EXHIBIT 10.13
LOAN AGREEMENT
Dated as of December 31, 2001
Between
FIBERCORE, U.S.A., INC.
and
EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA
and
TEACHERS' RETIREMENT SYSTEM OF ALABAMA
* * * *
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is dated as of December __, 2001 by
FiberCore, U.S.A. a corporation organized under the laws of the State of
Delaware, (the "Borrower"), 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. (ERSA and TRSA, and their successors or assigns, as
their interests may appear being sometimes individually referred to as a
"Lender" and collectively as the "Lenders").
WITNESSETH
WHEREAS, the Borrower is a wholly owned subsidiary of FiberCore, Inc.
("FCI"), and Borrower intends to develop, build and equip a plant located on
certain land located in the City of Auburn (the "City") Lee County, Alabama (the
"County") for fiber optic manufacturing ("the Project");
WHEREAS, in connection with the Project, the Borrower has entered into,
among other agreements, (1) a certain Option Agreement with the City and its
Industrial Development Board dated December 31, 2001, to acquire for $100.00,
Lot No. 1, in the Auburn Technology Park, North, in the City of Auburn, Alabama,
containing approximately 35 acres of land and certain appurtenant rights and
easements (collectively, the "Land") valued at $1,100,000.00 and (2) has
accepted certain business development assistance and benefits (collectively the
"AIDB Agreements". A copy of the AIDB Agreements is attached hereto as Exhibit
"__ ";
WHEREAS, the construction of the Project is estimated to cost
approximately $33,000,000.00 (the "Project Cost");
WHEREAS, the Borrower has requested, and the Lenders have agreed, to make
certain loans (the "Loans") to the Borrower in an amount equal to two-thirds
(2/3rds) of the Project Costs (the "Commitment"), not to exceed the aggregate
amount of $22,000,000.00 in order to finance, among other things, the costs of
the construction and development of the Project, subject to the terms and
conditions of this Agreement;
WHEREAS, FCI shall contribute up to $11,000,000.00 to Borrower to pay the
Project Costs;
WHEREAS, all Project Costs in excess of $33,000,000.00 shall be paid
solely by the Borrower;
WHEREAS, Lenders shall advance two-thirds (2/3) of the Project Costs, not
to exceed $22,000,000, such advance to be made pari passu with Borrower's
payment of one-third (1/3) of the Project Costs, up to $11,000,000, and of all
Project Costs in excess of $33,000,000;
WHEREAS, the Lenders' loans shall be evidenced by and repaid pursuant to
secured installment notes bearing simple interest at the rate of eight percent
(8%) per annum: (i) with interest capitalized for a period of fifteen (15)
months from the Initial Disbursement Date, but in no event later than to
December 31, 2003; (ii) in the event the Capitalization Period expires prior to
December 31, 2003, then interest only payable on the amount outstanding from the
expiration of the Capitalization Period to December 31, 2003 , and payable on
each intervening June 30th and December 31st; and, (iii) thereafter payable in
thirty (30) level semi- annual principal and interest installments beginning
June 30, 2004 and ending on December 31, 2018 (the "Maturity Date"); and
providing for pre-payment at any time without penalty;
WHEREAS, the Loans shall be payable in full in the event of default or
with any change in control of the Borrower; and, Lenders shall receive a first
mortgage and security interest on all of Borrower's real property, plant
equipment and fixtures, including, without limitation, the proceeds therefrom
,and, replacements thereof;
WHEREAS, the Loan is among other things subject to: 1) approval of the
Board of Directors of FCI; 2) exercise of the Option and consummation of the
transaction with the City of Auburn and its Industrial Development Board to
Acquire Lot No. 1, of the Auburn Technology Park North; 3) assurance of
availability of utility requirements necessary to operate the Project; 4)
Borrower's acceptance of Alabama's business development assistance and benefit
programs; and, the other terms and conditions set forth in this Agreement;
WHEREAS, in order to induce the Lenders to make the Loans, Borrower and
the Lenders desire to execute and deliver this Agreement in order to confirm
their mutual understandings with respect thereto;
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto covenant, agree and
bind themselves as follows:
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in the recital paragraphs above shall have the
meanings assigned to them in such paragraphs. The terms defined in this Article
shall have the meanings assigned to them in this Article. Singular terms shall
include the plural as well as the singular, and vice versa. All defined terms
shall include any and all amendments, modifications, replacements, supplements
or substitutions thereof or thereto;
(2) All references in this instrument to designated "Articles," "Sections"
and other subdivisions are to the designated Articles, Sections and subdivisions
of this instrument as originally executed;
(3) The terms "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and,
(4) The term "person" shall include any individual, corporation,
partnership, joint venture, association, trust, unincorporated organization and
any government or agency or political subdivision thereof.
Architect's Contract shall mean that certain Agreement to be entered into
between the Borrower and the Project Architect providing for the preparation of
the Construction Drawings for the Project and for supervision and other
architectural services required to properly complete the Project.
Authorized Borrower Representative shall mean such person or persons as
may be authorized by the Borrower from time to time to act as "Authorized
Borrower Representative" for purposes of this Agreement. The actions of the
Authorized Borrower Representative shall be binding on the Borrower. As of the
date hereof, each of the following persons is hereby designated as an
"Authorized Borrower Representative: __________________________.
Building shall mean the building or buildings and other structures and all
related improvements that are now or hereafter located on the Land relating to
the Project, as such buildings and other structures and related improvements may
at any time exist.
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Business Day shall mean any day not a Saturday, Sunday or day on which
banks are authorized or required to be closed in the Montgomery County, Alabama.
Casualty Event shall mean damage to the Project by fire, wind, water or
other casualty.
Change Orders shall mean any material amendments or modifications to the
Construction Drawings, the Construction Agreement, the Architect's Contract or
any other contract executed by the Borrower for the purchase of labor, materials
or services for the construction or development of the Project.
Change in Control of Borrower shall mean any change in the ownership of
Borrower which after giving effect to such change results in Borrower no longer
being a wholly (100%) owned subsidiary of FCI, or other adjustment or change in
control which effects in any way whatsoever FCI's ability to elect directors or
officers of Borrower or otherwise merge and control Borrower.
Checks shall have the meaning assigned to such term in Section 3.6(h).
Commitment shall have the meaning assigned to such term in the fourth
(4th) WHEREAS clause.
Commitment Period shall mean the period beginning on the Effective Date
and ending upon the expiration of the Capitalization Period, provided, however,
that if the Initial Draw is not made by Borrower on or before September 30,
2002, then the period shall expire on September 30, 2002.
Completion shall have the meaning assigned to such term in Section 4.4(a).
Completion Date shall mean the date that, or as of which, Completion of
the Project shall have occurred as provided in this Agreement.
Construction Agreement shall mean that certain Construction Agreement to
be entered into between the Borrower and the Contractor relating to the
construction of the Project.
Construction Drawings shall mean the drawings, plans and specifications to
be prepared by the Project Architect pursuant to the Architect's Contract,
together with any Change Orders approved by Lenders, The Construction Drawings
shall be drawn by the Project architect in accordance with good architectural
practice and in compliance with all applicable laws, ordinances and regulations.
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Continuation Report shall have the meaning assigned to such term in
Section 3.6.
Contractor shall mean a contractor designated by the Borrower who shall
have a high quality reputation and experience constructing plant facilities
similar in scope and nature to the Project so long as that contractor shall be
reasonably acceptable to the Lenders.
Contracts and Subcontracts shall mean any and all contracts and agreements
relating to construction or development of the Project.
Debt Service shall mean the principal and Simple Interest payable on the
Notes.
Debt Service Coverage Ratio shall mean the ratio of Net Operating Income
from the Project for the Fiscal Year in question, calculated quarterly, to the
Debt Service Requirements for all Long Term Indebtedness for such Fiscal Year.
Debt Service Requirements shall mean, with respect to a specified
Indebtedness for a specified period, the payments required on account thereof or
the payments for which provision for payment must be made during such period.
The term "Debt Service Requirements" shall not include any prepayment of such
indebtedness.
Disputed Project Costs shall have the meaning assigned to such term in
Section 4.4(b) hereof.
Dollars and $ shall mean lawful money of the United States of America.
Draw shall mean any advance requested by Borrower and made by Lenders on
the Notes.
Draw Request Documents shall have the meaning assigned to such term in
Section 3.6.
Effective Date shall mean the date that the Loan Documents are signed and
delivered by the parties, and, the conditions precedent for the Initial Closing
have been satisfied.
Eminent Domain shall mean, when used herein with respect to a taking of
property, the power (actual or claimed) of any governmental authority or any
person, firm or corporation acting under governmental authority (actual or
claimed) to take such property, and for purposes of this Agreement, a taking of
property under the exercise of the power of Eminent Domain shall include a
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conveyance made, or use granted or taken, under either the threat or the fact of
the exercise of governmental authority.
Enforcement Limitations shall have the meaning assigned to such term in
Section 2.1(4) hereof.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended and in effect from time to time, and the regulations and
public interpretations thereunder.
Event of Default shall mean an "Event of Default" as defined in Article 8
of this Agreement.
ERSA Note shall mean that certain Promissory Note of even date herewith
from the Borrower to ERSA in an amount equal to ERSA's percentage of the
Commitment.
Fiscal Year shall mean the twelve (12) month period immediately preceding
the date in question.
Force Majeure shall mean any acts or activities that are beyond the
reasonable control of the Borrower, and which materially diminish the ability of
the Borrower to complete the Project by December 31, 2003 which may include,
without limitation, acts of God, earthquakes, blizzards, tornados, hurricanes,
fires, flood, malicious mischief, insurrection, riots, strikes, lockouts,
boycotts, picketing, labor disturbances, public enemy (declared or undeclared),
landslides, explosions, epidemics, compliance with any order, rule, injunction
or decree by any court, tribunal or judicial authority of competent
jurisdiction, inability to obtain materials or supplies after the exercise of
all reasonable efforts, substantial interference in construction activities
resulting from construction activities conducted simultaneously on adjacent
lands by or under the direction of unrelated parties and any other similar
circumstances beyond the reasonable control of the Borrower.
GAAP shall mean those principles promulgated by the Financing Accounting
Standards Board or such other body recognized as authoritative by the American
Institute of Certified Public Accountants consistently applied in effect as of
the date hereof.
Gross Revenues shall mean all receipts, revenues, income (including
investment income) and other money received by or on behalf of the Borrower
attributable to the Project derived from all sources including, without
limitation, the operation of the Project Plant, and the proceeds of any license,
sale or other disposition of Project assets, any insurance proceeds and
condemnation awards
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paid to the Borrower on account of the Project, whether now existing or
hereafter coming into existence and whether now owned or held or hereafter
acquired by the Borrower.
Indebtedness shall mean, without duplication, all (i) indebtedness or
liability of the Borrower for borrowed money or the deferred purchase price of
property or services; (ii) obligations of the Borrower under this Agreement;
(iii) any guaranty and any contingent obligation of the Borrower to purchase,
supply funds or otherwise assure a creditor against loss; and (iv) other
liabilities which would be included in determining total liabilities of the
Borrower as determined in accordance with GAAP.
Independent shall mean a person who is not a member of the governing body
of the Borrower or its affiliates or an officer or employee of the Borrower or
its affiliates, and which is not a partnership, corporation or association
having a partner, director, officer, member or stockholder who is a member of
the governing body of the Borrower or its affiliates or an officer or employee
of the Borrower or its affiliates; provided, however, that the fact that such
person or firm is retained regularly by or transacts business with the Borrower
shall not make such person or firm an employee within the meaning of this
definition.
Initial Disbursement Date shall mean the date of the initial disbursement
of principal under the Notes to the Borrower.
Interest shall have the meaning assigned to such term in Section 5.2(a).
Land shall have the meaning assigned to such term in the second (2nd)
WHEREAS clause.
Lien Waivers shall have the meaning assigned to such term in Section
3.6(a).
Loan Amount Certificate shall have the meaning assigned to such term in
Section 3.6(a).
Loan Documents shall mean this Agreement, the Notes, the Security
Documents and all other documents now or hereafter executed evidencing, securing
and/or relating to the Loans.
Long Term Indebtedness shall mean Indebtedness having an original maturity
greater than, or renewable at the option of the obligor for a period greater
than, one year from the original incurrence thereof (which Indebtedness shall
include, without limitation, the Indebtedness due under the Notes).
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Loans shall have the meaning assigned to such term in the tenth (10th)
WHEREAS clause.
Maturity Date shall mean December 31, 2018.
Mortgage shall mean a certain Mortgage and Security Agreement from the
Borrower to the Lenders encumbering the Borrower's rights in the Project,
including the Land and all existing personal property including replacements and
proceeds thereof.
Net Condemnation Award shall mean the total amount awarded as compensation
for any part of the Project taken under the exercise of the power of Eminent
Domain plus damages to any part not taken, less and except (i) any portion
thereof to which the Borrower is entitled for the taking of its property and
(ii) all reasonable attorneys' fees and other reasonable expenses incurred in
the condemnation proceeding with respect to which the award was made (other than
those paid directly by the Borrower or deducted from that portion of the award
to which the Borrower is entitled).
Net Insurance Proceeds shall mean the gross amount of casualty insurance
proceeds recovered on account of the Casualty Event which are attributable to
the Project, less all reasonable out-of-pocket expenses incurred in the
collection of such proceeds.
Net Operating Income shall mean Gross Revenues, less Operating Expenses.
No Default Certificate shall have the meaning assigned to such term in
Section 3.6.
Notes shall mean the ERSA Note and the TRSA Note.
Operating Expenses shall mean all operating costs and expenses of the
Borrower incurred in the operation, maintenance and repair (excluding items
which are to be capitalized) of the Project, but excluding amortization and
depreciation, all as determined in accordance with GAAP.
Operating Income shall mean Gross Revenues minus Operating Expenses, all
as determined in accordance with GAAP.
Opinion of Counsel shall mean a written opinion of counsel, as necessary,
who may (except as otherwise expressly provided in this Agreement) be counsel
for the Borrower and, in any event, shall be acceptable to the Lenders.
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Option shall mean the option agreement between the Borrower, the City and
its industrial development board with respect to the purchase of the Land.
Option Expiration Date shall mean the 30th day of September, 2002.
Payment and Performance Bonds shall mean any and all payment and
performance bonds issued by a company or companies reasonably acceptable to the
obligee and co-obligee(s) named thereunder naming and indemnifying the Borrower,
and the Lenders with respect to any cost or damage arising from the failure by
the Contractors and/or Subcontractors to pay for material or labor or to perform
under the Contracts and insuring (i) payment to all persons supplying labor and
materials and (ii) performance of the Contracts and Subcontractors.
Payment Date shall mean a date on which principal or interest is payable
under the Notes.
Permitted Encumbrances shall mean, as of any particular time, (i) liens
for ad valorem taxes and general and special assessments not then due or
delinquent, (ii) utility, access, drainage and other easements and
rights-of-way, mineral rights, restrictions and exceptions none of the foregoing
of which, individually or in the aggregate, in the reasonable judgment of
counsel to the Lenders, materially interfere with or impair the use of the
Project for the purpose for which it was acquired or is held, (iii) such other
minor defects, irregularities, encumbrances, easements, rights-of- way and
clouds on title (including zoning and other similar restrictions and
regulations) as in the reasonable judgment of counsel to the Lenders customarily
exist with respect to properties similar in character to the Project and do not
in the aggregate materially impair the title or interest of the Borrower in the
Project or the use of the Project for the purpose for which it was acquired or
is held. Anything herein to the contrary notwithstanding, Lenders, in their sole
discretion, may require affirmative coverage by title insurance over such title
exceptions before they shall be deemed to be "permitted". Permitted Encumbrances
shall also include any lien, security interest or charge on after-acquired
project equipment and acquired by Borrower soley with funds from sources other
than Lenders, except that no such encumbrance shall be deem "permitted" with
respect to replacements or proceeds of Project Equipment originally acquired in
whole or part with Lenders' funds.
Prime Rate shall mean the prime rate of interest as reported from time to
time in the Wall Street Journal, For purposes hereof, any change in the Prime
Rate shall be effective on the date such change in the Prime Rate is reported.
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Profile shall mean that certain Project-Cost Profile attached hereto as
Exhibit A. The Profile shall be attached by supplement on or before the Initial
Draw.
Project shall mean the Land, the Building and the Project Equipment, as
they may at any time exist.
Project Architect shall mean any architect or architectural firm
designated by the Borrower who shall have a high quality reputation and
experience designing plant and facilities similar in scope and nature to the
Project and shall be reasonably acceptable to the Lenders.
Project Budget shall mean the anticipated aggregate amount of Project
Costs as shown in the first eight (8) columns of the Profile. The term "Project
Budget" also shall include the General Summary of Estimated Project Costs as
such Estimate more specifically describes the line items for disbursement
contained in the column entitled "General Contractor Disbursement" listed in the
Profile. The Project Budget may be revised in material respects from time to
time by the Borrower with the prior approval of the Lenders. The Project Budget
shall be attached hereto by supplement after the Initial Closing but on or
before the Initial Draw on the Initial Disbursement Date.
Project Consultant shall mean any architect, engineer or firm of
architects or engineers which is Independent and is appointed by the Borrower,
with Lenders prior approval, not to be unreasonably withheld, to report to the
Lenders for the purposes set forth herein. The Borrower may appoint a new or
successor Project Consultant as necessary with thirty (30) days notice to
Lenders and subject to Lenders' reasonable approval.
Project Costs shall mean all costs and expenses incurred by the Borrower
in connection with (i) the Borrower's acquisition of the Land (ii) the planning,
development and design of the Building and the Project Equipment, including the
costs of preliminary investigations, surveys, estimates and Construction
Drawings, (iii) the construction of the Building, including the cost to the
Borrower of supervising construction, payments to contractors and materialmen
and fees for professional or other specialized services (including, without
limitation, the Project Consultant), (iv) the acquisition and installation of
the Project Equipment, (v) obtaining contract bonds and insurance of all kinds
which may be necessary or desirable in connection with the Project and which are
not paid by any contractor or otherwise provided for, (v) the loan transaction
evidenced hereby, including (without limitation) all legal, accounting,
financial, printing, recording, filing and other fees and expenses, (vii) all
other work deemed necessary or desirable by the Borrower, and (viii) the
reimbursement to the Borrower of all amounts paid directly by the Borrower for
costs and fees, including loan
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commitment and attorney fees, related to the Project and in respect of any of
the aforesaid costs and expenses.
Project Documents shall mean the AIBD Agreements, and all other documents,
instruments and agreements now or hereafter executed relating to the Project to
which the Borrower is a party.
Project Equipment means all items of machinery, equipment, furniture,
fixtures or other personal property necessary for or useful in the operation of
the Project (as specified by the Borrower) (i) the costs of which, in whole or
in part, have been or are to be paid, directly or indirectly, by the Borrower,
(ii) which are not part of the regular and permanent heating, ventilating, air
conditioning, electrical, fire protection or plumbing system of the building and
(iii) which, although physically attached (by bolting, welding or otherwise) to
the Project Realty, can be severed and removed from the Project Realty without
material damage either to the Project Realty or to such items of machinery,
equipment or other personal property.
Project Work shall mean (i) acquisition of the Land by the Borrower, (ii)
the completion of the planning, design and construction of the Building in
accordance with the Construction Drawings, (iii) completion of the planning,
design and acquisition of the Project Equipment and the installation thereof in
or about the Building and (iv) completion of the planning, design and work in
accordance with the Design Plans.
Requisition shall have the meaning assigned to such term in Section 3.6(a)
hereof.
RSA Indebtedness shall mean all indebtedness of the Borrower to the
Lenders at any time owing under this Agreement, the Notes and the other Loan
Documents.
Security Documents shall mean (i) the Mortgage, (ii) a certain Security
Agreement from the Borrower to the Lenders and related and necessary financing
statements, and all other documents, instruments and agreements now or hereafter
executed securing the Loans and/or the Notes.
Subcontractors shall mean any and all parties contracting with the
Contractor to perform under subcontracts.
Transfer shall mean the sale or transfer (whether through foreclosure or
otherwise) of all or part of the Borrower's fee title to the Project.
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TRSA Note shall mean that certain Promissory Note of even date herewith
from the Borrower to TRSA in an amount equal to TRSA's percentage of the
Commitment.
SECTION 1.2 Effect of Headings and Table of Contents
The Article and Section headings herein and in the Table of Contents are
for convenience of reference only and shall not affect the construction or
interpretation hereof.
SECTION 1.3 Severability Clause
If any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.4 Governing Law
This Agreement shall be performed in, and construed in accordance with and
governed by, the laws of the State of Alabama.
SECTION 1.5 Counterparts
This Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed an original, but all such counterparts
shall together constitute but one and the same instrument,
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 Representations and Warranties of Borrower
The Borrower represents and warrants to the Lenders as follows:
(1) It is a corporation duly organized and validly existing under the laws
of the State of Delaware,
(2) It has all requisite corporate power and all material governmental
licenses, authorizations, consents and approvals to own its assets and to carry
on its business as now being conducted, and it is authorized, qualified and
registered to do business in Alabama and in each other jurisdiction where the
character of its properties or the nature of its activities makes such
authorization necessary,
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(3) It has all requisite power and authority to execute, deliver and
perform its obligations under the Project Documents and the Loan Documents, and
the execution and delivery of each of the Project Documents and the Loan
Documents by the Borrower and the performance by the Borrower thereunder have
been duly authorized by all requisite corporate action,
(4) Each of the Project Documents and the Loan Documents will, when
executed by the Borrower and the other parties thereto, constitute the legal,
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their terms, except as enforcement may be limited (the
"Enforcement Limitations") by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles,
(5) Except as disclosed to the Lenders in writing prior to the date
hereof, there is no action, suit, proceeding or investigation pending or, to the
knowledge of the Borrower, threatened against the Borrower or any of their
properties before any court, governmental agency or regulatory authority
(federal, state or local) which, in the reasonable opinion of the Borrower, is
more likely than not to involve an adverse decision which could have a material
adverse impact on the financial condition of the Borrower and there is no
action, suit, proceeding or investigation pending against the Borrower in
relation to the Project,
(6) The principal office of the Borrower is located in _________________,
(7) The execution and delivery of the Project Documents and the Loan
Documents by the Borrower and the performance of the Borrower's obligations
hereunder and thereunder will not (i) violate (a) any provision of law or the
Borrower's articles of incorporation or Bylaws (b) any applicable final order of
any court or other agency of government or (c) any indenture, agreement for
borrowed money, bond, note or other similar instrument or any other material
agreement to which the Borrower is a party or by which the Borrower or any of
its property is bound, (ii) be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement, bond, note or instrument or (iii) result in the creation
or imposition of any lien of any nature whatsoever upon any property or assets
of the Borrower, except as permitted under the Project Documents and the Loan
Documents,
(8) All required permits in connection with the Project Work (the
"Applicable Permits") will be obtained and be in full force and effect prior to
the initial Draw and all Applicable Permits that may later be required shall be
obtained or made and shall be maintained in full force and effect when and as
required. All other actions by governmental authorities or agencies that are not
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required in connection with the construction or operation of the Project but
that are otherwise required in connection with the execution and delivery of
this Agreement by the Borrower and with the borrowing hereunder on any date this
representation is made or deemed to have been made, and required to make this
Agreement legal, valid and enforceable, have been obtained or made and are in
full force and effect,
(9) The Borrower has filed or caused to be filed all federal, state and
local tax returns and all tax returns in other jurisdictions which are required
to be filed and has paid or caused to be paid all taxes as shown on such returns
or on any assessment received by it to the extent that such taxes have become
due, except taxes the amount or validity of which is being contested in good
faith by appropriate proceedings and with respect to which the Borrower shall
have set aside on its books adequate reserves,
(10) The Borrower is in compliance in all material respects with those
provisions of ERISA which are applicable to the Borrower. As of the date hereof,
no reportable event, as defined in ERISA, has occurred with respect to any
employee plan which is subject to the provisions of Title IV of ERISA and which
is maintained for employees of the Borrower or any corporation which is an
affiliate of the Borrower, and no material "unfunded vested liabilities" within
the meaning of ERISA exists under any such plan,
(11) The Borrower is not an "investment company" as that term is defined
in, and is not otherwise subject to regulation under, the Investment Company Act
of 1940. The Borrower is not a "holding company" as that term is defined in, and
is not otherwise subject to regulation under, the Public Utility Holding Company
Act of 1935. The issuance of the Notes to the Lenders do not require
registration under the Securities Act of 1933, as amended, or pursuant to the
provisions of any securities or Blue Sky law of the State of Alabama,
(12) The Borrower is not engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying any margin stock, as defined under Regulation U of the Board of
Governors of the Federal Reserve System of the United States, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof. No part of the proceeds of the Loans will be used,
whether directly, incidentally or ultimately, to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock or to refund indebtedness originally incurred for
such purpose and the Borrower will take no action that would violate, or be
inconsistent with, the provisions of Regulations G, U or X of such Board, as the
same are from time to time in effect, and all official rulings and
interpretations thereunder or thereof,
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(13) No information, report, financial statement, exhibit or schedule
furnished by or on behalf of the Borrower, or any of its affiliates, to the
Lenders in connection with this Agreement contains any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein not misleading when made or delivered or as of any date to which such
statements expressly relate,
(14) The Borrower is in compliance with all laws, including without
limiting the generality of the foregoing, those relating to environmental
matters, non-compliance with which could, singly or in the aggregate, have a
material adverse effect on the business, assets, liabilities, financial
position, results of operations or business prospects of the Borrower or on the
ability of the Borrower to perform its obligations under the Project Documents
and the Loan Documents or the construction and operation of the Project as
contemplated herein,
(15) The information regarding the Borrower or the Project which has been
supplied in writing by the Borrower to the Lenders is true and complete as of
the date of this Agreement in all material respects; all projections contained
in such information have been made in good faith and are believed by the
Borrower as of the date of this Agreement to be reasonable; and the Borrower
does not have knowledge as of the date of this Agreement of any matters relating
to the properties, business or operations of the Borrower, other than matters
fully disclosed in such information, which would adversely affect the
properties, business or operations of the Borrower in any material respect. Such
information shall be held in confidence by the Lenders,
(16) The Borrower hereby agrees to construct and keep the Project in
compliance with all applicable laws, ordinances and regulations including
(without limitation) applicable federal, state and local environmental laws,
ordinances and regulations. Without limiting the generality of the foregoing,
and without the Lenders acknowledging or agreeing that either of them have any
liability or obligation whatsoever to remove, clean up, abate, encapsulate or
otherwise handle, treat or dispose of any toxic waste or hazardous substance in,
on or under any portion of the Project, the Borrower hereby agrees to indemnify
and hold the Lenders harmless from and against all claims, costs, expense and
liability incurred by the Lenders in complying, or in bringing the Project (or
any part thereof) into compliance, with any federal, state or local
environmental law, ordinance or regulation. The foregoing indemnity and hold
harmless agreement shall be in addition and cumulative to the rights and
remedies contained in that certain Environmental Indemnity Agreement of even
date herewith between and among Borrower and Lenders and shall survive the
cancellation, satisfaction of record or expiration of the Mortgage without any
further action or documentation on the part of the Borrower or the Lenders. Such
indemnity and hold harmless
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agreement shall be binding upon, and shall inure to the benefit of, the Lenders
and its successors and assigns. The Borrower agrees to immediately notify the
Lenders of any knowledge, notice, action, lien or other similar actions alleging
either the location of any hazardous substance or the violation of any
environmental law with respect to the Project,
(17) The Land is suitable for the construction, development and operation
of the Project. The Land has satisfactory access to public roads. The Project,
when completed, will be adequately serviced by all necessary water, sewer,
electrical, telephone and any other utility services required to construct, use
and occupy the Project. Upon construction, the Project will be free from
structural defects and its equipment will be of first-class workmanship and
materials and free from material defects. The Project, when completed in
accordance with the Construction Drawings and the Design Plans, will be suitable
for the Borrower's purposes and needs,
(18) The obligations of the Borrower under the Notes and the Loan
Documents are not subordinate to any obligations of the Borrower to the City,
County or State of Alabama.
(19) The mortgage and security interests held by the Lenders under the
Security Documents are valid and perfected first priority mortgage and security
interests in the collateral described therein, superior to any interest therein;
such collateral is subject to no liens securing the payment of a debt except for
those types of liens not yet delinquent referred to in the definition of
"Permitted Encumbrances",
(20) To the best of Borrower's knowledge, after due inquiry, the Land does
not contain any hazardous wastes, hazardous substances, hazardous materials,
toxic substances, or toxic pollutants, as those terms are used in the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act, the Clean Water Act, or in any
regulations promulgated pursuant thereto, or in any other applicable law
(collectively, "Hazardous Substances"),
(21) To the best of Borrower's knowledge, after due inquiry, no Event of
Default has occurred and is continuing and no event has occurred which with the
giving of notice or the passage of time or both would constitute Event of
Default.
THE REPRESENTATIONS AND WARRANTIES OF THE BORROWER CONTAINED IN CLAUSES
(11), (12), (17), (18) AND (19) OF THIS SECTION 2.1 SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
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SECTION 2.2 Representations and Warranties of Lenders
Each of the Lenders represents and warrants to the Borrower as follows:
(1) It is a public corporation duly organized and validly existing under
the laws of the State of Alabama,
(2) It has all requisite power and authority to execute, deliver and
perform its obligations under this Agreement and the other Loan Documents to
which it is a party, and the execution and delivery of each such Document has
been duly authorized by all requisite action.
(3) Each of the Loan Documents to which the Lenders are a party, when
executed by all parties thereto, will constitute the legal, valid and binding
obligation of the Lenders.
ARTICLE 3
AGREEMENT TO MAKE LOANS
SECTION 3.1 Loans
(a) The Lenders agree, on the terms of this Agreement, to make Loans to
the Borrower during the Commitment Period, provided that the conditions
precedent for the Initial Draw are satisfied, and Borrower makes the Initial
Draw, on or before September 30, 2002. In the event the Initial Draw is not made
by Borrower by September 30, 2002, then Lenders' Commitment to make the Loans
shall immediately terminate and expire. As between the Lenders, ERSA agrees to
fund up to $6,600,000, or thirty percent (30.0%) of the Commitment, while TRSA
agrees to fund up to $15,400,00 or seventy percent (70.0%) of the Commitment;
but in no event shall the aggregate amount of Loans to be made by the Lenders
hereunder exceed the Commitment. The Lenders shall not be required to make any
Loan hereunder in an amount less than $300,000 (except if the un-borrowed
balance of the Commitment is less than $300,000 (the "Balance"). The Lenders
shall not be required to make more than one Draw per calendar quarter, or, to
make any Draw after the expiration of the fifteen (15) month period immediately
following the Initial Disbursement Date. Not later than 1:00 P.M., Central Time
on the date specified for each Draw, the Lenders shall, subject to the terms and
conditions of this Agreement, make the Draw by wiring its portion thereof in
immediately available funds to the Borrower in accord with wiring instructions
provided to Lenders in writing by Borrower.
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(b) In the event that the Project Costs are less than $33,000,000, then
the Lenders' loan amount shall be decreased so as to maintain a 2:1 ratio with
Borrower's contribution (the "Adjusted Commitment"). All Project Costs in excess
of $33,000,000.00 shall be paid and funded solely by Borrower.
SECTION 3.2 Documentation of Loans
The Loans made by ERSA shall be evidenced by the ERSA Note and the Loans
made by TRSA shall be evidence by the TRSA Note. Each Lender shall, and is
hereby authorized by the Borrower to, endorse on the schedule attached to the
Note issued to it (or on a continuation of such schedule attached to such Note
and made a part thereof), or otherwise record in such Lender's internal records,
an appropriate notation evidencing the date and amount of each Loan from such
Lender, each payment and prepayment of principal of each Note, each payment of
interest on each Note and the other information provided for on such schedule;
provided, however, that the failure of any Lender to make such a notation or any
error in such a notation shall not affect the obligation of the Borrower to
repay the Loans made by such Lender to it in accordance with the terms of the
Note and this Agreement.
SECTION 3.3 Security for the Loans
(a) The Notes shall be secured by the Security Documents.
(b) 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 Project in agreeing to
make the Loans, and will continue to rely on Borrower's ownership of the Project
as a means of maintaining the value of the Property as security for repayment of
the Loans and the performance of its other obligations under the Loan Documents.
Borrower acknowledges that Lenders have a valid interest in maintaining the
value of the Project so as to ensure that, should Borrower default in the
repayment of the Loans or the performance of any of its obligations under any of
the Loan Documents, Lenders can recover the Loans by a sale of the Project and
the collateral under the Security Documents.
(c) Due on Sale. Borrower covenants and agrees not to transfer the
Project, or any collateral under the Security Documents, or any part thereof or
any interest therein or permit or suffer the Project 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 Project, or any collateral secured under the Security
Documents.
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SECTION 3.4 Conditions Precedent to Close
The obligation of the Lenders to execute the Loan Documents to which it is
a party and to close this transaction ( the "Initial Closing") is subject to the
satisfaction of the following conditions, and, the receipt by the Lenders of the
following documents, each of which shall be reasonably satisfactory to Lenders
in form and substance:
(a) Evidence that the Borrower has acquired, or obtained an Option to
acquire the Land and any and all parking facilities which may be constructed on
the Land, for parking, in order to satisfy the needs of the Project and its
anticipated guests. In the event the Borrower has obtained an Option to acquire
the Land, the Option shall not expire prior to September 30, 2002.
(b) Execution of the Loan Documents by the Borrower, including without
limitation, the Notes.
(c) Certified copies of (i) the Articles of Incorporation, Certificate of
Incorporation and Bylaws of the Borrower and all amendments thereto and all
corporate action taken by the Borrower approving each of the Project Documents
and the Loan Documents and the consummation of the transactions contemplated
thereby, (ii) certified copies of Articles of Incorporation, Certificate of
Incorporation and Bylaws of FCI and all amendments thereto and all corporate
action taken by FCI, approving the formation of Borrower as a wholly owned
subsidiary and its participation in the Project and the consummation of the
transactions contemplated hereby.
(d) An opinion of Messrs. Cadwalader, Wickersham and Taft, counsel to the
Borrower, and an Alabama counsel, as necessary, substantially in the forms
attached hereto as Exhibits 3.4(d)1 and 3.4(d)2.
(e) A survey of the Land by a registered surveyor showing no
encroachments, overlaps or violations of restrictions, showing a permanent means
of ingress and egress to the Land and containing a certification as to whether
or not the Land lies in a flood hazard area.
(f) Evidence that the construction, and operation of the Project will not
violate any applicable zoning laws or any other applicable ordinances and
governmental rules, regulations and restrictions, including, without limitation,
copies of the Applicable Permits issued to date.
(g) Evidence that the Land has satisfactory access to public roads.
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(h) Evidence that the Project, when completed, will be adequately serviced
by all necessary water, sewer, electrical, telephone and any other utility
services required to construct, use and occupy the Project.
(i) Evidence of the registration, qualification and good standing of the
Borrower to do business in the State of Alabama.
(j) A Phase I environmental audit of the Land satisfactory to Lenders
indicating an absence of contaminated soil and contaminated water and no
apparent violations or non-compliance with any federal, state or local
environmental statutes, rules, regulations or ordinances.
(k) An appraisal report of the Project indicating the Project as designed
has a value equal to or greater than $33,000,000.00.
(l) A commitment for a title insurance policy issued by Chicago Title
Insurance Company committing to insure the interest of the Lenders in the amount
of the Commitment, stating that upon excercize of the Option, the Mortgage
creates a valid mortgage lien on the Project subject only to matters and
encumbrances acceptable to the Lenders and that all filings and/or recordings
required in order to perfect and preserve such lien have been duly accomplished
and returned to Lenders. Such commitment shall provide for affirmative coverage
for, and/or, endorsement as to, the following matters: (1) access, (2) parking
rights, (3) contiguity, (4) environmental (ALTA 8.11), (5) no violation of
covenants, conditions or restrictions (ALTA 9), (6) deletion of standard
exceptions, and (7) other matters/coverage reasonably requested by Lenders.
Lenders and or their counsel shall procure said title insurance commitment and
loan policy. The premium for such policy shall be paid by the Borrower,
(m) Certificates evidencing the issuance of the insurance required under
this Agreement, including addition of Lenders, their successors and assigns, as
Mortgage Loss Payees and as additional insureds, as their interests may appear,
as applicable.
(n) No Event of Default shall have occurred and be continuing or event
which with the giving of notice or the passage of time or both would an
constitute Event of Default.
(o) The representations and warranties made by the Borrower in Section 2.1
hereof shall be true.
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(p) Borrower shall have paid the reasonable fees and expenses of Lenders'
counsel for services rendered and expenses incurred in connection with this
transaction for the period through and including the Initial Closing, not to
exceed $50,000.
SECTION 3.5 Conditions Precedent to Initial Draw
The obligation of the Lenders to make the initial draw ( the "Initial
Draw") on the Loan hereunder is subject to satisfaction of the following
conditions, and, the receipt by the Lenders of the following documents, each of
which shall be reasonably satisfactory to it in form and substance:
(a) Evidence that the Borrower has acquired fee-simple ownership and title
of the Land ;
(b) Evidence that the Borrower has accepted the economic and business
development assistance and benefits set forth in that certain letter dated July
24, 2001 from Norman L. Caldwell, Chairman of the City of Auburn Industrial
Development Board, and, Bill Harper, Jr., Mayor of the City of Auburn, addressed
to Steven Phillips of FiberCore, Inc.
(c) Original executed counterparts of the Loan Documents, except only one
original of each of the Notes,
(d) The Borrower shall have entered into the Construction Agreement and
the Architect's Contract, the Lenders shall have reviewed and approved those
Contracts, the Lenders shall have been granted a first priority security
interest in those Contracts in form and substance reasonably acceptable to the
Lenders and the Lenders shall have received from the Contractor and the Project
Architect a consent and estoppel agreement in form and reasonably substance
reasonably satisfactory to the Lenders,
(e) The Borrower shall have designated a Project Consultant reasonably
acceptable to the Lenders.
(f) The Borrower shall be in compliance with its obligations under the
AIBD Agreement.
(g) Evidence of the registration, qualification and good standing of the
Project Architect and the Contractor to do business in the State of Alabama,
(h) No event of Default shall have occurred and be continuing or event
which with the giving of notice or the passage of time or both would constitute
an Event of Default.
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(i) The representations and warranties made by the Borrower in Section 2.1
hereof, shall be true on and as of the date of the making of such Loans with the
same force and effect as if made on and as of such date.
(j) Evidence satisfactory to Lenders that the Builders Risk and other
necessary coverages required by Section 7.7 hereof have been issued and are in
full force and effect.
(k) The Payment and Performance Bonds in respect of the Construction
Agreements shall have been issued on terms and conditions reasonably acceptable
to Lenders and naming Lenders as co-obligees thereunder.
(l) Concurrently with the submission of the Requisition, the Borrower and
FCI shall also submit to Lender a certificate to the effect that all the
conditions precedent to the initial draw set forth in this Section 3.5 have
occurred and are satisfied.
(m) Evidence satisfactory to Lenders that FCI has contributed, or is
obligated to contribute, to Borrower not less than $11,000,000, which is
available for, and restricted to, the payment of Borrower's share of Project
costs as the same become due on a concurrent basis with draws on the Loans.
(n) A title insurance loan policy in the minimum sum of $22,000,000 in
favor of Lenders as their interests may appear, obtained by Lenders at
Borrower's expense stating that the Mortgage creates a valid mortgage lien on
the Project subject only to Permitted Encumbrances and that all filing and or
recordings required in order to perfect and preserve such lien have been duly
accomplished and returned to Lenders. Such title insurance loan policy shall
provide coverage affirmatively for the following matters;
(1) Access,
(2) Parking rights,
(3) Continuity,
(4) Environmental (ALTA 8.11),
(5) No violations of covenants, conditions or restrictions (ALTA 9),
(6) Deletion of standard exceptions, and,
(7) Other matters/coverage reasonable requested by Lenders.
Lender or their counsel shall procure said title insurance policy and
Borrower shall pay the premium for such policy.
(o) Payment of the reasonable fees and expenses of Lenders' counsel in
connection with this transaction, for the period through and including the
Initial Draw/Initial Disbursement Date, not to exceed $50,000 in the aggregate.
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(p) Evidence that Borrower has agreed to pay the additional reasonable
fees and expenses of Lenders' counsel incident to services rendered and expenses
incurred on behalf of Lenders subsequent to the Initial Draw in connection with
the enforcement and implementation of this agreement.
(q) Evidence that all conditions precedent and documents, if any, under
Section 3.4 of this Agreement, which were waived or deferred by Lenders in
connection with the Initial Closing, have been since satisfied or received.
SECTION 3.6 Procedure for Disbursement of Loans
(1) In order to initiate a request for the Initial Draw on the Loan and
each subsequent draw, the Borrower shall forward the following to the Project
Consultant:
(a) a requisition (the "Requisition") in substantially the form attached
hereto as EXHIBIT B, dated, and numbered consecutively upwards from 1, signed by
an Authorized Borrower Representative and addressed to the Lenders and the
Project Consultant, which shall state (a) the name and address of the person to
whom the payment is to be made; (b) the amount to be paid; (c) the obligation on
account of which the payment is to be made, showing the total obligation, any
amount previously paid, and the unpaid balance; (d) that the obligation was
properly incurred as a Project Cost; (e) that the amount requisitioned is due
and unpaid; (f) that with respect to items covered in the Requisition, there are
no vendors, mechanics, or other liens, which should be satisfied or discharged
before the payments as requisitioned therein are made, or which will not be
discharged before the payments requisitioned therein are made, or which will not
be discharged by such payment; (g) that the amount remaining in the Project
Budget after the payment of the Requisition will be sufficient to pay all
remaining Project Costs in accordance with the Project Budget; (h) that the work
performed or materials supplied is satisfactory to the Borrower; (i) that after
giving effect to the anticipated draw, Borrower from its own funds has paid
one-third (1/3) of the Project Costs paid to date; and (j) that all required
insurance respecting the Project (including flood insurance, if required) is in
full force and effect, evidence of which insurance has been provided to Lender.
The Requisition shall contain or be accompanied by:
(i) acknowledgments of payment and waivers of lien from all persons
supplying labor or materials for all lien-able work done and materials
delivered through the date of the previous Requisition (collectively, the
"Lien Waivers") [SEE, ATTACHMENT NO. 1 TO EXHIBIT B ];
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(ii) a copy of the Payment and Performance Bond from each
Subcontractor intended to be paid as part of the Requisition [SEE,
ATTACHMENT NO. 2 TO EXHIBIT B];
(iii) a certificate (the "No Default Certificate") signed by an
Authorized Borrower Representative stating that, as of the date of the
Requisition and after giving effect to the anticipated draw on the Loan
from the Lenders on account thereof, (a) no Event of Default shall have
occurred and be continuing and no event or condition which with the giving
of notice or the passage of time, or both, would constitute an Event of
Default and (b) the representations and warranties of the Borrower set
forth in this Agreement are true and correct in all respects; [SEE, P.
(XII) OF REQUISITION];
(iv) a loan amount certificate (the "Loan Amount Certificate")
signed by an Authorized Borrower Representative stating that the amount
requested by the Borrower in the Requisition is properly charged to
Project Costs, and when combined with all other Loans theretofore made by
the Lenders, does not exceed the Commitment;[SEE,P. (XIII) OF REQUISITION]
(v) a certificate signed by an authorized representative of FCI (the
"FCI Certificate") stating that, as of the date of the Requisition and
after giving effect to the anticipated draw, FCI has contributed to
Borrower, and that Borrower has paid, an amount not less than one-third
(1/3) of the total Project Costs paid to date;[SEE, END OF REQUISITION]
(vi) a continuation report, duly executed by an authorized
representative of the insurer under the title insurance commitment/policy
furnished to the Lenders under Section 3.4 hereof, showing that from the
date of the title commitment/policy or the last continuation report (as
applicable) through the Business Day immediately preceding the date the
Draw on the Loan is to be made, the mortgage lien created by the Mortgage
is subject only to Permitted Encumbrances, unless otherwise approved by
the Lenders and that the title insurance continues in effect without
exception for matters other than the encumbrances (a "Continuation
Report"), the cost of the Continuation Report to be paid by the Borrower
[SEE, ATTACHMENT NO. 3 TO EXHIBIT B],
(b) a certificate in substantially the form of EXHIBIT C attached hereto
from the Project Architect, addressed to the Lenders and the Borrower and the
Project Consultant ( the "Architect's Certificate"), certifying (i) his approval
of the Requisition; (ii) that the obligation was properly incurred as a Project
Cost; (iii) that the amount requisitioned is due and unpaid; (iv) that, insofar
as the payment is to be made for work, material, supplies or equipment, the work
has
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been performed and the materials, supplies or equipment have been installed or
have been delivered at the Land and are covered by the builders' risk insurance;
(v) that all work, material, supplies and equipment for which payment is to be
made are, in the Project Architect's opinion, in accordance with the
Construction Drawings, the Design Plans and the Project Budget, except as noted;
(vi) that the amount remaining in the Project Budget after the payment of the
Requisition will be sufficient to pay all remaining Project Costs in accordance
with the Project Budget; and (vii) that with respect to items covered in the
Requisition, there are no vendors, mechanics, or other liens, which should be
satisfied or discharged before the payments as requisitioned therein are made,
or which will not be discharged before the payments requisitioned therein are
made, or which will not be discharged by such payment.
(2) Project Consultants Certificate.
(a) The Project Consultant shall review the Requisition with all
attachments and certificates (SEE, EXHIBIT "B") and the certificate from the
Project Architect (SEE, EXHIBIT "C") in order to ascertain whether the work and
services which are the subject of the Requisition is consistent with the
Construction Drawings and is a proper charge against the Project Budget as a
Project Cost. In this regard, the Project Consultant may, in its reasonable
discretion, approve or deny (in whole or in part) the Borrower's Requisition if
it is not in accordance with any of the foregoing. In connection with the
review, the Project Consultant may, either personally or through its agents or
employees, physically inspect the Project to ascertain whether the work or
services covered by the Requisition was performed in a manner consistent with
the Construction Drawings. The Project Consultant shall have the right to
request any reasonable additional or further information in order to evaluate
any Requisition from the Borrower and the Borrower agrees to cooperate, and
cause the Project Architect and any other person to cooperate, with the Project
Consultant by, among other things, furnishing the additional information or
documentation reasonably requested by the Project Consultant and otherwise
taking such action as may be reasonably requested by the Project Consultant to
facilitate its review of the Borrower's Requisition.
(b) The Project Consultant shall render its approval or disapproval of the
Borrower's Requisition as soon as practicable under the circumstances, but in no
event more than five (5) business days after the date on which Borrower has
actually delivered to Project Consultant the materials required under Section
3.6 (1). In the event that the Project Consultant shall request any changes or
corrections in construction in order to comply with Construction Drawings or the
Project Budget, the Borrower shall promptly make those changes unless the
Borrower demonstrates to the satisfaction of the Project Consultant that the
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corrective work is inconsistent with the Project Budget or the Construction
Drawings, as the case may be. Notice of any such inconsistency shall be
forwarded in writing to the Lenders.
(c) Any approval by the Project Consultant of any Requisition (in whole or
in part) from the Borrower shall be evidenced by a certificate in substantially
the form of EXHIBIT D attached hereto from the Project Consultant addressed to
the Lenders and the Borrower certifying (i) his approval of the Requisition;
(ii) that the obligation was properly incurred as a Project Cost; (iii) that the
amount requisitioned is due and paid; (iii) that, insofar as the payment is to
be made for work, material, supplies or equipment, the work has been performed
and the materials, supplies or equipment have been installed or have been
delivered at the Land and are covered by the builders' risk insurance; (v) that
all work, material, supplies and equipment for which payment is to be made are,
in the Project Consultant's opinion, in accordance with the Construction
Drawings, the Design Plans and the Project Budget; (vi) that the amount
remaining in the Project Budget after the payment of the Requisition will be
sufficient to pay all remaining Project Costs in accordance with the Project
Budget; and (vii) that with respect to items covered in the Requisition, there
are no vendors, mechanics, or other liens, which should be satisfied or
discharged before the payments as requisitioned therein are made, or which will
not be discharged before the payments requisitioned therein are made, or which
will not be discharged by that payment. The Project Consultant's certificate
shall be adjusted accordingly in the event of any approval by the Project
Consultant of less than the entire amount requisitioned by the Borrower.
(d) The Lenders acknowledge and agree that the Borrower shall not have any
liability to any other party hereto on account of (i) the services performed by
the Project Consultant, (ii) any neglect or failure on the part of the Project
Consultant to perform its services properly and (iii) any approval or
disapproval by the Project Consultant of Project Work. It is expressly
acknowledged and agreed that no party hereto assumes any obligation to any other
party hereto or any other person in respect of the proper performance of the
Project Consultant, although nothing contained herein is intended to relieve the
Borrower of any liability for its warranties and representations.
(e) On the Business Day following the date on which the Project Consultant
approves any Requisition, the Project Consultant shall forward the original
Borrower's Requisition (EXHIBIT B), the Project Architect Certificate (EXHIBIT
C) and the Project Consultant Certificate (EXHIBIT D) to the Lenders, with a
copy to Borrower, along with any other documents reviewed by the Project
Consultant in connection with its review of the Requisition ( hereinafter
referred to, collectively, the "DRAW REQUEST DOCUMENTS").
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(3) Lenders' Funding.
(a) Lenders (in accordance with each Lender's applicable percentage of the
Commitment as set forth in this Agreement) shall fund its portion of the Draw on
the Loan within ten (10) Business Days after the Lenders' receipt of the Draw
Request Documents. Notwithstanding anything contained in this Agreement to the
contrary, the Lenders nevertheless agree, subject to the terms of this Section,
to make a Draw on the Loan equal to the amount of any line item in the
Requisition representing accrued but unpaid interest on the Notes.
(b) Notwithstanding anything to the contrary contained in this Agreement,
no draw on the Loan shall be made without the Lenders' prior written consent if
at the time thereof an Event of Default has occurred and is continuing.
(4) Initial Requisition.
The Borrower intends to submit its initial Requisition not later than the
earlier of the Option Expiration Date, or, September 30, 2002. Failure to submit
the Initial Requisition and make the Initial Draw by September 30, 2002 shall
result in the immediate termination of the Commitment.
ARTICLE 4
THE PROJECT
SECTION 4.1 Agreement to Construct the Project
(a) The Borrower agrees that it will complete the Project Work in
accordance with the Construction Drawings and the Project Budget. The Borrower
shall complete the Project in a good and workmanlike manner in accordance with
all applicable laws.
(b) The Borrower will enter into the Construction Agreement and the
Architect's Contract and such other contracts, and do, or cause to be done, all
other acts or things that may be necessary or proper to complete the acquisition
and construction of the Project and to perform fully its obligations under this
Agreement.
(c) The Borrower agrees to use its best efforts to (i) commence
construction of the Project on or before September 30, 2002 and (ii) continue
without delay and complete the construction of the Project, subject to Force
Majeure.
(d) Prior to the Contractor entering into Subcontracts, the Borrower shall
obtain, or cause to be obtained, a Payment and Performance Bond from that
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Subcontractor showing the Contractor, the Borrower, and the Lenders as obligees.
Promptly following the execution and delivery of any Subcontract, the Contractor
shall forward, or cause to be forwarded, to the Lenders and the Borrower, a copy
of the Payment and Performance Bond obtained from that Subcontractor.
SECTION 4.2 Deficiency - Project Costs
If at any time the proceeds derived from the Loans are insufficient to pay
in full the Project Costs as they become due, the Borrower shall demonstrate to
the reasonable satisfaction of the Lenders that it has funds, or access to
funds, which when combined with the unused amount of the Commitment, are readily
available to pay all Project Costs.
SECTION 4.3 Remedies Against Contractors, Etc.
If the Contractor, the Project Architect or any vendor or Subcontractor
shall default under any contract or purchase order with Borrower in connection
with the construction of the Project, the Borrower shall pursue any remedies
that may be available under the circumstances, including, without limitation,
pursuit under the Payment and Performance Bonds,
SECTION 4.4 Completion of the Project
(a) The completion of the Project ("Completion") shall be evidenced by the
filing with the Lenders of the certificates of the Project Architect, the
Contractor and the Project Consultant addressed to the Lenders and the Borrower
stating that (i) the Project Work, including without limitation the construction
of the Building, and the acquisition and installation of the Project Equipment
have been completed in accordance with the Construction Drawings, and the
Project Budget, and (ii) all of the Project Costs have been paid in full except
for those Costs the liability for payment of which is being contested or
disputed.
(b) In addition, the Contractor also shall forward to the Lenders a
certificate in furtherance of clause (ii) of paragraph (a) above addressed to
the Borrower and the Lenders stating the amount of unpaid Project Costs the
liability for payment of which is being contested or disputed and whether that
liability is covered by insurance, a Payment and Performance Bond or otherwise
(the unpaid Costs which are not so covered by insurance, a Payment and
Performance Bond or otherwise being hereinafter referred to as "Disputed Project
Costs").
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Promptly following payment or resolution (as the case may be) of the
Disputed Project Costs, the Contractor shall forward to the Lenders a
certificate addressed to the Borrower and the Lenders containing a reasonably
detailed breakdown of the actual amount of Project Costs, and the aggregate
amount thereof,
(c) Upon Completion, a final title insurance policy showing that the
mortgage lien created by the Mortgage is subject only to matters referred to in
the title commitment, Permitted Encumbrances and any other matters approved by
the Lenders shall be delivered to the Lenders.
(d) After Completion, the Borrower shall notify the Lenders of completion
and at the request of the Lenders, will enter into a supplemental agreement
identifying the items of Project Equipment installed in or about the Project.
Borrower shall pay Lenders' attorneys fees and expenses incident to the
documentation and filing thereof.
ARTICLE 5
LOANS AND TERMS OF REPAYMENT
SECTION 5.1 Loans and Execution of Notes to Evidence Loans
(a) The aggregate principal amount of the Notes which may be outstanding
is limited to an amount up to $22,000,000, the amount of the Commitment.;
(b) Immediately upon the delivery of funds by the Lenders to Borrower in
the manner contemplated by Section 3.6, Draws on the Loan in those amounts shall
be deemed to have been made by the Lenders and accepted by the Borrower, and the
outstanding principal amount of the Notes shall be increased accordingly on the
schedule attached to the Notes;
(c) All Loans made by the Lenders and all payments and redemptions made on
account of the principal of the Notes shall be recorded by the Lenders on the
schedule attached to the Notes; provided, that any failure by the Lenders to
make endorsements shall not affect the obligations of the Borrower hereunder or
under the Notes;
(d) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrower under the Notes
shall be made in Dollars, in immediately available funds, to the Lenders via
Lenders' wiring instructions attached hereto as EXHIBIT E, not later than 12:00
pm. Central Standard Time on the date on which the payment shall become due
(each payment made after that time on that date to be deemed to
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have been made on the next succeeding Business Day), If the due date of any
payment under this Agreement or the Notes would otherwise fall on a day which is
not a Business Day, that payment shall be made on the next succeeding Business
Day with the same effect as if made on the day that payment was due;
(e) Anything in this Agreement or the Notes to the contrary
notwithstanding, interest on the Notes shall in no event exceed the maximum rate
permitted by applicable law and Borrower shall provide Lenders with an opinion
of Alabama counsel indicating the interest on the Loans, as called for herein,
does not exceed that permitted by Alabama law;
SECTION 5.2 Interest on the Notes.
(a) Simple Interest. The sums advanced under the Notes shall bear simple
interest ("Simple Interest") at the annual rate eight percent (8%).
Following an Event of Default and acceleration of the principal of the
Notes and accrued interest thereon pursuant to Section 8.2(a) hereof, Simple
Interest thereafter shall accrue and shall be payable on the outstanding
principal advanced under the Notes from time to time on demand by the Lenders on
overdue principal of the Notes at the rate of ten percent (10%) per annum, or
the maximum rate of interest then allowed by law (the "Maximum Legal Rate"),
whichever is less (the "Default Rate"). Simple Interest shall be calculated on
the basis of a three hundred sixty (360) day year and twelve (12) thirty (30)
day months.
SECTION 5.3 Scheduled Principal and Interest Repayments of the Notes
(a) Interest on the Notes shall accrue and shall not be payable for a
period of fifteen (15) months from the Initial Disbursement Date (the
"Capitalization Period"), but in no event longer than for a period expiring on
December 31, 2003.
(b) Interest only shall be payable on the principal amount of the Notes
outstanding, including capitalized accrued interest thereon, for the period from
the expiration of the Capitalization Period to December 31, 2003, due and
payable on each intervening June 30th and December 31st.
(c) Thereafter, the principal amount of the Notes outstanding, including
capitalized accrued interest, together with Interest thereon shall be repaid in
thirty (30) equal semi- annual payments of principal and Interest commencing on
June 30, 2004, and continuing to and including December 31, 2018, the Maturity
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Date, when any remaining outstanding principal and accrued interest shall be due
and payable.
If the Borrower fails to make any payment of principal and/or interest
when due on the Notes (other than a payment due on the stated maturity of the
Notes or a payment following an acceleration of the notes following an Event of
Default), the Borrower shall pay to the Lenders, in addition to the payment of
principal and/or interest, a delinquency or "late charge" equal to four percent
(4%) of the amount of the past due payment.
SECTION 5.4 Optional Prepayment of the Notes
The Borrower shall have the privilege of prepaying the indebtedness at any
time in whole or in part, without notice, premium or penalty. All prepayments
pursuant to this Section 5.4 shall be applied against the installments of
principal payable under Section 5.3 in the inverse order of their maturities.
Any permitted partial prepayment, however, will not alter or reduce the amount
of the payment due on each Payment Date until the principal and interest on the
Notes is paid in full.
SECTION 5.5 Mutilated, Lost, Stolen or Destroyed Note; Transfer of Note
(a) If any Note is mutilated, lost, stolen or destroyed, the Borrower
(upon the receipt of a written authorization from the Lenders) may authenticate
and deliver a new Note in the same principal amount in lieu of and in
substitution for the Note mutilated, lost, stolen or destroyed; provided that,
in the event of the mutilation of a Note, the mutilated Note shall first be
surrendered to the Borrower, and in the event that a Note is lost, stolen or
destroyed, there shall be first furnished to the Borrower evidence satisfactory
to the Borrower of the ownership of the Note and of the loss, theft or
destruction, together with a written indemnification from Lenders in form
satisfactory to Borrower.
(b) Lenders shall not transfer or assign the Notes or any of them provided
that no uncured Event of Default exists. In the even an uncured Event of Default
exists, the Notes shall be fully transferable by the Lenders. The person in
whose name a Note is registered from time to time shall be deemed and regarded
as the absolute owner thereof for all purposes and payment of or on account of
the principal of and interest on the Note shall be made only to or upon the
order of the registered owner thereof, or its attorney duly authorized in
writing, and neither the Borrower, nor any paying agent acting for the Borrower
shall be affected by any notice to the contrary. All such payments shall be
valid and effectual to satisfy and discharge the liability upon the Note to the
extent of the sum or sums so paid,
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ARTICLE 6
FINANCIAL COVENANTS
Borrower agrees and covenants that so long as the Loans, or any amount due
thereunder, remain outstanding, it shall not authorize, approve or issue any
cash, stock or liquidating dividend, or make any other distribution in property
or return of capital, provided, however, that Borrower shall be permitted to pay
dividends if the Debt Service Coverage Ratio exceeds 1.2 to 1.0, and, the ratio
of current assets as compared to current liabilities ( the " Current Coverage
Ratio") exceeds 1.2 to 1.0, at the time the dividend is paid, and, after giving
effect to the payment of the dividend, immediately thereafter.
ARTICLE 7
PROJECT OPERATION
SECTION 7.1 Possession and Use of Project
(a) The Project may be operated as a fiber-optic manufacturing facility.
The Project shall not be used for any other purpose without Lender's prior
written consent.
(b) The Borrower shall be permitted to possess, use, manage, operate and
enjoy the Project without hindrance on the part of the Lenders, subject,
however, to all the terms and conditions of this Agreement.
SECTION 7.2 Maintenance and Other Operating Expenses
The Borrower will, at its own expense, pay all gas, electric, water, sewer
and all other charges, fixed or otherwise, for the operation, use and upkeep of
the Project. Subject to Section 7.1 hereof, the Borrower shall operate and
maintain the Project in a first class manner and condition, and shall not commit
any waste thereof.
SECTION 7.3 Taxes, Assessments, Etc.
The Borrower will pay or cause to be paid as they become due and payable
all taxes, assessments and governmental charges or other payments or fees in
lieu thereof, of any kind lawfully levied or assessed upon the Project or any
part thereof or upon any income therefrom; provided, however, that the Borrower
shall not be required to pay and discharge or cause to be paid and discharged
any such tax, assessment or governmental charge or levy to the extent that the
amount, applicability or validity thereof is then being contested in good faith
by appropriate proceedings and the Borrower shall set aside on its books and
shall maintain those reserves as are required by GAAP with respect to
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any tax, assessment, charge or levy. The Borrower will promptly forward to the
Lenders copies of any bills, statements, assessments, notices or other
instruments asserting or otherwise relating to any real estate taxes,
assessments or charges.
SECTION 7.4 Improvements, Alterations, Etc.
(a) The Borrower may, at its own expense, make changes, additions,
improvements or alterations to the buildings, structures and other improvements
constituting a part of the Project, provided that the Borrower shall not make
any material change, addition, improvement or alteration without the consent of
Lenders, which consent shall not be unreasonably withheld or delayed.
(b) The Borrower may, at its own expense, install in the Building or
elsewhere in the Project any equipment or property which does not constitute
part of the Project Equipment and which in the Borrower's judgment is necessary
or convenient for its use and occupancy of the Project, provided that the
installation thereof does not materially impair the value of the Project. Any
such equipment or personal property owned (or leased pursuant to a lease
contract) by the Borrower shall be identified by Borrower in writing to Lenders
and may be removed by the Borrower at any time and from time to time without
responsibility or accountability to the Lenders, provided that (i) there shall
be no Event of Default and (ii) the Borrower shall promptly repair at its own
expense any damage to the Project caused by the removal of any such equipment or
other personal property.
SECTION 7.5 Transfer or Encumbrance Created by Borrower
The Borrower (i) may not sell, transfer or convey the Project or any part
thereof, as provided in this Agreement, and (ii) except for Permitted
Encumbrances, will not create or incur or suffer or permit to be created or
incurred or to exist any mortgage, lien, charge or encumbrance on the Project or
any part thereof.
SECTION 7.6 Other Indebtedness of Borrower
Without the prior written consent of the Lenders, the Borrower will not at
any time create, incur, suffer to exist, assume, guarantee or otherwise become
liable for, contingently or otherwise, any unsecured indebtedness, if after
giving effect thereto, the Borrower's obligations under the Loan Documents will
be subordinate to that indebtedness.
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SECTION 7.7 Insurance
(a) The Borrower shall maintain (or cause the Construction Manager to
maintain) builder's risk insurance on the Project while the Project is under
construction, and thereafter, at the Borrower's cost and expense, (i) insurance
on the Project against loss or damage by fire, explosion, and other risks
insured against by extended coverage in an amount not less than the full
replacement cost value of the Project. Each policy of insurance shall name the
Lenders and Borrower as additional insureds, as their interests may appear, and
shall name the Lenders as loss payee/mortgagee under the terms of a standard
mortgagee clause.
(b) In addition, the Borrower shall at all times maintain insurance
against liability for bodily injury to or death of persons and for damage to or
loss of property occurring on or about the Project or in any way related to the
condition or operation of the Project, in the minimum amounts of $1,000,000
combined single limit for any one occurrence, and $5,000,000 aggregate for any
one year for all death and bodily injury claims and property damage. All
policies or other contracts for liability insurance shall insure the Borrower,
and the Lenders against such liability, as their interests may appear.
(c) All insurance described in this Section shall be effected with
insurance carriers reasonably acceptable to the Lenders, shall provide for not
less than twenty (20) days' prior written notice to the Lenders before
cancellation or termination and may be effected under a blanket policy or
policies.
(d) Borrower shall maintain flood insurance on the Project unless Borrower
provides evidence to Lender that flood insurance is not required.
SECTION 7.8 Damage and Destruction
(a) In the event that the Project shall be damaged or destroyed in whole
or in part by a Casualty Event, then all Net Insurance Proceeds shall be paid
jointly to Borrower and Lenders and used for restoration of the Project pursuant
to paragraph (c) below, unless the Borrower and the Lenders, in their sole
discretion, otherwise agree in writing within sixty (60) days following the
Casualty Event not to effect restoration of the Project. Any excess Net
Insurance Proceeds remaining after the completion of restoration shall be
applied in the manner set forth in clause (b) below,
(b) In the event that the Borrower and the Lenders timely agree in writing
not to effect restoration of the Project, then this Agreement shall terminate
and all Net Insurance Proceeds shall be paid to the Borrower and applied against
the RSA Indebtedness with any balance remaining being paid to the Borrower.
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(c) In the event that this Agreement has not been terminated pursuant to
paragraph (b), then the Borrower shall use diligent efforts to restore the
Project as nearly as possible to its condition immediately prior to the Casualty
Event.
SECTION 7.9 Condemnation
(a) If the Project or any part thereof is taken by Eminent Domain, the
entire condemnation award, including any portion thereof that may be recoverable
by the Borrower, shall be paid to the Lenders and applied as follows:
(i) If all or substantially all of the Project is taken by the eminent
domain proceedings, the Net Condemnation Award shall be applied pursuant
to Section 8,3.
(ii) If less than all or less than substantially all of the Project is
taken by the eminent domain proceeding, this Agreement shall continue in
full force and effect but with the following consequences:
(1) If no part of the Project Building or the Project Equipment is
taken or damaged and in the Borrower's opinion the efficient
utilization of the Project is not impaired by the taking, the Net
Condemnation Award shall be applied pursuant to Section 8.3 hereof,
(2) If (i) any part of the Project Building or the Project Equipment
is taken or damaged or (ii) in the Borrower's opinion the efficient
utilization of the Project is impaired by the taking, the Borrower
will proceed, as promptly as practicable under the circumstances and
upon those terms as shall be approved in writing by the Borrower, to
repair, replace, rebuild or restore the portion or portions of the
Project so taken or damaged or to rearrange the facilities then
forming a part of the Project so as to make them suitable for the
Borrower's uses, and the Lenders will apply the Net Condemnation
Award referable to the taking to payment of the costs of the repair,
replacement, rebuilding or restoration. If the Net Condemnation
Award is in excess of the costs of the repair, the excess shall be
applied pursuant to Section 8.3 hereof. If the Net Condemnation
Award is not sufficient to pay all of the costs of the repair, the
Borrower will pay, or cause to be paid, the deficiency. If, after
being furnished with the necessary funds (whether from the Borrower,
from the condemnation award or from both sources), the Borrower
fails or refuses after reasonable request to repair, replace or
rebuild or restore
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the portion or portions of the Project taken or damaged or to
rearrange the facilities then forming a part of the Project so as to
make them suitable for the Borrower's uses, as the case may, the
Lenders may, for and in the name and behalf of the Borrower, perform
the work of that repair, replacement, rebuilding or rearrangement,
in which case it shall be entitled to reimbursement for the costs
thereof from the funds referred to above, to the extent that the
funds are sufficient therefor.
(b) The Lenders shall cooperate fully with the Borrower in the handling
and conduct of any prospective or pending condemnation proceeding with respect
to the Project or any part thereof and will, to the extent it may lawfully do
so, permit the Borrower to litigate in any such proceeding in the name and
behalf of the Borrower. In no event will the Borrower voluntarily settle, or
consent to the settlement of, any prospective or pending condemnation proceeding
with respect to the Project or any part thereof without the written consent of
the Lenders.
(c) Upon payment to the Lenders of any condemnation award referable to any
taking through the power of Eminent Domain, the Lenders, at the Borrower's
expense, shall execute and deliver to the Borrower or to any person or
governmentality successfully exercising the power of Eminent domain any and all
instruments that may be necessary to release from this Agreement all property
forming part of the Project so taken.
SECTION 7.10 Granting of Easements
If no Event of Default shall exist, the Borrower may, with the consent of
the Lenders, which will not be unreasonably withheld or delayed, grant easements
or other rights of others in or to the Project or any portion thereof for
streets, roads, pipes, pipelines, electric transmission and distribution lines,
telephone and telegraph lines, and other similar purposes (provided that grant
will not materially adversely affect the operation of the Project), flood
rights, river control and development rights, and sewage and drainage rights.
Following notice to the Lenders and consent by the Lenders, the Lenders shall
execute and deliver any instrument necessary or appropriate to confirm and grant
or release any easement or other right upon receipt of: (i) a copy of the
instrument of grant or release; and (ii) a written application signed by an
Authorized Borrower Representative requesting the instrument and stating that
the grant or release will not materially impair the use of the Project.
SECTION 7.11 Party Wall Provisions
If the Borrower purchases, leases or otherwise acquires any other land
adjacent to the Land, or if any unimproved portion of the Land is released from
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the demise hereof, then, in that event, with prior notice to and consent of
Lenders, all building walls now standing or hereafter erected on or contiguous
to any common boundary between the Land and land adjacent to the Land that has
been purchased, leased or otherwise acquired by the Borrower or any land
theretofore constituting part of the Land that has been released from the demise
thereof, as the case may be, shall be party walls, and each parcel of land on
either side of the common boundary shall be subject to a reciprocal easement for
the benefit of the other parcel, which easement on each of the common boundaries
shall extend out ten feet from that boundary and shall be for the purpose of
construction, inspection, maintenance, repair and replacement of any party wall
now or hereafter erected on or contiguous to the common boundary.
To the extent permitted by applicable building codes and accepted
principles of structural design, new buildings or other structures located on
their side of any common boundary may be structurally connected to any party
wall then in existence, but any party exercising the right of connection to an
existing party wall shall indemnify and hold harmless the owner, mortgagee and
lessee of the parcel of land on which the party wall was erected (as well as any
other person having an interest in that parcel) against any and all losses and
damages that may in any way result from the construction and connection of
adjacent buildings and other structures to the party wall, including damage or
loss occurring after the completion of construction as well as any that may
occur during construction.
If a building or other structure now or hereafter located on a parcel of
land on either side of any common boundary utilizes a party wall with a building
or other structure now or hereafter located on the parcel of land on the other
side of the common boundary, and if all buildings or other structures utilizing
that party wall are leased or owned by the same person or are otherwise operated
under common control, then the party wall may be constructed or modified to
permit openness between the buildings or other structures utilizing the party
wall as may be deemed desirable by the person exercising common control over the
buildings or structures, and the utilities serving either of the parcels may be
tied in or connected with the utilities serving either of the parcels, but in
the event that the parcels thereafter cease to be leased or owned by the same
person or otherwise operated under common control, the openings in the party
wall shall be closed by using any materials or construction methods which will
produce a completed wall of a structural quality equivalent to or better than
the structural quality of the Building, as they then exist, and separate
utilities shall be provided for each of the parcels of land.
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The covenants and agreements on the part of the Borrower contained in this
Section 7.11 shall run with all separate parcels of land into which the Land may
be hereafter divided and shall be enforceable for the benefit of each parcel by
all present and future owners, lessees and mortgagees thereof.
SECTION 7.12 Removal of Project Equipment
The Borrower may, if no Event of Default shall have occurred and be
continuing, dispose of any item of the Project Equipment upon compliance with
the conditions set forth in either subparagraph (a) or (b) below:
(a) The item of Project Equipment may be removed, sold or otherwise
disposed of if it is retired or replaced in the ordinary course of operation of
the Project, or
(b) The Borrower may sell part of the Project Equipment for fair market
value provided the net proceeds of the sale after the payment of all costs
thereof shall be used to purchase replacement Project equipment, or, paid to the
Lenders for application against the principal on the Loan.
The Borrower will not remove any items of the Project Equipment pursuant
to the provisions of this Section if the operating utility of the Project will
be significantly impaired by the removal.
In furtherance of the preceding provisions of this Section, the Borrower
will do the following:
(1) The Borrower will execute and deliver to the Lenders those documents
as the Lenders may from time to time require to confirm the title of the
Borrower to any items of equipment and other personal property that under the
provisions of this Section are to become a part of the Project Equipment.
(2) The Borrower will pay all reasonable costs (including attorneys' fees)
incurred by Lenders in subjecting to the lien of Lenders' Mortgage and Security
Agreement any items of equipment and other personal property that under the
provisions of this Section are to become a part of the Project Equipment
Upon the removal by the Borrower of any item of the Project Equipment from
the Project in compliance with the conditions of this Section 7.12, the Borrower
will convey title to that item to the purchaser thereof by bill of sale or other
appropriate conveyance. The Lenders shall execute and deliver any instruments
that the Borrower may deem necessary to confirm the release of any of the
Project Equipment after notice to and the consent of the Lenders. The Borrower
will reimburse the Lenders for their reasonable expenses (including attorneys'
fees) incurred in connection with the release.
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Nothing contained herein shall prohibit the Borrower from removing from
the Project any equipment or other personal property that is owned by it or
leased by it from third parties, provided that the Borrower will promptly repair
at its own expense any damage to the Project caused by such removal.
SECTION 7.13 Warranty of Title
(a) After the exercise of the Option, the Borrower shall maintain a valid
fee simple interest in the Project and the Project Equipment, subject, in each
case, to no lien, charge or encumbrance other than Permitted Encumbrances.
(b) The Borrower will warrant and defend the title to the Project and the
Project Equipment against the claims and demands of all persons arising out of
liens or other encumbrances created or permitted by the Borrower, other than
those referred to in subsection (a) above and claims and demands arising out of
this Agreement.
SECTION 7.14 Advances by Lenders
If the Borrower shall fail to perform any of its covenants in this
Agreement, the Lenders may, but shall not be required to, at any time and from
time to time, after written notice to the Borrower, make advances to effect
performance of that covenant on behalf of the Borrower. Any money so advanced by
the Lenders, together with interest at the Prime Rate plus two percent (2%), or
Simple Interest plus four percent (4%), whichever is greater, or the maximum
rate permitted by law, whichever is less, shall be repaid upon demand,
SECTION 7.15 Financial Statements and Reports
The Borrower and FCI shall furnish or cause to be furnished to the
Lenders:
(a) Within forty-five (45) days after the end of each of the four (4)
calendar quarters during the Borrower's and FCI's respective fiscal years, an
income statement, a balance sheet, a statement of cash flow, and a statement of
profit and loss regarding the operations of the Project for that quarter, and a
certificate of the Debt Service Coverage Ratio, and, the Current Coverage Ratio
certified by an officer of the Borrower and an officer of FCI.
(b) Within ninety (90) days after the end of each fiscal year of the
Borrower, an income statement, balance sheet, a statement of cash flow and
statement of profit and loss, setting forth, in each case, in comparative form
corresponding figures from the preceding fiscal year, audited by independent
public accountants who are reasonably acceptable to Lenders.
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SECTION 7.16 Lenders' Signs and Other Promotional Materials
Following the commencement of construction on the Project through and
including the Completion Date, an exterior sign or signs, the design, size and
content of which shall be satisfactory in all respects to the Lenders shall be
installed and maintained at the Project, at the Borrower's cost and expense,
recognizing and acknowledging the participation of the Lenders in the financing
and construction of the Project. The sign shall be not less than 10' by 5' high,
in red, white and blue colors and shall name the Secretary-Treasurer and the
Chairmen of the retirement systems Boards of Control.
ARTICLE 8
EVENTS OF DEFAULT; REMEDIES
SECTION 8.1 Events of Default
"Event of Default," wherever used herein, means any one of the following
events:
(1) Default in the payment of any interest upon the Notes when that
interest becomes due and payable, provided, however, payment may be made within
five (5) calendar days of when otherwise due or payable, if paid with additional
per diem interest accrued thereon; or
(2) Default in the payment of the principal of the Notes when that
principal becomes due and payable, provided, however, payment may be made within
five (5) calendar days of when otherwise due or payable, if paid with additional
per diem interest accrued thereon; or
(3) Default in the performance, or breach, of any covenant or warranty of
the Borrower in this Agreement, or, the other Loan Documents (other than a
payment default under Section 8.1(1) and (2), or any other covenant or warranty
a default in the performance or breach of which is elsewhere in this Section
specifically dealt with), or the Project Documents, or if any condition or
matter contained in Sections 3.5 or 3.6 of this Agreement ceases to be true and
correct, and continuance of that default or breach for a period of thirty (30)
days after there has been given, by registered or certified mail, to the
Borrower by the Lenders, a written notice specifying the default or breach and
requiring it to be remedied and stating that the notice is a "notice of default"
hereunder; or
(4) The appointment by a court of competent jurisdiction of a receiver for
the Project, or approval by a court of competent jurisdiction of any petition
for rearrangement or readjustment of the obligations of the Borrower or FCI
relating
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to the Project under any provisions of the bankruptcy laws of the United States,
or the entry of an order of relief by such court with respect thereto, or
(5) The entry of a decree or order by a court having jurisdiction in the
premises adjudging the Borrower or FCI a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Borrower or FCI under the federal Bankruptcy
Act or any other applicable federal or state law, or appointing a receiver,
liquidator, assignee or trustee of the Borrower, or FCI, or any substantial part
of their property, or ordering the winding up or liquidation of their affairs,
and the continuance of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive days, or,
(6) Borrower's or FCI's institution of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by either to the institution of bankruptcy
or insolvency proceedings against it, or either filing of a petition or answer
or consent seeking reorganization or relief under the federal Bankruptcy Act or
any other applicable federal or state law, or either consenting to the filing of
any such petition or to the appointment of a receiver, liquidator, assignee or
trustee of the company, or of any substantial part of its property, or either
making of an assignment for the benefit of creditors or the admission by either
in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Borrower or FCI in furtherance of any such
action.
SECTION 8.2 Acceleration of Maturity; Remedies
If (i) an Event of Default exists, or (ii) there is any Change in Control
of Borrower, or (iii) the Project is sold by Borrower, then the Lenders may, at
their option, exercise any and all of the following rights and remedies on
account of the Event of Default/Change in Control:
(a) The Lenders may declare the principal of the Notes and interest
accrued thereon to be due and payable immediately, by a notice in writing to the
Borrower, and upon that declaration the principal and the interest accrued
thereon shall become immediately due and payable,
(b) The Lenders may undertake, either personally or through its agents or
employees, following written notice to the Borrower of its election so to do,
enter upon the Project and perform any and all remaining Project Work necessary
to effect Completion of the Project substantially in accordance with the Project
Budget, the Construction Drawings and take all appropriate steps to secure and
protect the Project. In furtherance (but not in limitation) of the foregoing,
the Lenders shall be and hereby are authorized to undertake any and
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all acts deemed necessary or appropriate to effect Completion of the Project as
set forth above, including, without limitation, the right to:
(i) make changes in the Construction Drawings as may be necessary or
desirable;
(ii) hire any person to complete the Project Work;
(iii) pay, settle or compromise bills and claims with the holders
thereof,
(iv) use all material, equipment, fixtures, furniture and
furnishings purchased for the construction and operation of the Project;
(v) prosecute and defend all actions or proceedings in connection
with the construction and operation of the Project; and
(vi) otherwise take any and all action relating to the construction
and development of the Project as if the Lenders were the record owner
thereof. Provided, however, that all action taken by the Lenders under
this clause shall be in compliance with the Borrower's obligations under
the AIDB Purchase Agreement. In furtherance of the rights granted to the
Lenders in this clause, the Borrower hereby appoints the Lenders as its
attorney in fact, with full power of substitution to complete the Project
in the name of the Borrower to take any and all action necessary or
appropriate in furtherance thereof following an Event of Default. This
power of attorney is a power coupled with an interest and cannot be
revoked by the Borrower.
(c) The Borrower, upon written demand of the Lenders and if the Event of
Default has not been cured, shall forthwith surrender the possession of, and it
shall be lawful for the Lenders, by such officer or agent as it may appoint, to
take possession of all or any part of the Project together with the books,
papers and accounts of the Borrower pertaining thereto, and including the rights
and the position of the Borrower under this Agreement and other licenses,
contracts and agreements, and to hold, operate and manage the property, and from
time to time to make all needful repairs and improvements as the Lenders shall
deem necessary or appropriate; and the Lenders may sell or lease the Project or
any part thereof in the name and for the account of the Borrower and collect,
receive and sequester the rents, revenues, earnings, income, products and
profits therefrom, and out of the same and any monies received from any receiver
of any part thereof pay, and/or set up proper reserves for the payment of, all
proper costs and expenses of the taking, holding and managing the property,
including reasonable compensation to the Lenders, its agents and counsel, and
any
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charges of the Lenders hereunder, and any taxes and assessments and other
charges prior to the lien of this Agreement which the Lenders may deem it wise
to pay, and all expenses of the repairs and improvements. Whenever all that is
due upon the Notes shall have been paid and all defaults made good, the Lenders
shall surrender possession to the Borrower, its successors or assigns, the same
right of entry, however, to exist upon any subsequent Event of Default,
(d) The Lenders may exercise any and all of their rights and remedies
under the Security Documents.
SECTION 8.3 Application of Money Collected
Any money collected by the Lenders pursuant to this Article shall be
applied in the following order on the date or dates fixed by the Lenders, and in
case of the distribution of that money on account of principal or interest, upon
presentation of the Note and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
(a) First: To the payment of all unpaid amounts due the Lenders under
Section 7.14, 8.2(b), (c) and (d) and attorneys' fees and costs;
(b) Second: To the payment of the whole amount then due and unpaid upon
the Note for principal and interest, and on overdue installments of interest,
and in case the proceeds shall be insufficient to pay in full the whole amount
so due and unpaid upon the Notes, then to the payment of the principal and
interest as the Lenders may elect, it being the intention under this clause (b)
that unless otherwise agreed by the Lenders, all payments hereunder shall be
made to the applicable Lender in direct proportion to the ratio which the
original principal amount of that Lender's Note bears to the Commitment;
(c) Third: To the payment of any amounts owed to the Borrower; and
(d) Fourth: To the payment of the remainder, if any, to the Borrower or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
SECTION 8.4 Lenders May Enforce Claim for Holders of Notes
All rights of action and claims under this Agreement or the Notes may be
prosecuted and enforced by the Lenders on behalf of the holder of the Notes with
the production of the Notes in any proceeding relating thereto, Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Lenders, their agents and counsel,
be for the benefit of the holders of the Notes.
-43-
SECTION 8.5 Unconditional Right of Lenders to Receive Principal and
Interest
Notwithstanding any other provision in this Agreement, the Lenders shall
have the right, which is absolute and unconditional so long as Lenders are the
holders of the Notes, to receive payment of the principal of and interest on its
Note on the Payment Dates and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of the
Lenders.
SECTION 8.6 Restoration of Positions
If the Lenders have instituted any proceeding to enforce any right or
remedy under this Agreement by foreclosure, entry or otherwise and that
proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Lenders, then and in every case the Borrower and the
Lenders shall, subject to any determination in that proceeding, be restored to
their former positions hereunder, and thereafter all rights and remedies of the
Lenders shall continue as though no proceeding had been instituted,
SECTION 8.7 Rights and Remedies Cumulative
No right or remedy herein conferred upon or reserved to the Lenders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 8.8 Delay or Omission Not Waiver
No delay or omission of the Lenders to exercise any right or remedy
accruing upon an Event of Default shall impair any right or remedy or constitute
a waiver of any Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Lenders may be exercised from time
to time, and as often as may be deemed expedient, by the Lenders.
SECTION 8.9 Suits to Protect Lenders' Interest in Property
The Lenders shall have power to institute and to maintain those
proceedings as it may deem expedient to prevent any acts which may be unlawful
or in violation of this Agreement and to protect its interests and the interests
of the Lenders in the rents, issues, profits, revenues and other income arising
from the Project, including the power to institute and maintain
-44-
proceedings to restrain the enforcement of or compliance with any governmental
enactment, rule or order that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with that enactment, rule or order would impair
security hereunder or be prejudicial to the interests of the Lenders.
SECTION 8.10 Remedies Subject to Applicable Law
All rights, remedies and powers provided by this Article may be exercised
only to the extent that the exercise hereof does not violate any applicable
provision of law in the premises, and all the provisions of this Article are
intended to be subject to all applicable mandatory provisions of law which may
be controlling in the premises and to be limited to the extent necessary so that
they will not render this Agreement invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Payment of Expenses
(a) 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 Documents, 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
execution and delivery of the Security Documents, 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.
(b) Regardless of whether the transaction contemplated hereby or any of
the Project Documents shall be consummated, the Borrower agrees to pay all
reasonable out-of-pocket expenses of the Lenders (including reasonable fees and
expenses of its counsel) in connection with the negotiation, documentation,
consummation and implementation of the transactions contemplated hereby and the
Project Documents. The foregoing notwithstanding, the aggregate fees and
expenses payable to Lenders' counsel for services and expenses rendered and
incurred through the Initial Draw on the Initial Disbursement Date shall not
exceed $50,000, based upon a rate of $250 per hour. Borrower shall pay on the
date of the Initial Closing the fees and expenses of Lenders' counsel accrued
through, and as of, the date of the Initial Closing, subject to the aggregate
limitation. The additional fees and expenses of Lenders' counsel for services
and expenses rendered after the Initial Closing through the earlier of the
Initial Disbursement Date or September 30, 2002, subject to the aggregate
limitation,
-45-
shall be paid by Borrower on the earlier of the Initial Disbursement Date, or
September 30, 2002. The provisions of this Section shall survive the termination
of this Agreement.
SECTION 9.2 Termination
Except as otherwise provided herein, this Agreement shall terminate when
all Loans and all other amounts due to the Lenders hereunder have been fully
paid.
SECTION 9.3 Successors and Assigns
Except as provided in Section 9.4, all covenants and agreements in this
Agreement by the Borrower or the Lenders shall bind their respective successors
and assigns, whether so expressed or not,
SECTION 9.4 Assignment
(a) If an Event of Default exists which remains uncured, then any Lender
may assign its rights under this Agreement to any person without the consent of
the Borrower, provided that person agrees with the Borrower to be bound by the
terms and conditions of this Agreement and the Loan Documents, and agrees, inter
alia to fund its percentage of the Commitment as set forth herein.
(b) Except as otherwise provided in this Agreement, the Borrower may not
assign its rights or delegate its obligations under this Agreement to any person
without the prior written consent of the Lenders.
SECTION 9.5 Benefit of Agreement
Nothing in this Agreement, express or implied, is intended to give any
person, other than the parties hereto and their successors and (subject to the
requirements of Section 9.4) assigns hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 9.6 Notices
(a) Any request, demand, authorization, direction, notice, consent, or
other document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with, the Borrower or the Lenders shall be sufficient for
every purpose hereunder if in writing and, except as otherwise provided in this
Agreement either (i) delivered personally to the party or to an officer of the
party to whom it is directed, (ii) delivered to the party by telex or telecopy
(provided that the original shall be forwarded first class mail, postage prepaid
to the addressee),
-46-
or (iii) mailed, first- class postage prepaid and addressed to the person at the
address specified below:
(1) If to the Borrower:
FiberCore USA, Inc.
c/o FiberCore, Inc.
253 Worcester Road
Post Office Box 180
Charlton, MA 01507
with a copy to:
Malcom Wattman, Esq.
Cadwalader, Wickersham & Taft
100 Maiden Lane
New York, NY 10038
(2) If to ERSA:
Employees' Retirement System of Alabama
135 South Union Street
Montgomery, Alabama 36130-4101
Attention: Dr. David G. Bronner, Secretary-Treasurer
with a copy to:
John N. Pappanastos, Esq.
Pappanastos, Wilson & Assoc., P.C.
P.O. Box 2030
Montgomery, AL 36102-2030
(3) If to TRSA:
Teachers' Retirement System of Alabama
135 South Union Street
Montgomery, Alabama 36130-4101
Attention: Dr. David G. Bronner, Secretary-Treasurer
-47-
with a copy to:
John N. Pappanastos, Esq.
Pappanastos, Wilson & Associates, P.C.
P.O. Box 2030
Montgomery, AL 36102-2030
(b) Except as otherwise provided in this Agreement, any notice or other
document shall be deemed to be received upon receipt if sent in the manner set
forth in this Section 9.6.
SECTION 9.7 Lenders
The obligations of the Lenders hereunder (including, without limitation,
the obligation to fund the Commitment as set forth herein) are the joint
obligations of the Lenders.
SECTION 9.8 INTENTIONALLY OMITTED
SECTION 9.9 Further Assurances
The Borrower will do, execute, acknowledge and deliver those further acts,
instruments and assurances, and otherwise cooperate with the Lenders as the
Lenders shall deem necessary or appropriate, to evidence, preserve or protect
the collateral secured by the Security Documents or better effectuate the
intents and purposes of this Agreement.
SIGNATURE PAGES FOLLOW
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IN WITNESS WHEREOF, the Borrower and the Lenders have caused this
Agreement to be duly executed as the day and year first above written by
individuals duly authorized on behalf of the respective parties hereto.
FIBERCORE USA, INC.
a Delaware Corporation
By: /s/ Robert Lobban
---------------------------
Robert Lobban
Its: Chief Financial Officer
ATTEST:
/s/ Steven Phillips
- ----------------------------
Steven Phillips
Its: Secretary (Ass't)
STATE OF MASSACHUSETTS *
COUNTY OF WORCESTER *
Before me the undersigned Notary Public, appeared ROBERT LOBBAN whose name as
Chief Financial Officer of FiberCore USA, Inc., a corporation, is signed to the
foregoing, and who is known to me, acknowledged before me on this day that being
informed of the contents of the foregoing, he executed the same voluntarily for
and as the act of said corporation on the date the same bears date.
Given under my hand and official seal this 28th day of December, 2001.
/s/ Cassandra De Luca
--------------------------------------
NOTARY PUBLIC
My Commission expires: 12/17/04
THIS IS A SIGNATURE PAGE FOR
LOAN AGREEMENT
EMPLOYEES' RETIREMENT SYSTEM
OF ALABAMA
By: /s/ David G. Bronner
-------------------------------------
David G. Bronner, Secretary-Treasurer
STATE OF ALABAMA *
MONTGOMERY COUNTY *
I, the undersigned Notary Public, hereby certify that DAVID G. BRONNER,
whose name as SECRETARY-TREASURER OF EMPLOYEES' RETIREMENT SYSTEM OF ALABAMA, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the said instrument, he,
in his capacity as such officer, and with full authority, executed the same
voluntarily for and as the act of said Employee's Retirement System of Alabama
GIVEN under my hand this 31st day of December, 2001.
(SEAL)
/s/ (ILLEGIBLE)
--------------------------------------
NOTARY PUBLIC
My Commission expires: _______________
THIS IS A SIGNATURE PAGE FOR
LOAN AGREEMENT
TEACHERS' RETIREMENT SYSTEM
OF ALABAMA
By: /s/ David G. Bronner
-------------------------------------
David G. Bronner, Secretary-Treasurer
STATE OF ALABAMA *
MONTGOMERY COUNTY *
I, the undersigned Notary Public, hereby certify that DAVID G. BRONNER,
whose name as SECRETARY-TREASURER OF TEACHERS' RETIREMENT SYSTEM OF ALABAMA, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the said instrument, he,
in his capacity as such officer, and with full authority, executed the same
voluntarily for and as the act of said Teachers' Retirement System of Alabama.
GIVEN under my hand this 31st day of December, 2001.
(SEAL)
/s/ (ILLEGIBLE)
--------------------------------------
NOTARY PUBLIC
My Commission expires: _______________
LIST OF EXHIBITS
Exhibit A: Cost Profile
Exhibit A-1: General Summary of Estimate of Project Costs
Exhibit B: Loan Requisition
Exhibit C: Certificate - Project Architect
Exhibit D: Certificate - Project Consultant
Exhibit E: Lenders' Wiring Instructions
EXHIBIT A
Cost Profile
[TO BE ADDED BY SUPPLEMENT AFTER INITIAL CLOSING BUT ON OR
BEFORE INITIAL DRAW ON INITIAL DISBURSEMENT DATE]
A-1
EXHIBIT A-1
Fibercore USA, Inc.
Estimated Project Costs
[TO BE ADDED BY SUPPLEMENT AFTER INITIAL CLOSING BUT
ON OR BEFORE INITIAL DRAW ON INITIAL DISBURSEMENT DATE]
A-1-1
EXHIBIT B
Loan Requisition
REQUISITION NO. __________
TO: PROJECT CONSULTANT
MONTGOMERY, ALABAMA
and
EMPLOYEE'S RETIREMENT SYSTEM OF ALABAMA
and
TEACHER'S RETIREMENT SYSTEM OF ALABAMA
RE: FIBERCORE, USA / AUBURN PLANT PROJECT
This Requisition is made pursuant to a certain Loan Agreement (the
"Agreement") dated as of December ________, 2001 by Fibercore, USA (the
"Borrower") and Employee's Retirement System of Alabama and the Teacher's
Retirement System of Alabama (the "Lenders"). Terms used in this Requisition
shall have the meanings specified for them in the Agreement. The Lenders are
hereby authorized and directed to make a loan to the Borrower as specified
herein. Such funds shall be advanced to Borrower in accordance with the
following wire transfer instructions:
BANK: ___________________________________________________
ABA NO.: ________________________________________________
ACCOUNT NO.: ____________________________________________
The Borrower hereby certifies the following:
i) Name and Address of Person to whom payment is to be
made:______________________________________________________
ii) Amount to be paid:_________________________________________
iii) Obligation on account of which payment is to be made, showing total
obligation, any amount previously paid, and the unpaid balance:
____________________________________________________________________
____________________________________________________________________
B-1
iv) The obligation to be paid under this Requisition was properly
incurred as a Project Cost, has not been the basis of any previous
draw; and the purpose for which such payment is to be made is one
for which the loan proceeds are authorized under the Loan Agreement
to be expended.
v) The amount being requisitioned under the Requisition is due and
unpaid.
vi) With respect to items covered by this Requisition, there are no
vendors', mechanics' or other liens, bailment leases or conditional
sales contracts which should be satisfied or discharged before the
payments as requisitioned herein are made, or which will not be
discharged before the payments requisitioned herein are made, or
which will not be discharged by this payment.
vii) The amount remaining in the Project Budget after the payment of this
Requisition together with other amounts reasonably expected to be
available therefor, will be sufficient to pay the remaining Project
Costs.
viii) The work material or other purchased item to which the payment
covered by this Requisition relates has been accomplished, delivered
or installed in a manner satisfactory to the Borrower and the amount
to be paid pursuant to this Requisition does not exceed the
obligation on account of which the payment is to be made.
ix) Attached to this Requisition is the certificate of the Project
Architect making the certifications set forth in the Agreement.
x) After giving effect to the anticipated draw, Borrower has paid from
its own funds one- third (1/3) of the Project Costs paid to date;
xi) All required insurance respecting the Project is in full force and
effect, evidence of which is attached to this Requisition.
xii) No Default Certificate: As of the date of this Requisition and after
giving effect to the anticipated draw on the Loans from the Lenders
on account thereof, (1) no Event of Default has occurred and is in
continuing, and no event or condition has occurred which, with
notice or passage of time or both, would constitute and Event of
Default, (2) the representations and warranties of the Borrower are
true and correct in all respects; and, (3) the conditions contained
in Sections 3.5 and 3.6 of the Loan Agreement are true and correct.
xiii) Loan Amount Certificate: The amount requested by Borrower is
properly chargeable to Project Costs, and when combined with all
other Loans or draws heretofore made by Lenders does not exceed the
Commitment.
B-2
FIBERCORE USA, INC.
By: ___________________________________________
Its: __________________________________________
Dated: ________________________________________
B-3
FCI CERTIFICATE
As of the date of this Requisition and after giving effect to the
anticipated draw, FiberCore, Inc. ("FCI") hereby certifies that (1) it has
contributed to Borrower, and that Borrower has paid, an amount not less than
one-third (_) of the total Project Costs paid to date; (2) it has no knowledge
after due inquiry that any Event of Default has occurred and is continuing, or
that any event or condition has occurred which, with notice or passage of time
or both, would constitute and Event of Default, (3) it has no knowledge after
due inquiry that any of the representations and warranties of the Borrower are
not true and correct in all respects; (4) it has no knowledge that any of the
conditions contained in Sections 3.5 and 3.6 of the Loan Agreement are not true
and correct; and, (5) it has not filed for relief or reorganization under any
federal or state bankruptcy or insolvency law.
FIBERCORE, INC.
By: ___________________________________________
Its: __________________________________________
Date: _________________________________________
B-4
ATTACHMENT NO. 1 TO EXHIBIT "B" REQUISITION
LIEN WAIVERS
[Paragraph 3.6 (a) (i)(a)]
B-1
ATTACHMENT NO. 2 TO EXHIBIT "B" - Requisition
Subcontractors' Payment and Performance Bonds
[Paragraph 3.6 9a)(i)(b)]
B-2
Attachment No. 3 to Exhibit B - Requisition
Title Insurance Company Continuation Report
[Paragraph 3.6 (a) (i) (c)]
B-3
EXHIBIT C
Certificate No. ___________: Project Architect
TO: PROJECT CONSULTANT
MONTGOMERY, ALABAMA
and
EMPLOYEE'S RETIREMENT SYSTEM OF ALABAMA
and
TEACHER'S RETIREMENT SYSTEM OF ALABAMA
RE: FIBERCORE, USA / AUBURN PLANT PROJECT
This Certificate is made pursuant to that certain Loan Agreement (the
"Agreement") dated as of September ______, 2001 and is annexed to Requisition
No.______ (the "Requisition"). Terms used in this Certificate shall have the
meanings specified for them in the Agreement. The Lenders are hereby authorized
and directed to make a Loan to the Borrower as specified herein.
_____________________________ - (the "Project Architect") hereby certifies
as follows:
i) The obligation to be paid under the Requisition was properly incurred
as a Project Cost.
ii) The amount of $________ being requisitioned under the Requisition is
due and unpaid.
iii) That, insofar as the payment is to be made for work, material,
supplies or equipment, the work has been performed and the materials, supplies
or equipment have been installed or have been delivered at the site and are
covered by the builders' risk insurance.
iv) That all work, material, supplies and equipment for which payment is
to be made are, in the Project Architect's opinion, in accordance with the
Construction Drawings, the Design Plans and the Project Budget.
v) The amount remaining in the Project Budget after payment of the
Requisition, together with other amounts reasonably expected to be available
therefor, will be sufficient to pay all remaining Project Costs in accordance
with the Project Budget.
vi) With respect to items covered by this Requisition, there are no
vendors', mechanics' or other liens, bailment leases or conditional sales
contracts which should be satisfied or discharged before the payments as
requisitioned herein are made, or which will not be discharged before the
payments requisitioned herein are made, or which will not be discharged by such
payment.
C-1
vii) The Requisition is hereby approved by the Project Architect.
________________________________________
________________________________________
Authorized Officer
Dated:___________________
C-2
EXHIBIT D
Certificate No. _____: Project Consultant
TO: EMPLOYEE'S RETIREMENT SYSTEM OF ALABAMA
and
TEACHER'S RETIREMENT SYSTEM OF ALABAMA
RE: FIBERCORE, USA / AUBURN PLANT PROJECT
This Certificate is made pursuant to that certain Loan Agreement (the
"Agreement") dated as of September ______, 2001 and is annexed to Requisition
No.______ (the "Requisition"). Terms used in this Certificate shall have the
meanings specified for them in the Agreement. The Lenders are hereby authorized
and directed to make a Loan to the Borrower as specified herein.
__________________________ (the "Project Consultant") hereby certifies as
follows:
i) The Requisition is in the form required by the Loan Agreement and has
been fully completed.
ii) The obligation to be paid under the Requisition was properly incurred
as a Project Cost.
iii) The amount being requisitioned under the Requisition is due and
unpaid.
iv) That, insofar as the payment is to be made for work, material,
supplies or equipment, the work has been performed and the materials, supplies
or equipment have been installed or have been delivered at the site and are
covered by the builders' risk insurance.
v) That all work, material, supplies and equipment for which payment is to
be made are, in the Project Consultant's opinion, in accordance with the
Construction Drawings, the Design Plans and the Project Budget.
vi) The amount remaining in the Project Budget after payment of the
Requisition, together with other amounts reasonably expected to be available
therefor, will be sufficient to pay all remaining Project Costs in accordance
with the Project Budget.
vii) With respect to items covered by the Requisition, there are no
vendors', mechanics' or other liens, bailment leases or conditional sales
contracts which should be satisfied or discharged before the payments as
requisitioned herein are made, or which will not be discharged before the
payments requisitioned herein are made, or which will not be discharged by such
payment.
D-1
viii) The Requisition is hereby approved by the Project Consultant.
________________________________________
________________________________________
Authorized Officer
Dated:___________________
D-2
EXHIBIT E
Lender's Wiring Instructions
REGIONS BANK
FED@ Birmingham
For Account Regions Bank - Birmingham
ABA# 06005690
Attention: Montgomery Office
For Credit: State Treasurer's Account
Montgomery, AL
Account #: 20-00393
Name of applicable system: The Employees Retirement System of Alabama
Teachers Retirement System of Alabama
E-1