SECURITY INTEREST AGREEMENT
Between FiberCore Glasfaser Jena GmbH (hereinafter "FiberCore")and AMP
Incorporated (hereinafter "AMP").
1. FiberCore transfers title to current and future assets to AMP in
consideration of securing the loan for a capital investment granted from AMP to
FiberCore, Inc. in the amount of US$3,000,000 up to 125% of said amount.
2. FiberCore guarantees that it is, without limitations, entitled to dispose of
the assets and that no third party rights are in existence with regard to said
assets. The transfer of title will comprise with priority of the latest acquired
machinery and equipment.
3. If banks or other creditors shall request a security interest, FiberCore
guarantees that AMP's security interest will always have first ranking during
the term of this agreement.
4. AMP provides FiberCore the free of charge use of the assets relating to this
agreement. FiberCore provides insurance coverage for such assets on its own
expense against all risks.
5. This agreement remains in force in the event of a change of the shareholders
of FiberCore or any other changes in the company's legal structure.
6. AMP and FiberCore shall terminate this agreement without limitations if:
a) both parties agree to a termination; or
b) the loan, including interest, is completely paid back
to AMP.
AMP can terminate this agreement upon its own choice if AMP can sell FiberCore,
Inc. stock in the equivalent of US$3,000,000 plus an annual interest rate of
10%.
7. If any provision of this agreement is considered to be invalid all other
provisions remain unaffected.
8. Venue is Wiesbaden.
FiberCore Glasfaser Jena GMBH
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FiberCore, Inc.
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AMP Incorporated
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Chairman of the Board