Environmental Indemnity Agreement

ENVIRONMENTAL INDEMNITY AGREEMENT


ENVIRONMENTAL INDEMNITY AGREEMENT (this "Agreement") made as of the 31st day of December, 2001, by FIBERCORE USA, INC., a Delaware corporation having an office at __________________________________ ("Guarantor"), in favor of the Employees' Retirement System of Alabama, an instrumentality of the State of Alabama established as a public corporation pursuant to Code of Alabama 1975, Section 36-27-2 et seq. ("ERSA"), and the Teachers' Retirement System of Alabama ("TRSA"), an instrumentality of the State of Alabama established as a public corporation pursuant to Code of Alabama 1975, Section 16-25-2 et seq., having an office at 135 South Union Street, Montgomery, Alabama 36130, individually and as co-Lenders (ERSA AND TRSA hereinafter referred to individually and collectively as the context requires, as "Indemnitee") and other Indemnified Parties (defined below).


RECITALS:


A. Guarantor is the owner of certain real property more particularly described in Exhibit A attached hereto (said real property being referred to as the "Land"; the Land, together with all structures, buildings and improvements now or hereafter located on the Land, being collectively referred to as the "Property").


B. lndemnitee is prepared to make a loan (the "Loan") to Guarantor in the principal amount of TWENTY TWO MILLION AND NO/100 DOLLARS ($22,000,000.00) pursuant to a Loan Agreement of even date herewith between Guarantor and Indemnitee (as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, the "Loan Agreement"), which Loan shall be evidenced by the Note (as defined in the Loan Agreement) and secured by, among other things, the Security Instrument (as defined in the Loan Agreement).


C. Indemnitee is unwilling to make the Loan unless Guarantor agrees to provide the indemnification, representations, warranties, covenants and other matters described in this Agreement for the benefit of the Indemnified Parties.


D. Guarantor is entering into this Agreement to induce Indemnitee to make the Loan.


AGREEMENT


In order to induce the Indemnitee to make the Loan to Guarantor, and in consideration of the substantial benefit each and every Guarantor will derive from the Loan:


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ARTICLE 1 DEFINITIONS


Capitalized terms used herein and not specifically defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. As used in this Agreement, the following terms shall have the following meanings:


The term "Environmental Law" means any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, policies and other governmental directives or requirements, as well as common law, that apply to Guarantor or the Property and relate to Hazardous Materials, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act and the Resource Conservation and Recovery Act.


The term "Hazardous Materials" means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives, flammable materials; radioactive materials; polychlorinated biphenyls and compounds containing them; lead and lead-based paint; asbestos or asbestos-containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Property is prohibited by any federal, state or local authority; and any other material or substance now or in the future defined as a "hazardous substance," "hazardous material," "hazardous waste," "toxic substance," "toxic pollutant," "contaminant," "pollutant" or other words of similar import within the meaning of any Environmental Law.


The term "Indemnified Parties" means Indemnitee, any person or entity who is or will have been involved in the origination of the Loan, any person or entity who is or will have been involved in the servicing of the Loan, any person or entity in whose name the encumbrance created by the Security Documents is or will have been recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the Loan, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, members, employees, agents, servants, representatives, attorneys, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other person or entity who holds or acquires or will have held a participation or other full or partial interest in the Loan or the Property, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of lndemnitee's assets and business).


The term "Legal Action" means any claim, suit or proceeding, whether administrative or judicial in nature.


The term "Losses" means any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages,


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losses, costs, expenses, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement of whatever kind or nature (including but not limited to reasonable attorneys' fees and other costs of defense).


The term "Release" with respect to any Hazardous Substance means any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.


ARTICLE 2 INDEMNIFICATION


2.1 INDEMNIFICATION, Guarantor covenants and agrees at its sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) any presence of any Hazardous Materials in, on, above, or under the Property, except to the extent arising from the active intentional conduct of the Indemnified Party; (b) any past, present or threatened Release of Hazardous Materials in, on, above, under or from the Property; (c) any activity by any Guarantor, any person or entity affiliated with any Guarantor, and any tenant or other user of the Property in connection with any actual, proposed or threatened use, treatment, storage, holding, existence, disposition or other Release, generation, production, manufacturing, processing, refining, control, management, abatement, removal, handling, transfer or transportation to or from the Property of any Hazardous Materials at any time located in, under, on or above the Property or any actual or proposed remediation of any Hazardous Materials at any time located in, under, on or above the Property, whether or not such remediation is voluntary or pursuant to court or administrative order, including but not limited to any removal, remedial or corrective action; (d) any past, present or threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Property or operations thereon, including but not limited to any failure by any Guarantor, any person or entity affiliated with any Guarantor, and any tenant or other user of the Property to comply with any order of any governmental authority in connection with any Environmental Laws; (e) the imposition, recording or filing or the threatened imposition, recording or filing of any environmental lien encumbering the Property; (f) any acts of any Guarantor, any person or entity affiliated with any Guarantor, and any tenant or other user of the Property in (i) arranging for disposal or treatment, or arranging with a transporter for transport for disposal or treatment, of Hazardous Materials at any facility or incineration vessel containing such or similar Hazardous Materials or (ii) accepting any Hazardous Materials for transport to disposal or treatment facilities, incineration vessels or sites from which there is a Release, or a threat ...