and assigns, the sum of Five Million Dollars ($5,000,000) as
evidenced by its Secured 7% Convertible Promissory Note (the "Note") dated
as of the date hereof, together with interest from such date at the rate
specified therein.
3. Use of Collateral. The Goods will be used exclusively for the
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manufacture of product or products derived from or otherwise substantially
relating to the Company's Silicon-Film(TM) technology, unless Corning gives
its written consent to another use.
4. Removal of Goods. The Goods will be kept at the Company's
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principal place of business at Newark, Delaware, or at places of business
in the United States relating to the manufacture of product or products
derived from or otherwise substantially relating to the Company's Silicon-
Film(TM) technology. The location of the Goods shall be provided in writing
to Corning within a reasonable time of locating such Goods at such location
and shall not be removed therefrom without the written consent of Corning.
Removal of any or all of the Goods by the Company, or its agents, servants
or employees, shall be deemed a willful taking and an unlawful conversion
under this Security Agreement, and shall constitute a default hereunder,
and all sums owing and secured hereby, whether or not due, shall thereupon
become immediately due and payable.
5. Repairs and Taxes. The Company shall at its own expense, from
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time to time, replace and repair all parts of the Goods as may be broken,
worn or
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damaged, and shall keep the Goods in every respect in good working order
and repair.
6. Insurance. The Company shall keep the Goods fully insured against
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loss and damage by fire and theft , and the insurance proceeds covering the
Goods shall be made payable to Corning to the extent of any principal and
interest outstanding under the Note.
7. Default. Misrepresentation or misstatement in connection with,
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noncompliance with, or nonperformance of any of the Company's obligations
or agreements as hereinabove set forth shall constitute a default
hereunder. If any such default shall occur, or if any default shall be
made in the payment of any sum owing and secured hereby or any part or
installment thereof, or if the Goods or any part thereof shall be seized or
levied upon under any process, or if the Goods or any part thereof shall be
removed or attempted to be removed from the Company's place of business, as
hereinabove set forth, or if the Company shall fail to keep the Goods in
good condition and repair and replace all such parts as may be broken, worn
or damaged, or if the Company shall sell, assign, create a security
interest in, or transfer its right, title and interest in and to, the Goods
or its right of possession thereto or any part thereof, or if an event of
default under the Promissory Note shall occur and be continuing, then
Corning may exercise its rights of enforcement under the Uniform Commercial
Code in force in the State of New York at the date of such default. In
addition to those rights, at Corning's discretion, all the moneys to be
paid hereunder and/or under the Note, whether or not then due, shall
immediately become due and payable, notwithstanding the terms hereof, and
then it shall be lawful for Corning, and the Company does hereby authorize
and empower Corning, with the aid and assistance of any person or persons,
with or without legal process, to enter such place or places where the
Goods are or may be placed, and to take exclusive possession thereof, and
to sell them either in bulk or parcels at public or private sale upon the
premises above mentioned or at such other place as Corning may determine or
designate and to such person or persons (including Corning), or to take and
carry the Goods away and to sell and dispose of the same at public or
private sale either in bulk or parcels, and at the same time to sell and
dispose of all the right, title and interest of the Company in and to the
Goods in the absolute discretion of Corning, and out of the moneys arising
therefrom to retain and to pay Corning any and all sums then owing to
Corning as above set forth, plus all costs, fees, charges and expenses
incurred in connection with the taking, maintaining, storage and disposing
of the Goods, rendering the excess (if any) to the Company or its
successors or assigns, and the Company hereby stipulates to be bound by the
result of such sales as shall be made in accordance herewith. If for any
reason such property shall fail to satisfy all of the foregoing items, the
Company shall pay Corning the deficiency. Until there shall be a default
in any payment or in the performance of any term, covenant or condition
hereof or of the Note, the Company is to remain and continue in the
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quiet and peaceable possession of the Goods and the full and free enjoyment
of the same.
The Company shall be entitled to five (5) days' advance notice of the
date, time and place of any sale or other disposition of the Goods
hereunder and shall be entitled to be a bidder and to purchase the same for
no more than the balance owing plus costs of sale, including any attorney
fees and other costs incurred in connection with such sale.
8. Waiver by the Company. If Corning shall at any time obtain
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possession, either with or without legal process, or be entitled to
possession of the Goods, then and in that event, it shall not be necessary
for Corning to remove the Goods but the Company will permit Corning, and
hereby authorizes and empowers Corning, to keep the goods in the place of
business of the Company and to remove any locks thereon and put its own
locks on such premises or on any other premises where the Goods may be
located until five (5) days after the sale of the Goods. The Company waives
any and all claims of any nature, kind or description which it has, or may
claim to have, against Corning or its representatives, by reason of taking
possession or selling the Goods.
9. Waiver of Breach. The acceptance by Corning of any payments after
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maturity, or the acceptance of a partial payment, or the waiver of any
breach or default shall not constitute a waiver of any other or subsequent
breach or default or prevent Corning from immediately pursuing any or all
of its remedies hereunder.
IN WITNESS WHEREOF, the Company and Corning have caused this Security
Agreement to be duly executed and delivered as of August ____, 1997.
ASTROPOWER, INC.
By:________________________
Name:______________________
Title:_____________________
CORNING INCORPORATED
By:________________________
Name:______________________
Title:_____________________
By:________________________
Name:______________________
Title:_____________________
