EXHIBIT 10.14
ENVIRONMENTAL INDEMNITY AGREEMENT
ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") made as of the
31st day of December, 2001, by FIBERCORE USA, INC., a Delaware corporation
having an office at __________________________________ ("Guarantor"), in favor
of the Employees' Retirement System of Alabama, an instrumentality of the State
of Alabama established as a public corporation pursuant to Code of Alabama 1975,
Section 36-27-2 et seq. ("ERSA"), and the Teachers' Retirement System of Alabama
("TRSA"), an instrumentality of the State of Alabama established as a public
corporation pursuant to Code of Alabama 1975, Section 16-25-2 et seq., having an
office at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000, individually and as
co-Lenders (ERSA AND TRSA hereinafter referred to individually and collectively
as the context requires, as "Indemnitee") and other Indemnified Parties (defined
below).
RECITALS:
A. Guarantor is the owner of certain real property more particularly
described in Exhibit A attached hereto (said real property being referred to as
the "Land"; the Land, together with all structures, buildings and improvements
now or hereafter located on the Land, being collectively referred to as the
"Property").
B. lndemnitee is prepared to make a loan (the "Loan") to Guarantor
in the principal amount of TWENTY TWO MILLION AND NO/100 DOLLARS
($22,000,000.00) pursuant to a Loan Agreement of even date herewith between
Guarantor and Indemnitee (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the "Loan Agreement"),
which Loan shall be evidenced by the Note (as defined in the Loan Agreement) and
secured by, among other things, the Security Instrument (as defined in the Loan
Agreement).
C. Indemnitee is unwilling to make the Loan unless Guarantor agrees
to provide the indemnification, representations, warranties, covenants and other
matters described in this Agreement for the benefit of the Indemnified Parties.
D. Guarantor is entering into this Agreement to induce Indemnitee to
make the Loan.
AGREEMENT
In order to induce the Indemnitee to make the Loan to Guarantor, and
in consideration of the substantial benefit each and every Guarantor will derive
from the Loan:
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ARTICLE 1 DEFINITIONS
Capitalized terms used herein and not specifically defined herein
shall have the respective meanings ascribed to such terms in the Loan Agreement.
As used in this Agreement, the following terms shall have the following
meanings:
The term "Environmental Law" means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations, standards,
policies and other governmental directives or requirements, as well as common
law, that apply to Guarantor or the Property and relate to Hazardous Materials,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act and the Resource Conservation and Recovery Act.
The term "Hazardous Materials" means petroleum and petroleum
products and compounds containing them, including gasoline, diesel fuel and oil;
explosives, flammable materials; radioactive materials; polychlorinated
biphenyls and compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable;
underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which on the Property is prohibited by
any federal, state or local authority; and any other material or substance now
or in the future defined as a "hazardous substance," "hazardous material,"
"hazardous waste," "toxic substance," "toxic pollutant," "contaminant,"
"pollutant" or other words of similar import within the meaning of any
Environmental Law.
The term "Indemnified Parties" means Indemnitee, any person or
entity who is or will have been involved in the origination of the Loan, any
person or entity who is or will have been involved in the servicing of the Loan,
any person or entity in whose name the encumbrance created by the Security
Documents is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan, as well as
custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in the Loan for the benefit of third parties) as well as the
respective directors, officers, shareholders, partners, members, employees,
agents, servants, representatives, attorneys, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any and all of
the foregoing (including but not limited to any other person or entity who holds
or acquires or will have held a participation or other full or partial interest
in the Loan or the Property, whether during the term of the Loan or as a part of
or following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of lndemnitee's assets and business).
The term "Legal Action" means any claim, suit or proceeding, whether
administrative or judicial in nature.
The term "Losses" means any and all claims, suits, liabilities
(including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, damages,
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losses, costs, expenses, fines, penalties, charges, fees, expenses, judgments,
awards, amounts paid in settlement of whatever kind or nature (including but not
limited to reasonable attorneys' fees and other costs of defense).
The term "Release" with respect to any Hazardous Substance means any
release, deposit, discharge, emission, leaking, leaching, spilling, seeping,
migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing
or other movement of Hazardous Materials.
ARTICLE 2 INDEMNIFICATION
2.1 INDEMNIFICATION, Guarantor covenants and agrees at its sole cost
and expense, to protect, defend, indemnify, release and hold Indemnified Parties
harmless 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 one or more of the following: (a) any presence
of any Hazardous Materials in, on, above, or under the Property, except to the
extent arising from the active intentional conduct of the Indemnified Party; (b)
any past, present or threatened Release of Hazardous Materials in, on, above,
under or from the Property; (c) any activity by any Guarantor, any person or
entity affiliated with any Guarantor, and any tenant or other user of the
Property in connection with any actual, proposed or threatened use, treatment,
storage, holding, existence, disposition or other Release, generation,
production, manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from the Property of any
Hazardous Materials at any time located in, under, on or above the Property or
any actual or proposed remediation of any Hazardous Materials at any time
located in, under, on or above the Property, whether or not such remediation is
voluntary or pursuant to court or administrative order, including but not
limited to any removal, remedial or corrective action; (d) any past, present or
threatened non-compliance or violations of any Environmental Laws (or permits
issued pursuant to any Environmental Law) in connection with the Property or
operations thereon, including but not limited to any failure by any Guarantor,
any person or entity affiliated with any Guarantor, and any tenant or other user
of the Property to comply with any order of any governmental authority in
connection with any Environmental Laws; (e) the imposition, recording or filing
or the threatened imposition, recording or filing of any environmental lien
encumbering the Property; (f) any acts of any Guarantor, any person or entity
affiliated with any Guarantor, and any tenant or other user of the Property in
(i) arranging for disposal or treatment, or arranging with a transporter for
transport for disposal or treatment, of Hazardous Materials at any facility or
incineration vessel containing such or similar Hazardous Materials or (ii)
accepting any Hazardous Materials for transport to disposal or treatment
facilities, incineration vessels or sites from which there is a Release, or a
threatened Release of any Hazardous Substance which causes the incurrence of
costs for remediation; and (g) any material misrepresentation or inaccuracy in
any representation or warranty or material breach or failure to perform any
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covenants or other obligations pursuant to this Agreement, the Loan Agreement or
the Security Instrument relating to environmental matters.
2.2 DUTY TO DEFEND AND ATTORNEYS AND OTHER FEES AND EXPENSES.
Upon written request by any Indemnified Party, Guarantor shall
defend such Indemnified Party (if requested by any Indemnified Party, in the
name of the Indemnified Party) by attorneys and other professionals reasonably
approved by the Indemnified Parties. Notwithstanding the foregoing, any
Indemnified Parties may, in their sole discretion, engage their own attorneys
and other professionals to defend or assist them, and, at the option of
Indemnified Parties, their attorneys shall control the resolution of any claim
or proceeding. Upon demand, Guarantor shall pay or, in the sole discretion of
the Indemnified Parties, reimburse, the Indemnified Parties for the payment of
reasonable fees and disbursements of attorneys, engineers, environmental
consultants, laboratories and other professionals in connection therewith.
2.3 SUBROGATION. Guarantor shall take any and all reasonable
actions, including institution of legal action against third-parties, necessary
or appropriate to obtain reimbursement, payment or compensation from such
persons responsible for the presence of any Hazardous Materials at, in, on,
under or near the Property or otherwise obligated by law to bear the cost.
Indemnified Parties shall be and hereby are subrogated to all of Guarantor's
rights now or hereafter in such claims.
2.4 INTEREST. Any amounts payable to any Indemnified Parties under
this Agreement shall become immediately due and payable on demand therefor and,
if not paid within thirty (30) days of such demand therefor, shall bear interest
at a per annum rate equal to the lesser of (a) three percent (3%) plus the
Default Interest Rate (as defined in the Loan Agreement) or (b) the maximum
interest rate which Guarantor or any other Guarantor may by law pay or
Indemnified Parties may charge and collect, from the date payment was due,
2.5 SURVIVAL. The obligations and liabilities of Guarantor under
this Agreement shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure, exercise of any
power of sale, or delivery of a deed in lieu of foreclosure of the Security
Documents; provided, however, the obligations of Guarantor shall not apply to
any Losses which Guarantor can establish arose as a result of the active
intentional conduct of the Indemnified Party. Notwithstanding the above,
Guarantor shall be released from its responsibility and obligations under this
Agreement if the Project is sold with the consent of Lenders, and a substitute
guarantor, approved by, and, in their sole discretion, acceptable to Lenders has
assumed all of the terms conditions, covenants and obligations in this
Agreement.
2.6 NOTICE OF LEGAL ACTIONS. Each party hereto shall, within five
(5) Business Days of receipt thereof, give written notice to the other party
hereto of (i) any notice, advice or other communication from any governmental
entity or any
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source whatsoever with respect to Hazardous Materials on, from or affecting the
Property, and (ii) any Legal Action brought against such party or related to the
Property, with respect to which any Guarantor may have liability under this
Agreement. Such notice shall comply with the provisions of Section 5.1 hereof,
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES AND COVENANTS
3.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. Guarantor hereby
makes the corporate authority representations and warranties and the
environmental representations, warranties and covenants contained in Sections
2.1 of the Loan Agreement and agrees that the same are hereby made a part of
this Agreement to the same extent and with the same force as if fully set forth
herein.
ARTICLE 4 - GENERAL
4.1 UNIMPAIRED LIABILITY. Except as provided in Section 2.5 hereof,
the liability of Guarantor under this Agreement shall in no way be limited or
impaired by, and Guarantor hereby consent to and agree to be bound by, any
amendment or modification of the provisions of the Note, the Security Instrument
or any other Loan Document to or with lndemnitee by any Guarantor or any person
who succeeds any Guarantor or any person as owner of the Property. In addition,
the liability of Guarantor under this Agreement shall in no way be limited or
impaired by (i) any extensions of time for performance required by the Note, the
Loan Agreement, the Security Instrument or any of the other Loan Documents, (ii)
any sale or transfer of all or part of the Property, (iii) except as provided
herein, any exculpatory provision in the Note, the Loan Agreement, the Security
Instrument, or any of the other Loan Documents limiting Indemnitee' s recourse
to the Property or to any other security for the Note, or limiting Indemnitee' s
rights to a deficiency judgment against Guarantor, (iv) the accuracy or
inaccuracy of the representations and warranties made by Guarantor under the
Note, the Loan Agreement, the Security Instrument or any of the other Loan
Documents or herein, (v) the release of Guarantor or any other person from
performance or observance of any of the agreements, covenants, terms or
condition contained in any of the other Loan Documents by operation of law,
lndemnitee's voluntary act, or otherwise, (vi) the release or substitution in
whole or in part of any security for the Note, or (vii) Indemnitee's failure to
record the Security Documents or file any UCC financing statements (or
Indemnitee's improper recording or filing of any thereof) or to otherwise
perfect, protect, secure or insure any security interest or lien given as
security for the Note; and, in any such case, whether with or without notice to
Guarantor and with or without consideration,
4.2 ENFORCEMENT. Indemnified Parties may enforce the obligations of
Guarantor without first resorting to or exhausting any security or collateral or
without first having recourse to the Note, the Loan Agreement, the Security
Instrument, or any other Loan Documents or any of the Property, through
foreclosure proceedings or otherwise, provided, however, that nothing herein
shall inhibit or prevent Indemnitee
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from suing on the Note, foreclosing, or exercising any power of sale under, the
Security Instrument, or exercising any other rights and remedies thereunder.
This Agreement is not collateral or security for the debt of Guarantor pursuant
to the Loan, unless Indemnitee expressly elects in writing to make this
Agreement additional collateral or security for the debt of Guarantor pursuant
to the Loan, which Indemnitee is entitled to do in its sole discretion. It is
not necessary for an Event of Default to have occurred pursuant to and as
defined in the Security Instrument for Indemnified Parties to exercise their
rights pursuant to this Agreement. Notwithstanding any provision of the Security
Instrument, the obligations pursuant to this Agreement are exceptions to any
non-recourse or exculpation provision of the Security Instrument; Guarantor is
fully and personally liable for such obligations, and its liability is not
limited to the original or amortized principal balance of the Loan or the value
of the Property.
4.3 WAIVERS. (a) Guarantor hereby waives (i) any right or claim of
right to cause a marshalling of any Guarantor's assets or to cause Indemnitee or
other Indemnified Parties to proceed against any of the security for the Loan
before proceeding under this Agreement against Guarantor; (ii) and relinquish
all rights and remedies accorded by applicable law to indemnitors or Guarantor,
except any rights of subrogation which Guarantor may have, provided that the
indemnity provided for hereunder shall neither be contingent upon the existence
of any such rights of subrogation nor subject to any claims or defenses
whatsoever which may be asserted in connection with the enforcement or attempted
enforcement of such subrogation rights including, without limitation, any claim
that such subrogation rights were abrogated by any acts of lndemnitee or other
Indemnified Parties; (iii) the right to assert a counterclaim, other than a
mandatory or compulsory counterclaim, in any action or proceeding brought
against or by Indemnitee or other Indemnified Parties; (iv) notice of acceptance
hereof and of any action taken or omitted in reliance hereon; (v) presentment
for payment, demand of payment, protest or notice of nonpayment or failure to
perform or observe, or other proof, or notice or demand; and (vi) all homestead
exemption rights against the obligations hereunder and the benefits of any
statutes of limitations or repose. Notwithstanding anything to the contrary
contained herein, Guarantor hereby agrees to postpone the exercise of any rights
of subrogation with respect to any collateral securing the Loan until the Loan
shall have been paid in full. No delay by any Indemnified Party in exercising
any right, power or privilege under this Agreement shall operate as a waiver of
any such privilege, power or right.
(b) GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN
EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THE
NOTE, THE SECURITY DOCUMENTS, THIS AGREEMENT OR THE OTHER SECURITY DOCUMENTS OR
ANY ACTS OR OMISSIONS OF ANY INDEMNIFIED PARTIES IN CONNECTION THEREWITH.
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ARTICLE 5 - MISCELLANEOUS
5.1 NOTICES. All notices required or permitted hereunder shall be
given and shall become effective as provided in the Loan Agreement. Notices to
GUARANTOR shall be addressed as follows:
FiberCore USA, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxxx, Esq.
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
5.2 NO THIRD-PARTY BENEFICIARY. The terms of this Agreement are for
the sole and exclusive protection and use of Indemnified Parties. No party shall
be a third-party beneficiary hereunder, and no provision hereof shall operate or
inure to the use and benefit of any such third party. It is agreed that those
persons and entities included in the definition of Indemnified Parties are not
such excluded third party beneficiaries.
5.3 DUPLICATE ORIGINALS - COUNTERPARTS. This Agreement may be
executed in any number of duplicate originals and each duplicate original shall
be deemed to be an original. This Agreement 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 Agreement. The failure of
any party hereto to execute this Agreement, or any counterpart hereof, shall not
relieve the other signatories from their obligations hereunder,
5.4 NO ORAL CHANGE. This Agreement, 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 any Guarantor or any
Indemnified Party, 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.
5.5 HEADINGS. ETC. The headings and captions of various paragraphs
of this Agreement 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,
5.6 NUMBER AND GENDER; SUCCESSORS AND ASSIGNS. All pronouns and any
variations thereof shall be deemed to refer to the masculine,
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feminine, neuter, singular or plural as the identity of the person or persons
referred to may require. Without limiting the effect of specific references in
any provision of this Agreement, the term "Guarantor" shall be deemed to refer
to each and every person or entity comprising an Guarantor from time to time, as
the sense of a particular provision may require, and to include the heirs,
executors, administrators, legal representatives, successors and assigns of
Guarantor, all of whom shall be bound by the provisions of this Agreement,
provided that no obligation of any Guarantor may be assigned except with the
written consent of lndemnitee. Each reference herein to Indemnitee shall be
deemed to include its successors and assigns. This Agreement shall inure to the
benefit of Indemnified Parties and their respective successors and assigns
forever,
5.7 JOINT AND SEVERAL LIABILITY. If Guarantor consists of more than
one person or entity, the obligations and liabilities of each such person and
entity hereunder are joint and several.
5.8 RELEASE OF LIABILITY. Any one or more parties liable upon or in
respect of this Agreement may be released without affecting the liability of any
party not so released.
5.9 RIGHTS CUMULATIVE. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies which lndemnitee has
under the Note, the Loan Agreement, the Security Instrument or the other Loan
Documents or would otherwise have at law or in equity.
5.10 INAPPLICABLE PROVISIONS. If any term, condition or covenant of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, this Agreement shall be construed without such provision.
5.11 GOVERNING LAW. This Agreement 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.
5.12 SUBMISSION TO JURISDICTION. With respect to any claim or action
arising hereunder, Guarantor (a) irrevocably submit to the nonexclusive
jurisdiction of the courts of the State of Alabama and the United States
District Court for the Middle District of Alabama located in Montgomery,
Alabama, and appellate courts from any thereof, and (b) irrevocably waive 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 Agreement brought in any
such court, irrevocably waive any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum
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[GUARANTOR - BORROWER]
FIBERCORE USA, INC.
a Delaware corporation
By:
------------------------------------
Its:
------------------------------------
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IN WITNESS WHEREOF, this Agreement has been executed by Guarantor
and is effective as of the day and year first above written.
[GUARANTOR - BORROWER]
FIBERCORE USA, INC.
a Delaware corporation
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
Its: Chief Financial Officer
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EXHIBIT A
TO ENVIRONMENTAL INDEMNITY AGREEMENT BY
FIBERCORE USA, INC (as "Guarantor")
In Favor of
EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA and
TEACHERS' RETIREMENT SYSTEM OF ALABAMA
(As "Indemnitees")
----------
[Real Property Legal Description]
XXX 0 XX XXX XXXXXX XXXXXXXXXX XXXX XXXXX, AS SAME APPEARS IN THE
RECORDS OF THE OFFICE OF THE JUDGE OF PROBATE FOR XXX COUNTY, ALABAMA
AT:_______________________________________________________________.
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