EXHIBIT 10.3.1
INDEMNITY RE: Xx. Xxx November 20, 2001
Recitals
A. On August 24, 2000, Cathay Bank ("Lender") provided land acquisition and
construction financing in the amount of $27,000,000 to DICON FIBEROPTICS
("Borrower"). In providing the financing Lender relied, in part, on the
unconditional Commercial Guaranty of Borrower's founder and President,
Xx. Xx-Xxxxx Xxx ("Xx. Xxx").
X. Xxxxxxxx has requested Xxxxxx to renew and extend the loan for an additional
three year term and to release Xx. Xxx from his guaranty of the indebtedness.
X. Xxxxxx is willing to provide the requested financing and release Xx. Xxx'x
guaranty, provided that Xx. Xxx personally indemnifies Lender against any loss,
expense or damage suffered by the Lender resulting from the Lender's reliance
upon certain representations and warranties provided by Xxxxxx in the loan
agreement executed in connection with the term financing.
Indemnity
For good and valuable consideration, Xx. Xxx unconditionally agrees to indemnify
Lender and hold harmless Lender against any and all costs, losses, liabilities,
expenses (including reasonable attorneys' fees), judgments, amounts, including,
without limitation, any loss suffered by Lender if the loan is not paid as
agreed, to the extent such costs, losses, liabilities, expenses, judgments or
amounts arise out of or result from any of the Representations or Warranties in
Paragraphs 3.2, 3.3, 3.4 or 3.6 of the loan agreement being false or misleading
in any material respect at the time made or furnished. These Representations
and Warranties are set forth below:
3.2 AUTHORIZATION. The execution, delivery, and performance of
this Agreement and the Related Documents by Xxxxxxxx, to the extent to
be executed, delivered or performed by Borrower, have been duly
authorized by all necessary action by Borrower; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of,
or constitute a default under (a) any provision of its articles of
incorporation, by-laws, or any other agreement or other instrument
binding upon Borrower, or (b) any law, governmental regulation, court
decree, or order applicable to Borrower.
3.3 FINANCIAL INFORMATION. Any financial statement of Xxxxxxxx
supplied to Lender truly and completely disclosed Xxxxxxxx's financial
condition as of the date of the statement, and there has been no
material adverse change in Borrower's financial condition subsequent to
the date of the most recent financial statement supplied to Lender which
will more likely than not result in Borrower not being able to repay the
Loan in accordance with its amortization schedule. Borrower has no
material contingent obligations except as disclosed in such financial
statements.
3.4 LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event has
occurred, which will more likely than not result in the Borrower not
being able to repay Loan in accordance with its amortization schedule
other than litigation, claims, or other events, if any, that have been
disclosed to Lender in writing.
3.6 HAZARDOUS SUBSTANCES. The terms "hazardous waste,"
"hazardous substance," "disposal," "release," and "threatened release,"
as used in this Agreement, shall have the same meanings as set forth in
the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("XXXX"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et seq., Chapter 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25100, et seq., or other
applicable state or Federal laws, rules, or regulations adopted pursuant
to any of the foregoing. Except as disclosed to and acknowledged by
Xxxxxx in writing, Borrower represents and warrants that: (a) During the
period of Borrower's ownership of the Property, there has been no use,
generation, manufacture, storage, treatment, disposal, release or
threatened release of any hazardous waste or substance by any person on,
under, about or from any of the Property, except in compliance with all
applicable federal, state, and local laws, regulations, and ordinances,
including without limitation those laws, regulations and ordinances
described above; and (b) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the Property shall use,
generate, manufacture, store, treat, dispose of, or release any
hazardous waste or substance on, under, about or from any of the
Property, except in compliance with all applicable federal, state, and
local laws, regulations, and ordinances, including without limitation
those laws, regulations and ordinances described above. Borrower
authorizes Xxxxxx and its agents at any reasonable time and upon
reasonable notice to Borrower to enter upon the Property to make such
inspections and tests as Lender may deem appropriate to determine
compliance of the Property with this Paragraph 3.6. Any inspections or
tests made by Lender shall be at Borrower's expense and for Lender's
purposes only and shall not be construed to create any responsibility or
liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower's
due diligence in investigating the Property for hazardous waste and
hazardous substances. Borrower hereby releases and waives any future
claims against Lender for indemnity or contribution in the event
Borrower becomes liable for cleanup or other costs under any such laws.
So long as Xxxxxxxx owns the Property, Xxxxxxxx agrees to indemnify and
hold Xxxxxx harmless against any and all claims, losses, liabilities,
damages, penalties, and expenses which Lender may sustain or suffer
resulting from a breach of this Paragraph 3.6, but only to the extent
such claims, losses, liabilities, damages, penalties, and expenses are
not caused by the negligent acts of Lender. This indemnity shall survive
termination of this Agreement and repayment of the Loan.
This indemnity agreement entered into November 20, 2001.
By: /s/ XX-XXXXX XXX
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Xx-Xxxxx Xxx, individually
