EXH10-18
7 June, 1994
Xx. Xxxxxx Xxxxxx
XXXX, Xxxx GmbH
D-7724 Jena, Xxxxxxxx 00
XXXXXXX
Dear Xxxxxx:
Re: Agreement between SICO and FiberCore, Inc.
This represents a legally binding contract and agreement between FiberCore and
SICO to manufacture optical fibers and optical fiber preforms in SICO's existing
facility in Jena, Germany, and to market the products.
Attachment 1 defines the terms of this agreement.
Both parties recognize that they will reveal confidential information to the
other party and agree that all such proprietary information will not be
disclosed to third parties without express written permission.
Understood and agreed to by:
For SICO GmbH For FiberCore, Inc.
------------------------------ --------------------------------
Xxxxxx Xxxxxx Date Xxxx Xxxxxx Date
President & Chairman
ATTACHMENT 1 - Term of the Agreement
1. FiberCore will organize a 100% German subsidiary FiberCore GmbH. This new
company will become FiberCore's European Common Market base.
2. FiberCore GmbH will take over operational control of SICO Preform and fiber
operation, including manufacturing, sales, marketing, quality control,
billing and collections.
3. FiberCore Inc. will provide technology to upgrade existing multi-mode fiber
production.
4. FiberCore Inc. will provide product and process technology to add single
mode fiber production.
5. FiberCore GmbH will provide the necessary investment to upgrade the
existing equipment shown in Exhibit B, so as to increase total production
and improve the product quality, and increase sales subject to market
demands, and cost competitiveness. The minimum investment guaranteed by
FiberCore, Inc. shall be DM 2,000,000. The nature, timing, and any other
considerations with respect to such upgrades shall be determined by
FiberCore GmbH's board of directors.
6. FiberCore GmbH will lease factory and office space as shown on Exhibit A,
from SICO for six(6) years at a fixed monthly rental, as provided for in
item #8 below. The lease term shall commence on July , 1994. The monthly
rental shall include all utility costs, such as air conditioning, heating,
water, lighting, etc., for preform and fiber draw rooms, property taxes,
insurance, maintenance, and other related operating expenses for all leased
space.
In addition, FiberCore GmbH shall be granted renewal options (for periods
of 1,3, or 5 years) for an aggregate period of twenty five (25) years.
Within 120 days prior to the termination of the initial lease term, and any
subsequent lease terms, FiberCore GmbH shall notify SICO of its intention
to exercise the 1, 3, or 5 year renewal option. In the event that FiberCore
GmbH elects to renew the lease, the annual rental during the renewal
period(s) shall be adjusted by the excess of actual annual utility expenses
paid (by FiberCore GmbH directly to SICO) over the $207,000 ($179,000 and
28,000) annual base charge for such expenses, as shown in Exhibit C (3),
provided however, that such annual percentage increase shall not exceed the
annual percentage increase in the inflation rate, as customarily measured
for that region of Germany. The other items listed on Exhibit C (3) remain
fixed for any subsequent renewal period.
7. FiberCore GmbH will lease from SICO all existing equipment relating to
fiber and preform manufacturing, as shown in Exhibit B for a period of six
(6) years, at a fixed rate as provided for in item #8, below, commencing on
July , 1 994. At the end of the six (6) year lease period, FiberCore GmbH
shall make a lump-sum payment equal to the then book value of the existing
equipment shown in Exhibit B, in lieu of future lease payment.
The fixed rate shall include all costs associated with utilities, such as
air conditioning, heating, water, lighting, and clean room utilities,
taxes, maintenance, and insurance.
For purposes of this agreement, the existing equipment shown in Exhibit B
shall be deemed to have a useful life of six (6) years from the date of the
lease and, accordingly, said equipment should be depreciated over a period
not to exceed six (6) years.
8. The payment for items 6 and 7 above shall be DM 584,000 per year, paid in
equal monthly payments of DM 48.675.
9. FiberCore GmbH will contract with SICO for personnel including factory
labor at SICO's direct costs. FiberCore GmbH will guarantee employing the
services of at least 20 people at salaries and benefits as shown on Exhibit
C, for the first 6 months of this Agreement. During the second six months
the number of employees shall increase to at least 25. After this period,
the minimum number of employment shall be at least 30. FiberCore GmbH shall
have the option of selecting the personnel from the list shown on Exhibit
C.
To the extent that SICO satisfies its personnel obligations with respect to
its government commitment under the program, FiberCore GmbH may elect to
reduce its requirement ID contract for personnel from SICO, during the six
(6) years covered under this provision. This requirement shall expire after
the first six (6) year term.
10. FiberCore GmbH will transfer to SICO or SICO's owners 605,000 shares of
FiberCore, Inc. (USA), currently valued at US $4 per share. Such transfer
of shares shall be tied to the transfer of manufacturing equipment to
FiberCore GmbH as indicated under item 7
11. Xx. Xxxxxx Xxxxxx will be offered directorship on the board of FiberCore
GmbH for the term of this agreement.
12. This agreement is subject to FiberCore, Inc. approval of the Board of
Directors.
13. In the event of default by FiberCore GmbH, SICO shall retain title to the
equipment as listed in Exhibit B. Furthermore, SICO shall have the option
to purchase any additional equipment acquired by FiberCore GmbH at fair
market value. In the event SICO, or its' assignee chooses to maintain
preform and/or fiber manufacturing, SICO must enter into an agreement with
FiberCore to pay a royalty fee of five percent (5%).
14. In the event of default by SICO, FiberCore GmbH shall have the option to
fulfill SICO's contractual agreement with the Government and obtain title
to all assets on SICO's behalf.
15. All parties to this Agreement acknowledge and agree that other (sub)
contracts, such as rental and equipment leases, security agreements, and
other related agreements will be executed and delivered in connection to
and in respect of this Agreement (collectively, the "transaction
Agreements".
16. FiberCore will have the exclusive right to use all trade names, patents and
proprietary know how that has been developed or owned by SICO with] respect
to fiber optics.
17. SICO and Shareholders jointly and severally represent, warrant and
convenient to and with FiberCore GmbH and FiberCore. Inc. as follows:
See Attachment A
18. FiberCore GmbH and FiberCore, Inc. represent, warrant and covenant to SICO
and its Shareholders as follows:
See Attachment B
19. Financials
ATTACHMENT A
Representation and Warranties:
(i) SICO and of its related entities, if any, duly organized and existing
and, if applicable, in good standing under the laws of its jurisdiction
of organization, and has the full power and authority to own its
property and carry on its business as now being conducted.
(ii) SICO has full power and authority to enter into, execute and deliver
this Agreement and any other agreements executed and delivered in
connection herewith (collectively, the "Transaction Agreements") and to
incur the obligations provided for herein and therein, all of which
have been duly authorized by all proper and necessary action. No
consent or approval is required as a condition to the validity or
performance of any of the Transaction Agreements, and the performance
of SICO of its obligations thereunder will not violate (1 ) any law,
ordinance or rule applicable to SICO or its Shareholders, (ii) the
articles of incorporation, by-laws, partnership agreement or
certificate of partnership, as applicable, of SICO or (iii) any
agreement by which the Customer is bound or by which any of its assets
are affected.
(iii) All authorizations, consents, approvals, registrations, exemptions and
licenses with or from governmental authorities which are necessary for
entering into, execution and delivery of the Transaction Agreements and
the performance by SICO of its obligations thereunder have been
effected or obtained and are in full force and effect
(iv) This Agreement constitutes, and the other Transaction Agreements, when
executed and delivered for value received, will constitute, the valid
and legally binding obligations of SICO and Shareholders enforceable in
accordance with their terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(v) There are no legal proceedings, law suits, or investigations pending
or, so far as the officers or Shareholders, as the case may be of SICO
know, threatened before any court or arbitrator or before or by any
governmental authority which, in any one case or in the aggregate, if
determined adversely to the interests of SICO or its related entities,
if any, would have a material adverse effect on (a) the business,
properties, conditions (financial or otherwise) or operations, present
or prospective, of SICO or its related entities if any, or (b) the
Transaction (s) contemplated by this Agreement.
SICO is not aware of infringing on any third party patents or has it
been notified by any such third party.
(vi) There is no statute, regulation, rule, order or judgment, and no
provision of any mortgage, indenture, contract or agreement binding on
SICO or affecting its properties which would prohibit, conflict with or
in any way prevent the execution, delivery, or carrying out of the
terms of any of the Transaction Agreements.
(vii) SICO and each of its related entities, if any, has filed or caused to
be filed all tax returns which to the knowledge of SICO are required to
be filed and has paid all taxes shown to be due and payable on said
returns or on any assessment made against it or any of its property and
all other taxes, assessments, fees, liabilities or other charges
imposed on it or any of its property by any governmental authority,
except for any taxes, assessments, fees, liabilities or other charges
which are being contested in good faith and for which reserves which
are adequate under generally accepted accounting principles have been
established.
(viii) SICO holds full right, title and interest in and to the equipment and
other property describe in this Agreement, free and clear of any claim,
lien, security interest, or other similar charge, except as others
provided for in this agreement to FiberCore. GmbH.
(ix) Shareholders covenant that during the initial six (6) year term of this
Agreement that they will not (a) sell, transfer, gift, or in any manner
whatsoever, directly or indirectly, dispose of their shares in SICO,
and (b) cause SICO to sell, dispose, transfer, or in any manner
whatsoever, including by way of merger, consolidation, or other
corporate transaction, directly or indirectly, dispose of substantially
all the assets or property of SICO, including specifically the assets
and property of SICO which are the subject of this Agreement.
ATTACHMENT B
Representation and Warranties of FiberCore, Inc.
(I) FiberCore, Inc. is a corporation validly existing and in good standing
under the laws of the State of Nevada.
(ii) FiberCore, Inc. has full corporate power and authority to make,
execute, deliver and perform this Agreement and to execute, deliver and
perform the other instruments required to be delivered.
(iii) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action on the part of FiberCore,
Inc., and this Agreement when executed and delivered, will constitute
the legal, valid and binding obligations of FiberCore, Inc.,
enforceable against it in accordance with their respective terms
Representation and Warranties of FiberCore GmbH.
(i) Organization and Good Standing FiberCore GmbH is a corporation validly
existing and in good standing under the laws of Germany.
(ii) FiberCore GmbH has full corporate power and authority to make, execute,
deliver and perform this Agreement and to execute, deliver and perform
the other instruments required to be delivered.
(iii) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary corporate action on the part of FiberCore
GmbH, and this Agreement when executed and delivered will constitute
the legal, valid and binding obligations of FiberCore GmbH, enforceable
against it in accordance with their respective terms.
BQL Burgauer Quarzglasschmelze
und Lichtwellenleiterwerk GmbH
Bisherige Arbeiten zur Preformentwicklung
1979-1981 GI-MM-Preform 50/125
Kernglassystem GeO2-P2O5-SiO2
Arbeitswellenlange 0,85 (mu)m
1984-1986 GI-MM-Preform 50/125
Xxxxxxxxxxxxxxxxxx 0,0 (mu)m
1985-1986 Strahlungsharte GI-MM-Preform 50/125
Kernglassystem GeO2- SiO2
Arbeitswellenlange 1,3, (mu)m
1987-1989 Standard-SM-Preform 9/125
Profiltyp: depressed cladding
Kernglassystem GeO2-SiO2
Claddingglassystem P2O5-F-SiO2
1990 DS-SM-Preform
Profiltyp:triangular core
triple clad, depressed inner cladding
Arbeitswellenlange 1,55(mu)m
1991 HNA-GI-MM-Preform 62,5/125
Arbeitswellenlange 0,85 / 1,3 (mu)m
1992 HNA large core XX-Xxxxxxx 000/000
Xxxxxxxxxxxxxxxxxx 0,85 / 1,3 (mu)m
SECURITY OWNERSHIP CONTRACT
between
1) Jena, etc. represented by its Managing Director Xxxxxx Xxxxxx,
2) FiberCore, etc. represented by its President Xx. Xxxx X. Xxxxxx and Xxxxxxx
X. Xxxxx.
In view of the already sealed but still to be certified, contract agreements
regarding the formation of FiberCore GmbH, Germany, signatory 1.) will give
signatory, 2.) for receipt of six hundred five thousand shares, current market
value of S4 per/sh., equipment listed in the appendix, property of Jena
Quarzschmelze GmbH, as security.
The security will be maintained until payment for 605,000 shares of FiberCore,
Inc. has been made. Signatory 1.) declares that all afore mentioned equipment is
free of any lien against it by any third party.
