Document:

SECURITY AGREEMENT

Between

FIBERCORE JENA GMBH (hereinafter "FC")
a corporation organized and existing under the laws of the Federal Republic of
Germany with its corporate seat in Jena/Germany having its office at Goschwitzer
Stra(beta)e 20, 07745 Jena/Germany

and

CRESCENT INTERNATIONAL LTD. (hereinafter "CI"),
an entity organized and existing under the laws of Bermuda,
having its offices at Clarendon House, 2 Church Street, Hamilton H11, Bermuda

This Security Agreement (this "Agreement") is entered into as of the *** day of
June, 2000, by and between FC and CI.

Whereas the parties are entering into this Agreement in connection with that
certain Securities Purchase Agreement, dated June 8, 2000 (the "Securities
Purchase Agreement") between CI and FiberCore, Inc., a Nevada corporation and
the parent company and sole shareholder of FC, covering, inter alia, convertible
notes in the aggregate nominal amount of up to $7.5 million US dollars, issued
by FiberCore, Inc. in favor of CI (the "Convertible Notes") which shall be
secured by the assets owned by FC listed on Attachment A hereto (the
"Collateral") (all capitalized terms used and not otherwise defined herein shall
have their respective meanings set forth in the Securities Purchase Agreement).

NOW, THEREFORE the parties agree as follows:

1.   FC  herewith  grants  to  CI a  security  interest  in  the  Collateral,
     according  to the  terms  and  conditions  of  this  Agreement  , for the
     purpose of securing all actual,  contingent,  present and future  claims,
     including damage claims,  of CI against  FiberCore,  Inc. with respect to
     the  fulfillment  - or any  consequence  of  non-fulfillment  - of all of
     FiberCore,  Inc.'s  obligations  arising  out of or with  respect  to the
     Convertible  Notes (as amended,  supplemented  or novated)  (the "Secured
     Obligations").

2.   In  order  to  secure  the  Secured  Obligations,  FC  transfers  to  CI
     ownership     of     the     Collateral     for     security     purposes
     (Sicherungsubereignung).  All assets  comprising  part of the  Collateral
     are tangible and  non-fixed  assets.  CI hereby  accepts such transfer of
     ownership of the Collateral for security purposes.

     All assets comprising the Collateral are located at FC's plant in
     Goschwitzer Stra(beta)e 20, 07745 Jena/Germany, except the "CVD 4 -
     Anlage", equipment no. 4273000, which is located at the R & D Department of
     FC in Carl-Zei(beta)-Promenade 10, 07745 Jena/Germany . The assets are
     identified on Attachment A by the name or description of each item and its
     listed equipment number(s), which are marked on each respective item.

     Pursuant to an agreement dated October 25, 1996 , as amended, supplemented
     or novated, FC has in connection with a capital investment loan from AMP to
     FiberCore Inc. in the amount of US$ 3,000,000, granted to Tyco Electronics
     Corporation, formerly AMP Incorporated ("AMP"), a security interest in its
     current and future assets, up to 125% of the principal amount of the loan
     (the "AMP Security Interest"). By a letter dated June 6, 2000, which is
     attached to this Agreement as Attachment B, AMP has released the AMP
     Security Interest.

3.   The transfer of possession of the Collateral shall be effected in such a
     way that FC shall retain possession of the Collateral on behalf of CI, in
     custody at no cost or charge therefor. In the event any third party obtains
     actual possession of the Collateral or any part thereof, FC shall use
     commercially reasonable efforts to repossess any Collateral held by such
     third party, and hereby assigns to CI its present and future claims for
     repossession. CI hereby accepts such assignment.

4.
     a)   FC is revocably entitled to dispose of the Collateral provided that
          any such disposition takes place in the due course of business of FC
          and pursuant to an arm's length transaction with a party unrelated to
          FC.

     b)   As long as no Event of Default (as such term is defined in the
          Convertible Notes) has occurred, FC is entitled to use the Collateral
          in the due course of its business. FC is required to appropriately
          maintain the Collateral in order to keep it in good and usable
          condition and function. All costs and efforts relating to the
          maintenance of the Collateral shall be borne by FC.

     c)   FC shall adequately insure the assets at its own expense, and shall
          provide evidence of such insurance to CI on the Closing Date and upon
          reasonable demand by CI.

     d)   FC is required to substitute any items of the Collateral which are,
          for whatever reason, damaged or destroyed, disposed of pursuant to
          Section 4(a) above, or replaced in the ordinary course of business. In
          such event, FC will transfer to CI the ownership for security purposes
          of the assets comprising the substituted Collateral (the "Substituted
          Assets"),according to the terms and conditions of this Agreement. The
          parties are aware that a transfer in accordance with the preceding
          sentences constitutes a claim by CI to transfer of ownership for
          security purposes with respect to such Substituted Assets, but such
          transfer of ownership is not legally effected by this Agreement. FC
          and CI agree that upon the substitution of any Collateral, FC and CI
          shall amend Attachment A to this Agreement to include the Substituted
          Assets in the Collateral subject to this Agreement.

5.   The parties are aware that the lessor of the premises and  facilities of
     FC  located  at FC's  principal  address  first set forth  above  holds a
     statutory  prior  lien on the  Collateral,  to the  extent of its  claims
     arising  from  the  lease  agreements   relating  to  such  premises  and
     facilities.  The payment  obligations  of FC under such lease  agreements
     amount to  Euro27,500  per month,  and no  payments  due under such lease
     agreements  are  currently in arrears.  Upon demand of CI, FC will on the
     Closing  Date and from time to time  provide  evidence  to CI that it has
     settled  all  current  liabilities  arising  out of the lease  agreements
     relating to said premises and facilities.

     Furthermore, in the event of any breach by FC of its obligations arising
     under said lease agreements (a "Breach"), which Breach might entitle the
     lessor to enforce its statutory lien, CI may, at its discretion, on behalf
     of and for the account of FC settle any liabilities or claims arising out
     of such Breach,. In such event CI may assert a claim for immediate
     reimbursement by FC for any costs and expenses incurred with respect to any
     actions taken by it in accordance with the preceding sentence, and the
     security interest in the Collateral under this Agreement shall be extended
     to any amounts for which CI asserts a reimbursement claim. If any such
     Breach occurs, FC will immediately inform CI thereof in writing.

6.   FC represents and warrants to CI and its successors and assigns, such
     representations and warranties being an independent guarantee
     (selbstandiges Garantieversprechen), that as of the Closing Date:

     (a)  Except to the extent that any part of the Collateral is a fixture of
          the land on which such Collateral is located (unless such part is a
          Scheinbestandteile within the meaning of sec. 95 para. 1 of the German
          Civil Code) FC holds title to and may freely dispose of any of the
          Collateral, and of any of the claims assigned hereunder (the
          "Claims"), and is the owner of the Collateral and the Claims, free and
          clear of all encumbrances and competing security interests of any
          third parties whatsoever.

     (b)  The Collateral and the Claims have not previously been transferred to
          any third party.

     (c)  Except as provided in the next paragraph, FC has full power, authority
          and legal right to execute and perform its obligations under this
          Agreement, and to transfer and grant a security interest over the
          Collateral and the Claims pursuant to this Agreement. The execution
          and performance of this Agreement and the transfer of the Collateral
          and the Claims hereunder have been duly authorized by all necessary
          corporate or other action and do not contravene any law, rule or
          regulation, any provision of FC's organizational and governing
          documents, any judgment, decree or order of any tribunal, or any
          agreement or instrument to which FC is a party or by which it or any
          of its property is bound or affected, or constitute a default
          thereunder.

          The parties to this Agreement are aware of the current negotiations
          with the Kreditanstalt fur Wiederaufbau (KFW) and the Berliner Bank
          as to the need to obtain KFW's and/or Berliner Bank's consent to this
          Agreement.

7.   CI may at its own expense, except for any inspection occurring prior to the
     date hereof, which shall be at the expense of FiberCore, Inc., inspect the
     Collateral within due business course from time to time, or may appoint an
     agent to inspect the Collateral. FC will give any necessary information for
     the purpose indicated and will grant CI or its agent access to any premises
     and facilities in which the Collateral is located.

8.   Subject to Section 5 above, upon the occurrence of an Event of Default
     under the Convertible Notes or a breach by FC of any of its obligations
     arising under this Agreement, CI may enter the premises, take possession of
     the Collateral and enforce the Collateral

     In any event, CI will enforce the Collateral only to the extent necessary
     to settle any claims by CI against FiberCore, Inc. arising out of an Event
     of Default.

     CI agrees, subject to Section 8 below, to release proceeds from the
     enforcement of the Collateral if and to the extent that this Agreement
     constitutes an up-stream or cross-stream granting of collateral and that
     the application of the proceeds toward the Secured Obligations would
     otherwise lead to the situation that FC does not have sufficient assets to
     maintain its stated share capital (Stammkapital) in accordance with
     Sections 30 and 31 of the German Limited Liability Companies Act ("GmbHG"),
     provided that for the purposes of the calculation of the amount to be
     released (if any), FC's balance sheet shall be adjusted so that loans
     provided to FC by any Affiliate of FiberCore, Inc., to the extent such
     loans are subordinated or qualify under Section 32a GmbHG, shall be
     disregarded.

     In addition, in a situation where FC does not have sufficient assets to
     maintain its capital (Stammkapital), FC shall realize, if and to the extent
     legally permitted and, acting reasonably in respect of FC's businessany and
     all of its assets that are shown in the balance sheet with a Book Value
     (Buchwert) that is significantly lower than the market value of the asset
     if such asset is not necessary for FC's business (betriebsnotwendig). FC
     agrees to take any measures which are possible under applicable law
     (including, without limitation, realization of set-off claims) to avoid
     that the realization of the Collateral under this Agreement causes FC's net
     assets to be reduced below the amount of its registered share capital which
     is protected by sections 30 and 31 GmbHG.

     CI may, in a commercially reasonable manner, enforce the Collateral through
     a private sale, either in its own name or in the name of FC. Following such
     sale, CI will distribute to FC any proceeds from such sale in excess of
     amounts required to satisfy any claims against FiberCore, Inc. under the
     Convertible Notes, as well as any costs relating to such sale . The costs
     of any enforcement proceedings hereunder shall be borne by FC.

9.   CI  shall   retransfer  the  ownership  of  the  Collateral  to  FC  upon
     satisfaction  of  the  condition  precedent  that  FiberCore,   Inc.  has
     irrevocably   fulfilled  all  of  its  obligations  arising  out  of  the
     Convertible  Notes,  including,  but not limited to, the repayment of the
     principal  amount of the Convertible  Notes and any interest or penalties
     due thereon,  and the  delivery of shares of Common  Stock of  FiberCore,
     Inc. in the event of a conversion of the  Convertible  Notes, in whole or
     in part. FC shall accept such retransfer of ownership.

     Upon (i) any complete or partial conversion of the Convertible Notes as
     provided in Article 3 or section 2.5 thereof, or (ii) any complete or
     partial redemption of the Convertible Notes as provided in Section 2.4 or
     Section 2.5 thereof, CI shall release the Collateral (Sicherheitenfreigabe)
     by an amount proportional to the principal amount of the Convertible Notes
     so converted or redeemed; provided, however, that CI shall be required to
     release the Collateral only if and to the extent the Effective Collateral
     (as such term is defined in the Convertible Notes) on the applicable
     Conversion Date or Redemption Date exceeds 120% of the outstanding
     principal amount of the Convertible Notes following such conversion or
     redemption. FiberCore, Inc., shall have the right to determine from which
     assets the Collateral shall be released,shall give written notice to CI
     describing such assets within fourteen (14) calendar days of such release
     and shall amend Attachment A to this Agreement to reflect such release.

     The Book Value of the Collateral shall be the aggregate Book Value as set
     forth on Attachment A to this Agreement provided, however, that the Book
     Value of the Collateral shall decrease by an aggregate amount of $150,000
     per month on the first calendar day of each month, on and after July 1,
     2000.

10.  In the event of a change in  ownership  of the stock of FC or a change in
     the  legal  structure  of  either  of  one of the  parties  hereto  or of
     FiberCore, Inc. this Agreement shall remain in full force and effect.

     CI may transfer any security interests arising under this Agreement in
     whole or in par to an Affiliate of CI, provided thatthe Convertible Notes
     are simultaneously and proportionately assigned to such Affiliate , and

     such Affiliate assumes the respective obligations of CI arising under this
     Agreement. CI, or its Affiliate as its successor in accordance with the
     preceding paragraph, shall not transfer any security interest arising under
     this Agreement to any third party which is not an Affiliate of CI.

11.  All notices, demands, requests, consents, approvals, and other
     communications required or permitted hereunder shall be in writing and,
     unless otherwise specified herein, shall be (i) personally served, (ii)
     deposited in the mail, registered or certified, return receipt requested,
     postage prepaid, (iii) delivered by reputable air courier service with
     charges prepaid, or (iv) transmitted by hand delivery, telegram, or
     facsimile, addressed as set forth below or to such other address as such
     party shall have specified most recently by written notice given in
     accordance herewith. Any notice or other communication required or
     permitted to be given hereunder shall be deemed effective (a) upon hand
     delivery or delivery by facsimile, with accurate confirmation generated by
     the transmitting facsimile machine, at the address or number designated
     below (if delivered on a business day during normal business hours where
     such notice is to be received), or the first business day following such
     delivery (if delivered other than on a business day during normal business
     hours where such notice is to be received) or (b) on the second business
     day following the date of mailing by express courier service, fully
     prepaid, addressed to such address, or upon actual receipt of such mailing,
     whichever shall first occur. The addresses for such communications shall
     be:

          If to FC:
          FiberCore  Jena GmbH
          Goschwitzer Stra(beta)e 20
          07745 Jena/Germany
          Attention:  Lothar Brem

          Telephone:  + (49) 3641 610 150
          Facsimile:  + (49) 3641 610 101

          with a copy (which shall not constitute notice) to:

          FiberCore, Inc.
          253 Worcester Rd.
          P. O. Box 180
          Charlton, MA  01507
          Attention:  Dr. Mohd A. Aslami/Michael Beecher
          Telephone:  (508) 248-3900
          Facsimile:  (508) 248-5588

          Cadwalader Wickersham & Taft
          100 Maiden Lane
          New York, NY 10038
          Attention:  Malcolm Wattman, Esq.
          Telephone:  (212) 504-6222
          Facsimile:  (212) 504-6666

          if to the CI:

          Crescent International Ltd.
          c/o GreenLight (Switzerland) SA
          84, av Louis-Casai
          1216 Geneva, Cointrin
          Switzerland

          Attention:  Mel Craw/Maxi Brezzi
          Telephone:  +41 22 791 72 56
          Facsimile:  +41 22 929 53 94

          with a copy (which shall not constitute notice) to:

          Clifford Chance Rogers & Wells LLP
          200 Park Avenue, 52nd Floor

          New York, NY  10166
          Attention:  Sara P. Hanks, Esq./Earl S. Zimmerman, Esq.
          Telephone:  (212) 878-8000
          Facsimile:  (212) 878-8375

     Either party hereto may from time to time change its address or facsimile
     number for notices under this Section by giving at least ten (10) days'
     prior written notice of such changed address or facsimile number to the
     other party hereto.

12.  This Agreement shall be of no force or effect until such date on which (i)
     FC has obtained the valid written consent of KfW and Berliner Bank AG to FC
     entering into this Agreement, (ii) FC has delivered a copy of such valid
     written consent to CI, and (iii) CI has acknowledged receipt of such valid
     written consent.

13.  If any provision of this Agreement shall be determined by a court of
     competent jurisdiction to be invalid, all other provisions of this
     Agreement shall not be affected thereby. In such event , the parties hereto
     shall be required to substitute the invalid provision with such valid
     provision which best meets the commercial intentions of the parties. The
     preceding shall also apply in the event this Agreement shall be found by a
     court of competent jurisdiction to lack any necessary provisions.

     This Agreement shall be governed by the laws of the Federal Republic of
     Germany. Venue for any disputes arising between the parties out of or in
     connection with this Agreement shall be Frankfurt am Main/Germany.

<PAGE>

EXECUTION PAGES

-----------------------------------       -----------------------------------
FiberCore Jena GmbH, Jena                       Crescent  International  Ltd.,
Bermuda09 June 2000
CLIFFORD

CHANCE

PUNDER

                                 FIBERCORE, INC.

                                   AS PLEDGOR

                                       AND

                           CRESCENT INTERNATIONAL LTD.

                                   AS PLEDGEE

              ----------------------------------------------------
                             SHARE PLEDGE AGREEMENT
                  relating to the shares in FiberCore Jena GmbH
              ----------------------------------------------------

<PAGE>

                                  NOTARIAL DEED

                                                      ROLL OF DEED NO. _______

Recorded

at Basel/Switzerland this 9 day of  June 2000

Before me, the undersigned

                         Jacqueline Burckhardt Bertossa

                                     notary

with official offices in Basel/Switzerland appeared today:

[name of representative], born [ ] [profession] [Swiss] citizen, with private
domicile at [ ], personally known to the notary.

Hereinafter not acting in [his] [her] own name but, excluding any personal
liability and without having power of attorney (Vertreter ohne
Vertretungsmacht), for and on behalf of

      (a)   CRESCENT  INTERNATIONAL  LTD.  an entity  organized  and  existing
            under the laws of Bermuda,

      (b)   FIBERCORE, INC., an entity organized under the laws of Nevada.

The Notary convinced himself that the person appearing is in adequate command of
the English language and declared that he is in command of the English language
as well.

The person appearing stated that the parties represented by them requested that
this instrument be recorded in the English language.

[On being asked whether there had been any prior involvement by the notary in
terms of paragraph 3 sub-paragraph 1 No. 7 of the German Notarisation Act
(Beurkundungsgesetz) the provisions of which had been explained by the Notary,
the persons appearing said that there had been no such prior involvement.]

I.    Requesting  its  notarisation,  the persons  appearing then declared the
following:

<PAGE>

                             SHARE PLEDGE AGREEMENT

BETWEEN:

1.    FIBERCORE,  INC.,  an entity  organized  and existing  under the laws of
      Nevada,  having its business address at 253 Worcester Rd., P.O. Box 180,
      Charlton, MA 01507 (the "PLEDGOR");

2.    CRESCENT  INTERNATIONAL  LTD., an entitiy  organized and existing  under
      the laws of Bermuda,  having its offices at  Clarendon  House,  2 Church
      Street, Hamilton H11, Bermuda. (the "PLEDGEE").

WHEREAS:

(A)   The Pledgee and the Pledgor have entered into a certain securities
      purchase agreement dated on or about the date of this Agreement (the
      "SECURITIES PURCHASE AGREEMENT") covering, inter alia, convertible notes
      in the nominal aggregate amount of up to $7.5 million US dollars, issued
      by the Pledgor in favor of the Pledgee (the "CONVERTIBLE Notes").

(B)   The Pledgor has agreed to grant a pledge over its Shares in the Company
      (as defined below) as security for the Pledgee's respective claims (as
      defined below) against the Pledgor under the Convertible Notes.

NOW, IT IS AGREED as follows:

1.    DEFINITIONS AND LANGUAGE

1.1   In this Agreement:

      "BOOK VALUE" of the Collateral means the aggregate book value of the
      Collateral as set forth on Attachment A to this Agreement; provided,
      however, that the Book Value of the Collateral shall decrease by an
      aggregate amount of $150,000 per month on the first calendar day of each
      month, on and after January 1, 2000.

      "COLLATERAL" means the collateral to be granted under the Security
      Agreement.

      "COMPANY" means FiberCore Jena GmbH, a limited liability company
      (Gesellschaft mit beschrankter Haftung) organised under the laws of the
      Federal Republic of Germany having its business address at Goschwitzer
      Strasse 20, 07745 Jena/Germany, which is registered in the commercial
      register (Handelsregister) of the local court (Amtsgericht) of Gera under
      HRB 4819.

      "EFFECTIVE COLLATERAL" means the lesser of (A) the Book Value or (B) the
      Distributable Collateral which shall mean: total assets (Aktiva), less
      total reserves (Ruckstellungen), less total liabilities
      (Verbindlichkeiten), less additional items for investment subsidies for
      fixed assets (Sonderposten fur Investitionszuschusse zum Anlagevermogen),
      less additional items for investment grants for fixed assets (Sonderposten
      fur Investitionszulage zum Anlagevermogen) less registered capital
      (Stammkapital/gezeichnetes Kapital), of the Company, as shown on the
      balance sheet of the Company on the date such calculation is made.

      "SECURITY AGREEMENT" means the security agreement between the Company and
      the Pledgee dated on or about the date of this Agreement.

1.2   This Agreement is made in the English language. For the avoidance of
      doubt, the English language version of this Agreement shall prevail over
      any translation of this Agreement. However, where a German translation of
      a word or phrase appears in the text of this Agreement, the German
      translation of such word or phrase shall prevail.

2.    PLEDGED SHARES

2.1   The Company has a nominal share capital  (Stammkapital)  of DM 4,250,000
      (in words:  Deutsche Mark four million two hundred fifty thousand) which
      is divided into

2.2   two shares which shares have a nominal amount of DM 50,000 (in words:
      Deutsche Mark fifty thousand, and DM 4,200,000 (in words: Deutsche Mark
      four million two hundred thousand) (the "EXISTING SHARES").

2.3   The Pledgor is the owner of the Existing Shares.

3.    SECURED OBLIGATIONS

      The pledges hereunder are constituted in order to secure the prompt and
      complete satisfaction of any and all obligations (present and future,
      actual and contingent) which are (or are expressed to be) owed or become
      owing by the Pledgor to the Pledgee under the Convertible Notes (the
      "SECURED OBLIGATIONS").

4.    PLEDGE

4.1   The Pledgor hereby pledges to the Pledgee the Existing Shares as well as
      any other shares the Pledgor holds in the Company and all additional
      shares in the capital of the Company (irrespective of their nominal value)
      which the Pledgor may acquire in the future in the event of a share
      transfer, an increase of the capital of the Company or otherwise (the
      "FUTURE SHARES" and, together with the Existing Shares the "Shares")
      together with all ancillary rights and claims associated with the Shares
      as more particularly specified in Clause 5 hereof (the "PLEDGES").

4.2   The Pledgee hereby accepts the Pledges for itself.

4.3   The Pledges are in addition, and without prejudice, to any other security
      the Pledgee may now or hereafter hold in respect of the Secured
      Obligations.

4.4   The Pledgor hereby waives any and all rights of pre-emption it may have
      under the articles of association of the Company or otherwise.

5.    SCOPE OF THE PLEDGES

5.1   The Pledges constituted by this Agreement includes:

      (a)   the present and future rights to receive:

            (i)   dividends payable in relation to the Shares, if any; and

            (ii)  liquidation proceeds, redemption proceeds
                  (Einziehungsentgelt), repaid capital in case of a capital
                  decrease, any compensation in case of termination (Kundigung)
                  and/or withdrawal (Austritt) of a shareholder of the Company,
                  the surplus in case of surrender (Preisgabe) and all other
                  pecuniary claims associated with the Shares;

      (b)   the right to subscribe for newly issued shares; and

      (c)   all other rights and benefits attributable to the Shares.

5.2   Notwithstanding that the dividends are pledged hereunder, the Pledgor
      shall be entitled to receive and retain all dividend payments whether in
      cash, non-cash, by the issue of any loan note or debt instrument in
      respect of the Shares until such time as the Pledgee is entitled to
      enforce the Pledges constituted hereunder.

6.    EXERCISE OF MEMBERSHIP RIGHTS

      The membership rights, including the voting rights, attached to the Shares
      remain with the Pledgor. The Pledgor, however, shall at all times until
      the full satisfaction of all Secured Obligations or the release of the
      Pledges exercise its membership rights, including its voting rights, in
      good faith to ensure that the validity and enforceability of the Pledges
      and the existence or value of all or part of the Shares are not in any way
      adversely affected, other than through dividend payments pursuant to
      Clause 5.2 above. The Pledgor undertakes that no resolutions are passed
      which constitute a breach of its obligations under Clause 8 hereof.

7.    ENFORCEMENT OF THE PLEDGES

7.1   If the requirements set forth in Section 1204 et seq. of the German Civil
      Code (Burgerliches Gesetzbuch) with regard to the enforcement of the
      Pledges are met (Pfandreife), in particular, if any of the Secured
      Obligations has become due and payable, then in order to enforce the
      Pledges, the Pledgee may at any time thereafter avail itself of all rights
      and remedies that a pledgee has upon default of a pledgor under the laws
      of the Federal Republic of Germany.

7.2   Notwithstanding Section 1277 of the German Civil Code, the Pledgee is
      entitled to exercise their rights without obtaining enforceable judgment
      or other instrument (vollstreckbarer Titel) by the way of public auction.

7.3   The Pledgor hereby expressly agrees that five (5) business days' prior
      written notice to the Pledgor of the place and time of any such public
      auction shall be sufficient. The public auction may take place at any
      place in the Federal Republic of Germany designated by the Pledgee.

7.4   If the Pledgee should seek to enforce the Pledges under Clause 7.1 hereof,
      the Pledgor shall, at its own expense, render forthwith all necessary
      assistance in order to facilitate the prompt sale of the Shares or any
      part thereof and/or the exercise by the Pledgee of any other right it may
      have as Pledgee.

7.5   The proceeds of the realisation shall be applied by the Pledgee in
      discharge of the Secured Obligations. The balance, if any, of any of such
      proceeds shall be paid to the Pledgor.

7.6   Following satisfaction of the requirements for enforcement under Clause
      7.1 hereof, all subsequent dividend payments and all payments based on
      similar ancillary rights attributed to the Shares may be applied by the
      Pledgee in satisfaction in whole or in part of the Secured Obligations or
      treated as additional collateral.

7.7   Even if the requirements for enforcement referred to under Clause 7.1
      above are met, the Pledgee shall not, whether as proxy or otherwise, be
      entitled to exercise the voting rights attached to the Shares. However,
      the Pledgor shall, upon occurrence of an event which allows the Pledgee to
      enforce the Pledges, have the obligations and the Pledgee shall have the
      rights set forth in Clauses 8.5 below regardless of which resolutions are
      intended to be adopted.

7.8   The Pledgee may, in its sole discretion, determine which of several
      security interests, if applicable, shall be used to satisfy the Secured
      Obligations.

7.9   The Pledgor hereby expressly waives all defences of revocation (Einrede
      der Anfechtbarkeit) and set-off (Einrede der Aufrechenbarkeit) pursuant to
      Sections 770, 1211 of the German Civil Code. In the case of enforcement,
      Section 1225 of the German Civil Code (legal subrogation of claims to a
      pledgor - Forderungsubergang auf den Verpfander) shall not apply.

8.    UNDERTAKINGS OF THE PLEDGOR

      During the term of this Agreement, the Pledgor undertakes to the Pledgee:

8.1   not to take, or participate in, any action which results or might result
      in the Plegor's loss of ownership of all or part of the Shares, and any
      other transaction which would have the same result as a sale, transfer,
      encumbrance or other disposal of the Shares or which would for any other
      reason be inconsistent with the security interest of the Pledgee or the
      security purpose (as described in Clause 3 hereof) or defeat, impair or
      circumvent the rights of the Pledgee except as permitted by the Pledgee;

8.2   not to encumber, permit to subsist, create or agree to create any other
      security interest or third party right in or over the Shares except as set
      out in this Agreement;

8.3   to promptly effect any payments to be made in respect of the Shares;

8.4   to promptly  notify the Pledgee of any change in the  shareholding in or
      capital of the  Company or any  encumbrance  over the Shares (or part of
      them);

8.5   to promptly inform the Pledgee of all matters concerning the Company of
      which the Pledgor is aware which might adversely affect the security
      interest of the Pledgee. In particular, the Pledgor shall notify the
      Pledgee forthwith of any shareholders' meeting at which a shareholders'
      resolution is intended to be adopted which could have an adverse effect
      upon any of the Pledges. The Pledgor shall allow, following the occurrence
      of any of the circumstances which permit the Pledgee to enforce the
      Pledges constituted hereunder in accordance with Clause 7 hereof, the
      Pledgee or, as the case may be, its proxy or any other person designated
      by the Pledgee, to participate in all such shareholders' meetings of the
      Company as attendants without power to vote. Subject to the provision
      contained in Clause 11.1 hereof, the Pledgee's right to attend the
      shareholders' meeting shall lapse immediately upon complete satisfaction
      and discharge and discharge of the Secured Obligations. In any event, as
      long as the Pledges remain in effect, the Pledgee shall receive, by the
      Pledgor a protocol of any ordinary or extraordinary shareholders' meeting;

8.6   in the event of any increase in the capital of the Company, not to allow,
      without the prior written consent of the Pledgee, any other party to
      subscribe for any Future Shares if such subscription were to result in a
      decrease of the Pledgor's shareholding below the proportion currently held
      by the Pledgor, and not to defeat, impair or circumvent in any way the
      rights of the Pledgee created hereunder;

8.7   to refrain from any acts or omissions, the purpose or effect of which is
      or would be the dilution of the value of the Shares, the Shares ceasing to
      exist or being encumbered;

8.8   to change the Articles of Association of the Company to the effect that
      any transfer of Shares shall only be possible with the consent of the
      shareholders;

8.9   not to amend the articles of association of the Company to the extent that
      such amendment would or would be likely to adversely affect the security
      interest of the Pledgee created hereunder without the prior written
      consent of the Pledgee

8.10  insofar as additional declarations or actions are necessary for the
      creation of the Pledges in favour of the Pledgee, the Pledgor shall at the
      Pledgee's request make such declarations and undertake such actions at the
      Pledgor's costs and expenses.

9.    REPRESENTATIONS AND WARRANTIES

      The Pledgor represents and warrants to the Pledgee by way of an
      independent guarantee (unabhangiges Garantieversprechen) that:

9.1   at  the  date  hereof  the  Company  is  validly  existing  and  neither
      insolvent nor subject to any composition or insolvency proceedings;

9.2   the statements made in Clause 2 above are true and correct;

9.3   it is and will be the sole legal and beneficial owner, free from
      encumbrances (other than the Pledges created hereunder), of all Existing
      Shares and has the corporate power and authority to enter into this
      Agreement;

9.4   this Agreement constitutes its legal valid and binding obligations and the
      Pledges constituted hereunder creates valid pledges which are enforceable
      without enforceable judgment or other instrument (vollstreckbarer Titel);

9.5   all necessary authorisations to enable or entitle the Pledgor to enter
      into this Agreement have been obtained and are in full force and effect
      and will remain in full force and effect at all times during the
      subsistence of the security hereby construed and pursuant to the articles
      of association of the Company, and the Pledges over the Shares is not
      subject to the approval of the Company's shareholders or the Company;

9.6   the Existing Shares are and the Future Shares will be fully paid in and
      there is no nor will there be any obligation for a shareholder to make
      additional contributions;

9.7   the share capital has not been repaid in any way; all facts capable of
      being entered into the commercial register of the Company have been
      entered into the commercial register, and, in particular, no shareholders'
      resolutions regarding changes in the articles of association of the
      Company have been passed which are not entered into the commercial
      register of the Company; and

9.8   there are no silent partnership agreements or similar arrangements by
      which a third party is entitled to a participation in the profits or
      revenue of the Company.

10.   INDEMNITY

10.1  The Pledgee shall not be liable for any loss or damage suffered by the
      Pledgor save in respect of such loss or damage which is suffered as a
      result of the wilful misconduct or gross negligence of the Pledgee.

10.2  The Pledgor will indemnify the Pledgee and keep the Pledgee indemnified
      against any and all damages, losses, actions, claims, expenses, demands
      and liabilities which may be incurred by or made against the Pledgee for
      anything done or omitted in the exercise or purported exercise of the
      powers contained herein and occasioned by any breach of the Pledgor of any
      of its obligations or undertakings herein contained other than to the
      extent that such damages, losses, actions, claims, expenses, demands and
      liabilities are incurred or made against the Pledgee as a result of the
      gross negligence or wilful misconduct of the Pledgee.

11.   DURATION AND INDEPENDENCE

11.1  This Agreement shall remain in full force and effect until complete
      satisfaction of the Secured Obligations. The Pledges shall not cease to
      exist, if the Pledgor under the Convertible Notes has only temporarily
      discharged the Secured Obligations.

11.2  This Agreement shall create a continuing security and no change,
      amendment, or supplement whatsoever in the Convertible Notes or in any
      document or agreement related to any of the Convertible Notes shall affect
      the validity or the scope of this Agreement nor the obligations which are
      imposed on the Pledgor pursuant to it.

11.3  This Agreement is independent from any other security or guarantee which
      may have been or will be given to the Pledgee. None of such other security
      shall prejudice, or shall be prejudiced by, or shall be merged in any way
      with this Agreement.

12.   RELEASE (PFANDFREIGABE)

12.1  Upon complete and irrevocable satisfaction of the Secured Obligations, the
      Pledgee will, as soon as reasonably practical, declare the release of the
      Pledges (Pfandfreigabe) to the Pledgor as a matter of record. For the
      avoidance of doubt, the parties are aware that upon full and complete
      satisfaction of the Secured Obligations the Pledges due to their accessory
      nature (Akzessorietat) cease to exist by operation of German mandatory
      law.

12.2  Notwithstanding anything herein to the contrary, upon written request of
      the Pledgor, the Pledgee agrees to release the Pledges if the Effective
      Collateral exceeds 120% of the outstanding principal amount of the
      Convertible Notes. Such written request shall be accompanied by a
      certificate of an accountant confirming the value of the Distributable
      Collateral which can be distributed in accordance with sections 30 and 31
      of the German Limited Liability Companies Act ("GmbHG") of as of the date
      of the request. After the release of the Pledges pursuant to the prior
      sentence and upon the Pledgee's request, the Pledgor shall be required to
      provide the Pledgee with monthly certificates from a certified accountant
      setting forth the current details of the value of the Distributable
      Collateral. If at any time after the Pledges have been released, the
      outstanding principal amount of the Convertible Notes exceeds the
      Effective Collateral by more than Euros 100,000, the Pledgor agrees to
      enter into a new pledge agreement on the same terms and conditions of this
      Agreement, with all costs and expenses relating to such pledge agreement
      to be borne by the Pledgor.

13.   COSTS AND EXPENSES

      All costs, charges, fees and expenses triggered by this Agreement or
      reasonably incurred in connection with its preparation, execution,
      amendments and enforcement (in each case including fees for legal
      advisers) shall be borne by the Pledgor.

14.   PARTIAL INVALIDITY; WAIVER

14.1  If at any time, any one or more of the provisions hereof is or becomes
      invalid, illegal or unenforceable in any respect under the law of any
      jurisdiction, such provision shall as to such jurisdiction, be ineffective
      to the extent necessary without affecting or impairing the validity,
      legality and enforceability of the remaining provisions hereof or of such
      provisions in any other jurisdiction. The invalid or unenforceable
      provision shall be deemed replaced by such valid, legal or enforceable
      provision which comes as close as possible to the original intent of the
      parties and the invalid, illegal or unenforceable provision.

14.2  No failure to exercise, nor any delay in exercising, on the part of the
      Pledgee, any right or remedy hereunder shall operate as a waiver thereof,
      nor shall any single or partial exercise of any right or remedy prevent
      any further or other exercise thereof or the exercise of any other right
      or remedy. The rights and remedies provided hereunder are cumulative and
      not exclusive of any rights or remedies provided by law.

14.3  In particular, the Pledges shall not be affected and shall in any event
      extend to any and all Shares in the Company even if the number or nominal
      value of the Existing Shares or the aggregate share capital of the Company
      as stated in Clause 2 are inaccurate or deviate from the actual facts.

15.   AMENDMENTS

      Changes and amendments to this Agreement including this subsection shall
      be made in writing, unless notarial form by operation of law is required.
      This also applies to this Clause 15.

16.   NOTICES AND THEIR LANGUAGE

16.1  Any notice or other communication under or in connection with this
      Agreement shall be in writing and shall be delivered personally, or sent
      by post or fax to the following addresses:

      For the Pledgor:                     FIBERCORE, INC.
                                           Address:   253 Worcester Rd.
                                                      P.O. Box 180
                                                      Charlton, MA 01507

                                           Tel.:      (508) 248-3900
                                           Fax:       (508) 248-5588
                                           Attention:  Dr. Mohd A Aslami/
                                                       Michael Beecher

      with a copy (which shall not constitute notice) to:

                                            CADWALADER WICKERSHAM & TAFT
                                            Address   100 Maiden Lane
                                                      New York, NY 10038
                                            Tel:      (212) 504-6222
                                            Fax:      (212) 504-6666
                                            Attention: Malcolm Wattman, Esq.

      For the Pledgee :                    CRESCENT INTERNATIONAL LTD.
                                           Address:   c/o GreenLight
                                                      (Switzerland) S.A.
                                                      84, av Louis-Casai
                                                      1216 Geneva,
                                                      Cointrin, Switzerland

                                           Tel.:      +41 22 791 72 56
                                           Fax:       +41 22 929 53 94
                                           Attention:  Mel Craw/Maxi Brezzi

      with a copy (which shall not constitute notice) to:

                                            CLIFFORD CHANCE ROGERS & WELLS LLP
                                            Address:  200 Park Avenue,
                                                      52nd Floor
                                            New York, NY  10166
                                            Tel:      (212) 878-8000
                                            Fax:      (212) 878-8375
                                            Attention: Sara P. Hanks, Esq./
                                                       Earl S. Zimmerman, Esq

      or to such other address as the recipient may notify or may have notified
      to the other party in writing.

16.2  Save for the notice pursuant to Section 16 of the German Limited Liability
      Companies Act (Gesetz betreffend die Gesellschaften mit beschrankter
      Haftung) any notice or other communication under or in connection with
      this Agreement shall be in the English language or, if in any other
      language, accompanied by a translation into English. In the event of any
      conflict between the English text and the text in any other language, the
      English text shall prevail.

17.   APPLICABLE LAW, JURISDICTION

17.1  This Agreement shall be governed by and construed in accordance with the
      laws of the Federal Republic of Germany.

17.2  The place of jurisdiction for any and all disputes arising under or in
      connection with this agreement shall be the district court (Landgericht)
      in Frankfurt am Main. The Pledgee however, shall also be entitled to take
      action against the Pledgor in any other court of competent jurisdiction.
      Further, the taking of proceedings against the Pledgor in any one or more
      jurisdictions shall not preclude the taking of proceedings in any other
      jurisdiction (whether concurrently or not) if and to the extent permitted
      by applicable law.

The Notary advised the persons appearing

      -  that a pledge is a security instrument of strictly accessory nature
         (which means that it comes into legal existence only if, to the extent
         that, and as long as, the underlying secured claims do in fact exist,
         and that the owners of the secured claims and the pledgees must be
         identical);

      -  that there is no bona fide creation, acquisition nor ranking of a
         pledge of shares (which means that the pledgees are not protected if
         the shares purported to be pledged do not exist, have been previously
         transferred to a third party, or have been previously encumbered for
         the benefit of a third party); and

      -  that the English original version of this Agreement will not be
         acceptable for enforcement but will have to be translated, by a
         certified translator, into German for such purposes.

The Notary is hereby instructed to give notice of this Agreement and the Pledges
of the rights pursuant to Clause 4 (Pledge) and Clause 5 (Scope of the Pledges)
to the Company by means of forwarding to the Company a certified copy of this
Agreement.

The above Agreement was read aloud by the Notary to the persons appearing,
approved by them and signed in their own hand as follows:

<PAGE>

                                  ATTACHMENT A

                                   BOOK VALUE

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