EXHIBIT 10.17
FIBERCORE USA, INC. as mortgagor (Borrower)
to
EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA
and
TEACHERS' RETIREMENT SYSTEM OF ALABAMA
individually and collectively as their interests may appear,
as mortgagees (Lenders)
================================================================================
MORTGAGE AND SECURITY AGREEMENT
Dated: December 31, 2001
Location: Auburn, Alabama
Lot: Xx. 0, Xxxxxx Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx: Xxx Xxxxxx, Xxxxxxx
================================================================================
PREPARED BY AND UPON
RECORDATION RETURN TO:
Messrs. Xxxxxxxxxxx, Xxxxxx & Associates, P.C.
00 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx, Esq. [PAP002]
THIS MORTGAGE AND SECURITY AGREEMENT (this "Security Document") is
made as of the 31st day of December, 2001 by FiberCore USA, INC., a Delaware
corporation, having its principal place of business at ________________________
_______________________________________________________________________________,
as mortgagor ("Borrower") to Employees' Retirement System of Alabama, an
instrumentality of the State of Alabama, established as a public corporation
pursuant to Code of Alabama 1975, ss.36-27-2, et seq. an Teachers' Retirement
System of Alabama, an instrumentality of the State of Alabama, established as a
public corporation pursuant to Code of Alabama 1975, ss.16-25-2 et seq. having
an address at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, individually
and collectively as their interest may appear, their successors and assigns, as
mortgagees ("Lenders").
RECITALS:
This Security Document is given to secure the loan (the "Loan") in
the aggregate principal sum of TWENTY TWO MILLION AND N0/100 DOLLARS
($22,000,000.00), or so much thereof advanced pursuant to that certain Loan
Agreement, dated as of the date hereof, between Borrower and Lenders (as the
same may be amended, restated, replaced, supplemented or otherwise modified from
time to time, the "Loan Agreement") and evidenced by those certain Promissory
Notes, dated the date hereof, made by Borrower in favor of Lenders respectively
(such Promissory Notes, together with all extensions, renewals, replacements,
restatements or modifications thereof being hereinafter referred to as the
"Notes").
Borrower desires to secure the payment of the Loans (as defined in
the Loan Agreement) and the performance of all of its obligations under the
Notes, the Loan Agreement and the other Loan Documents (as herein defined).
This Security Document is given pursuant to the Loan Agreement, and
payment, fulfillment, and performance by Borrower of its obligations thereunder
and under the other Loan Documents are secured hereby, and each and every term
and provision of the Loan Agreement, the Notes, including the rights, remedies,
obligations, covenants, conditions, agreements, indemnities, representations and
warranties of the parties therein, are hereby incorporated by reference herein
as though set forth in full and shall be considered a part of this Security
Document (the Loan Agreement, the Notes, this Security Document, the Assignment
of Leases and Rents and all other documents evidencing or securing the Loans
(including all additional mortgages, deeds to secure Loans and assignments of
leases and rents), are hereinafter referred to collectively as the "Loan
Documents"). All capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Loan Agreement.
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Article 1 GRANTS OF SECURITY
SECTION 1.1 PROPERTY MORTGAGED. Borrower does hereby irrevocably mortgage,
grant, bargain, sell, pledge, assign, warrant, transfer and convey to and grant
a security interest to Lenders and their respective successors and assigns as
their interest may appear in the following property, rights, interests and
estates now owned, or hereafter acquired by Borrower (collectively, the
"Property"):
(a) Land. The real property described in Exhibit A attached hereto and
made a part hereof (the "Land");
(b) Improvements. The buildings, structures, fixtures, additions,
enlargements, extensions, modifications, repairs, replacements and improvements
now or hereafter erected or located on the Land (the "Improvements");
(c) Easements. All easements, rights-of-way or use, rights, streets, ways,
alleys, passages, sewer rights, water, water courses, water rights and powers,
air rights and development rights, and all estates, rights, titles, interests,
privileges, liberties, servitudes, tenements, hereditaments and appurtenances of
any nature whatsoever, in any way now or hereafter belonging, relating or
pertaining to the Land and the Improvements and the reversion and reversions,
remainder and remainders, and all land lying in the bed of any street, road or
avenue, opened or proposed, in front of or adjoining the Land, to the center
line thereof and all the estates, rights, titles, interests, dower and rights of
dower, curtesy and rights of curtesy, property, possession, claim and demand
whatsoever, both at law and in equity, of Borrower of, in and to the Land and
the Improvements and every part and parcel thereof, with the appurtenances
thereto;
(d) Fixtures and Personal Property. All machinery, equipment, fixtures
(including, but not limited to, the Project Equipment, all heating, air
conditioning, plumbing, lighting, communications and elevator fixtures) and
other property of every kind and nature whatsoever owned by Borrower, or in
which Borrower has or shall have an interest, now or hereafter located upon the
Land and the improvements, or appurtenant thereto, and usable in connection with
the present or future operation and occupancy of the Land and the Improvements
and all building equipment, materials and supplies of any nature whatsoever
owned by Borrower, or in which Borrower has or shall have an interest, now or
hereafter located upon the Land and the Improvements, or appurtenant thereto, or
usable in connection with the present or future operation and occupancy of the
Land and the Improvements (collectively, the "Personal Property"), and the
right, title and interest of Borrower in and to any of the Personal Property
which may be subject to any security interests, as defined in the Uniform
Commercial Code, as adopted and enacted by the State or States where any of the
Property is located (the "Uniform Commercial Code"), superior in lien to the
lien of this Security Document and all proceeds and products of the above;
provided, however, that except for replacements or proceeds of Personal Property
originally acquired in whole or part with Lenders' funds, Personal Property
shall not include equipment, machinery or furnishings
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purchased or financed after Project Completion solely with funds obtained from
sources other than Lenders.
(e) Leases and Rents. All leases, subleases and other agreements affecting
the use, enjoyment or occupancy of the Land and/or the Improvements heretofore
or hereafter entered into and all extensions, amendments and modifications
thereto, whether before or after the filing by or against Borrower of any
petition for relief under [Section 365(h)(1) of the Bankruptcy Code, Title 11
U.S.C.A. ss. 101 et seq. (as the same may be amended from time to time, the
"Bankruptcy Code")] [the Bankruptcy Code] (the "Leases") and all right, title
and interest of Borrower, its successors and assigns therein and thereunder,
including, without limitation, any guaranties of the lessees' obligations
thereunder, cash or securities deposited thereunder to secure the performance by
the lessees of their obligations thereunder and all rents, additional rents,
revenues, issues and profits (including all oil and gas or other mineral
royalties and bonuses) from the Land and/or the Improvements whether paid or
accruing before or after the filing by or against Borrower of any petition for
relief under the Bankruptcy Code (the "Rents") and all proceeds from the sale or
other disposition of the Leases and the right to receive and apply the Rents to
the payment of the Loans;
(f) Condemnation Awards. All awards or payments, including interest
thereon, which may heretofore and hereafter be made with respect to the
Property, whether from the exercise of the right of eminent domain (including
but not limited to any transfer made in lieu of or in anticipation of the
exercise of the right), or for a change of grade, or for any other injury to or
decrease in the value of the Property;
(g) Insurance Proceeds. All proceeds of and any unearned premiums on any
insurance policies covering the Property, including, without limitation, the
right to receive and apply the proceeds of any insurance, judgments, or
settlements made in lieu thereof, for damage to the Property;
(h) Tax Certiorari. All refunds, rebates or credits in connection with a
reduction in real estate taxes and assessments charged against the Property as a
result of tax certiorari or any applications or proceedings for reduction;
(i) Conversion. All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing including, without limitation, proceeds of insurance and
condemnation awards, into cash or liquidation claims;
(j) Rights. The right, in the name and on behalf of Borrower, to appear in
and defend any action or proceeding brought with respect to the Property and to
commence any action or proceeding to protect the interest of Lenders in the
Property;
(k) Agreements. All agreements, contracts, certificates, instruments,
franchises, permits, licenses, plans, specifications and other documents, now or
hereafter entered into, and all rights therein and thereto, respecting or
pertaining to the use, occupation, construction, management or operation of the
Land and any part thereof and any Improvements or respecting any business or
activity conducted on the
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Land and any part thereof and all right, title and interest of Borrower therein
and thereunder, including, without limitation, the Architect's Contract, the
Construction Agreement and all other Contracts and Subcontracts relating to the
construction or development of the Project, and, the right, upon the happening
of any default hereunder, to receive and collect any sums payable to Borrower
thereunder;
(l) Causes of Action. All causes of action and claims (including, without
limitation, all causes of action or claims arising in tort, by contract, by
fraud or by concealment of material fact) against any Person for damages or
injury to the Property or in connection with any transactions financed in whole
or in part by the proceeds of the Loans ("Cause of Action");
(m) Other Rights. Any and all other rights of Borrower in and to the items
set forth in Subsections (a) through (o) above.
SECTION 1.2 ASSIGNMENT OF LEASES AND RENTS. Borrower hereby absolutely and
unconditionally assigns to Lenders, their successors and assigns, as their
interests may appear, Borrower's right, title and interest in and to all current
and future Leases and Rents; it being intended by Borrower that this assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Nevertheless, subject to the terms of this Section 1.2, Lenders
grant to Borrower a revocable license to collect and receive the Rents. Borrower
shall hold the Rents, or a portion thereof sufficient to discharge all current
sums due on the Loans, for use in the payment of such sums.
SECTION 1.3 SECURITY AGREEMENT. This Security Document is both a real
property mortgage and a "security agreement" within the meaning of the Uniform
Commercial Code. The Property includes both real and personal property and all
other rights and interests, whether tangible or intangible in nature, of
Borrower in the Property. By executing and delivering this Security Document,
Borrower hereby grants to Lenders, as security for the Obligations, (defined
below) a security interest in the Personal Property to the full extent that the
Personal Property may be subject to the Uniform Commercial Code.
CONDITIONS TO GRANT
TO HAVE AND TO HOLD the above granted and described Property unto
and to the use and benefit of Mortgagees and their respective successors and
assigns, as their interests may appear, forever;
PROVIDED, HOWEVER, these presents are upon the express condition
that, if Borrower shall well and truly pay to Mortgagees the Loans at the time
and in the manner provided in the Notes and this Security Document, shall well
and truly perform the Other Obligations (defined below) as set forth in this
Security Document and shall well and truly abide by and comply with each and
every covenant and condition set forth herein, in the Notes and in the Loan
Agreements, then this conveyance shall be null and void.
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Article 2 LOANS AND OBLIGATIONS SECURED
SECTION 2.1 LOANS. This Security Document and the grants, assignments and
transfers made in Article 1 are given for the purpose of securing the Loans,
including without limitation,
(a) the payment of the principal indebtedness evidenced by the Notes in
lawful money of the United States of America;
(b) the payment of interest, default interest, and late charges and other
sums, as provided in the Notes, the Loan Agreement, this Security Document or
the other Loan Documents;
(c) the payment of all other moneys agreed or provided to be paid by
Borrower in the Notes, the Loan Agreement, this Security Document or the other
Loan Documents;
(d) the payment of all sums advanced pursuant to this Security Document to
protect and preserve the Property and the lien and the security interest created
hereby; and
(e) the payment of all sums advanced and costs and expenses incurred by
Lenders in connection with the Loans or any part thereof, any modification,
amendment, renewal, extension, or change of or substitution for the Loans or any
part thereof, or the acquisition or perfection of the security therefor, whether
made or incurred at the request of Borrower or Lenders,
SECTION 2.2 OTHER OBLIGATIONS. This Security Document and the grants,
assignments and transfers made in Article I are also given for the purpose of
securing the following (the "Other Obligations"):
(a) the performance of all other obligations of Borrower contained herein;
(b) the performance of each obligation of Borrower contained in any other
agreement given by Borrower to Lenders which is for the purpose of further
securing the obligations secured hereby, and any renewals, extensions,
substitutions, replacements, amendments, modifications and changes thereto; and
(c) the performance of each obligation of Borrower contained in any
renewal, extension, amendment, modification, consolidation, change of, or
substitution or replacement for, all or any part of the Notes, the Loan
Agreement, this Security Document or the other Loan Documents.
SECTION 2.3 LOANS AND OTHER OBLIGATIONS. Borrower's obligations for the
payment of the Loans and the performance of the Other Obligations shall be
referred to collectively below as the "OBLIGATIONS."
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Article 3 BORROWER COVENANTS
Borrower covenants and agrees that:
SECTION 3.1 PAYMENT OF LOANS. Borrower will pay the Loans at the time and
in the manner provided in the Notes, the Loan Agreement, and in this Security
Document.
SECTION 3.2 INCORPORATION BY REFERENCE. All the covenants, conditions and
agreements contained in the Loan Agreement, the Notes and all and any of the
other Loan Documents, are hereby made a part of this Security Document to the
same extent and with the same force as if fully set forth herein.
SECTION 3.3 INSURANCE. Borrower shall obtain and maintain, or cause to be
maintained, insurance in full force and effect at all times with respect to
Borrower and the Property as required pursuant to the Loan Agreement.
SECTION 3.4 PAYMENT OF TAXES, ETC. Borrower shall promptly pay all taxes
and other charges in accordance with the terms of the Loan Agreement.
SECTION 3.5 MAINTENANCE AND USE OF PROPERTY. Borrower shall cause the
Property to be maintained in a good and safe condition and repair in accordance
with the terms of the Loan Agreement. The Improvements and the Personal Property
shall not be removed, demolished or materially altered (except for normal
replacement of the Personal Property) without the consent of Lenders. Borrower
shall promptly repair, replace or rebuild any part of the Property which may be
destroyed by any Casualty, or become damaged, worn or dilapidated or which may
be affected by any Condemnation and shall complete and pay for any structure at
any time in the process of construction or repair on the Land. Borrower shall
not initiate, join in, acquiesce in, or consent to any change in any private
restrictive covenant, zoning law or other public or private restriction,
limiting or defining the uses which may be made of the Property or any part
thereof. If under applicable zoning provisions the use of all or any portion of
the Property is or shall become a nonconforming use, Borrower will not cause or
permit the nonconforming use to be discontinued or the nonconforming Improvement
to be abandoned without the express written consent of Lenders.
SECTION 3.6 WASTE. Borrower shall not commit or suffer any waste of the
Property or make any change in the use of the Property which will in any way
materially increase the risk of fire or other hazard arising out of the
operation of the Property, or take any action that might invalidate or give
cause for cancellation of any Policy, or do or permit to be done thereon
anything that may in any way materially impair the value of the Property or the
security of this Security Document. Borrower will not, without the prior written
consent of Lenders, permit any drilling or exploration for or extraction,
removal, or production of any minerals from the surface or the subsurface of the
Land, regardless of the depth thereof or the method of mining or extraction
thereof.
SECTION 3.7 PAYMENT FOR LABOR AND MATERIALS. Borrower will promptly pay
when due all bills and costs for labor, materials, and specifically fabricated
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materials incurred in connection with the Property and never permit to exist in
respect of the Property or any part thereof any lien or security interest, even
though inferior to the liens and the security interests hereof, and in any event
never permit to be created or exist in respect of the Property or any part
thereof any other or additional lien or security interest other than the liens
or security interests hereof, except for the Permitted Encumbrances.
SECTION 3.8 PERFORMANCE OF OTHER AGREEMENTS. Borrower shall observe and
perform each and every term to be observed or performed by Borrower pursuant to
the terms of the Loan Agreements, any other Loan Documents and any agreement or
recorded instrument affecting or pertaining to the Property, or given by
Borrower to Lenders for the purpose of further securing an Obligation and any
amendments, modifications or changes thereto,
SECTION 3.9 CHANGE OF NAME, IDENTITY OR STRUCTURE. Except as may be
permitted under the Loan Agreements, Borrower will not change Borrower's name,
identity (including its trade name or names) or corporate, partnership or other
structure without notifying Lenders of such change in writing at least thirty
(30) days prior to the effective date of such change and, in the case of a
change in Borrower's structure, without first obtaining the prior written
consent of Lenders. Borrower shall execute and deliver to Lenders, prior to or
contemporaneously with the effective date of any such change, any financing
statement or financing statement change required by Lenders to establish or
maintain the validity, perfection and priority of the security interest granted
herein. At the request of Lenders, Borrower shall execute a certificate in form
satisfactory to Lenders listing the trade names under which Borrower intends to
operate the Property, and representing and warranting that Borrower does
business under no other trade name with respect to the Property.
SECTION 3.10 PROPERTY USE. The Property shall be used only for manufacture
of optical fiber and any ancillary use relating thereto, and for no other uses
without the prior written consent of Lenders, which consent may be withheld in
Lenders' sole and absolute discretion.
Article 4 [OMITTED INTENTIONALLY]
Article 5 OBLIGATIONS AND RELIANCES
SECTION 5.1 RELATIONSHIP OF BORROWER AND LENDERS. The relationship between
Borrower and Lenders is solely that of debtor and creditor, and Lenders have no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Loan Agreement, the Notes, this Security Document and the other
Loan Documents shall be construed so as to deem the relationship between
Borrower and Lenders to be other than that of Loans or and creditor.
SECTION 5.2 NO RELIANCE ON LENDERS. The shareholders and principals and
owners of Borrower are experienced in the ownership and operation of properties
similar to the Property, and Borrower and Lenders are relying solely upon such
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expertise and business plan in connection with the ownership and operation of
the Property. Borrower is not relying on Lenders expertise, business acumen or
advice in connection with the Property.
SECTION 5.3 NO LENDERS OBLIGATIONS. (a) Notwithstanding the provisions of
Section 1.1(e) and (k) or Section 1.2, Lenders are not undertaking the
performance of (i) any obligations under the Leases; or (ii) any obligations
with respect to such Contracts and Subcontracts, agreements, contracts,
certificates, instruments, franchises, permits, trademarks, licenses and other
documents.
(b) By accepting or approving anything required to be observed, performed
or fulfilled or to be given to Lenders pursuant to this Security Document, the
Loan Agreement, the Notes or the other Loan Documents, including without
limitation, any officer's certificate, balance sheet, statement of profit and
loss or other financial statement, survey, appraisal, or insurance policy,
Lenders shall not be deemed to have warranted, consented to, or affirmed the
sufficiency, the legality or effectiveness of same, and such acceptance or
approval thereof shall not constitute any warranty or affirmation with respect
thereto by Lenders.
SECTION 5.4 RELIANCE. Borrower recognizes and acknowledges that in
accepting the Notes, the Loan Agreement, this Security Document and the other
Loan Documents, Lenders are expressly and primarily relying on the truth and
accuracy of the warranties and representations set forth in Section 2.1 of the
Loan Agreement and Article 3 hereof without any obligation to investigate the
Property and notwithstanding any investigation of the Property by Lenders; that
such reliance existed on the part of Lenders prior to the date hereof; that the
warranties and representations are a material inducement to Lenders in accepting
the Notes, the Loan Agreement, this Security Document and the other Loan
Documents; and that Lenders would not be willing to make the Loans and accept
this Security Document in the absence of the warranties and representations as
set forth in Section 2.1 of the Loan Agreement and Article 3 hereof.
Article 6 FURTHER ASSURANCES
SECTION 6.1 RECORDING OF SECURITY DOCUMENT ETC. Borrower forthwith upon
the execution and delivery of this Security Document and thereafter, from time
to time, will cause this Security Document and any of the other Loan Documents
creating a lien or security interest or evidencing the lien hereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect and perfect the
lien or security interest hereof upon, and the interest of Lenders in, the
Property (the "Legal Requirements"). Borrower will pay all taxes, filing,
registration or recording fees, and all expenses incident to the preparation,
execution, acknowledgment and/or recording of this Security Document, the other
Loan Documents, and any instrument of further assurance, and any modification or
amendment of the foregoing documents, and all federal, state, county and
municipal taxes, duties, imposts, assessments and charges arising out of or in
connection with the
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execution and delivery of this Security Document, the other Loan Documents, or
any instrument of further assurance, and any modification or amendment of the
foregoing documents, except where prohibited by law so to do.
SECTION 6.2 FURTHER ACTS, ETC. Borrower will, at the cost of Borrower, and
without expense to Lenders, do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, deeds of trust, mortgages, assignments,
notices of assignments, transfers and assurances as Lenders shall, from time to
time, require, for the better assuring, conveying, assigning, transferring, and
confirming unto Lenders the rights hereby deeded, mortgaged, granted, bargained,
sold, conveyed, confirmed, pledged, assigned, warranted and transferred or
intended now or hereafter so to be, or which Borrower may be or may hereafter
become bound to convey or assign to Lenders, or for carrying out the intention
or facilitating the performance of the terms of this Security Document or for
filing, registering or recording this Security Document, or for complying with
all Legal Requirements. Borrower, on demand, will execute and deliver and hereby
authorizes Lenders, following ten (10) days' notice to Borrower, to execute in
the name of Borrower or without the signature of Borrower to the extent Lenders
may lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Lenders in
the Property or any Collateral. Borrower grants to Lenders an irrevocable power
of attorney coupled with an interest for the purpose of exercising and
perfecting any and all rights and remedies available to Lenders at law and in
equity, including without limitation such rights and remedies available to
Lenders pursuant to this Section 6.2.
SECTION 6.3 CHANGE IN TAX, DEBT, CREDIT AND DOCUMENTARY STAMP LAWS.
(a) If any law is enacted or adopted or amended after the date of this
Security Document which imposes on Lenders a tax, either directly or indirectly,
on the Loans or Lenders' interest in the Property, Borrower will pay the tax,
with interest and penalties thereon, if any. If Lenders are advised by counsel
chosen by them that the payment of tax by Borrower would be unlawful or taxable
to Lenders or unenforceable or provide the basis for a defense of usury, then
Lenders shall have the option, exercisable by written notice of not less than
ninety (90) days to declare the Loans immediately due and payable.
(b) Borrower will not claim or demand or be entitled to any credit or
credits on account of the Loans for any part of the taxes or other charges
assessed against the Property, or any part thereof, and no deduction shall
otherwise be made or claimed from the assessed value of the Property, or any
part thereof; for real estate tax purposes by reason of this Security Document
or the Loans. If such claim, credit or deduction shall be required by law,
Lenders shall have the option, exercisable by written notice of not less than
ninety (90) days, to declare the Loans immediately due and payable.
(c) If at any time the United States of America, any State thereof or any
subdivision of any such State shall require revenue or other stamps to be
affixed to the Notes, the Loan Agreement, this Security Document, or any of the
other Loan
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Documents or impose any other tax or charge on the same, Borrower will pay for
the same, with interest and penalties thereon, if any.
SECTION 6.4 REPLACEMENT DOCUMENTS. Upon Borrower's receipt of (i) an
affidavit of an officer of Lenders as to the loss, theft, destruction or
mutilation of the Notes or any other Loans Document which is not of public
record, and, (ii) an indemnification from Lenders' in favor of Borrower, in form
and substance reasonably satisfactory to Borrower, in the case of any such
mutilation, upon surrender and cancellation of such Notes or other Loan
Documents, Borrower will issue, in lieu thereof, a replacement Note or other
Loan Documents, dated the date of such lost, stolen, destroyed or mutilated
Notes or other Loan Documents in the same principal amount thereof and otherwise
of like tenor.
SECTION 6.5 PERFORMANCE AT BORROWER'S EXPENSE. Borrower acknowledges and
confirms that Lenders shall impose certain reasonable administrative processing
and/or commitment fees in connection with (c) the extension, renewal,
modification, amendment and termination of the Loans, (d) the release or
substitution of collateral therefor, (e) obtaining certain consents, waivers and
approvals with respect to the Property, or (f) the review of any lease or
proposed lease or the preparation or review of any subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event"). Borrower further acknowledges and confirms that it shall be
responsible for the payment of all costs of reappraisal of the Property or any
part thereof; whether required by law, regulation, Lenders or any governmental
or quasi-governmental authority. Borrower hereby acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time), and any additional reasonable fees of a similar
type or nature which may be imposed by Lenders from time to time, upon the
occurrence of any Event or otherwise. Wherever it is provided for herein that
Borrower pay any costs and expenses, such costs and expenses shall include, but
not be limited to, all reasonable legal fees and disbursements of Lenders,
whether with respect to retained firms, the reimbursement for the reasonable
expenses of in-house staff or otherwise.
SECTION 6.6 LEGAL FEES FOR ENFORCEMENT. (a) Borrower shall pay all
reasonable legal fees incurred by Lenders in connection with (i) the preparation
of the Notes, this Security Document, the other Security Documents and the other
Loan Documents, and (ii) the items set forth in Section 6.5 above; and, (b)
Borrower shall pay to Lenders on demand any and all reasonable expenses,
including reasonable legal expenses and attorneys' fees, incurred or paid by
Lenders in protecting its interest in the Property or in collecting any amount
payable hereunder or in enforcing its rights hereunder with respect to the
Property (including commencing any foreclosure action), whether or not any legal
proceeding is commenced hereunder or thereunder, together with interest thereon
at the Default Rate from the date paid or incurred by Lenders until such
expenses are paid by Borrower.
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Article 7 DUE ON SALE/ENCUMBRANCE
SECTION 7.1 LENDERS RELIANCE. Borrower acknowledges that Lenders have
examined and relied on the experience of Borrower and its shareholders,
affiliates and principals owning and operating properties such as the Property
in agreeing to make the Loans, and will continue to rely on Borrower's ownership
of the Property as a means of maintaining the value of the Property as security
for repayment of the Loans and the performance of the Other Obligations.
Borrower acknowledges that Lenders have a valid interest in maintaining the
value of the Property so as to ensure that, should Borrower default in the
repayment of the Loans or the performance of the Other Obligations, Lenders can
recover the Loans by a sale of the Property.
SECTION 7.2 NO SALE/ENCUMBRANCE. Borrower shall not transfer the Property
or any part thereof or any interest therein or permit or suffer the Property or
any part thereof or any interest therein to be Transferred so long as the Loans
are outstanding, without the prior written consent of Lenders. The Loans are not
assumable and shall be immediately due and payable in the event Borrower
transfers or conveys all, or any interest in, the Property.
Article 8 PREPAYMENT
SECTION 8.1 PREPAYMENT. The Loans may not be prepaid in whole or in part
except in accordance with the express terms and conditions of the Loan
Agreement.
Article 9 RIGHTS AND REMEDIES
SECTION 9.1 REMEDIES. Upon the occurrence of any Event of Default,
Borrower agrees that Lenders may take such action, without notice or demand, as
it deems advisable to protect and enforce its rights against Borrower and in and
to the Property, including, but not limited to, the following actions, each of
which may be pursued concurrently or otherwise, at such time and in such order
as Lenders may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Lenders:
(a) declare the entire unpaid Loans to be immediately due and payable;
(b) institute proceedings, judicial or otherwise, for the complete
foreclosure of this Security Document under any applicable provision of law in
which case the Property or any interest therein may be sold for cash or upon
credit in one or more parcels or in several interests or portions and in any
order or manner;
(c) with or without entry, to the extent permitted and pursuant to the
procedures provided by applicable law, institute proceedings for the partial
foreclosure of this Security Document for the portion of the Loans then due and
payable, subject to the continuing lien and security interest of this Security
Document for the balance of the Loans not then due, unimpaired and without loss
of priority;
Page 12 of 22
(d) sell for cash or upon credit the Property or any part thereof and all
estate, claim, demand, right, title and interest of Borrower therein and rights
of redemption thereof; pursuant to power of sale or otherwise, at one or more
sales, in one or more parcels, at such time and place, upon such terms and after
such notice thereof as may be required or permitted by law;
(e) institute an action, suit or proceeding in equity for the specific
performance of any covenant, condition or agreement contained herein, in the
Notes, the Loan Agreement, or in the other Loan Documents;
(f) recover judgment on the Notes either before, during or after any
proceedings for the enforcement of this Security Document or the other Loan
Documents;
(g) apply for the appointment of a receiver, trustee, liquidator or
conservator of the Property, without notice and without regard for the adequacy
of the security for the Loans and without regard for the solvency of Borrower,
any Guarantor or of any person, firm or other entity liable for the payment of
the Loans;
(h) subject to any applicable law, the license granted to Borrower under
Section 1.2 shall automatically be revoked and Lenders may enter into or upon
the Property, either personally or by its agents, nominees or attorneys and
dispossess Borrower and its agents and servants therefrom, without liability for
trespass, damages or otherwise and exclude Borrower and its agents or servants
wholly therefrom, and take possession of all books, records and accounts
relating thereto and Borrower agrees to surrender possession of the Property and
of such books, records and accounts to Lenders upon demand, and thereupon
Lenders may (i) use, operate, manage, control, insure, maintain, repair, restore
and otherwise deal with all and every part of the Property and conduct the
business thereat; (ii) complete any construction on the Property in such manner
and form as Lenders deems advisable; (iii) make alterations, additions,
renewals, replacements and improvements to or on the Property; (iv) exercise all
rights and powers of Borrower with respect to the Property, whether in the name
of Borrower or otherwise, including, without limitation, the right to make,
cancel, enforce or modify Leases, obtain and evict tenants, and demand, xxx for,
collect and receive all Rents of the Property and every part thereof; (v)
require Borrower to pay monthly in advance to Lenders, or any receiver appointed
to collect the Rents, the fair and reasonable rental value for the use and
occupation of such part of the Property as may be occupied by Borrower; (vi)
require Borrower to vacate and surrender possession of the Property to Lenders
or to such receiver and, in default thereof; Borrower may be evicted by summary
proceedings or otherwise; and (vii) apply the receipts from the Property to the
payment of the Loans, in such order, priority and proportions as Lenders shall
deem appropriate in its sole discretion after deducting therefrom all expenses
(including reasonable attorneys' fees) incurred in connection with the aforesaid
operations and all amounts necessary to pay the taxes, other charges, insurance
premiums and other expenses in connection with the Property, as well as just and
reasonable compensation for the services of Lenders, its counsel, agents and
employees;
Page 13 of 22
(i) exercise any and all rights and remedies granted to a secured party
upon default under the Uniform Commercial Code, including, without limiting the
generality of the foregoing:
(j) the right to take possession of any collateral (including, without
limitation, the Personal Property) or any part thereof; and to take such other
measures as Lenders may deem necessary for the care, protection and preservation
of the Property (including without limitation, the Personal Property), and (ii)
request Borrower at its expense to assemble the Collateral, including without
limitation, the Personal Property and make it available to Lenders at a
convenient place acceptable to Lenders. Any notice of sale, disposition or other
intended action by Lenders with respect to the Collateral, including without
limitation, the Personal Property sent to Borrower in accordance with the
provisions hereof at least five (5) days prior to such action, shall constitute
commercially reasonable notice to Borrower;
(k) apply any sums sums held in escrow or otherwise by Lenders in
accordance with the terms of this Security Document, the Loan Agreement, or any
other Loan Documents to the payment of the following items in any order in its
sole discretion:
(i) taxes and other charges allowed under the Loan Documents;
(ii) insurance premiums in respect of the Property;
(iii) interest on the unpaid principal balance of the Notes;
(iv) amortization of the unpaid principal balance of the Notes; or
(v) all other sums payable pursuant to the Notes, the Loan
Agreement, this Security Document and the other Loan Documents, including
without limitation advances made by Lenders pursuant to the terms of this
Security Document;
(l) foreclosure by power of sale or otherwise and apply the proceeds of
any recovery to the Loans in accordance with Article 9 or to any deficiency
under this Security Document;
(m) exercise all rights and remedies under any Causes of Action, whether
before or after any sale of the Property by foreclosure, power of sale, or
otherwise and apply the proceeds of any recovery to the Loans in accordance with
Article 9 or to any deficiency under this Security Document; or
(n) pursue such other remedies as Lenders may have under applicable law.
In the event of a sale, by foreclosure, power of sale, or otherwise, of
less than all of the Property, this Security Document shall continue as a lien
and security interest on the remaining portion of the Property unimpaired and
without loss of priority,
Page 14 of 22
SECTION 9.2 APPLICATION OF PROCEEDS. The purchase money, proceeds and
avails of any disposition of the Property, or any part thereof; or any other
sums collected by Lenders pursuant to the Notes, this Security Document, the
Loan Agreement, or the other Loan Documents, may be applied by Lenders to the
payment of the Loans in such priority and proportions as Lenders in its
discretion shall deem proper.
SECTION 9.3 RIGHT TO CURE DEFAULTS. Upon the occurrence of any Event of
Default Lenders may, but without any obligation to do so and without notice to
or demand on Borrower and without releasing Borrower from any obligation
hereunder, make or do the same in such manner and to such extent as Lenders may
deem necessary to protect the security hereof, Lenders is authorized to enter
upon the Property for such purposes, or appear in, defend, or bring any action
or proceeding to protect its interest in the Property or to foreclose this
Security Document or collect the Loans. The reasonable cost and expense of any
cure hereunder (including reasonable attorneys' fees to the extent permitted by
law), with interest as provided in this Article 9, shall constitute a portion of
the Loans and shall be due and payable to Lenders upon demand. All such
reasonable costs and expenses incurred by Lenders in remedying such Event of
Default or such failed payment or act or in appearing in, defending, or bringing
any such action or proceeding shall bear interest at the Default Rate for the
period after notice from Lenders that such cost or expense was incurred to the
date of payment to Lenders.
SECTION 9.4 ACTIONS AND PROCEEDINGS. Lenders have the right to appear in
and defend any action or proceeding brought with respect to the Property and,
after the occurrence and during the continuance of an Event of Default, to bring
any action or proceeding, in the name and on behalf of Borrower, which Lenders,
in its discretion, decides should be brought to protect their interest in the
Property.
SECTION 9.5 RECOVERY OF SUMS REQUIRED TO BE PAID. Lenders shall have the
right from time to time to take action to recover any sum or sums which
constitute a part of the Loans as the same become due, without regard to whether
or not the balance of the Loans shall be due, and without prejudice to the right
of Lenders thereafter to bring an action of foreclosure, or any other action,
for a default or defaults by Borrower existing at the time such earlier action
was commenced,
SECTION 9.6 OTHER RIGHTS, ETC. (a) The failure of Lenders to insist upon
strict performance of any term hereof shall not be deemed to be a waiver of any
term of this Security Document. Borrower shall not be relieved of Borrower's
obligations hereunder by reason of (i) the failure of Lenders to comply with any
request of Borrower or any Guarantor to take any action to foreclose this
Security Document or otherwise enforce any of the provisions hereof or of the
Notes or the other Loan Documents, (ii) the release, regardless of
consideration, of the whole or any part of the Property, or of any person liable
for the Loans or any portion thereof; or (iii) any agreement or stipulation by
Lenders extending the time of payment or otherwise modifying or supplementing
the terms of the Notes, the Loan Agreement, this Security Document or the other
Loan Documents,
Page 15 of 22
(b) It is agreed that the risk of loss or damage to the Property is on
Borrower, and Lenders shall have no liability whatsoever for decline in value of
the Property, for failure to maintain insurance on the Property, or for failure
to determine whether insurance in force is adequate as to the amount of risks
insured. Possession by Lenders shall not be deemed an election of judicial
relief; if any such possession is requested or obtained, with respect to the
Property or any other collateral not in Lenders' possession.
(c) Lenders may resort for the payment of the Loans to any other security
held by Lenders in such order and manner as Lenders, in its discretion, may
elect. Lenders may take action to recover the Loans, or any portion thereof; or
to enforce any covenant hereof without prejudice to the right of Lenders
thereafter to foreclose this Security Document. The rights of Lenders under this
Security Document shall be separate, distinct and cumulative and none shall be
given effect to the exclusion of the others. No act of Lenders shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision. Lenders shall not be limited exclusively to
the rights and remedies herein stated but shall be entitled to every right and
remedy now or hereafter afforded at law or in equity.
SECTION 9.7 RIGHT TO RELEASE ANY PORTION OF THE PROPERTY. Lenders may
release any portion of the Property for such consideration as Lenders may
require without, as to the remainder of the Property, in any way impairing or
affecting the lien or priority of this Security Document, or improving the
position of any subordinate lienholder with respect thereto, except to the
extent that the obligations hereunder shall have been reduced by the actual
monetary consideration, if any, received by Lenders for such release, and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lenders may require without being accountable for so doing to any other lien
holder. This Security Document shall continue as a lien and security interest in
the remaining portion of the Property.
SECTION 9.8 RIGHT OF ENTRY. Lenders and their agents shall have the right
to enter and inspect the Property at all reasonable times upon reasonable prior
written or oral notice to Borrower.
SECTION 9.9 FORECLOSURE. This instrument constitutes a mortgage on real
estate and a security agreement covering personal property under the laws of the
State of Alabama, and the Borrower shall be deemed to be the Mortgagor, and
Lenders shall be deemed to be the Mortgagees.
This Mortgage shall be subject to foreclosure and may be foreclosed as now
provided by law in the case of past due mortgages, and the Mortgagees shall be
authorized, at their option, whether or not in possession of the Property, after
giving notice by publication once a week for three (3) consecutive weeks of the
time, place and terms of each such sale by publication in a newspaper published
in the county or counties wherein the Property or any part thereof is located,
to sell the Property (or such part or parts thereof as the Mortgagees may from
time to time elect to sell) in front of such county's courthouse door, at public
outcry, all as otherwise provided in this
Page 16 of 22
Section 19.2. The Mortgagees may proceed to sell or dispose of both the real and
personal property comprising the Property in accordance with the rights and
remedies granted under this Mortgage with respect to the real property covered
hereby.
All references in this Mortgage to numbered sections of the "Uniform
Commercial Code" or the "UCC" shall be deemed to refer to the corresponding
section of Title 7 of the Code of Alabama, 1975.
Article 10 INDEMNIFICATIONS
SECTION 10.1 GENERAL INDEMNIFICATION. Borrower shall, at its sole cost and
expense, protect, defend, indemnify, and hold harmless the Lenders, their
officers, trustees, employees, agents, counsel, insurors, and other
representatives, successors and assigns (the "Indemnified Parties") from and
against any and all losses, damages, or expense imposed upon or incurred by or
assessed against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following: (a) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Property or any part thereof or on the adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (b) any use,
nonuse or condition in, on or about the Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets
or ways; (c) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (d)
any failure of the Property to be in compliance with any Legal Requirements; (e)
any and all claims and demands whatsoever which may be asserted against Lenders
by reason of any alleged obligations or undertakings on its part to perform or
discharge any of the terms, covenants, or agreements contained in any Lease; or
(f) the payment of any commission, charge or brokerage fee to anyone which may
be payable in connection with the funding of the Loans evidenced by the Notes
and secured by this Security Document, Any amounts payable to Lenders by reason
of the application of this Section 10.1 shall become immediately due and payable
and shall bear interest at the Default Rate from the date loss or damage is
sustained by Lenders until paid.
SECTION 10.2 MORTGAGE AND/OR INTANGIBLE TAX. Borrower shall, at its sole
cost and expense, protect, defend, indemnify, and hold harmless the Indemnified
Parties from and against any and all Losses imposed upon or incurred by or
asserted against any Indemnified Parties and directly or indirectly arising out
of or in any way relating to any tax on the making and/or recording of this
Security Document, the Loan Agreement, the Notes or any other Loans Document,
SECTION 10.3 ENVIRONMENTAL INDEMNITY. Simultaneously with this Security
Document, Borrower has executed and delivered the Environmental Indemnity.
Article 11 WAIVERS
SECTION 11.1 WAIVER OF COUNTERCLAIM. Borrower hereby waives the right to
assert a counterclaim, other than a mandatory or compulsory counterclaim, in any
Page 17 of 22
action or proceeding brought against it by Lenders arising out of or in any way
connected with this Security Document, the Notes, the Loan Agreement, any of the
other Loan Documents, or the Obligations.
SECTION 11.2 MARSHALING AND OTHER MATTERS. Borrower hereby waives, to the
extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Property or any
part thereof or any interest therein. Further, Borrower hereby expressly waives
any and all rights of redemption from sale under any order or decree of
foreclosure of this Security Document on behalf of Borrower, and on behalf of
each Person acquiring any interest in or title to the Property subsequent to the
date of this Security Document and on behalf of all persons to the extent
permitted by Legal Requirements.
SECTION 11.3 WAIVER OF NOTICE. Borrower shall not be entitled to any
notices of any nature whatsoever from Lenders except (a) with respect to matters
for which this Security Document, the Loan Agreement or any other Loans
Document, specifically and expressly provides for the giving of notice by
Lenders to Borrower, and (b) with respect to matters for which Lenders is
required by any applicable law to give notice, and Borrower hereby expressly
waives the right to receive any notice from Lenders with respect to any matter
for which this Security Document does not specifically and expressly provide for
the giving of notice by Lenders to Borrower.
SECTION 11.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby expressly
waives and releases to the fullest extent permitted by law, the pleading of any
statute of limitations as a defense to payment of the Loans or performance of
its Other Obligations.
SECTION 11.5 SOLE DISCRETION OF LENDERS. Wherever pursuant to this
Security Document (a) Lenders exercises any right given to it to approve or
disapprove, (b) any arrangement or term is to be satisfactory to Lenders, or (c)
any other decision or determination is to be made by Lenders, the decision of
Lenders to approve or disapprove, all decisions that arrangements or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lenders, shall be in the sole and absolute discretion of Lenders, except as
may be otherwise expressly and specifically provided herein.
Article 12 INTENTIONALLY DELETED
Article 13 SUBMISSION TO JURISDICTION
SECTION 13.1 SUBMISSION TO JURISDICTION. With respect to any claim or
action arising hereunder or under the Notes or the other Loan Documents,
Borrower (a) irrevocably submits to the nonexclusive jurisdiction of the courts
of the State of Alabama located in Xxxxxxxxxx County, Alabama and appellate
courts from any thereof; and (b) irrevocably waives any objection which it may
have at any time to the laying on venue of any suit, action or proceeding
arising out of or relating to this
Page 18 of 22
Security Document brought in any such court, irrevocably waives any claim that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum. Nothing in this Security Document will be deemed to
preclude Lenders from bringing an action or proceeding with respect hereto in
any other jurisdiction.
Article 14 APPLICABLE LAW
Section 14.1 CHOICE OF LAW. THIS SECURITY Document SHALL BE DEEMED TO BE A
CONTRACT ENTERED INTO PURSUANT TO THE LAWS OF THE STATE OF ALABAMA AND SHALL IN
ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ALABAMA.
SECTION 14.2 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers and
remedies provided in this Security Document may be exercised only to the extent
that the exercise thereof does not violate any applicable provisions of law and
are intended to be limited to the extent necessary so that they will not render
this Security Document invalid, unenforceable or not entitled to be recorded,
registered or filed under the provisions of any applicable federal, state or
local laws, rule or regulation (the "Legal Requirements"). If any term of this
Security Document or any application thereof shall be invalid or unenforceable,
the remainder of this Security Document and any other application of the term
shall not be affected thereby.
Article 15 DEFINITIONS
SECTION 15.1 GENERAL DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Security Document may be used interchangeably in singular or plural form
and the word "Borrower" shall mean "each Borrower and any subsequent owner or
owners of the Property or any part thereof or any interest therein," the word
"Lenders" shall mean "Lenders and any permitted subsequent holder of the Notes,"
the word "Notes," shall mean "the Notes and any other evidence of indebtedness
secured by this Security Document," the word "Property" shall include any
portion of the Property and any interest therein, and the phrases "legal fees",
"attorneys' fees" and "counsel fees" shall include any and all attorneys',
paralegal and law clerk fees and disbursements including, but not limited to,
fees and disbursements at the pre-trial, trial and appellate levels incurred or
paid by Lenders in protecting its interest in the Property, the Leases and the
Rents and enforcing its rights hereunder.
SECTION 15.2 HEADINGS, ETC. The headings and captions of various Articles
and Sections of this Security Document are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof,
Page 19 of 22
Article 16 MISCELLANEOUS PROVISIONS
SECTION 16.1 NO ORAL CHANGE. This Security Document and any provisions
hereof may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lenders, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.
SECTION 16.2 LIABILITY. If Borrower consists of more than one person, the
obligations and liabilities of each such person hereunder shall be joint and
several. This Security Document shall be binding upon and inure to the benefit
of Borrower and Lenders and their respective successors and assigns forever, as
their interests may appear.
SECTION 16.3 INAPPLICABLE PROVISIONS. If any term, covenant or condition
of the this Security Document or any other Loans Document, is held to be
invalid, illegal or unenforceable in any respect, the Notes and this Security
Document or the other Loan Documents, as the case may be, shall be construed
without such provision.
SECTION 16.4 DUPLICATE ORIGINALS-COUNTERPARTS. This Security Document may
be executed in any number of duplicate originals and each duplicate original
shall be deemed to be an original. This Security Document may be executed in
several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single Security
Document. The failure of any party hereto to execute this Security Document, or
any counterpart hereof; shall not relieve the other signatories from their
obligations hereunder,
SECTION 16.5 NUMBER AND GENDER. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
SECTION 16.6 NOTICE. All notices required or permitted under this Security
Document shall be given and be effective in accordance with 10.6 of the Loan
Agreement.
Article 17 INTENTIONALLY OMITTED
Article 18 INTENTIONALLY OMITTED
Page 20 of 22
Security Agreement
Signature Page
IN WITNESS WHEREOF, the parties have, executed this Security Agreement
under seal on the day and year first above written.
DEBTOR:
FIBERCORE USA, INC.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Xxxxxx Xxxxxx
Its: Chief Financial Officer
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxx
Its: Secretary
SECURED PARTY:
Employees Retirement System of Alabama
Teachers Retirement System of Alabama
-----------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Secretary-Treasure
Page 21 of 22
EXHIBIT A
(DESCRIPTION OF LAND)
All of that certain lot, piece or parcel of land, with the buildings and
improvements thereon, situate, lying and being
Page 22 of 22
