[GRAPHIC OMITTED] COMMERCIAL PROPOSAL 289/2000
Date :July 19, 2000.
To: FURUKAWA INDUSTRIAL S/A ELECTRIC PRODUCTS
Att.: Mr. Helio Durigan Phone: (021-41) 341-4085
General Manager of Supply Fax : (021-41) 341-4046
From: Nivaldo Seixas Phone: (021-19) 789 4209
Commercial Manager Fax : (021-19) 789 4204
CONDITIONS OF SUPPLY - OPTICAL FIBERS
1. SUPPLY
1.1 Product: Optical Fiber Monomodo Acrylate.
1.2 Quantity: 650.000 km of Optical Fiber.
1.3 Delivery Dates: July of 2000 to December of 2002.
1.3.1 Programming of quarterly delivery:
Period Year 2.000 Year 2.001 year 2002 year
----------- ---------- ---------- ---------
1st quarter ---------- 60.000 km 75.000 km
2nd quarter ---------- 60.000 km 75.000 km
3rd quarter 45.000 km 65.000 km 75.000 km
4th quarter 45.000 km 75.000 k 75.000 km
1.4 Deliveries schedule for the third quarter 2000:
Lots Month Guarantee Extra Amount
Amount (km) (km)
-------------- --------- ----------- ------------
1 July 12.000 3.000
2 August 12.000 3.000
3 September 12.000 3.000
1.5 Product Specification:
1.5.1 Attenuation: 80%: @1310nm \060= 0,344 dB/km and 20% @1310nm
\060= 0,354 dB/km.
80%: @1550nm \060= 0,214 dB/km and 20% @1550nm
\060= 0,224 dB/km.
1.5.2 Length: minimum of 12.600m, multiples of 2.100m and maximum of
50.400m.
1.5.3 Complimentary Specifications: According to Furukawa Specifications
FEM-U/001 Ed.01 " and Xtal " DMKV007-0 ".
1.6 Packaging: The reels and the protecting layers are returned to Xtal in
re-utilization conditions, according to loan invoice.
1.7 Local of delivery: position in the factory of Furukawa, with responsibility
of Xtal Optical Fibers S/A freight.
2. CONDITIONS
2.1 Net price, without Taxes:
July of 2000 - US$ 41.67 / km (forty one dollars and sixty seven cents per
kilometer).
August of 2000 - US$ 42.67 / km (forty two dollars and sixty seven cents per
kilometer).
September of 2000 - US$ 43.67 / km (forty three dollars and sixty seven
cents per kilometer).
The price and the amount will be renegotiated for each following quarter,
until the 10 (tenth) of the antecedent month to the beginning of each
quarter.
2.2 Payment: In US$ paid under Brazilian Commercial terms will be used,
published in the Newspaper Gazeta Mercantil on the day of payment.
2.3 Terms:
2.3.1 Payment to 30 d.d.l. (working days), without penalty.
3.INCIDENTS TAXES
3.1 ICMS to be included in the State where the product is sold.
3.2 15% IPI aliquot to remain outstanding.
4. LATE PAYMENTS
There will be charged 2% (two percent) penalty, increasing to 2,5% (two and
half percent) late charge fee, on the amount or in the event delay is not
attributed to Xtal Fibras Opticas S/A.
5. COMMITMENT OF PURCHASE AND SALE
5.1 Xtal will guarantee the delivery of 80% of the amounts mentioned in the item
1.3.1.
5.2 The delivery of 20% of the amounts mentioned in the item 1.3.1 subject to
the product availability.
6. DISCOUNT FOR THE ACCUMULATED AMOUNT OF PURCHASES IN 12 MONTHS
6.1 The discount will be supplied in percentile on the effective net price in
the quarter, in function of the amount of accumulated kilometers, being
considered the purchases accomplished in the last ones 12 (twelve) months,
counted retroactively in the date of each supply, according to the list
below.
6.2 Discount will be based on the total kilometers sold within 12 months,
according to the list below.
Discount Range on the Amount of Accumulated Discount
Kilometers in the last 12 months (5%)
------------------------------------------- --------
Range 1: more than 50.000km up to 100.000km 1,00%
Range 2: more than 100.000km 1,50%
7. PRODUCT GUARANTEE
Xtal Fibras Opticas S/A will substitute any part of the product with another
at no extra cost to the buyer, so long as buyer requests this change 10
(ten) days prior to shipment, the warranty period for the product shall be
06 (six) months from shipment date.
8. REGULATION / STATUTORY/ REQUISITS
Furukawa should inform Xtal of any restrictions imposed by Statutory/
Requisits/Regulations.
9. PROPOSAL VALIDITY
This proposal is valid until July 24, 2.000.
10. PROPOSAL APPROVAL - XTAL FIBRAS OPTICAS S/A
---------------------- ----------------------------- ------------------------
Rafael B. Gandara Celso Arantes Simoes Antonio Carlos de Campos
Manager Adm. Financier Director of Marketing & Sales Managing Superintendent
11. ACCEPTANCE OF THE PROPOSAL - INDUSTRIAL FURUKAWA S/A ELECTRIC PRODUCTS
Signatures:
-------------------------------- ----------------------------------
Takaomi Goto Helio J. Durigan
Executive Vice President General Manager of Supplies
