PATENT ASSIGNMENT AND TRANSFER AGREEMENT

THIS AGREEMENT is made between ALGAR S.A. EMPREENDIMENTOS E PARTICIPACOES, a
corporation duly organized under the laws of the Federal Republic of Brazil,
whose address is Avenida Alexandrino Garcia, 2689, Distrito Industrial,
Uberlandia, State of Minas Gerais, enrolled before the Ministry of Economy's
Corporate Taxpayer's Registry (C.N.P.J.) under n(0) 17.835.026/0001-52, herein
represented by its dully authorized representative (hereinafter called "ALGAR"),
and XTAL FIBRAS OPTICAS S.A., a corporation duly organized and validly existing
under the laws of the Federal Republic of Brazil, having its principal office at
Avenida Alexandrino Garcia, 2689, Distrito Industrial, Uberlandia, State of
Minas Gerais, Brazil, enrolled with the Ministry of Economy's Corporate
Taxpayers' Registry (C.N.P.J.) under n(0) 71.340.707/0001-95 (hereinafter called
"XTAL").


                                    RECITALS

WHEREAS, ALGAR has applied for the registration of patent n(0) PI9500990 before
the Brazilian Patent and Trademark Office ("INPI - Instituto Nacional da
Propriedade Industrial"), proof of application is attached as Exhibit A
(hereinafter referred to as "Patent Application");

WHEREAS, ALGAR intends to assign and transfer to XTAL the Patent Application and
XTAL wishes to have the Patent Application transferred and assigned to it;

NOW, THEREFORE, the parties have agreed to enter into this Patent Assignment and
Transfer Agreement (hereinafter referred to as "Agreement"), which will be
governed by the following clauses and conditions which are mutually agreed and
accepted:



PURPOSE



1.1   Subject to the terms and conditions set forth in this Agreement, ALGAR
      hereby, irrevocably, assigns and transfers to XTAL the Patent Application
      described under Exhibit A, in accordance with applicable law and
      regulations and especially with the applicable provisions of Law No. 9279
      of May 14, 1996.

1.2   XTAL is, as of this date, authorized to request the approval of the INPI
      in connection with the assignment and transfer of the rights to the Patent
      Application, as set forth herein. All the expenses related to the
      assignment and transfer of the Patent Application shall be of XTAL's
      responsibility.


2.    RESPONSABILITIES OF ALGAR

2.1   ALGAR hereby agrees to file any action that may be necessary at any time
      to secure the Patent Application and recognizes its responsibility for the
      Patent Application until the effective transfer of the Patent Application
      to XTAL.

2.2   ALGAR hereby represents and warrants to XTAL that it has required the
      examination of the Patent Application in the 36 (thirty-six) months period
      determined by Brazilian Law n(0) 9.279 of May 14, 1996.

2.3   ALGAR hereby represents and warrants that it is the sole owner of the
      entire right, title, and interest in and to the Patent Application in
      Brazil (the "Territory") and that the assignment and transfer of the
      Patent Application is duly authorized by ALGAR's By-Laws, and such
      assignment and transfer shall not violate any agreements, contracts,
      arrangements, administrative or judicial decisions to which ALGAR is a
      party and there are no rights granted to third parties by ALGAR for the
      acquisition of such Patent Application or any licensees with effective
      license agreements, whether or not providing rights of renewal, provided
      that the obligations of ALGAR herein are valid, legal, binding and
      enforceable against ALGAR on the terms agreed upon herein.

2.4   ALGAR hereby represents and warrants that the Patent Application does not
      knowingly infringe any third party intellectual property rights in the
      Territory and that no entity in the Territory has right to restrict the
      sale of the Product.

2.5   ALGAR hereby represents and warrants that it has not applied and will not
      apply for registration of the Patent Application in any other country
      apart from Brazil.


3.    RESPONSABILITIES OF XTAL

3.1   XTAL hereby represents and warrants that the acquisition of the Patent
      Application was duly authorized by its Articles of Association and that
      such assignment and transfer shall not violate any agreements, contracts,
      arrangements, administrative or judicial decisions to which XTAL is a
      party and that the obligations of XTAL hereunder are valid, legal, binding
      and enforceable in accordance with the terms agreed upon herein.


4.    COMPENSATION

4.1   The present assignment is royalty free and no payments of any kind are due
      in accordance with this Agreement.


5.    CONFIDENTIALITY

5.1   The parties hereto undertake to maintain the secrecy and confidentiality
      of all information provided and/or received from the other party hereto
      delivered under, or known pursuant to this Agreement. Neither ALGAR nor
      XTAL shall publish, in whole or in part, any information related to this
      Agreement without the prior written consent of the other party, except as
      required by applicable law, in which case the disclosing party shall send
      a prior notice to the other party in this regard.


6.    NO THIRD PARTY BENEFICIARIES

6.1.  Nothing in this Agreement will be construed as giving any person, firm,
      corporation or other entity, other than the parties hereto, their
      successors and permitted assigns, any right, remedy or claim under or in
      respect of this Agreement or any provision hereof.


7.    GENERAL PROVISIONS

7.1.  This Agreement constitutes the entire and only agreement between the
      parties for the Patent Application and all other prior negotiations,
      representations, agreements, and understandings are superseded hereby. No
      agreements altering or supplementing the terms hereof may be made except
      by means of a written document signed by the duly authorized
      representatives of the parties.

7.2.  All notices and other communications under this Agreement shall be in
      writing and may be given by delivering the same by hand at, or by sending
      the same by an overnight courier that maintains verification of delivery,
      or by facsimile, with confirmed answer back, to the relevant address set
      out below or such other address as either Party may notify to the other
      from time to time. Any such notice given as set forth above shall be
      deemed to have been given or received at the time of delivery (if
      delivered by hand) and upon verified receipt (if sent by post, facsimile
      or overnight courier).

      If to ALGAR:

      Algar S.A. - Empreendimentos e Participacoes

      Attn.:        Nelson Cascelli
      Address:      Avenida Alexandrino Garcia, 2689
                    Distrito Industrial
                    Uberlandia - MG
                    Brazil
      Facsimile No. (34) 212-0862


      If to XTAL:

      Xtal Fibras Opticas S.A.

      Attn.:        Antonio Carlos Campos
      Address:      Avenida Alexandrino Garcia, 2689
                    Distrito Industrial
                    Uberlandia - MG
                    Brazil
      Facsimile No. (019) 289-5211

      or such other address as may be given from time to time under the terms of
      this notice provision.

7.3   This agreement shall be construed in accordance with the laws of the
      Federate Republic of Brazil. The courts of the City of Sao Paulo, State of
      Sao Paulo, to the personal jurisdiction of which each party hereto
      voluntarily submits, shall have exclusive jurisdiction over any dispute
      arising out of the construction, interpretation or enforcement of this
      Agreement.

7.4   Failure of the parties to enforce a right under this Agreement shall not
      act as a waiver of that right or the ability to later assert that right
      relative to the particular situation involved.

7.5   If any provision of this Agreement shall be found by a court to be void,
      invalid or unenforceable, the same shall be reformed to comply with
      applicable law or stricken if not so conformable, so as not to affect the
      validity or enforceability of this Agreement.

7.6   It is the intention of the parties to carry out the provisions of this
      Agreement in accordance with principles of good faith and fair dealing and
      to respect and observe the spirit as well as the letter of this Agreement.
      The parties shall exercise their best efforts to settle between themselves
      in amicable way any dispute which may arise out of or in connection with
      this Agreement.

7.7   The parties acknowledge that each has read this Agreement, understands it,
      and agrees to be bound by its terms. This Agreement may be amended only by
      a subsequent writing that specifically refers to this Agreement and that
      is signed by both parties, and no other act, document, usage, or custom
      shall be deemed to amend this Agreement.

7.8   This Agreement shall be binding on or inure to the benefit of the
      respective successors and permitted assigns of the parties.

7.9   Each of the respective persons executing this Agreement hereby covenants
      and warrants that such person has full legal power, right and authority to
      bind the entity on whose behalf such person is signing to each and every
      term and provision herein.

7.10  The following Schedules are part of this Agreement: Exhibit A: Patent
      Application


IN WITNESS WHEREOF, ALGAR and XTAL have caused this Agreement to be executed in
quadruplicate.


ALGAR S.A. - EMPREENDIMENTOS E PARTICIPACOES



                  ---------------------------------------------
                  By: Nelson Cascelli Reis
                  Title: Attorney-in-fact



                  ---------------------------------------------
                  By: Jose Mauro Leal Costa
                  Title: Chief Executive Officer



XTAL FIBRAS OPTICAS S.A.



---------------------------------
By: Jose Mauro Leal Costa
Title: President Director



---------------------------------
By: Antonio Carlos Campos
Title: Managing Director


WITNESS



1. ___________________________________
   Name: Giseli Aparecida Perez Araujo
   RG: 16.978.964
   CPF: 074.393.068-13



2. ___________________________________
   Name: Eliane Barbosa Mari
   RG: 8.690.203
   CPF: 762.429.948-87



<PAGE>




                                    EXHIBIT A
                                    ---------

                               PATENT APPLICATION
                               ------------------



o     PI9500990