EXH10-55
LONG TERM PREFORM SUPPLY AGREEMENT
This First Preform Supply Agreement ("Agreement ") is made and entered into this
25th of July 1996.
BETWEEN
1. FIBER OPTIC INDUSTRIES (PVT.) LIMITED, a company incorporated in Pakistan
with its principal place of business at 74-B Nazimuddin Road, F-8/4 Sector
Islamabad Pakistan, referred as the "Buyer" or the "Company" hereafter.
AND
2. FIBERCORE, INC., an American Company with its principal place of business
at 174 Charlton Road, Sturbridge, Mass. 01566 hereafter referred as the
"Seller."
RECITALS
WHEREAS
A. The Company is being formed to manufacture optical fiber and fiberoptic
cable (the "Products");
B. The Seller has offered to supply raw materials including Optical Preforms
specified as INFOGLAS 1G-09/125 shown in the three page Appendix attached
herewith and has committed to a twenty year supply of Preform requirements
of the Company that the Buyer has agreed to
C. The Buyer is willing to purchase these preforms on the terms and conditions
set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
1. OBJECT OF THE AGREEMENT
1.1 The Buyer agrees to purchase from the Seller for twenty years and
the Seller agrees to sell to the Buyer the Preforms manufactured under the
patented of FiberCore from its manufacturing facility at Jena Germany or from
another location.
1.2 The Seller agrees to ship Preforms in time for testing of Buyer's
machinery and equipment for speedy implementation of optical fiber manufacturing
plant; The Seller further agrees to supply preforms for a twenty year period on
prices and delivery terms to be negotiated on a yearly basis.
1.3 The Buyer agrees to purchase First Run Preforms as the first phase
purchases for year 1 only for its current manufacturing needs and not for
purposes of inventory or resale.
2. PRICE
2.1 The price for "First Run Preforms" needed to test the plant and
machinery and initial production is fixed at US$4,500 per single mode preform as
per attached specifications in Appendix:
2.2 The price for "First Run Preform" shall be US$1.2 Million (US
Dollars One Million and Two Hundred Thousand only) FOB Frankfurt Airport which
covers (266.67) rods at an average cost of US$4,500 per rod.
3. PAYMENT
3.1 The order for the "First Run Preform" valued at US$1.2 Million will
be structured as follows:
3.1.1 10% advance payment against ($120,000) advance payment guarantee;
3.2.2 Open a letter of Credit for US$1,080,000 covering 90% of total
value of supplies valid for a period of 6 months from date of issuance and to
allow for payment in full upon FOB Delivery of Preforms with deposit of Bill of
Landing and Seller's Invoice;
3.1.3. The irrevocable Letter of Credit will allow for partial
shipments for a minimum quantity of 75 rods per shipment and in form and
substance that is acceptable to the Seller and its Bank.
3.2 All payments will be made to ALT/FiberCore Account No. 936344170 at
Fleet Bank of Massachusetts, N.A. (ABA Routing No. 011000138), USA;
3.3 All payments of any nature under this Agreement shall be made
without any deduction or withholding whatsoever unless the Buyer is required by
the specific Law of the Government of Pakistan.
4. SITE AND TERMS OF DELIVERY
4.1 The timely availability of the "First Run Preform" is contingent
upon the issuance of the Letter of Credit in accordance with 3.1;
4.2 Shipments for future requirements of the Buyer can be met from the
other FiberCore locations at terms to be agreed upon by the Parties under
separate contract;
4.3 All unadjusted advance payments made under the contract will be
refunded to the Buyer in all cases where the Supplier is unable to fulfill its
commitments.
5. TESTING OF THE PREFORMS
Seller's representatives shall be present for all inspections and
testing of Preforms both at the Manufacturing site and at the Buyer's building.
6. WARRANTY
The Seller shall be responsible for making good by replacement, at its
expense, any defective preform which may be identified during the period
commencing on the date of shipment of the Preform and ending twelve (12) months
after the preforms have been received by the buyer provided the defect was not
due to any wrongful act or omission on the part of the Buyer.
7. FORCE MAJEURE
Neither pat shall be liable for the delays or non-performance of this
Agreement due to acts of God, war, Government decrees, labor disturbances, or
an) other cause beyond the control of that party.
8. GOVERNING LAW AND DISPUTE RESOLUTION
This Agreement shall be governed by and construed in accordance with
the laws of Pakistan. However, nothing in this Agreement shall be construed to
require the Seller to take or omit to take any action if such act or omission is
contrary to the laws s of the United States of America and Germany.
9. NOTICES
Any notices given hereunder shall be deemed to be sufficiently given if they are
in writing and delivered by facsimile or by postpaid registered mail or through
international courier sent as follows:
If to the Seller FiberCore
174 Charlton Road
Sturbridge, Mass. 01566
Tel. (508) 347-7744
FAX: (508) 347-2778
Attention: Mr. Charles DeLuca
If to the Buyer Fiber Optic Industries ( PUT.) Limited
74-B Nazimuddin Road
F-8/4 Sector Islamabad, Pakistan
Tel. (508) 853520
Fax. (508) 256047
Attention: Sayed Ijaz Husain Shah
10. TERM AND TERMINATION OF THIS AGREEMENT
10.1 This Agreement shall be effective as of the date first written
above. Unless canceled, modified or terminated under the provisions set forth
below, this Agreement shall continue in force for an initial period of ten years
and will be renewable for another ten years with the mutual consent of both
parties.
10.2 Without prejudice to any other right or remedy available to it
either party shall have the right to terminate this Agreement:
10.2.1 If the Buyer commits a material breach of this Agreement by
offering to purchase from a competitor and such breach is not cured within 30
days of a written notice; or
10.2.2 Conditions of Force Majeure prevail for more than a year; or
10.2.3 The other party becomes bankrupt or ceases to continue business.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
for FiberCore, Inc. for FiberOptic Industries
NAME: Charles DeLuca NAME: M. Mahmud Awan
TITLE: Vice President Business Dev. TITLE: Chairman/CEO
___/s/_______________________________ ___/s/_______________________
APPENDIX I
PREFORM SUPPLY AGREEMENT
TABLE
TABLE
INFOGLAS IG-09/125 TARGET FIBER SPECIFICATION
TABLE
INFOGLAS IG-09/125
MASS - INSERT