Document:

EXHIBIT 10.05

                          FOREIGN EXCHANGE AND OPTIONS
                                MASTER AGREEMENT
                                     (FEOMA)

MASTER AGREEMENT dated as of April 30, 2000 by and between Morgan Stanley & Co.
Incorporated, a Delaware corporation, and Dean Witter Diversified Futures Fund
III L.P., a Delaware Limited Liability Company.

DEFINITIONS

Unless otherwise required by the context, the following terms shall have the
following meanings in the Agreement:

"Agreement" has the meaning given to it in Section 2.2.

"American Style Option" means an Option which may be exercised on any Business
Day up to and including the Expiration Time.

"Base Currency", as to a Party, means the Currency agreed to as such in relation
to it in Part VII of the Schedule.

"Business Day" means for purposes of: (i) Section 3.2, a day which is a Local
Banking Day for the applicable Designated Office of the Buyer; (ii) Section 5.1
and the definition of American Style Option, a day which is a Local Banking Day
for the applicable Designated Office of the Seller; (iii) clauses (i), (viii)
and (xii) of the definition of Event of Default, a day which is a Local Banking
Day for the Non-Defaulting Party; (iv) solely in relation to delivery of a
Currency, a day which is a Local Banking Day in relation to that Currency; and
(v) any other provision of the Agreement, a day which is a Local Banking Day for
the applicable Designated Offices of both Parties; provided, however, that
neither Saturday nor Sunday shall be considered a Business Day for any purpose.

"Buyer" means the owner of an Option.

"Call" means an Option entitling, but not obligating (except upon exercise), the
Buyer to purchase from the Seller at the Strike Price a specified quantity of
the Call Currency.

"Call Currency" means the Currency agreed to as such at the time an Option is
entered into, as evidenced in a Confirmation.

"Close-Out Amount" has the meaning given to it in Section 8.1.

"Close-Out Date" means a day on which, pursuant to the provisions of Section
8.1, the Non-Defaulting Party closes out Currency Obligations and/or Options or
such close-out occurs automatically.

"Closing Gain", as to the Non-Defaulting Party, means the difference described
as such in relation to a particular Value Date under the provisions of Section
8.1.

"Closing Loss", as to the Non-Defaulting Party, means the difference described
as such in relation to a particular Value Date under the provisions of Section
8.1.

"Confirmation" means a writing (including telex, facsimile or other electronic
means from which it is possible to produce a hard copy) evidencing an FX
Transaction or an Option, and specifying:

(A) in the case of an FX Transaction, the following information:

            (i) the Parties thereto and the Designated Offices through which
they are respectively acting,

            (ii) the amounts of the Currencies being bought or sold and by which
Party,

            (iii) the Value Date, and

            (iv) any other term generally included in such a writing in
accordance with the practice of the relevant foreign exchange market; and

(B) in the case of an Option, the following information:

            (i) the Parties thereto and the Designated Offices through which
they are respectively acting,

            (ii) whether the Option is a Call or a Put,

            (iii) the Call Currency and the Put Currency that are the subject of
the Option and their respective quantities,

            (iv) which Party is the Seller and which is the Buyer, (v) the
Strike Price,

            (vi) the Premium and the Premium Payment Date, (

            vii) the Expiration Date,

            (viii) the Expiration Time,

            (ix) whether the Option is an American Style Option or a European
Style Option, and

            (x) such other matters, if any, as the Parties may agree.

"Credit Support" has the meaning given to it in Section 8.2.

"Credit Support Document", as to a Party (the "first Party"), means a guaranty,
hypothecation agreement, margin or security agreement or document, or any other
document containing an obligation of a third party ("Credit Support Provider")
or of the first Party in favor of the other Party supporting any obligations of
the first Party under the Agreement.

"Credit Support Provider" has the meaning given to it in the definition of
Credit Support Document.

"Currency" means money denominated in the lawful currency of any country or the
Ecu.

"Currency Obligation" means any obligation of a Party to deliver a Currency
pursuant to an FX Transaction, the application of Section 6.3(a) or (b), or an
exercised Option (except, for the purposes of Section 8.1 only, one that is to
be settled at its In-the-Money Amount under Section 5.5).

"Currency Pair" means the two Currencies which potentially may be exchanged in
connection with an FX Transaction or upon the exercise of an Option, one of
which shall be the Put Currency and the other the Call Currency.

"Custodian" has the meaning given to it in the definition of Insolvency
Proceeding.

"Defaulting Party" has the meaning given to it in the definition of Event of
Default.

"Designated Office(s)", as to a Party, means the office or offices specified in
Part II of the Schedule.

"Effective Date" means the date of this Master Agreement.

"European Style Option" means an Option for which Notice of Exercise may be
given only on the Option's Expiration Date up to and including the Expiration
Time, unless otherwise agreed.

"Event of Default" means the occurrence of any of the following with respect to
a Party (the "Defaulting Party", the other Party being the "Non-Defaulting
Party"):

(i) the Defaulting Party shall (A) default in any payment when due under the
Agreement (including, but not limited to, a Premium payment) to the
Non-Defaulting Party with respect to any Currency Obligation or Option and such
failure shall continue for two (2) Business Days after the Non-Defaulting Party
has given the Defaulting Party written notice of non-payment, or (B) fail to
perform or comply with any other obligation assumed by it under the Agreement
and such failure is continuing thirty (30) days after the Non-Defaulting Party
has given the Defaulting Party written notice thereof;

(ii) the Defaulting Party shall commence a voluntary Insolvency Proceeding or
shall take any corporate action to authorize any such Insolvency Proceeding;

(iii) a governmental authority or self-regulatory organization having
jurisdiction over either the Defaulting Party or its assets in the country of
its organization or principal office (A) shall commence an Insolvency Proceeding
with respect to the Defaulting Party or its assets or (B) shall take any action
under any bankruptcy, insolvency or other similar law or any banking, insurance
or similar law or regulation governing the operation of the Defaulting Party
which may prevent the Defaulting Party from performing its obligations under the
Agreement as and when due;

(iv) an involuntary Insolvency Proceeding shall be commenced with respect to the
Defaulting Party or its assets by a person other than a governmental authority
or self-regulatory organization having jurisdiction over either the Defaulting
Party or its assets in the country of its organization or principal office and
such Insolvency Proceeding (A) results in the appointment of a Custodian or a
judgment of insolvency or bankruptcy or the entry of an order for winding-up,
liquidation, reorganization or other similar relief, or (B) is not dismissed
within five (5) days of its institution or presentation;

(v) the Defaulting Party is bankrupt or insolvent, as defined under any
bankruptcy or insolvency law applicable to it;

(vi) the Defaulting Party fails, or shall otherwise be unable, to pay its debts
as they become due;

(vii) the Defaulting Party or any Custodian acting on behalf of the Defaulting
Party shall disaffirm, disclaim or repudiate any Currency Obligation or Option;

(viii) any representation or warranty made or given or deemed made or given by
the Defaulting Party pursuant to the Agreement or any Credit Support Document
shall prove to have been false or misleading in any material respect as at the
time it was made or given or deemed made or given and one (1) Business Day has
elapsed after the Non-Defaulting Party has given the Defaulting Party written
notice thereof;

(ix) the Defaulting Party consolidates or amalgamates with or merges into or
transfers all or substantially all its assets to another entity and (A) the
creditworthiness of the resulting, surviving or transferee entity is materially
weaker than that of the Defaulting Party prior to such action, or (B) at the
time of such consolidation, amalgamation, merger or transfer the resulting,
surviving or transferee entity fails to assume all the obligations of the
Defaulting Party under the Agreement by operation of law or pursuant to an
agreement satisfactory to the Non-Defaulting Party;

(x) by reason of any default, or event of default or other similar condition or
event, any Specified Indebtedness (being Specified Indebtedness of an amount
which, when expressed in the Currency of the Threshold Amount, is in aggregate
equal to or in excess of the Threshold Amount) of the Defaulting Party or any
Credit Support Provider in relation to it: (A) is not paid on the due date
therefor and remains unpaid after any applicable grace period has elapsed, or
(B) becomes, or becomes capable at any time of being declared, due and payable
under agreements or instruments evidencing such Specified Indebtedness before it
would otherwise have been due and payable;

(xi) the Defaulting Party is in breach of or default under any Specified
Transaction and any applicable grace period has elapsed, and there occurs any
liquidation or early termination of, or acceleration of obligations under, that
Specified Transaction or the Defaulting Party (or any Custodian on its behalf)
disaffirms, disclaims or repudiates the whole or any part of a Specified
Transaction;

(xii) (A) any Credit Support Provider of the Defaulting Party or the Defaulting
Party itself fails to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with the applicable Credit
Support Document and such failure is continuing after any applicable grace
period has elapsed; (B) any Credit Support Document relating to the Defaulting
Party expires or ceases to be in full force and effect prior to the satisfaction
of all obligations of the Defaulting Party under the Agreement, unless otherwise
agreed in writing by the Non-Defaulting Party; (C) the Defaulting Party or any
Credit Support Provider of the Defaulting Party (or, in either case, any
Custodian acting on its behalf) disaffirms, disclaims or repudiates, in whole or
in part, or challenges the validity of, any Credit Support Document; (D) any
representation or warranty made or given or deemed made or given by any Credit
Support Provider of the Defaulting Party pursuant to any Credit Support Document
shall prove to have been false or misleading in any material respect as at the
time it was made or given or deemed made or given and one (1) Business Day has
elapsed after the Non-Defaulting Party has given the Defaulting Party written
notice thereof; or (E) any event set out in (ii) to (vii) or (ix) to (xi) above
occurs in respect of any Credit Support Provider of the Defaulting Party; or

(xiii) any other condition or event specified in Part IX of the Schedule or in
Section 11.14 if made applicable to the Agreement in Part XI of the Schedule.

"Exercise Date", in respect of any Option, means the day on which a Notice of
Exercise received by the applicable Designated Office of the Seller becomes
effective pursuant to Section 5.1.

"Expiration Date", in respect of any Option, means the date agreed to as such at
the time the Option is entered into, as evidenced in a Confirmation.

"Expiration Time", in respect of any Option, means the latest time on the
Expiration Date on which the Seller must accept a Notice of Exercise as agreed
to at the time the Option is entered into, as evidenced in a Confirmation.

"FX Transaction" means any transaction between the Parties for the purchase by
one Party of an agreed amount in one Currency against the sale by it to the
other of an agreed amount in another Currency, both such amounts either being
deliverable on the same Value Date or, if the Parties have so agreed in Part VI
of the Schedule, being cash-settled in a single Currency, which is or shall
become subject to the Agreement and in respect of which transaction the Parties
have agreed (whether orally, electronically or in writing): the Currencies
involved, the amounts of such Currencies to be purchased and sold, which Party
will purchase which Currency and the Value Date.

"In-the-Money Amount" means (i) in the case of a Call, the excess of the Spot
Price over the Strike Price, multiplied by the aggregate amount of the Call
Currency to be purchased under the Call, where both prices are quoted in terms
of the amount of the Put Currency to be paid for one unit of the Call Currency;
and (ii) in the case of a Put, the excess of the Strike Price over the Spot
Price, multiplied by the aggregate amount of the Put Currency to be sold under
the Put, where both prices are quoted in terms of the amount of the Call
Currency to be paid for one unit of the Put Currency.

"Insolvency Proceeding" means a case or proceeding seeking a judgment of or
arrangement for insolvency, bankruptcy, composition, rehabilitation,
reorganization, administration, winding-up, liquidation or other similar relief
with respect to the Defaulting Party or its debts or assets, or seeking the
appointment of a trustee, receiver, liquidator, conservator, administrator,
custodian or other similar official (each, a "Custodian") of the Defaulting
Party or any substantial part of its assets, under any bankruptcy, insolvency or
other similar law or any banking, insurance or similar law governing the
operation of the Defaulting Party.

"LIBOR", with respect to any Currency and date, means the average rate at which
deposits in the Currency for the relevant amount and time period are offered by
major banks in the London interbank market as of 11:00 a.m. (London time) on
such date, or, if major banks do not offer deposits in such Currency in the
London interbank market on such date, the average rate at which deposits in the
Currency for the relevant amount and time period are offered by major banks in
the relevant foreign exchange market at such time on such date as may be
determined by the Party making the determination.

"Local Banking Day" means (i) for any Currency, a day on which commercial banks
effect deliveries of that Currency in accordance with the market practice of the
relevant foreign exchange market, and (ii) for any Party, a day in the location
of the applicable Designated Office of such Party on which commercial banks in
that location are not authorized or required by law to close.

"Master Agreement" means the terms and conditions set forth in this Master
Agreement, including the Schedule.

"Matched Pair Novation Netting Office(s)", in respect of a Party, means the
Designated Office(s) specified in Part V of the Schedule.

"Non-Defaulting Party" has the meaning given to it in the definition of Event of
Default.

"Notice of Exercise" means telex, telephonic or other electronic notification
(excluding facsimile transmission) providing assurance of receipt, given by the
Buyer prior to or at the Expiration Time, of the exercise of an Option, which
notification shall be irrevocable.

"Novation Netting Office(s)", in respect of a Party, means the Designated
Office(s) specified in Part V of the Schedule.

"Option" means a currency option which is or shall become subject to the
Agreement.

"Parties" means the parties to the Agreement, including their successors and
permitted assigns (but without prejudice to the application of clause (ix) of
the definition of Event of Default); and the term "Party" shall mean whichever
of the Parties is appropriate in the context in which such expression may be
used.

"Premium", in respect of any Option, means the purchase price of the Option as
agreed upon by the Parties, and payable by the Buyer to the Seller thereof.

"Premium Payment Date", in respect of any Option, means the date on which the
Premium is due and payable, as agreed to at the time the Option is entered into,
as evidenced in a Confirmation.

"Proceedings" means any suit, action or other proceedings relating to the
Agreement, any FX Transaction or any Option.

"Put" means an Option entitling, but not obligating (except upon exercise), the
Buyer to sell to the Seller at the Strike Price a specified quantity of the Put
Currency.

"Put Currency" means the Currency agreed to as such at the time an Option is
entered into, as evidenced in a Confirmation.

"Schedule" means the Schedule attached to and part of this Master Agreement, as
it may be amended from time to time by agreement of the Parties.

"Seller" means the Party granting an Option.

"Settlement Date" means, in respect of: (i) an American Style Option, the Spot
Date of the Currency Pair on the Exercise Date of such Option, and (ii) a
European Style Option, the Spot Date of the Currency Pair on the Expiration Date
of such Option; and, where market practice in the relevant foreign exchange
market in relation to the two Currencies involved provides for delivery of one
Currency on one date which is a Local Banking Day in relation to that Currency
but not to the other Currency and for delivery of the other Currency on the next
Local Banking Day in relation to that other Currency, "Settlement Date" means
such two (2) Local Banking Days.

"Settlement Netting Office(s)", in respect of a Party, means the Designated
Office(s) specified in Part V of the Schedule.

"Specified Indebtedness" means any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) in respect of
borrowed money, other than in respect of deposits received.

"Specified Transaction" means any transaction (including an agreement with
respect thereto) between one Party to the Agreement (or any Credit Support
Provider of such Party) and the other Party to the Agreement (or any Credit
Support Provider of such Party) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
linked swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions) or any combination of any of the
foregoing.

"Spot Date" means the spot delivery day for the relevant Currency Pair as
generally used by the relevant foreign exchange market.

"Spot Price" means the rate of exchange at the time at which such price is to be
determined for foreign exchange transactions in the relevant Currency Pair for
value on the Spot Date, as determined in good faith: (i) by the Seller, for
purposes of Section 5, and (ii) by the Non-Defaulting Party, for purposes of
Section 8.

"Strike Price", in respect of any Option, means the price at which the Currency
Pair may be exchanged, as agreed to at the time the Option is entered into, as
evidenced in a Confirmation.

"Threshold Amount" means the amount specified as such for each Party in Part
VIII of the Schedule.

"Value Date" means, with respect to any FX Transaction, the Business Day (or
where market practice in the relevant foreign exchange market in relation to the
two Currencies involved provides for delivery of one Currency on one date which
is a Local Banking Day in relation to that Currency but not to the other
Currency and for delivery of the other Currency on the next Local Banking Day in
relation to that other Currency ("Split Settlement") the two (2) Local Banking
Days in accordance with that market practice) agreed by the Parties for delivery
of the Currencies to be purchased and sold pursuant to such FX Transaction, and,
with respect to any Currency Obligation, the Business Day (or, in the case of
Split Settlement, Local Banking Day) upon which the obligation to deliver
Currency pursuant to such Currency Obligation is to be performed.

FX TRANSACTIONS AND OPTIONS

Scope of the Agreement. The Parties (through their respective Designated
Offices) may enter into (i) FX Transactions, for such quantities of such
Currencies, as may be agreed subject to the terms of the Agreement, and (ii)
Options, for such Premiums, with such Expiration Dates, at such Strike Prices
and for the purchase or sale of such quantities of such Currencies, as may be
agreed subject to the terms of the Agreement; provided that neither Party shall
be required to enter into any FX Transaction or Option with the other Party
(other than in connection with an exercised Option). Unless otherwise agreed in
writing by the Parties, each FX Transaction and Option entered into between
Designated Offices of the Parties on or after the Effective Date shall be
governed by the Agreement. Each FX Transaction and Option between any two
Designated Offices of the Parties outstanding on the Effective Date which is
identified in Part I of the Schedule shall also be governed by the Agreement.

Single Agreement. This Master Agreement, the terms agreed between the Parties
with respect to each FX Transaction and Option (and, to the extent recorded in a
Confirmation, each such Confirmation), and all amendments to any of such items
shall together form the agreement between the Parties (the "Agreement") and
shall together constitute a single agreement between the Parties. The Parties
acknowledge that all FX Transactions and Options are entered into in reliance
upon such fact, it being understood that the Parties would not otherwise enter
into any FX Transaction or Option.

Confirmations. FX Transactions and Options shall be promptly confirmed by the
Parties by Confirmations exchanged by mail, telex, facsimile or other electronic
means from which it is possible to produce a hard copy. The failure by a Party
to issue a Confirmation shall not prejudice or invalidate the terms of any FX
Transaction or Option.

Inconsistencies. In the event of any inconsistency between the provisions of the
Schedule and the other provisions of the Agreement, the Schedule will prevail.
In the event of any inconsistency between the terms of a Confirmation and the
other provisions of the Agreement, (i) in the case of an FX Transaction, the
other provisions of the Agreement shall prevail, and the Confirmation shall not
modify the other terms of the Agreement and (ii) in the case of an Option, the
terms of the Confirmation shall prevail, and the other terms of the Agreement
shall be deemed modified with respect to such Option, except for the manner of
confirmation under Section 2.3 and, if applicable, discharge of Options under
Section 4.

OPTION PREMIUM

Payment of Premium. Unless otherwise agreed in writing by the Parties, the Buyer
shall be obligated to pay the Premium related to an Option no later than its
Premium Payment Date.

Late Payment or Non-Payment of Premium. If any Premium is not received on or
before the Premium Payment Date, the Seller may elect: (i) to accept a late
payment of such Premium; (ii) to give written notice of such non-payment and, if
such payment shall not be received within two (2) Business Days of such notice,
treat the related Option as void; or (iii) to give written notice of such
non-payment and, if such payment shall not be received within two (2) Business
Days of such notice, treat such non-payment as an Event of Default under clause
(i) of the definition of Event of Default. If the Seller elects to act under
either clause (i) or (ii) of the preceding sentence, the Buyer shall pay all
out-of-pocket costs and actual damages incurred in connection with such unpaid
or late Premium or void Option, including, without limitation, interest on such
Premium from and including the Premium Payment Date to but excluding the late
payment date in the same Currency as such Premium at overnight LIBOR and any
other losses, costs or expenses incurred by the Seller in connection with such
terminated Option, for the loss of its bargain, its cost of funding, or the loss
incurred as a result of terminating, liquidating, obtaining or re-establishing a
delta hedge or related trading position with respect to such Option.

DISCHARGE AND TERMINATION OF OPTIONS; NETTING OF OPTION PREMIUMS

Discharge and Termination. If agreed in Part V of the Schedule, any Call or any
Put written by a Party will automatically be discharged and terminated, in whole
or in part, as applicable, against a Call or a Put, respectively, written by the
other Party, such discharge and termination to occur automatically upon the
payment in full of the last Premium payable in respect of such Options; provided
that such discharge and termination may only occur in respect of Options:

each being with respect to the same Put Currency and the same Call Currency;

each having the same Expiration Date and Expiration Time;

each being of the same style, i.e. either both being American Style Options or
both being European Style Options;

each having the same Strike Price;

each being transacted by the same pair of Designated Offices of Buyer and
Seller; and

neither of which shall have been exercised by delivery of a Notice of Exercise;

and, upon the occurrence of such discharge and termination, neither Party shall
have any further obligation to the other Party in respect of the relevant
Options or, as the case may be, parts thereof so discharged and terminated. Such
discharge and termination shall be effective notwithstanding that either Party
may fail to record such discharge and termination in its books. In the case of a
partial discharge and termination (i.e., where the relevant Options are for
different amounts of the Currency Pair), the remaining portion of the Option
which is partially discharged and terminated shall continue to be an Option for
all purposes of the Agreement, including this Section 4.1.

Netting of Option Premiums. If agreed in Part V of the Schedule and if, on any
date, Premiums would otherwise be payable under the Agreement in the same
Currency between the same respective Designated Offices of the Parties, then, on
such date, each Party's obligation to make payment of any such Premium will be
automatically satisfied and discharged and, if the aggregate Premium(s) that
would otherwise have been payable by such Designated Office of one Party exceeds
the aggregate Premium(s) that would otherwise have been payable by such
Designated Office of the other Party, replaced by an obligation upon the Party
by whom the larger aggregate Premium(s) would have been payable to pay the other
Party the excess of the larger aggregate Premium(s) over the smaller aggregate
Premium(s) and, if the aggregate Premiums are equal, no payment shall be made.

EXERCISE AND SETTLEMENT OF OPTIONS

Exercise of Options. The Buyer may exercise an Option by delivery to the Seller
of a Notice of Exercise. Subject to Section 5.3, if a Notice of Exercise with
respect to an Option has not been received by the Seller prior to or at the
Expiration Time, the Option shall expire and become void and of no effect. Any
Notice of Exercise shall (unless otherwise agreed):

in respect of an American Style Option, (A) if received at or prior to 3:00 p.m.
on a Business Day, be effective upon receipt thereof by the Seller, and (B) if
received after 3:00 p.m. on a Business Day, be effective only as of the opening
of business of the Seller on the first Business Day subsequent to its receipt;
and

in respect of a European Style Option, if received on or, if the parties have so
agreed, before the Expiration Date, prior to or at the Expiration Time, be
effective upon receipt thereof by the Seller.

No Partial Exercise. Unless otherwise agreed by the Parties, an Option may be
exercised only in whole.

Automatic Exercise. Unless otherwise agreed in Part VI of the Schedule or unless
the Seller is otherwise instructed by the Buyer, if an Option has an
In-the-Money Amount at its Expiration Time that equals or exceeds the product of
(x) 1% of the Strike Price (or such other percentage or amount as may have been
agreed by the Parties) and (y) the amount of the Call Currency or Put Currency,
as appropriate, then the Option shall be deemed automatically exercised. In such
case, the Seller may elect to settle such Option either in accordance with
Section 5.4 or by payment to the Buyer on the Settlement Date for such Option of
the In-the-Money Amount, as determined at the Expiration Time or as soon
thereafter as practicable. In the latter case, the sole obligations of the
Parties with respect to settlement of such Option shall be to deliver or receive
the In-the-Money Amount of such Option on the Settlement Date. The Seller shall
notify the Buyer of its election of the method of settlement of an automatically
exercised Option as soon as practicable after the Expiration Time.

Settlement of Exercised Options. An exercised Option shall settle on its
Settlement Date. Subject to Section 5.3 and 5.5, on the Settlement Date, the
Buyer shall pay the Put Currency to the Seller for value on the Settlement Date
and the Seller shall pay the Call Currency to the Buyer for value on the
Settlement Date. An exercised Option shall be treated as an FX Transaction and a
Currency Obligation (except, for the purposes of Section 8.1 only, if it is to
be settled at its In-the-Money Amount), and for this purpose the relevant
Settlement Date shall be treated as the Value Date of the FX Transaction.

Settlement at In-the-Money Amount. An Option shall be settled at its
In-the-Money Amount if so agreed by the Parties at the time such Option is
entered into. In such case, the In-the-Money Amount shall be determined based
upon the Spot Price at the time of exercise or as soon thereafter as
practicable. The sole obligations of the Parties with respect to settlement of
such Option shall be to deliver or receive the In-the-Money Amount of such
Option on the Settlement Date.

SETTLEMENT AND NETTING OF FX TRANSACTIONS

Settlement of FX Transactions. Subject to Sections 6.2 and 6.3, each Party shall
deliver to the other Party the amount of the Currency to be delivered by it
under each Currency Obligation on the Value Date for such Currency Obligation.

Settlement Netting. If, on any date, more than one delivery of a particular
Currency under Currency Obligations is to be made between a pair of Settlement
Netting Offices, then each Party shall aggregate the amounts of such Currency
deliverable by it and only the difference between these aggregate amounts shall
be delivered by the Party owing the larger aggregate amount to the other Party,
and, if the aggregate amounts are equal, no delivery of the Currency shall be
made.

Novation Netting. (e) By Currency. If the Parties enter into an FX Transaction
through a pair of Novation Netting Offices giving rise to a Currency Obligation
for the same Value Date and in the same Currency as a then existing Currency
Obligation between the same pair of Novation Netting Offices, then immediately
upon entering into such FX Transaction, each such Currency Obligation shall
automatically and without further action be individually canceled and
simultaneously replaced by a new Currency Obligation for such Value Date
determined as follows: the amounts of such Currency that would otherwise have
been deliverable by each Party on such Value Date shall be aggregated and the
Party with the larger aggregate amount shall have a new Currency Obligation to
deliver to the other Party the amount of such Currency by which its aggregate
amount exceeds the other Party's aggregate amount, provided that if the
aggregate amounts are equal, no new Currency Obligation shall arise. This
Section 6.3 shall not affect any other Currency Obligation of a Party to deliver
any different Currency on the same Value Date.

By Matched Pair. If the Parties enter into an FX Transaction between a pair of
Matched Pair Novation Netting Offices then the provisions of Section 6.3(a)
shall apply only in respect of Currency Obligations arising by virtue of FX
Transactions entered into between such pair of Matched Pair Novation Netting
Offices and involving the same pair of Currencies and the same Value Date.

General. (f) Inapplicability of Sections 6.2 and 6.3. The provisions of Sections
6.2 and 6.3 shall not apply if a Close-Out Date has occurred or a voluntary or
involuntary Insolvency Proceeding or action of the kind described in clause
(ii), (iii) or (iv) of the definition of Event of Default has occurred without
being dismissed in relation to either Party.

Failure to Record. The provisions of Section 6.3 shall apply notwithstanding
that either Party may fail to record the new Currency Obligation in its books.

Cut-off Date and Time. The provisions of Section 6.3 are subject to any cut-off
date and cut-off time agreed between the applicable Novation Netting Offices and
Matched Pair Novation Netting Offices of the Parties.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Representations and Warranties. Each Party represents and warrants to the other
Party as of the Effective Date and as of the date of each FX Transaction and
each Option that: (i) it has authority to enter into the Agreement (including
such FX Transaction or Option, as the case may be); (ii) the persons entering
into the Agreement (including such FX Transaction or Option, as the case may be)
on its behalf have been duly authorized to do so; (iii) the Agreement (including
such FX Transaction or Option, as the case may be) is binding upon it and
enforceable against it in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and applicable principles of equity) and does not
and will not violate the terms of any agreements to which such Party is bound;
(iv) no Event of Default, or event which, with notice or lapse of time or both,
would constitute an Event of Default, has occurred and is continuing with
respect to it; (v) it acts as principal in entering into each FX Transaction and
Option and exercising each and every Option; and (vi) if the Parties have so
specified in Part XV of the Schedule, it makes the representations and
warranties set forth in such Part XV.

Covenants. Each Party covenants to the other Party that: (i) it will at all
times obtain and comply with the terms of and do all that is necessary to
maintain in full force and effect all authorizations, approvals, licenses and
consents required to enable it lawfully to perform its obligations under the
Agreement; (ii) it will promptly notify the other Party of the occurrence of any
Event of Default with respect to itself or any Credit Support Provider in
relation to it; and (iii) if the Parties have set forth additional covenants in
Part XVI of the Schedule, it makes the covenants set forth in such Part XVI.

CLOSE-OUT AND LIQUIDATION

Manner of Close-Out and Liquidation. (G) Close-Out. If an Event of Default has
occurred and is continuing, then the Non-Defaulting Party shall have the right
to close out all, but not less than all, outstanding Currency Obligations
(including any Currency Obligation which has not been performed and in respect
of which the Value Date is on or precedes the Close-Out Date) and Options,
except to the extent that in the good faith opinion of the Non-Defaulting Party
certain of such Currency Obligations or Options may not be closed out under
applicable law. Such close-out shall be effective upon receipt by the Defaulting
Party of notice that the Non-Defaulting Party is terminating such Currency
Obligations and Options. Notwithstanding the foregoing, unless otherwise agreed
by the Parties in Part X of the Schedule, in the case of an Event of Default in
clause (ii), (iii) or (iv) of the definition thereof with respect to a Party
and, if agreed by the Parties in Part IX of the Schedule, in the case of any
other Event of Default specified and so agreed in Part IX with respect to a
Party, close-out shall be automatic as to all outstanding Currency Obligations
and Options, as of the time immediately preceding the institution of the
relevant Insolvency Proceeding or action. The Non-Defaulting Party shall have
the right to liquidate such closed-out Currency Obligations and Options as
provided below.

Liquidation of Currency Obligations. Liquidation of Currency Obligations
terminated by close-out shall be effected as follows:

Calculating Closing Gain or Loss. The Non-Defaulting Party shall calculate in
good faith, with respect to each such terminated Currency Obligation, except to
the extent that in the good faith opinion of the Non-Defaulting Party certain of
such Currency Obligations may not be liquidated as provided herein under
applicable law, as of the Close-Out Date or as soon thereafter as reasonably
practicable, the Closing Gain, or, as appropriate, the Closing Loss, as follows:

for each Currency Obligation calculate a "Close-Out Amount" as follows

in the case of a Currency Obligation whose Value Date is the same as or is later
than the Close-Out Date, the amount of such Currency Obligation; or

in the case of a Currency Obligation whose Value Date precedes the Close-Out
Date, the amount of such Currency Obligation increased, to the extent permitted
by applicable law, by adding interest thereto from and including the Value Date
to but excluding the Close-Out Date at overnight LIBOR; and

for each such amount in a Currency other than the Non-Defaulting Party's Base
Currency, convert such amount into the Non-Defaulting Party's Base Currency at
the rate of exchange at which, at the time of the calculation, the
Non-Defaulting Party can buy such Base Currency with or against the Currency of
the relevant Currency Obligation for delivery (x) if the Value Date of such
Currency Obligation is on or after the Spot Date as of such time of calculation
for the Base Currency, on the Value Date of that Currency Obligation or (y) if
such Value Date precedes such Spot Date, for delivery on such Spot Date (or, in
either case, if such rate of exchange is not available, conversion shall be
accomplished by the Non-Defaulting Party using any commercially reasonable
method); and

determine in relation to each Value Date: (1) the sum of all Close-Out Amounts
relating to Currency Obligations under which the Non-Defaulting Party would
otherwise have been entitled to receive the relevant amount on that Value Date;
and (2) the sum of all Close-Out Amounts relating to Currency Obligations under
which the Non-Defaulting Party would otherwise have been obliged to deliver the
relevant amount to the Defaulting Party on that Value Date; and

if the sum determined under (B)(1) is greater than the sum determined under
(B)(2), the difference shall be the Closing Gain for such Value Date; if the sum
determined under (B)(1) is less than the sum determined under (B)(2), the
difference shall be the Closing Loss for such Value Date.

Determining Present Value. To the extent permitted by applicable law, the
Non-Defaulting Party shall adjust the Closing Gain or Closing Loss for each
Value Date falling after the Close-Out Date to present value by discounting the
Closing Gain or Closing Loss from and including the Value Date to but excluding
the Close-Out Date, at LIBOR with respect to the Non-Defaulting Party's Base
Currency as at the Close-Out Date or at such other rate as may be prescribed by
applicable law.

Netting. The Non-Defaulting Party shall aggregate the following amounts so that
all such amounts are netted into a single liquidated amount payable to or by the
Non-Defaulting Party: (x) the sum of the Closing Gains for all Value Dates
(discounted to present value, where appropriate, in accordance with the
provisions of Section 8.1(b)(ii)) (which for the purposes of the aggregation
shall be a positive figure); and (y) the sum of the Closing Losses for all Value
Dates (discounted to present value, where appropriate, in accordance with the
provisions of Section 8.1(b)(ii)) (which for the purposes of the aggregation
shall be a negative figure).

Liquidation of Options. To liquidate unexercised Options and exercised Options
to be settled at their In-the-Money Amounts that have been terminated by
close-out, the Non-Defaulting Party shall:

Calculating Settlement Amount. Calculate in good faith with respect to each such
terminated Option, except to the extent that in the good faith opinion of the
Non-Defaulting Party certain of such Options may not be liquidated as provided
herein under applicable law, as of the Close-Out Date or as soon as reasonably
practicable thereafter a settlement amount for each Party equal to the aggregate
of:

with respect to each Option purchased by such Party, and which the other Party
has not elected to treat as void pursuant to Section 3.2(ii) for lack of payment
of the Premium, the current market premium for such Option;

with respect to each Option sold by such Party and which such Party has not
elected to treat as void pursuant to Section 3.2(ii) for lack of payment of the
Premium, any unpaid Premium, provided that, if the Close-Out Date occurs before
the Premium Payment Date, such amount shall be discounted from and including the
Premium Payment Date to but excluding the Close-Out Date at a rate equal to
LIBOR on the Close-Out Date and, if the Close-Out Date occurs after the Premium
Payment Date, to the extent permitted by applicable law, the settlement amount
shall include interest on any unpaid Premium from and including the Premium
Payment Date to but excluding the Close-Out Date in the same Currency as such
Premium at overnight LIBOR;

with respect to any exercised Option to be settled at its In-the-Money Amount
(whether or not the Close-Out Date occurs before the Settlement Date for such
Option), any unpaid amount due to such Party in settlement of such Option and,
if the Close-Out Date occurs after the Settlement Date for such Option, to the
extent permitted by applicable law, interest thereon from and including the
applicable Settlement Date to but excluding the Close-Out Date at overnight
LIBOR; and

without duplication, the amount that the Non-Defaulting Party reasonably
determines in good faith, as of the Close-Out Date or as of the earliest date
thereafter that is reasonably practicable, to be its additional losses, costs
and expenses in connection with such terminated Option, for the loss of its
bargain, its cost of funding, or the loss incurred as a result of terminating,
liquidating, obtaining or re-establishing a delta hedge or related trading
position with respect to such Option;

Converting to Base Currency. Convert any settlement amount calculated in
accordance with clause (i) above in a Currency other than the Non-Defaulting
Party's Base Currency into such Base Currency at the Spot Price at which, at the
time of the calculation, the Non-Defaulting Party could enter into a contract in
the foreign exchange market to buy the Non-Defaulting Party's Base Currency in
exchange for such Currency (or, if such Spot Price is not available, conversion
shall be accomplished by the Non-Defaulting Party using any commercially
reasonable method); and

Netting. Net such settlement amounts with respect to each Party so that all such
amounts are netted to a single liquidated amount payable by one Party to the
other Party.

Final Netting. The Non-Defaulting Party shall net (or, if both are payable by
one Party, add) the liquidated amounts payable under Sections 8.1(b) and 8.1(c)
with respect to each Party so that such amounts are netted (or added) to a
single liquidated amount payable by one Party to the other Party as a settlement
payment.

Set-Off Against Credit Support. Where close-out and liquidation occurs in
accordance with Section 8.1, the Non-Defaulting Party shall also be entitled (i)
to set off the net payment calculated in accordance with Section 8.1(d) which
the Non-Defaulting Party owes to the Defaulting Party, if any, against any
credit support or other collateral ("Credit Support") held by the Defaulting
Party pursuant to a Credit Support Document or otherwise (including the
liquidated value of any non-cash Credit Support) in respect of the
Non-Defaulting Party's obligations under the Agreement or (ii) to set off the
net payment calculated in accordance with Section 8.1(d) which the Defaulting
Party owes to the Non-Defaulting Party, if any, against any Credit Support held
by the Non-Defaulting Party (including the liquidated value of any non-cash
Credit Support) in respect of the Defaulting Party's obligations under the
Agreement; provided that, for purposes of either such set-off, any Credit
Support denominated in a Currency other than the Non-Defaulting Party's Base
Currency shall be converted into such Base Currency at the rate specified in
Section 8.1(c)(ii).

Other Foreign Exchange Transactions and Currency Options. Where close-out and
liquidation occurs in accordance with Section 8.1, the Non-Defaulting Party
shall also be entitled to close-out and liquidate, to the extent permitted by
applicable law, any other foreign exchange transaction or currency option
entered into between the Parties which is then outstanding in accordance with
the provisions of Section 8.1, with each obligation of a Party to deliver a
Currency under such a foreign exchange transaction being treated as if it were a
Currency Obligation (including exercised options, provided that cash-settled
options shall be treated analogously to Options to be settled at their
In-the-Money Amount) and each unexercised option being treated as if it were an
Option under the Agreement.

Payment and Late Interest. The net amount payable by one Party to the other
Party pursuant to the provisions of Sections 8.1 and 8.3 above shall be paid by
the close of business on the Business Day following the receipt by the
Defaulting Party of notice of the Non-Defaulting Party's settlement calculation,
with interest at overnight LIBOR from and including the Close-Out Date to but
excluding such Business Day (and converted as required by applicable law into
any other Currency, any costs of conversion to be borne by, and deducted from
any payment to, the Defaulting Party). To the extent permitted by applicable
law, any amounts owed but not paid when due under this Section 8 shall bear
interest at overnight LIBOR (or, if conversion is required by applicable law
into some other Currency, either overnight LIBOR with respect to such other
Currency or such other rate as may be prescribed by such applicable law) for
each day for which such amount remains unpaid. Any addition of interest or
discounting required under this Section 8 shall be calculated on the basis of a
year of such number of days as is customary for transactions involving the
relevant Currency in the relevant foreign exchange market.

Suspension of Obligations. Without prejudice to the foregoing, so long as a
Party shall be in default in payment or performance to the other Party under the
Agreement and the other Party has not exercised its rights under this Section 8,
or, if "Adequate Assurances" is specified as applying to the Agreement in Part
XI of the Schedule, during the pendency of a reasonable request to a Party for
adequate assurances of its ability to perform its obligations under the
Agreement, the other Party may, at its election and without penalty, suspend its
obligation to perform under the Agreement.

Expenses. The Defaulting Party shall reimburse the Non-Defaulting Party in
respect of all out-of-pocket expenses incurred by the Non-Defaulting Party
(including fees and disbursements of counsel, including attorneys who may be
employees of the Non-Defaulting Party) in connection with any reasonable
collection or other enforcement proceedings related to the payments required
under the Agreement.

Reasonable Pre-Estimate. The Parties agree that the amounts recoverable under
this Section 8 are a reasonable pre-estimate of loss and not a penalty. Such
amounts are payable for the loss of bargain and the loss of protection against
future risks and, except as otherwise provided in the Agreement, neither Party
will be entitled to recover any additional damages as a consequence of such
losses.

No Limitation of Other Rights; Set-Off. The Non-Defaulting Party's rights under
this Section 8 shall be in addition to, and not in limitation or exclusion of,
any other rights which the Non-Defaulting Party may have (whether by agreement,
operation of law or otherwise), and, to the extent not prohibited by law, the
Non-Defaulting Party shall have a general right of set-off with respect to all
amounts owed by each Party to the other Party, whether due and payable or not
due and payable (provided that any amount not due and payable at the time of
such set-off shall, if appropriate, be discounted to present value in a
commercially reasonable manner by the Non-Defaulting Party). The Non-Defaulting
Party's rights under this Section 8.8 are subject to Section 8.7.

FORCE MAJEURE, ACT OF STATE, ILLEGALITY AND IMPOSSIBILITY

Force Majeure, Act of State, Illegality and Impossibility. If either Party is
prevented from or hindered or delayed by reason of force majeure or act of state
in the delivery or receipt of any Currency in respect of a Currency Obligation
or Option or if it becomes or, in the good faith judgment of one of the Parties,
may become unlawful or impossible for either Party to make or receive any
payment in respect of a Currency Obligation or Option, then the Party for whom
such performance has been prevented, hindered or delayed or has become illegal
or impossible shall promptly give notice thereof to the other Party and either
Party may, by notice to the other Party, require the close-out and liquidation
of each affected Currency Obligation and Option in accordance with the
provisions of Section 8.1 and, for such purposes, the Party unaffected by such
force majeure, act of state, illegality or impossibility (or, if both Parties
are so affected, whichever Party gave the relevant notice) shall perform the
calculation required under Section 8.1 as if it were the Non-Defaulting Party.
Nothing in this Section 9.1 shall be taken as indicating that the Party treated
as the Defaulting Party for the purpose of calculations required by Section 8.1
has committed any breach or default.

Transfer to Avoid Force Majeure, Act of State, Illegality or Impossibility. If
Section 9.1 becomes applicable, unless prohibited by law, the Party which has
been prevented, hindered or delayed from performing shall, as a condition to its
right to designate a close-out and liquidation of any affected Currency
Obligation or Option, use all reasonable efforts (which will not require such
Party to incur a loss, excluding immaterial, incidental expenses) to transfer as
soon as practicable, and in any event before the earlier to occur of the
expiration date of the affected Options or twenty (20) days after it gives
notice under Section 9.1, all its rights and obligations under the Agreement in
respect of the affected Currency Obligations and Options to another of its
Designated Offices so that such force majeure, act of state, illegality or
impossibility ceases to exist. Any such transfer will be subject to the prior
written consent of the other Party, which consent will not be withheld if such
other Party's policies in effect at such time would permit it to enter into
transactions with the transferee Designated Office on the terms proposed, unless
such transfer would cause the other Party to incur a material tax or other cost.

PARTIES TO RELY ON THEIR OWN EXPERTISE

Each Party will be deemed to represent to the other Party on the date on which
it enters into an FX Transaction or Option that (absent a written agreement
between the Parties that expressly imposes affirmative obligations to the
contrary for that FX Transaction or Option): (i)(A) it is acting for its own
account, and it has made its own independent decisions to enter into that FX
Transaction or Option and as to whether that FX Transaction or Option is
appropriate or proper for it based upon its own judgment and upon advice from
such advisors as it has deemed necessary; (B) it is not relying on any
communication (written or oral) of the other Party as investment advice or as a
recommendation to enter into that FX Transaction or Option, it being understood
that information and explanations related to the terms and conditions of an FX
Transaction or Option shall not be considered investment advice or a
recommendation to enter into that FX Transaction or Option; and (C) it has not
received from the other Party any assurance or guarantee as to the expected
results of that FX Transaction or Option; (ii) it is capable of evaluating and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that FX
Transaction or Option; and (iii) the other Party is not acting as a fiduciary or
an advisor for it in respect of that FX Transaction or Option.

MISCELLANEOUS

Currency Indemnity. The receipt or recovery by either Party (the "first Party")
of any amount in respect of an obligation of the other Party (the "second
Party") in a Currency other than that in which such amount was due, whether
pursuant to a judgment of any court or pursuant to Section 8 or 9, shall
discharge such obligation only to the extent that, on the first day on which the
first Party is open for business immediately following such receipt or recovery,
the first Party shall be able, in accordance with normal banking practice, to
purchase the Currency in which such amount was due with the Currency received or
recovered. If the amount so purchasable shall be less than the original amount
of the Currency in which such amount was due, the second Party shall, as a
separate obligation and notwithstanding any judgment of any court, indemnify the
first Party against any loss sustained by it. The second Party shall in any
event indemnify the first Party against any costs incurred by it in making any
such purchase of Currency.

Assignment. Neither Party may assign, transfer or charge or purport to assign,
transfer or charge its rights or obligations under the Agreement to a third
party without the prior written consent of the other Party and any purported
assignment, transfer or charge in violation of this Section 11.2 shall be void.

Telephonic Recording. The Parties agree that each may electronically record all
telephonic conversations between them and that any such recordings may be
submitted in evidence to any court or in any Proceedings for the purpose of
establishing any matters pertinent to the Agreement.

Notices. Unless otherwise agreed, all notices, instructions and other
communications to be given to a Party under the Agreement shall be given to the
address, telex (if confirmed by the appropriate answerback), facsimile
(confirmed if requested) or telephone number and to the individual or department
specified by such Party in Part III of the Schedule. Unless otherwise specified,
any notice, instruction or other communication given in accordance with this
Section 11.4 shall be effective upon receipt.

Termination. Each of the Parties may terminate the Agreement at any time by
seven (7) days' prior written notice to the other Party delivered as prescribed
in Section 11.4, and termination shall be effective at the end of such seventh
day; provided, however, that any such termination shall not affect any
outstanding Currency Obligations or Options, and the provisions of the Agreement
shall continue to apply until all the obligations of each Party to the other
under the Agreement have been fully performed.

Severability. In the event any one or more of the provisions contained in the
Agreement should be held invalid, illegal or unenforceable in any respect under
the law of any jurisdiction, the validity, legality and enforceability of the
remaining provisions contained in the Agreement under the law of such
jurisdiction, and the validity, legality and enforceability of such and any
other provisions under the law of any other jurisdiction shall not in any way be
affected or impaired thereby. The Parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.

No Waiver. No indulgence or concession granted by a Party and no omission or
delay on the part of a Party in exercising any right, power or privilege under
the Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

Master Agreement. Where one of the Parties to the Agreement is domiciled in the
United States, the Parties intend that the Agreement shall be a master
agreement, as referred to in 11 U.S.C. Section 101(53B)(C) and 12 U.S.C. Section
1821(e)(8)(D)(vii).

Time of Essence, Etc. Time shall be of the essence in the Agreement. Unless
otherwise agreed, the times referred to in the Agreement with respect to Options
shall in each case refer to the local time of the relevant Designated Office of
the Seller of the relevant Option.

Headings. Headings in the Agreement are for ease of reference only.

Payments Generally. All payments to be made under the Agreement shall be made in
same day (or immediately available) and freely transferable funds and, unless
otherwise specified, shall be delivered to such office of such bank, and in
favor of such account as shall be specified by the Party entitled to receive
such payment in Part IV of the Schedule or in a notice given in accordance with
Section 11.4.

Amendments. No amendment, modification or waiver of the Agreement will be
effective unless in writing executed by each of the Parties; provided that the
Parties may agree in a Confirmation that complies with Section 2.3 to amend the
Agreement solely with respect to the Option that is the subject of the
Confirmation.

Credit Support. A Credit Support Document between the Parties may apply to
obligations governed by the Agreement. If the Parties have executed a Credit
Support Document, such Credit Support Document shall be subject to the terms of
the Agreement and is hereby incorporated by reference in the Agreement. In the
event of any conflict between a Credit Support Document and the Agreement, the
Agreement shall prevail, except for any provision in such Credit Support
Document in respect of governing law.

Adequate Assurances. If the Parties have so agreed in Part XI of the Schedule,
the failure by a Party to give adequate assurances of its ability to perform any
of its obligations under the Agreement within two (2) Business Days of a written
request to do so when the other Party has reasonable grounds for insecurity
shall be an Event of Default under the Agreement.

Correction of Confirmations. Unless either Party objects to the terms contained
in any Confirmation sent by the other Party or sends a corrected Confirmation
within three (3) Business Days of receipt of such Confirmation, or such shorter
time as may be appropriate given the Value Date of an FX Transaction, the terms
of such Confirmation shall be deemed correct and accepted absent manifest error.
If the Party receiving a Confirmation sends a corrected Confirmation within such
three (3) Business Days, or shorter period, as appropriate, then the Party
receiving such corrected Confirmation shall have three (3) Business Days, or
shorter period, as appropriate, after receipt thereof to object to the terms
contained in such corrected Confirmation.

LAW AND JURISDICTION

Governing Law. The Agreement shall be governed by, and construed in accordance
with, the laws of the jurisdiction set forth in Part XII of the Schedule without
giving effect to conflict of laws principles.

Consent to Jurisdiction. (H) With respect to any Proceedings, each Party
irrevocably (i) submits to the non-exclusive jurisdiction of the courts of the
jurisdiction set forth in Part XIII of the Schedule and (ii) waives any
objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have
jurisdiction over such Party. Nothing in the Agreement precludes either Party
from bringing Proceedings in any other jurisdiction nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

Each Party irrevocably appoints the agent for service of process (if any)
specified with respect to it in Part XIV of the Schedule. If for any reason any
Party's process agent is unable to act as such, such Party will promptly notify
the other Party and within thirty (30) days will appoint a substitute process
agent acceptable to the other Party.

Waiver of Jury Trial. Each Party irrevocably waives any and all right to trial
by jury in any Proceedings.

Waiver of Immunities. Each Party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

                                        MORGAN STANLEY & CO. INCORPORATED

                                        By: /s/ Philip Newcomb
                                           -------------------------------------
                                           Name:  Philip Newcomb
                                           Title:

                                        DEAN WITTER DIVERSIFIED FUTURES
                                          FUND III L.P.

                                        By: Demeter Management Corporation

                                            By: /s/ Robert E. Murray
                                               ---------------------------------
                                               Name:  Robert E. Murray
                                               Title: President & Chairman

<PAGE>

                                    SCHEDULE
                                    --------

        Schedule to the International Foreign Exchange and Options Master
             Agreement dated as of April 30, 2000 (the "Agreement")
              between Morgan Stanley & Co. Incorporated ("Party A")
                                       and
                      Dean Witter Diversified Futures Fund III L.P.
                                  ("Party B").

Scope of the Agreement
----------------------

            The Agreement shall apply to all FX Transactions outstanding between
any two Designated Offices of the Parties on the Effective Date.

            The Agreement shall apply to all Currency Options outstanding
between any two Designated Offices of the Parties on the Effective Date.

Designated Offices
------------------

            Each of the following shall be a Designated Office:

            Party A: New York

            Party A is not a multibranch party.

            Party B:  New York

            Party B is not a multibranch party.

            Each Party (the "first Party") that enters into an FX Transaction or
Option through an agency, branch, or office other than its head or home office
represents to the other Party (the "second Party") that, notwithstanding the
place of booking office or jurisdiction of incorporation or organization of the
first Party, the obligations of the first Party are the same as if it had
entered into the FX Transaction or Option through its head or home office. This
representation will be deemed to be repeated by the first Party on each date on
which it enters into an FX Transaction or Option.

Notices
-------

            If sent to Party A:

Address:                     Morgan Stanley & Co. Incorporated
                             1585 Broadway, 4th floor
                             New York, New York 10036
Telephone Number:            (212) 761-2700
Telex Number:                6801048 (Answerback:    FXMS)
Facsimile Number:            (212) 761-0296
SWIFT Number:                MSNYUS33
Name of Individual or Department to whom Notices are to be sent: Foreign
Exchange Trading Department

            If sent to Party B:

Address:                     Party B c/o
                             Morgan Stanley Dean Witter & Co.
                             2 World Trade Center
                             62nd Floor
                             New York, NY 10048
Telephone Number:            212-392-3270
Telex Number:
Facsimile Number:            212-392-1306
SWIFT Number:
Name of Individual or Department to whom Notices are to be sent: Managed Futures

Payment Instructions
--------------------

            [X] Name of Bank and Office, Account Number and Reference with
respect to relevant Currencies:

            In the case of Party A, U.S. dollar payments shall be made to the
following account:

            Bank of New York, New York
            ABA#: 021000018
            For: Morgan Stanley & Co., New York
            Acct. #: 8900010932
            Ref: Chips UID 23-65-84

            In the case of Party B, U.S. dollar payments shall be made to the
following account:

            Citibank N.A.
            ABA#: 021-000089
            For: Dean Witter Reynolds Inc.
            Acct.#: 40611164
            For Further Credit to Managed Futures Fund Margin Transfer
            779-000999-4

            [X] With respect to each Party, as may be set forth in such Standard
Settlement Instructions as may be specified by such Party in a notice given in
accordance with Section 11.4.

Netting
-------

Discharge of Options
--------------------

            Section 4.1 shall apply to Options other than Barrier Options.

Netting of Premiums
-------------------

            Section 4.2 shall apply to Premium payments for Options other than
            Barrier Options.

Settlement Netting Offices
--------------------------

            Each of the following shall be a Settlement Netting Office:

            Party A:  Same as Part II.

            Party B: Same as Part II

            Party A and Party B agree that, notwithstanding Section 6.2 of the
Agreement, obligations to make payments pursuant to FX Transactions shall only
be netted, satisfied and discharged against obligations to make payments arising
out of the same or other FX Transactions between a pair of Settlement Netting
Offices and obligations to make payments pursuant to Options (including
exercised Options) shall only be netted, satisfied and discharged against
obligations to make payments arising out of the same or other Options (including
exercised Options) between a pair of Settlement Netting Offices.

Novation Netting Offices
------------------------

            Each of the following shall be a Novation Netting Office:

            Party A: Same as Part II.

            Party B: Same as Part II.

Matched Pair Novation Netting Offices
-------------------------------------

            Each of the following shall be a Matched Pair Novation Netting
Office:

            Not applicable.

Automatic Exercise of Options; Cash Settlement of FX Transactions

Automatic Exercise of Options
-----------------------------

            Automatic Exercise of certain In-the-money Options pursuant to
Section 5.3 shall apply to Party A as Buyer.

            Automatic Exercise of certain In-the-money Options pursuant to
Section 5.3 shall apply to Party B as Buyer.

Cash Settlement of FX Transactions
----------------------------------

            The following provision shall apply:

            The definition of FX Transaction in Section 1 shall include foreign
exchange transactions for the purchase and sale of one Currency against another
but which shall be settled by the delivery of only one Currency based on the
difference between exchange rates as agreed by the Parties as evidenced in a
Confirmation. Section 6.1 is modified so that only one Currency shall be
delivered for any such FX Transaction in accordance with the formula agreed by
the Parties. Section 8.1(b)(i)(A) is modified so that the Close-Out Amount for
any such FX Transaction for which the cash settlement amount has been fixed on
or before the Close-Out Date pursuant to the terms of such FX Transaction shall
be equal to the Currency Obligation arising therefrom (increased by adding
interest in the manner provided in clause (A)(2) if the Value Date precedes the
Close-Out Date) and for any such FX Transaction for which the cash settlement
amount has not yet been fixed on the Close-Out Date pursuant to the terms of
such FX Transaction, the Close-Out Amount shall be as reasonably determined by
Party A in accordance with market practice.

Base Currency
-------------

            Party A's Base Currency is U.S. Dollars.

            Party B's Base Currency is U.S. Dollars.

Threshold Amount
----------------

            For purposes of clause (x) of the definition of Event of Default:

            Party A's Threshold Amount is U.S.D. $10,000,000.

            Party B's Threshold Amount is U.S.D. $10,000,000.

Additional Events of Default
----------------------------

            Clause (x) of the definition of Event of Default shall be modified
by deleting the words ", or becomes capable at any time of being declared,"
after the words "and remains unpaid after any applicable grace period has
elapsed, or (B) becomes".

            The following provisions which are checked shall constitute Events
of Default:

            [X] (a) occurrence of garnishment or provisional garnishment against
a claim against the Defaulting Party acquired by the Non-Defaulting Party. The
automatic termination provision of Section 8.1 shall not apply to either Party
that is a Defaulting Party in respect of this Event of Default.

            [X] (b) suspension of payment by the Defaulting Party or any Credit
Support Provider in accordance with the Bankruptcy Law or the Corporate
Reorganization Law in Japan. The automatic termination provision of Section 8.1
shall not apply to either Party that is a Defaulting Party in respect of this
Event of Default.

            [X] (c) disqualification of the Defaulting Party or any Credit
Support Provider by any relevant bill clearing house located in Japan. The
automatic termination provision of Section 8.1 shall not apply to either Party
that is a Defaulting Party in respect of this Event of Default.

Automatic Termination

            The Automatic Termination provision of Section 8.1 shall not apply
to Party A as Defaulting Party in respect of clause (ii), (iii) or (iv) of the
definition of Event of Default.

            The Automatic Termination provision of Section 8.1 shall not apply
to Party B as Defaulting Party in respect of clause (ii), (iii) or (iv) of the
definition of Event of Default.

Adequate Assurances
-------------------

            Adequate Assurances under Section 11.14 shall not apply to the
Agreement.

Governing Law
-------------

            In accordance with Section 12.1 of the Agreement, the Agreement
shall be governed by the laws of:

            [X] the State of New York.

            [ ] England and Wales.

            [ ] Japan.

Consent to Jurisdiction
-----------------------

            In accordance with Section 12.2 of the Agreement, each Party
irrevocably submits to the non-exclusive jurisdiction of:

            [X] the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City.

            [ ] the courts of England.

            [ ] the Tokyo District Court.

Agent for Service of Process
----------------------------

            Party A appoints the following as its agent for service of process
in any Proceedings in the State of New York: Not applicable.

            Party B appoints the following as its agent for service of process
in any Proceedings in the State of New York: Not applicable.

Certain Regulatory Representations
----------------------------------

The following FDICIA representation shall apply:

            1. Party A represents and warrants that it qualifies as a "financial
institution" within the meaning of the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") by virtue of being a:

            [X]  broker or dealer within the meaning of FDICIA;

            [ ]  depository institution within the meaning of FDICIA;

            [X]  futures commission merchant within the meaning of FDICIA;

            [ ]  "financial institution" within the meaning of Regulation EE
                 (see below).

            2. Party B hereby represents and warrants that it qualifies as a
"financial institution" by virtue of being a:

            [ ]  broker or dealer within the meaning of FDICIA;

            [ ]  depository institution within the meaning of FDICIA;

            [ ]  futures commission merchant within the meaning of FDICIA;

            [ ] "financial institution" within the meaning of Regulation EE (see
                below).

            3. A Party representing that it is a "financial institution" as that
term is defined in 12 C.F.R. Section 231.3 of Regulation EE issued by the Board
of Governors of the Federal Reserve System ("Regulation EE") represents that:

               (a) it is willing to enter into "financial contracts" as a
counterparty "on both sides of one or more financial markets" as those terms are
used in Section 231.3 of Regulation EE; and

               (b) during the 15-month period immediately preceding the date it
makes or is deemed to make this representation, it has had on at least one (1)
day during such period, with counterparties that are not its affiliates (as
defined in Section 231.2(b) of Regulation EE) either:

                   (i) one or more financial contracts of a total gross
notional principal amount of $1 billion outstanding; or

                   (ii) total gross mark-to-market positions (aggregated across
counterparties) of $100 million; and

               (c) agrees that it will notify the other Party if it no longer
meets the requirements for status as a financial institution under Regulation
EE.

            4. If both Parties are financial institutions in accordance with the
above, the Parties agree that the Agreement shall be a netting contract, as
defined in 12 U.S.C. Section 4402(14), and each receipt or payment or delivery
obligation under the Agreement shall be a covered contractual payment
entitlement or covered contractual payment obligation, respectively, as defined
in FDICIA.

The following ERISA representation shall apply:

            Each Party represents and warrants that it is not (i) a plan subject
to the fiduciary responsibility part of the Employee Retirement Income Security
Act of 1974, as amended, or subject to Section 4975 of the Internal Revenue Code
of 1986, as amended; (ii) a person acting on behalf of any such plan; or (iii) a
person the assets of whom constitute assets of any such plan.

The following CFTC trade option representation shall not apply:

            Each Party represents and warrants that it is a commercial user of
or a merchant handling the Currencies subject to each Option and was offered or
entered into each Option solely for purposes related to its business as such.

The following CFTC eligible swap participant representation shall apply:

            Each Party represents and warrants that it is an "eligible swap
participant" under, and as defined in, 17 C.F.R. Section 35.1.

Representations and Warranties
------------------------------

            In addition to the representations and warranties set forth in
Section 7.1 and Part XV of this Schedule, each Party hereby represents and
warrants to the other Party on the date hereof and on the date of each FX
Transaction or Option, as the case may be, that: (a) it is a sophisticated
investor able to evaluate and assume the risks associated with transactions in
currencies as contemplated by the Agreement; (b) it is not relying upon any
representations (whether written or oral) of the other Party other than the
representations expressly set forth in the Agreement, this Schedule, any Credit
Support Document or in any Confirmation; (c) its execution and delivery of the
Agreement, and its performance of its obligations hereunder, do not and will not
conflict with any law or regulation of the jurisdiction of its organization or
other law or regulation applicable to it, and do not and will not violate,
constitute a default under, or result in the creation or imposition of any lien
or encumbrance on any of its property or assets under any agreement or
instrument to which it is a party or by which its assets are bound; (d) no
consent, authorization or approval (including exchange control approval) or
other action by, and no notice to or filing with, any person or entity,
including any governmental authority or regulatory body, other than any already
obtained, made or filed and remaining in full force and effect, and the
conditions of which have been duly complied with, is required in connection with
the performance of its obligations under the Agreement; and (e) there are no
actions, proceedings or claims pending or, to the best of its knowledge,
threatened, the adverse determination of which might have a materially adverse
effect on its ability to perform its obligations under, or affect the validity
or enforceability of, the Agreement.

Agreement Superseding
---------------------

            A new Section 11.16 shall be added to the Agreement which shall read
as follows: "The Agreement shall supersede any other agreement between the
Parties with respect to the subject matter hereof."

Barrier Options
---------------

            In connection with any Barrier Options between the Parties, Party B
acknowledges that:

            (a) As part of its business, Party A regularly trades in the foreign
exchange spot, forward, futures and options markets for its own account and for
the accounts of other customers. Such trading may affect spot prices in the
Currency Pair.

            (b) Party A generally hedges its Barrier Option positions by buying
or selling a quantity of the relevant currency, and may adjust (increase or
decrease) its hedge as market conditions change during the life of the Options
and it believes that it is more or less likely that a Barrier will be breached.
Such hedging and de-hedging activity may affect spot prices and may thus affect
the probability of a Barrier being breached.

1998 FX and Currency Option Definitions.
----------------------------------------

            The 1998 FX and Currency Option Definitions as published by ISDA,
EMTA and the Foreign Exchange Committee (the "Definitions") shall be applicable
to each FX Transaction and Option under the Agreement, including any FX
Transaction or Option outstanding on the date hereof, subject to the following:

Definitions:

            1.    The term "Agreement" in Section 2.2 of the Agreement shall
                  include the Agreement as modified and supplemented by this
                  Part.

            2.    The term "FX Transaction" and "Currency Option Transaction" in
                  the Definitions or in a Confirmation shall in all cases by
                  considered references to an "FX Transaction" and "Option"
                  under the Agreement.

            3.    All terms in this Part shall have the meanings given them
                  above or in the Definitions, unless not defined above or in
                  the Definitions, in which case the term shall have the meaning
                  given in the Agreement.

Scope
-----

            1.    Notwithstanding the absence of any reference to the
                  Definitions in a Confirmation, this Part and the Definitions
                  shall be applicable to any FX Transaction or Currency Option
                  Transaction covered by the Agreement; provided that the
                  Parties may agree otherwise for any Transaction as evidenced
                  by a Confirmation that complies with Section 2.3 of the
                  Agreement.

            2.    In the event of any inconsistency between the Definitions and
                  a Confirmation, the terms of the Confirmation shall govern for
                  the purpose of the relevant Transaction. In the event of any
                  inconsistency between the Definitions and the Agreement, the
                  Definitions shall prevail.

Confirmations
-------------

            Notwithstanding Sections 2.4 and 11.12 of the Agreement, in the
event of any inconsistency between the terms of a Confirmation for an FX
Transaction or Currency Option Transaction and the Agreement, the terms of the
Confirmation shall prevail.

Disruption Events
-----------------

            With respect to any Disruption Event that is applicable to an FX
Transaction or Currency Option Transaction pursuant to the Definitions or as
otherwise agreed by the Parties as evidenced by a Confirmation, Section 9 of the
Agreement shall not be applicable in respect of such FX Transaction or Currency
Option Transaction, and the Parties shall be subject to the Disruption Fallbacks
(including but not limited to No Fault Termination) specified as applicable
pursuant to the Definitions or such Confirmation.

Miscellaneous
-------------

            The provisions of Part VI.B of this Schedule relating to cash
settlement of FX Transactions shall apply to Non-Deliverable FX Transactions.

Margin and Security
-------------------

            (a) Party B shall at all times maintain with Dean Witter Reynolds
Inc. (the "Custodian") for and on behalf of Party A cash and securities
acceptable to Party A (together, the "Margin") in order to secure the
obligations of Party B under all open FX Transactions and Options entered into
under the Agreement. The amount of Margin which Party B shall maintain with
Party A shall be determined by Party A in its reasonable judgment (which
determination shall be conclusive in the absence of manifest error), on a risk
adjusted basis, taking into account historical volatility, imputed volatility
and/or such other factors as Party A reasonably deems relevant to this
determination (the "Aggregate Margin Requirement"). On or prior to the date of
the Agreement, Party B shall have established a special pledge account with the
Custodian (the "Account") for the purpose of holding custody of the Margin for
and on behalf of Party A in accordance with the provisions of the Custodian
Account Addendum, dated the date hereof, and the Agreement. Party B's failure to
deposit Margin or to establish the Account as required herein shall be an Event
of Default for all purposes under the Agreement (it being understood that there
shall be no grace period with respect to obligations of Party B pursuant to this
Part XX).

            (b) Whenever such Aggregate Margin Requirement shall exceed the
market value of Margin on deposit with the Custodian in the Account as
determined by Party A at such time in its reasonable judgment and which
determination shall be conclusive in the absence of manifest error (the "Margin
Balance", and the difference between such Aggregate Margin Requirement and the
Margin Balance being the "Shortfall"), then Party B shall deposit immediately
upon Party A's request, additional Margin in an amount at least equal to such
Shortfall.

            (c) In furtherance of the foregoing, as security for the prompt and
complete payment when due and the performance by Party B of all of its
obligations to Party A under the Agreement, Party B hereby grants to Party A a
continuing first priority security interest in and to all of Party B's right,
title and interest in and to the Margin, the Account, all financial assets,
investment property and other property and assets which are deposited from time
to time in, or credited from time to time to, the Account, all security
entitlements in respect thereof, all income and profits thereon, all interest,
dividends and other payments and distributions with respect thereto, and all
proceeds of any of the foregoing (the "Margin Collateral"). As additional
security for the prompt and complete payment when due and the performance by
Party B of all of its obligations to Party A under the Agreement, Party B hereby
grants to Party A and its affiliates a first priority security interest in and
to any property of Party B at any time held by or for the benefit of Party A or
any affiliate of Party A for any purpose, including, without limitation, any
property of Party B held in any account with Party A, any affiliate of Party A
or with the Custodian, any financial assets, investment property and other
property and assets which are deposited from time to time in, or credited from
time to time to, any such account, all security entitlements in respect thereof,
all income and profits thereon, all interest, dividends and other payments and
distributions with respect thereto, and all proceeds of any of the foregoing
(the "Collateral"), to secure all obligations of Party B to Party A. If
Collateral was delivered in connection with a particular agreement between Party
B and Party A or any of its affiliates, then such Collateral shall secure first
the obligations of Party B with respect to such agreement and second all other
obligations of Party B to Party A or any of its affiliates (in such order as
Party A shall determine in its sole discretion). Party A, its affiliates and the
Custodian and Party B hereby each acknowledge and agree that (a) each of Party A
and its affiliates which holds Collateral holds such Collateral for itself and
also as agent and bailee for all other of Party A and its affiliates which are
secured parties hereunder or under any agreement between Party B and Party A or
any of its affiliates and (b) the Custodian which holds Collateral for and on
behalf of Party A holds such Collateral as agent and bailee for Party A and its
affiliates which are secured parties hereunder and under any agreement between
Party B and Party A or any of its affiliates. If an Event of Default hereunder
shall occur, then each of Party A and its affiliates shall be entitled to retain
or sell all Collateral as security for Party B's obligations, even if otherwise
required pursuant to the terms of an agreement or otherwise to deliver any
Collateral to Party B or Party B's order. The parties agree that Party A and its
affiliates shall have the rights and remedies of a secured creditor under the
New York Uniform Commercial Code (the "UCC") and under any other applicable law
or agreement to exercise any right with respect to the Margin Collateral and the
Collateral subject to the security interest granted under the Agreement.
Notwithstanding Section 9-207 of the UCC, each of Party A or any of its
affiliates shall have free and unrestricted use of any Margin Collateral and/or
Collateral which it holds hereunder or with the Custodian, including, without
limitation, the right, from time to time and without notice to Party B, to sell,
pledge, repledge, hypothecate, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Margin Collateral
and/or Collateral separately or in common with other securities, commodities or
other property, for the sum due to any of Party A or any of its affiliates or
for a greater sum on terms which may otherwise impair the right of Party B to
redeem such Margin Collateral and/or Collateral, and free from any other right
of claim of any nature whatsoever of Party B, and without retaining possession
and control for delivery a like amount of similar securities, commodities, or
other property.

            (d) Party B represents and warrants that it owns the Margin
Collateral and the Collateral to be pledged and assigned to each of Party A and
its affiliates hereunder and under any other agreement between Party B and Party
A or any of its affiliates, free and clear of any liens, equities, claims
(including, without limitation, participation interests) and transfer
restrictions. Party B covenants and agrees that it will not sell, assign,
transfer, exchange or otherwise dispose of, or grant any option with respect to,
any of the Margin Collateral or the Collateral, nor will it create, incur or
permit to exist any lien on or with respect to any of the Margin Collateral or
the Collateral, any interest therein, or any proceeds thereof, except for the
security interests created under this Agreement or otherwise under any agreement
between Party B and Party A or any of its affiliates. Any purported sale,
assignment, transfer, exchange, disposition, grant or lien of the Margin
Collateral or the Collateral by Party B that is not permitted under the
foregoing sentence shall be null and void and shall constitute an Event of
Default hereunder and under any agreement between Party B and Party A or any of
its affiliates immediately prior to the taking of any such action, if Party A so
deems (it being understood that there shall be no grace period with respect to
obligations of Party B pursuant to this Part XX).

            (e) Party B shall, at its sole expense and as Party A in its sole
discretion may deem necessary or advisable from time to time, undertake all such
action as is necessary, (i) to create, preserve, protect and perfect the
security interests granted under the Agreement, (ii) to enable Party A to
exercise and enforce its rights with respect to such security interests, and
(iii) execute and deliver all documents and instruments in such manner and form
as Party A may require, including without limitation UCC financing statements
and continuation statements. Party B hereby appoints Party A as its true and
lawful attorney-in-fact, including without limitation, to sign and file such
documents and instruments on Party B's behalf and without Party B's signature;
such appointment, being coupled with an interest, shall be irrevocable. Without
limitation on the foregoing, Party B agrees to take such action as Party A in
its sole discretion may deem necessary or advisable in the event of any change
in applicable law, including, without limitation, Article 8 of the UCC and the
Regulations of the Department of the Treasury governing transfers of interests
in U.S. marketable treasury securities in book-entry form.

            (f) The parties hereto agree that each of the Account and any
account in which any Collateral is held or to which any Collateral is credited
(a "Collateral Account") is a "securities account" within the meaning of Article
8 of the UCC and that all property and assets (including, without limitation,
cash) held in or credited to (i) the Account or (ii) any Collateral Account
shall be treated as a "financial asset" for purposes of Article 8 of the UCC.

MORGAN STANLEY & CO. INCORPORATED

By: /s/ Philip Newcomb
   ---------------------------------
   Name:  Philip Newcomb
   Title:

DEAN WITTER DIVERSIFIED FUTURES FUND III L.P.

By: Demeter Management Corporation

    By: /s/ Robert E. Murray
       -----------------------------
       Name:  Robert E. Murray
       Title: President & Chairman
<PAGE>

                           CUSTODIAN ACCOUNT ADDENDUM

This Addendum supplements, forms part of, and is subject in all respects to, the
Foreign Exchange and Options Master Agreement (FEOMA) including the Schedule
thereto (the "Schedule") dated as of April 30, 2000 by and between Morgan
Stanley & Co. Incorporated and Demeter Management Corporation on behalf of Dean
Witter Diversified Futures Fund III L.P. (collectively, the "Agreement"), and is
a part of the Schedule with respect to each party; provided, however, as used
herein, "Pledgor" means Party B and "Secured Party" means Party A (as defined in
the Agreement). Other capitalized terms used herein, unless otherwise defined,
have the meanings specified in the Agreement. With respect to the rights or
obligations of the Secured Party or the Pledgor, in the event of any
inconsistencies between this Addendum and the Agreement, the Agreement will
prevail.

Having appointed Dean Witter Reynolds Inc. (the "Custodian") to hold Margin for
and on behalf of the Secured Party, the Secured Party, the Pledgor and the
Custodian (solely to the extent of the duties it has agreed to undertake and
perform hereunder) agree as follows:

In all respects, the rights of the Secured Party under the Schedule with respect
to Margin shall not be affected by the appointment of a Custodian hereunder. The
provisions of this Addendum in no way diminish or otherwise affect the rights of
the Secured Party under the Agreement.

The Secured Party, by written notice to the Custodian, may exercise all powers,
and exercise any and all rights and remedies permitted under the Schedule as
though the Secured Party was taking such action directly, and the Custodian will
comply with, and be entitled to rely on, all such instructions (including,
without limitation, entitlement orders) as if such instructions were provided by
the parties jointly.

As used herein, the following terms have the following meaning:

"Advice from the Secured Party" or "Advice" means a written notice sent to the
Pledgor and/or the Custodian or transmitted by a facsimile sending device by any
of those individuals designated by the Secured Party, except that for any of the
following purposes it shall mean notice by telephone to a person designated by
the Pledgor in writing as authorized to receive such advice or, in the event
that no such person is available, to any officer of the Pledgor and confirmed
promptly in writing thereafter: (i) for initial or additional Margin; (ii) that
the Secured Party has issued a Notice of Exercise with respect to an Option ; or
(iii) that the Pledgor has failed to give notice of intent to make payment of
amounts or deliveries as required under Paragraph 5 of this Addendum. With
respect to any covering purchase transaction, the Advice from the Secured Party
shall mean a Confirmation in use by the Secured Party and sent or transmitted to
the Pledgor and/or the Custodian. When used herein the term "Advise" means the
act of sending an Advice from the Secured Party.

The Custodian shall open an account on its books entitled "Special Custody
Account for Morgan Stanley & Co. Incorporated as Pledgee of Morgan Stanley Dean
Witter Strategic Alternatives, L.L.C (referred to herein as the "Special Custody
Account").

The parties hereto agree that all property and assets held in or credited to the
Special Custody Account will be treated as financial assets under Article 8 of
the Uniform Commercial Code as in effect in the State of New York (the "UCC").
The parties hereto further agree that the securities intermediary's
jurisdiction, within the meaning of Section 8-110(e) of the UCC, in respect of
the Special Custody Account and the Margin is the State of New York and agree
that none of them has or will enter into any agreement to the contrary.

Anything in this Addendum notwithstanding, the Custodian hereby agrees to comply
with entitlement orders and other instructions of the Secured Party with respect
to the Special Custody Account and any Margin without further consent of the
Pledgor. The Pledgor hereby consents to such agreement.

The Custodian represents and warrants that it has not, and agrees that it will
not, agree to comply with entitlement orders concerning the Special Custody
Account or any Margin that are originated by any person other than the Secured
Party.

The Pledgor agrees to inform the Custodian in writing that cash and securities
specified by the Pledgor as qualifying as Margin and equal in value to the
Aggregate Margin Requirement are to be identified on the Custodian's books and
records as pledged to the Secured Party. The Custodian will hold the Margin in,
and credit the Margin to, the Special Custody Account, separate and apart from
any other property of the Pledgor that may be held by the Custodian, subject to
the interest therein of the Secured Party as the Pledgee thereof in accordance
with the terms of the Agreement. The Custodian continuously represents that
Margin will not be subject to any other lien, charge, security interest or other
right or claim of the Custodian or any person claiming through the Custodian.
The Custodian will confirm in writing to the Secured Party and the Pledgor all
pledges, releases, substitutions or distributions of Margin permitted under the
Agreement, and will inform the Secured Party upon request of the kind and amount
of Margin pledged to the Secured Party.

In the event that (i) the Secured Party advises the Pledgor in an Advice from
the Secured Party that the Secured Party has exercised an Option sold by the
Pledgor and the Pledgor does not promptly notify the Secured Party by telephone
of the Pledgor's intention to comply with the Notice of Exercise by making
payment or delivery, as the case may be, as required under the terms of such
Option plus payment of applicable commissions or other charges; or (ii) the
Pledgor, having received such Notice of Exercise, fails to make such payment or
delivery, or cause such payment or delivery to be made, then the Secured Party
will immediately notify the Pledgor in an Advice from the Secured Party of such
failure to give telephone notice or failure to make payment or delivery, as
applicable, and may, after transmittal of an Advice from the Secured Party of
its intention to do so and only if the Pledgor does not promptly make payment or
delivery to the Secured Party, direct the Custodian to take any action necessary
to fully satisfy Pledgor's obligations to the Secured Party, including any of
the Secured Party's rights and remedies under Part XX of the Schedule.

With respect to any losses or liabilities, the Custodian shall be protected in
acting pursuant to any instructions from the Pledgor or Advices from the Secured
Party believed by the Custodian in good faith to be genuine and authorized. The
Pledgor agrees to indemnify the Custodian for, and hold it harmless against, any
loss, liability or expense incurred by the Custodian, without negligence or bad
faith on the part of the Custodian, arising out of this Addendum.

The Secured Party shall not be liable for any losses, costs, damages,
liabilities or expenses suffered or incurred by the Pledgor as a result of any
actions taken under this Addendum, or any other action taken or not taken by the
Secured Party hereunder for the Pledgor's account at the Pledgor's direction or
otherwise, except to the extent that such loss, cost, damage, liability or
expense is the result of the Secured Party's own recklessness, willful
misconduct or bad faith.

The Pledgor continuously represents and warrants to the Secured Party that
securities included at any time in the Margin shall be in good deliverable form
(or Custodian shall have the unrestricted power to put such securities into good
deliverable form) in accordance with the requirements of such exchanges as may
be the primary market or markets for such securities. Each of the Pledgor, the
Secured Party and the Custodian continuously represents and warrants that:

it has duly executed and delivered this Addendum, and has all requisite power,
authority and approvals to enter into and perform its obligations hereunder; and

this Addendum is its valid and legally binding obligation, enforceable against
it in accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and to general equitable principles.

The Secured Party and the Pledgor hereby acknowledge that the Custodian holds
securities and cash as custodian for its customers through sub-custodians,
depositaries and deposit-taking banks which maintain omnibus accounts on behalf
of customers of the Custodian. Securities held in the Special Custody Account
may be held at the Depository Trust Company or other book-entry depository
systems in the account of the Custodian, save that Margin denominated in
currencies other than US Dollars may be held by a sub-custodian for the
Custodian other than in book-entry form. U.S. Treasury securities shall be held
in a Treasury/Reserve Automated Debt Entry System ("TRADES") Participant's
securities account of the Custodian or of the Custodian's sub-custodian for the
account of the Custodian at the Federal Reserve Bank.

A monthly statement will be provided by the Custodian to the Secured Party and
the Pledgor listing all Margin held in the Special Custody Account. The
Custodian will also advise the Secured Party upon request, at any time, of the
kind and amount of Margin pledged to the Secured Party. It is agreed that,
notwithstanding any language to the contrary in Custodian's form of
confirmation, the Custodian holds the Margin as agent of the Secured Party as
pledgee hereunder, not as escrow agent. The Custodian makes no representations
as to the existence, perfection or enforceability of any security interest,
charge, lien or other rights of the Pledgor in or to the Margin.

The Pledgor shall pay the Custodian as compensation for its services pursuant to
this Addendum such compensation as may from time to time be agreed upon in
writing between the Pledgor and the Custodian.

No amendment to this Addendum shall be effective unless in writing and signed by
an authorized officer of each of the Secured Party, the Pledgor, and the
Custodian.

This Addendum may be executed in one or more counterparts, all of which together
shall constitute but one and the same instrument.

Any of the parties hereto may terminate the custodial relationship by notice,
given at least 10 business days prior to the date of such intended termination,
in writing to the other parties hereto; provided, however, that should the
Custodian or the Pledgor seek to terminate, then the Pledgor must designate a
replacement Custodian, which the Secured Party has, in the exercise of its sole
discretion, approved. Custodian agrees to remain as the Custodian until such
time as a replacement Custodian has been approved and such replacement Custodian
has agreed to the terms of its service hereunder and under the Agreement.

Written communications hereunder shall be sent in the manner specified in the
Agreement addressed:

            If to Custodian, to:

                        Dean Witter Reynolds Inc.
                        2 World Trade Center
                        New York, New York 10048
                        Attention:  Robert Murray - Managed Futures Department
                        Phone:      212-392-7404
                        Fax:  212-392-2804

            If to the Pledgor, to:

                        Demeter Management Corporation
                        Morgan Stanley Dean Witter & Co.
                        2 World Trade Center
                        62nd Floor
                        New York, New York 10048
                        Attention: Managed Futures Department
                        Phone:      212-392-3270
                        Fax:  212-392-1306

            If to the Secured Party, to:

                        Morgan Stanley & Co. Incorporated
                        1585 Broadway
                        4th floor
                        New York, New York 10036
                        Attention: Foreign Exchange Trading Desk
                        Phone:      (212) 761-2700
                        Fax:  (212) 761-0296

This Addendum will be governed by the laws of the State of New York applicable
to transactions entered into and to be performed wholly within the State of New
York.

                                        DEMETER MANAGEMENT CORPORATION
                                        on behalf of Dean Witter Diversified
                                        Futures Fund III L.P.

                                        By: /s/ Robert E. Murray
                                           -------------------------------------
                                           Name:  Robert E. Murray
                                           Title: President & Chairman

                                        MORGAN STANLEY & CO. INCORPORATED

                                        By: /s/ Philip Newcomb
                                           -------------------------------------
                                           Name:  Philip Newcomb
                                           Title:

                                        DEAN WITTER REYNOLDS INC.
                                        (for purposes of this Addendum)

                                        By: /s/ Robert E. Murray
                                           -------------------------------------
                                           Name:  Robert E. Murray
                                           Title: Senior Vice PresidentEXHIBIT 10.1

                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                           CRESCENT INTERNATIONAL LTD.

                                       AND

                                 FIBERCORE, INC.

                           DATED AS OF AUGUST 20, 2001

      This STOCK PURCHASE AGREEMENT is entered into as of the 20th day of
August, 2001 (this "Agreement"), by and between Crescent International Ltd. (the
"Investor"), an entity organized and existing under the laws of Bermuda, and
FiberCore, Inc., a corporation organized and existing under the laws of the
State of Nevada (the "Company").

      WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase, shares of
Common Stock (as defined below) for consideration of up to $19,000,000);

      WHEREAS, such investments will be made in reliance upon the provisions of
Section 4(2) ("Section 4(2)") and Regulation D ("Regulation D") of the U.S.
Securities Act of 1933, as amended and the rules and regulations promulgated
thereunder (the "Securities Act"), and/or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the investments in Common Stock to be made hereunder.

      NOW, THEREFORE, in consideration of the premises, representations,
warranties, covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, intending to be legally bound hereby, the parties hereto agree as
follows:

                                   ARTICLE I

                               CERTAIN DEFINITIONS

      Section 1.1. "Affiliate" shall mean any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under direct or indirect common control with any other Person. For the
purposes of this definition, "control," when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the term "controls" and "controlled" have meanings correlative
to the foregoing.

<PAGE>

      Section 1.2. "Capital Shares" shall mean the Common Stock and any shares
of any other class of common stock whether now or hereafter authorized, having
the right to participate in the distribution of dividends (as and when declared)
or assets (upon liquidation of the Company).

      Section 1.3. "Closing" shall mean one of the closings of a purchase and
sale of the Common Stock pursuant to Section 2.1 of this Agreement.

      Section 1.4. "Closing Date" shall mean, with respect to a Closing, the
second Trading Day following the Sale Date related to such Closing, provided all
conditions to such Closing have been satisfied on or before such Trading Day.

      Section 1.5. "Closing Statement" shall mean the closing statement executed
by the Company and the Investor on or before each Closing Date, setting forth
the actions taken by the Company and the Investor on the Subscription Date and
on such Closing Date, as applicable, and the amounts due to the payee entities
set forth on Schedule 10.1 hereto, on the Subscription Date and such Closing
Date, as applicable, in the form of Exhibit A attached hereto.

      Section 1.6. "Commitment Period" shall mean the period commencing on the
Subscription Date and expiring on the earlier to occur of (i) the date on which
the Investor shall have purchased Commitment Shares pursuant to this Agreement
for an aggregate Investment Amount equal to the Maximum Commitment Amount, (ii)
the date this Agreement is terminated pursuant to Section 2.5 hereof, or (iii)
December 31, 2002.

      Section 1.7. "Commitment Shares" shall mean the First Sale Shares and the
Subsequent Sale Shares, collectively.

      Section 1.8. "Common Stock" shall mean the Company's common stock, $0.001
par value per share.

      Section 1.9. "Condition Satisfaction Date" shall have the meaning set
forth in Section 7.2 of this Agreement.

      Section 1.10. "Daily Trading Value" shall mean on any Trading Day, the
Trade Price multiplied by the Trading Volume of the Common Stock.

      Section 1.11. "Damages" shall mean any and all losses, claims, damages,
liabilities, costs and expenses (including, without limitation, any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any and all amounts paid in defense or settlement of, any action, suit or
proceeding between any indemnified party and any indemnifying party or between
any indemnified party and any third party, or otherwise, or any claim asserted).

      Section 1.12. "Effective Date" with respect to each Sale of Registrable
Securities shall mean the earlier to occur of: (i) the applicable date on which
the SEC has declared effective a Registration Statement registering resale of
Registrable Securities as set forth in the Registration Rights Agreement and
(ii) the date on which any such Registrable Securities first become eligible for
resale pursuant to Rule 144 of the Securities Act.

                                      -2-
<PAGE>

      Section 1.13. "Exchange Act" shall mean the U.S. Securities Exchange Act
of 1934, as amended and the rules and regulations promulgated thereunder.

      Section 1.14. "First Sale" shall have the meaning set forth in Section
2.1(a) of this Agreement.

      Section 1.15. "First Sale Shares" shall have the meaning set forth in
Section 2.1(a) of this Agreement.

      Section 1.16. "Investment Amount" shall mean the dollar amount to be
invested by the Investor to purchase Commitment Shares with respect to any Sale
Date as notified by the Company to the Investor in accordance with and subject
to the provisions of Section 2.1 and Section 2.3 hereof.

      Section 1.17. "Legend" shall have the meaning specified in Section 8.1 of
this Agreement.

      Section 1.18. "Material Adverse Effect" shall mean any effect on the
business, operations, properties, prospects, or financial condition of the
Company that is material and adverse to the Company or to the Company and such
other entities controlling or controlled by the Company, taken as a whole,
and/or any condition, circumstance, or situation that would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
its obligations under this Agreement or the Registration Rights Agreement.

      Section 1.19. "Maximum Commitment Amount" shall mean $19,000,000.

      Section 1.20. "Maximum Sale Amount" shall mean:

            (i) with respect to the First Sale, $3,000,000;

            (ii) with respect to a Subsequent Sale Closing on or prior to the
Closing Date on which the Investor has purchased Commitment Shares for an
aggregate Investment Amount equal to $10,000,000, the lesser of (x) $2,500,000
and (y) 7.5% of the total Trading Volume during the 20 Trading Days preceding
the Sale Notice Date multiplied by the applicable Purchase Price; and

            (iii) with respect to a Subsequent Sale Closing after the Closing
Date on which the Investor has purchased Commitment Shares for an Investment
Amount equal to $10,000,000, the lesser of (x) twice the average of the Daily
Trading Values during the 22 Trading Day period immediately preceding the
applicable Sale Notice Date and (y) $3,500,000.

      Section 1.21. "NASD" shall mean the National Association of Securities
Dealers, Inc.

      Section 1.22. "Outstanding" when used with reference to Common Stock or
Capital Shares (collectively the "Shares"), shall mean, at any date as of which
the number of such Shares is to be determined, all issued and outstanding
Shares, and shall include all such Shares issuable in respect of outstanding
scrip or any certificates representing fractional interests in such Shares;
provided, however, that "Outstanding" shall not refer to any such Shares then
directly or indirectly owned or held by or for the account of the Company.

                                      -3-
<PAGE>

      Section 1.23. "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

      Section 1.24. "Principal Market" shall mean the Nasdaq National Market,
the Nasdaq SmallCap Market, the American Stock Exchange, the Electronic Bulletin
Board or the New York Stock Exchange, whichever is at the time the principal
trading exchange or market for the Common Stock.

      Section 1.25. "Purchase Price" shall mean:

            (i) with respect to the First Sale, 90% of the average of the Trade
Prices during the 10 Trading Day period immediately preceding the Subscription
Date;

            (ii) with respect to a Closing Date occurring on or prior to the
Closing Date on which the Investor has purchased Commitment Shares for an
aggregate Investment Amount equal to $10,000,000, the lesser of (x) 90% of the
Trade Price on the Trading Day immediately preceding the applicable Sale Notice
Date and (y) 90% of the average of the Trade Prices during the 20 Trading Day
period immediately preceding such Sale Notice Date; and

            (iii) with respect to a Closing Date occurring after the Closing
Date on which the Investor has purchased Commitment Shares for an aggregate
Investment Amount equal to $10,000,000, 93% of the average of the lowest three
consecutive Trade Prices during the 22 Trading Day period immediately preceding
the applicable Sale Notice Date.

      Section 1.26. "Registrable Securities" shall mean the Commitment Shares
and any securities issued or issuable with respect to any of the foregoing by
way of exchange, stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, once
issued such securities shall cease to be Registrable Securities when (w) the
applicable Registration Statement has been declared effective by the SEC and all
such Registrable Securities have been disposed of pursuant to the applicable
Registration Statement, or (x) such Registrable Securities have been sold under
circumstances under which all of the applicable conditions of Rule 144 (or any
similar provision then in force) under the Securities Act ("Rule 144") are met,
or (y) such time as all such Registrable Securities have been otherwise
transferred to holders who may trade such shares without restriction under the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend or
(z) in the opinion of counsel to the Company, which counsel shall be reasonably
acceptable to the Investor, such Registrable Securities may be sold by the
Investor without registration pursuant to Rule 144 (or any similar provision
then in effect) under the Securities Act.

      Section 1.27. "Registration Rights Agreement" shall mean the registration
rights agreement by and between the Company and the Investor, in the form of
Exhibit B hereto.

      Section 1.28. "Registration Statement" or "Registration Statements" shall
have the meaning set forth in the Registration Rights Agreement.

                                      -4-
<PAGE>

      Section 1.29. "Regulation D" shall have the meaning set forth in the
recitals of this Agreement.

      Section 1.30. "Representative" of a party shall mean any officer,
director, employee, agent, counsel, accountant, financial advisor, consultant or
other representative of such party.

      Section 1.31. "Sale" shall mean the First Sale, together with any and all
Subsequent Sales.

      Section 1.32. "Sale Date" shall mean (i) with respect to the First Sale,
the Subscription Date, and (ii) with respect to Subsequent Sales, the Trading
Day which is 5 Trading Days after a corresponding Sale Notice Date.

      Section 1.33. "Sale Fees" shall have the meaning specified in Section
10.1(b) hereof.

      Section 1.34. "Sale Notice" shall mean a written notice to the Investor,
setting forth the intended Closing Date, the Investment Amount and the number of
shares of Common Stock that the Company intends to require the Investor to
purchase pursuant to the terms of this Agreement.

      Section 1.35. "Sale Notice Date" shall mean (i) with respect to the First
Sale, the Subscription Date, and (ii) with respect to a Subsequent Sale, the
Trading Day during the Commitment Period upon which a Sale Notice to sell Common
Stock to the Investor is deemed delivered pursuant to Section 2.3(b) hereof.

      Section 1.36. "SEC" shall mean the U.S. Securities and Exchange
Commission.

      Section 1.37. "SEC Documents" shall mean the Company's latest Form 10-K as
of the time in question, all Forms 10-Q and 8-K filed thereafter, and the Proxy
Statement for its latest fiscal year as of the time in question until such time
the Company no longer has an obligation to maintain the effectiveness of a
Registration Statement as set forth in the Registration Rights Agreement.

      Section 1.38. "Section 4(2)" shall have the meaning set forth in the
recitals of this Agreement.

      Section 1.39. "Securities Act" shall have the meaning set forth in the
recitals of this Agreement.

      Section 1.40. "Short Sale" shall have the meaning specified in Rule 3b-3
of the Exchange Act; provided that the Investor shall not be deemed to own a
security for the purposes of Rule 3b-3(2) of the Exchange Act with respect to
any shares of Common Stock until a Sale Notice shall have been given with
respect to such shares.

      Section 1.41. "Strategic Investor" shall mean any Person that (i) is
engaged in or intends to enter into the business of buying, selling,
manufacturing, servicing, or licensing fiber optic or high quality glass
products or related products bought, sold, manufactured, serviced or licensed in
the ordinary course of the Company's business, (ii) is a present or potential
vendor to or vendee of the Company, (iii) intends to participate in the
corporate governance of the Company

                                      -5-
<PAGE>

or in the conduct of its business or (iv) as to whom the Company's Board of
Directors has made a determination in good faith that such Person has a
potential to develop a material strategic relationship with the Company in
connection with its present or future business.

      Section 1.42. "Subscription Date" shall mean the date on which this
Agreement is executed and delivered by the parties hereto.

      Section 1.43. "Subsequent Sale" shall have the meaning set forth in
Section 2.1(b) of this Agreement.

      Section 1.44. "Subsequent Sale Shares" shall have the meaning set forth in
Section 2.1(b) of this Agreement.

      Section 1.45. "Subsidiary" shall mean any Person in which the Company,
directly or indirectly through Subsidiaries or otherwise, beneficially owns more
than 50% of either the equity interests in, or the voting control of, such
Person.

      Section 1.46. "Trade Price" shall mean the volume-weighted average price
of the Common Stock as reported by Bloomberg L.P., using the Historical Price
(HP) Weighted Average function.

      Section 1.47. "Trading Day" shall mean any day during which the Principal
Market shall be open for business.

      Section 1.48. "Trading Volume" shall mean the number of shares of Common
Stock that is equal to the aggregate trading volume of the Common Stock as
reported by Bloomberg L.P. during the applicable time period.

      Section 1.49. "Transfer Agent Instructions" shall have the meaning set
forth in Section 2.4(a) of this Agreement.

      Section 1.50. "Underwriter" shall mean any underwriter participating in
any disposition of the Registrable Securities on behalf of the Investor pursuant
to a Registration Statement.

                                   ARTICLE II

                       SALE AND PURCHASE OF COMMON STOCK;
                           TERMINATION OF OBLIGATIONS

      Section 2.1. Sales.

            (a) First Sale. In accordance with the terms and conditions set
forth herein (including without limitation the provisions of Article VII
hereof), the Company shall deliver a Sale Notice on the Subscription Date. On
the Closing Date relating to the First Sale, the Company shall issue and sell
and the Investor shall purchase, such number of shares of Common Stock that are
determined by dividing the Investment Amount stated in the applicable Sale
Notice (subject to Section 2.3(c) hereof) by the applicable Purchase Price (such
transaction is

                                      -6-
<PAGE>

referred to herein as "First Sale," and all such shares are referred to herein
as "First Sale Shares").

            (b) Subsequent Sales. The Company may elect to exercise a Subsequent
Sale by the delivery of a Sale Notice in accordance with the following and all
other terms and conditions set forth herein (including, without limitation, the
provisions of Article VII hereof):

                  (i)   If the Company has not obtained additional equity
                  financing from a party other than the Investor prior to
                  September 30, 2001, then (x) the Company shall be permitted to
                  exercise one Subsequent Sale of Common Stock not previously
                  registered and not covered by an effective Registration
                  Statement filed with the SEC, by the delivery of a Sale Notice
                  between October 1, 2001 and October 31, 2001, provided that on
                  or before September 30, 2001 the Company notifies the Investor
                  in writing as to whether it intends to exercise a Subsequent
                  Sale during such time period, and (y) the Company shall be
                  permitted to exercise a Subsequent Sale after the Effective
                  Date of the Registration Statement relating to all Commitment
                  Shares issued to the Investor pursuant to the preceding clause
                  (x), provided that all Commitment Shares issued and Commitment
                  Shares that the Company has a present intent to issue to the
                  Investor have been registered for resale in accordance with
                  the Registration Rights Agreement.

                  (ii)   If the Company has obtained additional equity financing
                  from a party other than the Investor prior to September 30,
                  2001, the Company may elect to exercise a Subsequent Sale by
                  the delivery of a Sale Notice on any Trading Day during the
                  period from March 1, 2002 until the expiration of the
                  Commitment Period.

                  (iii)   On the Closing Date relating to each Subsequent Sale,
                  the Company shall issue and sell and the Investor shall,
                  subject to the provisions of paragraph (c) below, purchase
                  such number of shares of Common Stock that are determined by
                  dividing the Investment Amount stated in the applicable Sale
                  Notice (subject to Section 2.3(c) hereof) by the applicable
                  Purchase Price (each such transaction is referred to herein as
                  a "Subsequent Sale," and all such shares are referred to
                  herein as the "Subsequent Sale Shares").

            (c) Investment Amount of Sales.

                  (i) The aggregate Investment Amount of all Sales shall not
            exceed the Maximum Commitment Amount.

                  (ii) With respect to any Sale, the Investment Amount shall not
            exceed the Maximum Sale Amount.

      Section 2.2. Twenty Percent Limitation. Unless the Company obtains the
requisite approval of its shareholders in accordance with the corporate laws of
Nevada and the applicable

                                      -7-
<PAGE>

rules of the Principal Market and only to the extent such shareholder approval
is required by applicable rules of the Principal Market, no more than 19.9% of
the Outstanding shares of Common Stock may be issued and sold pursuant to Sales.

      Section 2.3. Sale Notice.

            (a) Timing. At any time during the Commitment Period, the Company
may deliver a Sale Notice to the Investor, subject to the conditions set forth
in Section 7.2.

            (b) Date of Delivery of Sale Notice for Subsequent Sales. A Sale
Notice shall be deemed delivered on (i) the Trading Day it is received by
facsimile or otherwise by the Investor if such notice is received prior to 12:00
noon New York time, or (ii) the immediately succeeding Trading Day if it is
received by facsimile or otherwise after 12:00 noon New York time on a Trading
Day or at any time on a day which is not a Trading Day. No Sale Notice will be
deemed delivered, on a day that is not a Trading Day.

            (c) Investment Amount Stated in Sale Notice. The Sale Notice shall
state the proposed Investment Amount related to the applicable Sale.

      Section 2.4. Closings.

            (a) Subscription Date. On the Subscription Date (i) the Company and
the Investor shall execute the Registration Rights Agreement and (ii) the
Company shall execute and deliver irrevocable instructions to the transfer
agent, in the form of Exhibit C attached hereto (the "Transfer Agent
Instructions"), instructing the transfer agent to prepare and deliver to the
Investor, following each Sale, a share certificate in the name of the Investor
and in the amount of the applicable Commitment Shares. The Company shall use
commercially reasonable efforts to cause the transfer agent to confirm and
accept such instructions, and a copy of such instructions shall be delivered to
the Investor's legal counsel. In addition, on or prior to the Subscription Date,
each of the Company and the Investor shall deliver to the other all documents,
instruments and writings required to be delivered or reasonably requested by
either of them pursuant to this Agreement in order to implement and effect the
transactions contemplated herein.

            (b) Closing Date. On each Closing Date (i) the Investor shall
deliver to the Company and the Company shall execute a Closing Statement, (ii)
the Company shall instruct the transfer agent to prepare and deliver to the
Investor a share certificate in the name of the Investor and in the amount of
the applicable Commitment Shares, in accordance with the Transfer Agent
Instructions, and the Company shall take all other actions necessary to ensure
the prompt delivery of such share certificate to the Investor, and (iii) the
Investor shall deliver to the Company the Investment Amount specified in the
Closing Statement, less applicable fees and costs determined in accordance with
Section 10.1, by wire transfer of immediately available funds to the account
designated in writing in the Sale Notice. In addition, on or prior to each
Closing Date, each of the Company and the Investor shall deliver to the other
all documents, instruments and writings required to be delivered or reasonably
requested by either of them pursuant to this Agreement in order to implement and
effect the transactions contemplated herein.

                                      -8-
<PAGE>

      Section 2.5. Termination of Agreement and Investment Obligation. The
Company shall have the right to terminate this Agreement at any time upon 30
days' written notice to the Investor. The Investor shall have the right to
immediately terminate this Agreement (including with respect to any Sale, notice
of which has been given but the applicable Closing Date has not yet occurred) in
accordance with Section 6.12 or in the event that: (i) any Registration
Statement has not been declared effective by the SEC within the applicable time
periods set forth in Section 1.1 of the Registration Rights Agreement, (ii)
there shall occur any stop order or suspension of the effectiveness of any
Registration Statement for an aggregate of 30 Trading Days during the Commitment
Period, or (iii) the Company shall at any time fail to comply with the
requirements of Section 6.2, 6.3, 6.4, 6.5, 6.6, 6.8 or 6.9.

                                  ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

The Investor represents and warrants to the Company that:

      Section 3.1. Intent. The Investor is entering into this Agreement for its
own account, and the Investor has no view to the distribution of the Registrable
Securities and has no present arrangement (whether or not legally binding) at
any time to sell, assign, transfer, pledge, encumber, hypothecate or otherwise
dispose of the Registrable Securities to or through any person or entity;
provided, however, that by making the representations herein, the Investor does
not agree to hold the Registrable Securities for any minimum or other specific
term and reserves the right to dispose of the Registrable Securities at any time
pursuant to the Registration Statement and in accordance with federal and state
securities laws applicable to such disposition.

      Section 3.2. Sophisticated Investor. The Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and the Investor has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in the Common Stock. The Investor
acknowledges that an investment in the Common Stock is speculative and involves
a high degree of risk.

      Section 3.3. Authority. Each of this Agreement and the Registration Rights
Agreement has been duly authorized by all necessary corporate action and no
further consent or authorization of the Investor, or its Board of Directors or
stockholders is required. Each of this Agreement and the Registration Rights
Agreement was validly executed and delivered by the Investor and each is a valid
and binding agreement of the Investor enforceable against it in accordance with
its terms, subject to applicable bankruptcy, insolvency, or similar laws
relating to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application.

      Section 3.4. Not an Affiliate. The Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.

      Section 3.5. Organization and Standing. The Investor is duly organized,
validly existing, and in good standing under the laws of Bermuda.

                                      -9-
<PAGE>

      Section 3.6. Absence of Conflicts. The execution and delivery of this
Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated thereby, and compliance with the
requirements thereof, will not to the Investor's knowledge (a) violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding on
the Investor, (b) violate any provision of any indenture, instrument or
agreement to which the Investor is a party or is subject, or by which the
Investor or any of its assets is bound, (c) conflict with or constitute a
material default thereunder, (d) result in the creation or imposition of any
lien pursuant to the terms of any such indenture, instrument or agreement, or
constitute a breach of any fiduciary duty owed by the Investor to any third
party, or (e) require the approval of any third-party (that has not been
obtained) pursuant to any material contract to which the Investor is subject or
to which any of its assets, operations or management may be subject.

      Section 3.7. Disclosure; Access to Information. The Investor has received
or had access to all documents, records, books and other information pertaining
to Investor's investment in the Company that have been requested by Investor.
The Investor has received and reviewed copies of the SEC Documents. Neither the
receipt by the Investor of such information, nor the access of the Investor to
such information shall modify, amend or affect the Investor's right to rely upon
the representations and warranties made by the Company pursuant to Article IV of
this Agreement.

      Section 3.8. Manner of Sale. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.

      Section 3.9. Resale Restrictions. Investor acknowledges that any
Registrable Securities to be acquired by Investor have not been registered under
the federal securities laws or any applicable state securities laws in reliance
upon exemptions available for non-public or limited offerings. Investor
understands that it must bear the economic risk of the investment in the
Registrable Securities because the Registrable Securities have not been so
registered and therefore are subject to restrictions upon transfer such that
they may not be sold or otherwise transferred unless registered under the
applicable securities laws or an exemption from such registration is available.
The Investor will not reoffer, sell, assign, transfer, pledge, encumber,
hypothecate or otherwise dispose of any Registrable Securities in the absence of
an effective registration statement, qualification or authorization relating
thereto under federal and applicable state securities laws or an opinion of
qualified counsel satisfactory to the Company to the effect that the proposed
transaction in the Registrable Securities will neither constitute or result in
any violation of the federal or state securities laws. Subject to Section 8.1 of
this Agreement, any certificate or other document that may be issued
representing any shares of Registrable Securities may be endorsed with a legend
to this effect.

      Section 3.10. Short Sales. In the 30 Trading Days preceding the
Subscription Date, the Investor has not directly or indirectly engaged in any
Short Sale of the Common Stock.

                                      -10-
<PAGE>

                                   ARTICLE IV

                REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor that on the Subscription
Date, each Effective Date and each Closing Date:

      Section 4.1. Organization of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Except as set forth in the SEC Documents, the Company does not own more than 50%
of the outstanding capital stock of or control any other Person. The Company is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, other than those in which the
failure so to qualify would not have a Material Adverse Effect.

      Section 4.2. Authority. (i) The Company has the requisite corporate power
and authority to enter into and perform its obligations under this Agreement and
the Registration Rights Agreement and to issue the Commitment Shares; (ii) the
execution and delivery of this Agreement and the Registration Rights Agreement
by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action,
and no further consent or authorization of the Company or its Board of Directors
or stockholders is required; and (iii) each of this Agreement and the
Registration Rights Agreement has been duly executed and delivered by the
Company and constitute valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general application.

      Section 4.3. Corporate Documents. The Company has furnished or made
available to the Investor true and correct copies of the Company's Articles of
Incorporation, as amended and in effect on the date hereof (the "Articles"), and
the Company's By-Laws, as amended and in effect on the date hereof (the
"By-Laws").

      Section 4.4. Books and Records. The minute books and other similar records
of the Company and its subsidiaries as made available to Investor prior to the
execution of this Agreement contain a true and complete record, in all material
respects, of all action taken at all meetings and by all written consents in
lieu of meetings of the stockholders, the boards of directors and committees of
the boards of directors of the Company and the subsidiaries. The stock transfer
ledgers and other similar records of the Company and the subsidiaries as made
available to Investor prior to the execution of this Agreement accurately
reflect all record transfers prior to the execution of this Agreement in the
capital stock of the Company and the subsidiaries. Neither the Company nor any
subsidiary has any of its books or records recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by any means
(including any electronic, mechanical or photographic process, whether
computerized or not)

                                      -11-
<PAGE>

which (including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Company or a subsidiary.

      Section 4.5. Capitalization. The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, of which 59,717,286 shares were
issued and outstanding as of June 30, 2001, and 10,000,000 shares of preferred
stock, one share of Series A Preferred Stock of which is issued and outstanding.
Except for (i) options to purchase not more than 4,924,656 shares of Common
Stock with purchase prices between $0.1875 and $5.93 per share; and (ii)
warrants to purchase not more than 3,493,930 shares of Common Stock with
purchase prices between $0.25 and $7.18 per share, there are no options,
warrants, preemptive rights for, or rights to subscribe to, securities, rights
or obligations convertible into or exchangeable for or giving any right to
subscribe for any shares of capital stock of the Company. There are no
anti-dilution or price adjustment provisions contained in any security issued by
the Company (or in any agreement providing rights to security holders) that will
be triggered by the issuance of Common Stock pursuant to this Agreement. All of
the outstanding shares of Common Stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable.

      Section 4.6. Registration and Listing of Common Stock. The Company has
registered its Common Stock pursuant to Section 12(b) or 12(g) of the Exchange
Act and is in full compliance with all reporting requirements of the Exchange
Act, and the Company has maintained all requirements for the continued listing
or quotation of its Common Stock, and such Common Stock is currently listed or
quoted on the Principal Market. As of the date hereof, the Principal Market is
the Nasdaq SmallCap Market.

      Section 4.7. Financial Statements. Prior to the execution of this
Agreement, the Company has delivered to the Investor true and complete copies of
the following financial statements:

            (a) the audited balance sheets of the Company and its consolidated
subsidiaries as of December 31, 2000, 1999 and 1998, and the related audited
consolidated statements of operations, stockholders' equity and cash flows for
each of the fiscal years then ended, together with a true and correct copy of
the report on such audited information by Deloitte and Touche LLP, and all
letters from such accountants with respect to the results of such audits; and

            (b) the unaudited balance sheets of the Company and its consolidated
subsidiaries as of March 31, 2001, and the related unaudited consolidated
statements of operations and stockholders' equity for the portion of the fiscal
year then ended, as set forth in the Company's latest quarterly report on Form
10-Q.

      The financial statements of the Company delivered to the Investor have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of

                                      -12-
<PAGE>

operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

      Section 4.8. SEC Documents. The Company has timely filed all SEC Documents
and has delivered or made available to the Investor true and complete copies of
the SEC Documents (including, without limitation, audited financial statements,
proxy information and solicitation materials). The Company has not provided to
the Investor any information that, according to applicable law, rule or
regulation, should have been disclosed publicly prior to the date hereof by the
Company, but which has not been so disclosed. As of their respective dates, the
SEC Documents complied as to form and substance in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and other federal, state and local laws, rules and regulations applicable to
such SEC Documents, and none of the SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the statements
made in any such SEC Documents is, or has been, required to be amended or
updated under applicable law (except for such statements as have been amended or
updated in subsequent filings prior to the date hereof). The financial
statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may include summary notes
and may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).

      Section 4.9. Exemption from Registration; Valid Issuances; New Issuances.
The sale and issuance of the Commitment Shares in accordance with the terms and
on the basis of the representations and warranties set forth in this Agreement,
may and will be properly issued pursuant to Section 4(2), Regulation D and/or
any applicable state law. When issued and paid for as provided herein, the
Commitment Shares will be duly and validly issued, fully paid, and
nonassessable. Neither the sales of the Commitment Shares pursuant to, nor the
Company's performance of its obligations under, this Agreement or the
Registration Rights Agreement will (i) result in the creation or imposition of
any liens, charges, claims or other encumbrances upon the Commitment Shares or
any of the assets of the Company, or (ii) entitle the holders of Outstanding
Capital Shares to preemptive or other rights to subscribe to or acquire the
Capital Shares or other securities of the Company, other than pursuant to this
Agreement and the transactions contemplated hereby. The Commitment Shares will
not subject the Investor to personal liability by reason of the ownership
thereof. The Commitment Shares have been duly authorized by the Company, but
have not been issued (whether or not subsequently repurchased by the Company) to
any Person.

      Section 4.10. No General Solicitation or Advertising. In regard to the
transactions contemplated hereby, neither the Company nor any of its Affiliates
nor any distributor or any

                                      -13-
<PAGE>

person acting on its or their behalf (i) has conducted or will conduct any
general solicitation (as that term is used in Rule 502(c) of Regulation D) or
general advertising with respect to any of the Commitment Shares, or (ii) made
any offers or sales of any security or solicited any offers to buy any security
under any circumstances that would require registration of the Commitment Shares
under the Securities Act.

      Section 4.11. No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby, including without limitation the issuance of
the Commitment Shares, do not and will not (i) result in a violation of the
Certificate or By-Laws or (ii) conflict with, or constitute a material default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture, instrument or any "lock-up"
or similar provision of any underwriting or similar agreement to which the
Company is a party, or (iii) result in a violation of any federal, state, local
or foreign law, rule, regulation, order, judgment or decree (including federal
and state securities laws and regulations, or any rule, regulation, order,
judgment or decree of any self-regulatory organization having authority over the
matters contemplated hereby, applicable to the Company or by which any property
or asset of the Company is bound or affected (except for such conflicts,
defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect)
nor is the Company otherwise in violation of, conflict with or in default under
any of the foregoing; provided, however, that for purposes of the Company's
representations and warranties as to violations of foreign law, rule or
regulation referenced in clause (iii), such representations and warranties are
made only to the best of the Company's knowledge insofar as the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby are or may be affected by
the status of the Investor under or pursuant to any such foreign law, rule or
regulation; and provided, further, that for purposes of the Company's
representations and warranties referenced in clauses (ii) and (iii) that are
made on the Subscription Date and each Effective Date, such representations and
warranties are made only to the Company's knowledge. The business of the Company
is not being conducted in violation of any law, ordinance or regulation of any
governmental or self-regulatory entity, except for possible violations that
either singly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under any federal, state or local law, rule
or regulation, order, judgment or decree (including federal and state securities
laws and regulations), or any rule, regulation, order, judgment or decree of any
self-regulatory organization having authority over the matters contemplated
hereby, to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement or issue and sell
the Commitment Shares in accordance with the terms hereof (other than any SEC,
NASD or state securities filings that may be required to be made by the Company
subsequent to any Closing, any registration statement that may be filed pursuant
hereto, and any shareholder approval required by the rules applicable to
companies whose common stock trades on the Principal Market); provided that, for
purposes of the representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant representations and agreements of
the Investor herein.

                                      -14-
<PAGE>

      Section 4.12. No Material Adverse Change. Since December 31, 2000, no
event has occurred that would have a Material Adverse Effect on the Company.

      Section 4.13. No Undisclosed Liabilities. The Company has no liabilities
or obligations that are material, individually or in the aggregate, other than
those incurred in the ordinary course of the Company's businesses since December
31, 2000, and which, individually or in the aggregate, do not or would not have
a Material Adverse Effect on the Company.

      Section 4.14. No Undisclosed Events or Circumstances. Since December 31,
2000, no event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, prospects, operations or financial
condition, that, under applicable law, rule or regulation, requires public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly disclosed or announced.

      Section 4.15. No Integrated Offering. Neither the Company, nor any of its
Affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, other than pursuant to this Agreement, under circumstances
that would require registration of the Commitment Shares under the Securities
Act.

      Section 4.16. Litigation and Other Proceedings. Except as set forth in the
SEC Documents, there are no lawsuits or proceedings pending or threatened
against the Company, nor has the Company received any written or oral notice of
any such action, suit, proceeding or investigation, which have had or might have
a Material Adverse Effect. Except as set forth in the SEC Documents, no
judgment, order, writ, injunction or decree or award has been issued by or, so
far as is known by the Company, requested of any court, arbitrator or
governmental agency which has resulted in or might result in a Material Adverse
Effect.

      Section 4.17. No Misleading or Untrue Communication. The Company, any
Person representing the Company, and, to the knowledge of the Company, any other
Person selling or offering to sell the Commitment Shares in connection with the
transactions contemplated by this Agreement, have not made, at any time, any
oral communication in connection with the offer or sale of the same which
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.

      Section 4.18. Material Non-Public Information. The Company is not in
possession of, nor has the Company or its agents disclosed to the Investor, any
material non-public information that according to applicable law, rule or
regulation, should have been disclosed publicly by the Company prior to the date
hereof, including without limitation in connection with any Registration
Statement, but which has not been so disclosed.

                                      -15-
<PAGE>

                                   ARTICLE V

                            COVENANTS OF THE INVESTOR

      Section 5.1. Compliance. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and the rules and
regulations of the Principal Market on which the Company's Common Stock is
listed.

      Section 5.2. Confidential Information. The Investor will hold, and will
use its best efforts to cause its Affiliates, and each of their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative), unless (i) compelled to disclose by judicial
or administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of governmental or regulatory authorities) or by other
requirements of law or (ii) disclosed in an action or proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, all documents and information concerning the other party or any of
its Affiliates furnished to it by the other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (a) previously known by the party receiving such documents
or information, (b) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (c) later acquired by the receiving party from another source
if the receiving party is not aware that such source is under an obligation to
another party hereto to keep such documents and information confidential.

      Section 5.3. Periodic Reports. The Investor shall, upon the written
request of the Company, deliver to the Company a written statement of the number
of shares of Common Stock held by the Investor on the date of such statement;
provided, however, that the Investor shall not be required to deliver such
statement to the Company more frequently than once per calendar week.

      Section 5.4. Short Sales. The Investor shall not engage in any Short Sale
of the Common Stock to the extent that the number of shares of Common Stock sold
in any Short Sale exceeds the number of shares of Registrable Securities either
held by the Investor or required to be purchased by the Investor pursuant to any
Sale Notice.

                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

      Section 6.1. Registration Rights. The Company shall cause the Registration
Rights Agreement to remain in full force and effect, and the Company shall
comply in all respects with the terms thereof.

      Section 6.2. Listing of Common Stock. The Company shall exercise best
efforts to maintain the listing or quotation of the Common Stock on a Principal
Market, and as soon as

                                      -16-
<PAGE>

practicable (but in any event prior to the Closing Date
for any Sale) will cause the Commitment Shares to be listed on the Principal
Market. The Company further shall, if the Company applies to have the Common
Stock traded on any other Principal Market, include in such application the
Commitment Shares, and shall take such other action as is necessary or desirable
in the opinion of the Investor to cause the Common Stock to be listed on such
other Principal Market as promptly as possible. The Company shall use
commercially reasonable efforts to continue the listing and trading of its
Common Stock on the Principal Market (including, without limitation, maintaining
sufficient net tangible assets) and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or rules of
the NASD and the Principal Market.

      Section 6.3. Exchange Act Registration. The Company shall comply with all
applicable requirements set forth in the Registration Rights Agreement,
including, without limitation, its obligation to file each Registration
Statement with the SEC within the applicable time periods set forth in the
Registration Rights Agreement. After each Registration Statement becomes
effective, the Company shall cause the Common Stock covered by such Registration
Statement to continue to be registered under Section 12(g) or 12(b) of the
Exchange Act, will comply in all respects with its reporting and filing
obligations under the Exchange Act, and will not take any action or file any
document (whether or not permitted by the Exchange Act or the rules thereunder)
to terminate or suspend such registration or to terminate or suspend its
reporting and filing obligations under the Exchange Act.

      Section 6.4. Legends. The certificates evidencing the Commitment Shares
shall be free of legends, except as provided for in Article VIII.

      Section 6.5. Corporate Existence. The Company shall take all steps
necessary to preserve and continue the corporate existence of the Company.

      Section 6.6. Additional SEC Documents. Until any of the Registrable
Securities issued or issuable to the Investor pursuant to this Agreement may be
sold by the Investor without registration pursuant to Rule 144 (or any similar
provision then in effect) under the Securities Act, the Company shall, as and
when the originals thereof are submitted to the SEC for filing, notify the
Investor in writing of any SEC Documents furnished or submitted to the SEC, and
upon the request of the Investor the Company shall deliver to the Investor, as
and when the originals thereof are submitted to the SEC for filing, copies of
all SEC Documents so furnished or submitted to the SEC.

      Section 6.7. Notice of Certain Events Affecting Registration; Suspension
of Right to Make a Subsequent Sale. The Company shall immediately notify the
Investor upon the occurrence of any of the following events in respect of a
Registration Statement or related prospectus in respect of an offering of
Registrable Securities: (i) receipt of any request for additional information by
the SEC or any other federal or state governmental authority during the period
of effectiveness of the Registration Statement for amendments or supplements to
the Registration Statement or related prospectus; (ii) the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the

                                      -17-
<PAGE>

Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the Registration Statement, related prospectus or documents so that,
in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (v) the declaration by
the SEC of the effectiveness of a Registration Statement; and (vi) the Company's
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate, and the Company shall promptly make available to
the Investor any such supplement or amendment to the related prospectus. The
Company shall not deliver to the Investor any Sale Notice during the
continuation of any of the foregoing events, except for (v) above.

      Section 6.8. Consolidation; Merger. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another entity unless the resulting successor or acquiring entity (if not the
Company) executes a written instrument acknowledging and assuming the obligation
to issue to the Investor, upon any Sale, in lieu of each share of Common Stock
theretofore issuable upon such Sale, other securities, money or property
receivable by the Investor upon such merger, consolidation or transfer had the
Sale occurred immediately prior to such merger, consolidation or transfer.

      Section 6.9. Issuance of Shares. The sale of the Commitment Shares shall
be made in accordance with the provisions and requirements of Regulation D and
any applicable state law.

      Section 6.10. Legal Opinions. The Company's independent Nevada counsel
shall deliver to the Investor, on the Closing Date relating to the First Sale,
an opinion in the form of Exhibit D-1 hereto. The Company's special New York
counsel shall deliver to the Investor, on the Closing Date relating to the First
Sale, an opinion in the form of Exhibit D-2 hereto.

      Section 6.11. No Similar Arrangement; Right of First Refusal. The Company
shall refrain from entering into any other agreements, arrangements or
understandings granting to the Company the right to sell shares of its
securities to one or more investors, other than the Investor, in placements
exempt from registration under the Securities Act until 30 calendar days after
this Agreement is terminated pursuant to Section 2.5 hereof or the earlier
expiration of the Commitment Period (the "Exclusivity Period"). If the Company,
for the purpose of obtaining any additional financing, wishes to sell shares of
its securities in placements exempt from registration under the Securities Act
during the Exclusivity Period (a "Third Party Sale") to a party other than a
Strategic Investor and other than the Investor (the "Third Party"), the Company
shall first offer (the "Offer") to the Investor, in writing, the right to
purchase such shares (the "Offered Shares") at the bona fide price offered by
the Third Party (the "Offer Price"). The Offer shall grant the Investor the
right during the 5 Trading Days immediately following the date of the Offer to
elect to purchase any or all of the Offered Shares. The

                                      -18-
<PAGE>

Company, in connection with such a Third Party Sale, shall refrain from
circumventing or attempting to circumvent the Investor's right of first refusal
by way of making such a Third Party Sale to any of its Affiliates without first
making an Offer to the Investor. If the Investor so exercises its right to
purchase any or all of the Offered Shares, the purchase will be treated as a
Subsequent Sale except that the purchase price for the Offered Shares shall be
the Offer Price. The closing and method of payment shall be as provided for in
Sections 2.3 and 2.4 hereof and the Closing Date shall be 7 Trading Days after
the Investor exercises such right. If the Investor fails to exercise its right
to purchase any or all of the Offered Shares, then during the 60 calendar days
immediately following the expiration of such right, the Company shall be free to
sell any or all of the Offered Shares to a purchaser for a purchase price not
lower than the Offer Price payable on terms and conditions that are not more
favorable to such purchaser than those contained in the Offer. In the event that
the Company effects a Third Party Sale, the Investor may immediately terminate
this Agreement. Notwithstanding the foregoing, the Company shall be permitted to
issue shares of its securities in connection with an acquisition of another
entity or assets related to the Company's current or future business.

      Section 6.12. Confidential Information. The Company will hold, and will
use its best efforts to cause its Affiliates, and each of their respective
Representatives to hold, in strict confidence from any Person (other than any
such Affiliate or Representative), unless (i) compelled to disclose by judicial
or administrative process (including without limitation in connection with
obtaining the necessary approvals of this Agreement and the transactions
contemplated hereby of governmental or regulatory authorities) or by other
requirements of law or (ii) disclosed in an action or proceeding brought by a
party hereto in pursuit of its rights or in the exercise of its remedies
hereunder, all documents and information concerning the other party or any of
its Affiliates furnished to it by the other party or such other party's
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (a) previously known by the party receiving such documents
or information, (b) in the public domain (either prior to or after the
furnishing of such documents or information hereunder) through no fault of such
receiving party or (c) later acquired by the receiving party from another source
if the receiving party is not aware that such source is under an obligation to
another party hereto to keep such documents and information confidential.

      Section 6.13. Public Announcements. The Company, its Representatives and
legal advisors, and the Investor will not issue or make any reports, statements
or releases to the public or to any third party with respect to this Agreement
or the transactions contemplated hereby without the consent of both the Company
and the Investor, which consent shall not be unreasonably withheld. The Company,
its Representatives and legal advisers, and the Investor also will obtain the
other party's prior approval of any press release to be issued announcing the
consummation of the transactions contemplated by this Agreement or in any way
referring to the other party or affiliates of the other party. If either party
is unable to obtain the approval of its public report, statement, or press or
other release from the other party and such report, statement, or press or other
release is, in the opinion of legal counsel to such party, required by
applicable law or by any rule or regulation of the Principal Market in order to
discharge such party's disclosure obligations, then such party may make or issue
the legally required report, statement, or press or other release and promptly
furnish the other party with a copy thereof.

                                      -19-
<PAGE>

      Section 6.14. Delivery of Share Certificates. The Company shall use
commercially reasonable efforts to cause its transfer agent to dispatch, using a
nationally recognized and reputable overnight courier, share certificates
representing shares of Common Stock issued pursuant to a Sale within three (3)
Trading Days following the Closing Date relating to such Sale in accordance with
the provisions of the Transfer Agent Instructions.

                                  ARTICLE VII

                            CONDITIONS TO DELIVERY OF
                     SALE NOTICES AND CONDITIONS TO CLOSING

      Section 7.1. Conditions Precedent to the Obligation of the Company to
Issue and Sell Common Stock. Provided that the Company has delivered a Sale
Notice in accordance with the provisions of Section 2.3 and provided, further,
that the conditions set forth in Section 7.2 have been met, the obligation
hereunder of the Company to issue and sell the Common Stock to the Investor
incident to each Closing is subject to the satisfaction, at or before each such
Closing, of each of the conditions set forth below.

            (a) Accuracy of the Investor's Representation and Warranties. The
representations and warranties of the Investor shall be true and correct in all
material respects as of the date of this Agreement and as of the date of each
such Closing as though made at each such time.

            (b) Performance by the Investor. The Investor shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Closing.

      Section 7.2. Conditions Precedent to the Right of the Company to Deliver a
Sale Notice and the Obligation of the Investor to Purchase Common Stock. The
right of the Company to deliver a Sale Notice and the obligation of the Investor
hereunder to acquire and pay for the Common Stock incident to a Closing is
subject to the satisfaction, on (i) the Subscription Date, (ii) the applicable
Sale Notice Date and (iii) the applicable Closing Date (each a "Condition
Satisfaction Date"), of each of the following conditions; provided, however,
that with respect to the Subscription Date and the Closing relating to the First
Sale and a Subsequent Sale exercised pursuant to Section 2.1(b)(i)(x) only, the
Investor waives the conditions set forth in paragraphs (a) and (b) of this
Section 7.2:

            (a) Filing of Registration Statements with the SEC. In accordance
with the provisions set forth in the Registration Rights Agreement, the Company
shall have timely filed with the SEC Registration Statements covering the resale
of Registrable Securities.

            (b) Effective Registration Statements. (1) All Commitment Shares
issued to the Investor and all Commitment Shares that the Company intends to
issue to the Investor shall be covered by an effective Registration Statement
available for the sale of such Commitment Shares. (2) The Company shall have
notified the Investor in accordance with Section 6.8 hereof that all
Registration Statements covering Registrable Securities required to have been
filed by the

                                      -20-
<PAGE>

Company in accordance with the Registration Rights Agreement have been declared
effective by the SEC. (3) In accordance with the Registration Rights Agreement,
all such Registration Statements shall remain effective on each Condition
Satisfaction Date. (4) Neither the Company nor the Investor shall have received
notice that the SEC has issued or intends to issue a stop order with respect to
a Registration Statement or that the SEC otherwise has suspended or withdrawn
the effectiveness of a Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the SEC's concerns
have been addressed and the Investor is reasonably satisfied that the SEC no
longer is considering or intends to take such action). (5) No other suspension
of the use or withdrawal of the effectiveness of such Registration Statement or
related prospectus shall exist.

      (c) Accuracy of the Company's Representations and Warranties. The
representations and warranties of the Company shall be true and correct as of
each Condition Satisfaction Date as though made at each such time (except for
representations and warranties specifically made as of a particular date).

      (d) Performance by the Company. The Company shall have performed,
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement and the Registration Rights Agreement to
be performed, satisfied or complied with by the Company at or prior to each
Condition Satisfaction Date.

      (e) No Injunction. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or adopted by
any court or governmental authority of competent jurisdiction that prohibits the
transactions contemplated by this Agreement or otherwise has a Material Adverse
Effect, and no actions, suits or proceedings shall be in progress, pending or
threatened by any Person, that seek to enjoin or prohibit the transactions
contemplated by this Agreement or otherwise could reasonably be expected to have
a Material Adverse Effect. For purposes of this paragraph (e), no proceeding
shall be deemed pending or threatened unless one of the parties has received
written or oral notification thereof prior to the applicable Closing Date.

      (f) No Suspension of Trading in or Delisting of Common Stock. The trading
of the Common Stock shall not have been suspended by the SEC, the Principal
Market or the NASD, and the Common Stock shall have been approved for listing or
quotation on and shall not have been delisted from the Principal Market. The
issuance of shares of Common Stock with respect to the applicable Closing shall
not violate the shareholder approval requirements of the Principal Market.

      (g) Legal Opinion. The Company shall have caused to be delivered to the
Investor, within 5 Trading Days of the effective date of a Registration
Statement, opinions of the Company's special New York counsel in the forms of
Exhibit D-2 and D-3 hereto, addressed to the Investor.

      (h) Disclosure. No dispute between the Company and the Investor shall
exist pursuant to Section 7.3 as to the adequacy of the disclosure contained in
each Registration Statement.

                                      -21-
<PAGE>

      (i) Ten Percent Limitation. On each Closing Date, the number of Commitment
Shares then to be purchased by the Investor shall not exceed the number of such
shares that, when aggregated with all other shares of Common Stock and
Registrable Securities then owned by the Investor beneficially or deemed
beneficially owned by the Investor, as determined in accordance with the
definition of beneficial ownership in Rule 13d-3 promulgated under the Exchange
Act, would result in the Investor owning more than 9.9% of all of such Common
Stock as would be outstanding on such Closing Date, as determined in accordance
with Section 13(d) of the Exchange Act and the regulations promulgated
thereunder. For purposes of this Section, in the event that the amount of Common
Stock outstanding as determined in accordance with Section 13(d) of the Exchange
Act and the regulations promulgated thereunder is greater on a Closing Date than
on the Sale Notice Date associated with such Closing Date, the amount of Common
Stock outstanding on such Closing Date shall govern for purposes of determining
whether the Investor, when aggregating all purchases of Common Stock made
pursuant to this Agreement would own more than 9.9% of the Common Stock
following such Closing Date.

      (j) No Knowledge. The Company shall have no knowledge of any event more
likely than not to have the effect of causing any Registration Statement to be
suspended or otherwise ineffective (which event is more likely than not to occur
within the fifteen Trading Days following the Trading Day on which such notice
is deemed delivered.

      (k) Minimum Time Interval. At least 20 Trading Days shall have elapsed
since the Closing Date relating to the previous Sale.

      (l) Shareholder Vote. The issuance of Commitment Shares with respect to
the applicable Closing, if any, shall not violate the shareholder approval
requirements of the Principal Market. Each Sale Notice shall provide the
Investor with the following information as of the applicable Sale Notice Date:
(i) the total number of shares of Outstanding Common Stock, (ii) the number of
Subsequent Sale Shares issuable with respect to the applicable Closing, and
(iii) the number of shares of Commitment Shares issued pursuant to previous
Sales. If the issuance by the Company of a number of Commitment Shares equal to
the sum of the amounts stated in clauses (ii) and (iii) hereof would result in a
violation by the Company of the shareholder approval requirements of the
Principal Market, the applicable Sale Notice shall be deemed null and void.

      (m) Other. On each Condition Satisfaction Date, the Investor shall have
received and been reasonably satisfied with such other certificates and
documents as shall have been reasonably requested by the Investor in order for
the Investor to confirm the Company's satisfaction of the conditions set forth
in this Section 7.2., including, without limitation, a certificate in
substantially the form and substance of Exhibit E hereto, executed in either
case by an executive officer of the Company and to the effect that all the
conditions to such Closing shall have been satisfied as at the date of each such
certificate.

      (n) Certain Events. The Company shall not be permitted to deliver a Sale
Notice during any period in which the events described in Section 6.7, except
for clause (v) thereof, continue to occur.

                                      -22-
<PAGE>

      Section 7.3. Due Diligence Review; Non-Disclosure of Non-Public
Information.

            (a) The Company shall make available for inspection and review by
the Investor, advisors to and representatives of the Investor (who may or may
not be affiliated with the Investor and who are reasonably acceptable to the
Company), and any Underwriter, any Registration Statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all financial and
other records, all SEC Documents and other filings with the SEC, and all other
corporate documents and properties of the Company as may be reasonably necessary
for the purpose of such review, and cause the Company's officers, directors and
employees to supply all such information reasonably requested by the Investor or
any such representative, advisor or Underwriter in connection with such
Registration Statement (including, without limitation, in response to all
questions and other inquiries reasonably made or submitted by any of them),
prior to and from time to time after the filing and effectiveness of such
Registration Statement for the sole purpose of enabling the Investor and such
representatives, advisors and Underwriters and their respective accountants and
attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.

            (b) None of the Company, its officers, directors, employees and
agents shall in any event disclose material non-public information to the
Investor, advisors to or representatives of the Investor unless prior to
disclosure of such information the Company identifies such information as being
material non-public information and provides the Investor, such advisors and
representatives with the opportunity to accept or refuse to accept such
non-public information for review. As a condition to disclosing any non-public
information hereunder, the Company may require the Investor and the Investor's
advisors and representatives to enter into a confidentiality agreement in form
reasonably satisfactory to the Company and the Investor.

            (c) Nothing herein shall require the Company to disclose non-public
information to the Investor or its advisors or representatives, and the Company
represents that it does not disseminate material non-public information to any
investors who purchase stock in the Company in a public offering, to money
managers or to securities analysts; provided, however, that notwithstanding
anything herein to the contrary, the Company shall, as hereinabove provided,
immediately notify the advisors and representatives of the Investor and any
Underwriters of any event or the existence of any circumstance (without any
obligation to disclose the specific event or circumstance) of which it becomes
aware, constituting non-public information (whether or not requested of the
Company specifically or generally during the course of due diligence by such
persons or entities), which, if not disclosed in the prospectus included in the
applicable Registration Statement would cause such prospectus to include a
material misstatement or to omit a material fact required to be stated therein
in order to make the statements, therein, in light of the circumstances in which
they were made, not misleading. Nothing contained in this Section 7.3 shall be
construed to mean that such persons or entities other than the Investor (without
the written consent of the Investor prior to disclosure of such information) may
not obtain non-public information in the course of conducting due diligence in
accordance with the terms and conditions of this Agreement and nothing herein
shall prevent any such persons or entities from notifying the Company of their
opinion that based on such due diligence by such persons or entities, that such
Registration Statement contains an untrue statement of a material fact or omits
a material fact required to be stated in such Registration

                                      -23-
<PAGE>

Statement or necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading.

                                  ARTICLE VIII

                                     LEGENDS

      Section 8.1. Legends. Unless otherwise provided below, each certificate
representing Registrable Securities will bear the following legend (the
"Legend"):

      "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
      OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE
      UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
      AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
      PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
      PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
      OR PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
      REGISTRATION. THE HOLDER OF THIS CERTIFICATE IS THE BENEFICIARY OF CERTAIN
      OBLIGATIONS OF FIBERCORE, INC. SET FORTH IN A STOCK PURCHASE AGREEMENT,
      DATED AS OF AUGUST 20, 2001, BETWEEN FIBERCORE, INC. AND CRESCENT
      INTERNATIONAL LTD. A COPY OF THE PORTION OF THE AFORESAID AGREEMENT
      EVIDENCING SUCH OBLIGATIONS MAY BE OBTAINED FROM FIBERCORE, INC.'S
      EXECUTIVE OFFICES."

      On the Subscription Date the Company shall issue to the transfer agent for
its Common Stock (and to any substitute or replacement transfer agent for its
Common Stock upon the Company's appointment of any such substitute or
replacement transfer agent) Transfer Agent Instructions, with a copy to the
Investor. Other than as required as a result of change in law, such instructions
shall be irrevocable by the Company from and after the date hereof or from and
after the issuance thereof to any such substitute or replacement transfer agent,
as the case may be, except as otherwise expressly provided in the Registration
Rights Agreement. It is the intent and purpose of such instructions, as provided
therein, to require the transfer agent for the Common Stock from time to time
upon transfer of Registrable Securities by the Investor to issue certificates
evidencing such Registrable Securities free of the Legend during the following
periods and under the following circumstances and without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the transfer agent by or from
the Company or its counsel or the Investor; and the Company agrees that it will,
and will cause its counsel to, provide the transfer agent with any and all
documentation reasonably requested or required by the transfer agent, the
Investor or their respective counsel, including without limitation the
documentation and confirmations referenced in the Transfer Agent Instructions:

                                      -24-
<PAGE>

            (a) At any time after the applicable Effective Date, upon surrender
of one or more certificates evidencing Registrable Securities that bear the
Legend, to the extent accompanied by a notice requesting the issuance of new
certificates free of the Legend to replace those surrendered; provided that (i)
the applicable Registration Statement shall then be effective and (ii) if
reasonably requested by the transfer agent the Investor confirms to the transfer
agent that the Investor has transferred the Registrable Securities pursuant to
such Registration Statement and has complied with the prospectus delivery
requirement; or

            (b) At any time upon any surrender of one or more certificates
evidencing Registrable Securities that bear the Legend, to the extent
accompanied by a notice requesting the issuance of new certificates free of the
Legend to replace those surrendered and containing representations that the
Investor is permitted to dispose of such Registrable Securities without
limitation as to amount or manner of sale pursuant to Rule 144 under the
Securities Act.

      Section 8.2. No Other Legend or Stock Transfer Restrictions. No legend
other than the one specified in Section 8.1 has been or shall be placed on the
share certificates representing the Registrable Securities, and no instructions
or "stop transfer orders," so called, "stock transfer restrictions," or other
restrictions have been or shall be given to the Company's transfer agent with
respect thereto other than as expressly set forth in this Article VIII and as
required by applicable law.

      Section 8.3. Investor's Compliance. Nothing in this Article VIII shall
affect in any way the Investor's obligations to comply with all applicable
securities laws.

                                   ARTICLE IX

                          INDEMNIFICATION; ARBITRATION

      Section 9.1. Indemnification. The Company agrees to indemnify and hold
harmless the Investor, its partners, Affiliates, officers, directors, employees,
and duly authorized agents, and each Person or entity, if any, who controls the
Investor within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act, together with its controlling persons from and against any
Damages, joint or several, and any action in respect thereof to which the
Investor, its partners, Affiliates, officers, directors, employees, and duly
authorized agents, and any such controlling person becomes subject to, resulting
from, arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, unless such
Damages result primarily from the Investor's gross negligence, recklessness or
bad faith in performing its obligations under this Agreement; provided, however,
that the maximum aggregate liability of the Company shall be limited to the
amount actually invested by the Investor under this Agreement, and provided,
further, that in no event shall this provision be deemed to limit any rights to
indemnification arising under the Registration Rights Agreement.

      Section 9.2. Method of Asserting Indemnification Claims. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.1
shall be asserted and resolved as follows:

                                      -25-
<PAGE>

            (a) In the event any claim or demand in respect of which any person
claiming indemnification under any provision of Section 9.1 (an "Indemnified
Party") might seek indemnity under Section 9.1 is asserted against or sought to
be collected from such Indemnified Party by a person other than the Company, the
Investor or any Affiliate of the Company (a "Third Party Claim"), the
Indemnified Party shall deliver a written notification, enclosing a copy of all
papers served, if any, and specifying the nature of and basis for such Third
Party Claim and for the Indemnified Party's claim for indemnification that is
being asserted under any provision of Section 9.1 against any person (the
"Indemnifying Party"), together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith, of such Third
Party Claim (a "Claim Notice") with reasonable promptness to the Indemnifying
Party. If the Indemnified Party fails to provide the Claim Notice with
reasonable promptness after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to indemnify the
Indemnified Party with respect to such Third Party Claim to the extent that the
Indemnifying Party's ability to defend has been irreparably prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall notify the
Indemnified Party as soon as practicable within the period ending 30 calendar
days following receipt by the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute Period") whether the
Indemnifying Party disputes its liability or the amount of its liability to the
Indemnified Party under Section 9.1 and whether the Indemnifying Party desires,
at its sole cost and expense, to defend the Indemnified Party against such Third
Party Claim.

                  (i) If the Indemnifying Party notifies the Indemnified Party
            within the Dispute Period that the Indemnifying Party desires to
            defend the Indemnified Party with respect to the Third Party Claim
            pursuant to this Section 9.2(a), then the Indemnifying Party shall
            have the right to defend, with counsel reasonably satisfactory to
            the Indemnified Party, at the sole cost and expense of the
            Indemnifying Party, such Third Party Claim by all appropriate
            proceedings, which proceedings shall be vigorously and diligently
            prosecuted by the Indemnifying Party to a final conclusion or will
            be settled at the discretion of the Indemnifying Party (but only
            with the consent of the Indemnified Party in the case of any
            settlement that provides for any relief other than the payment of
            monetary damages or that provides for the payment of monetary
            damages as to which the Indemnified Party shall not be indemnified
            in full pursuant to Section 9.1). The Indemnifying Party shall have
            full control of such defense and proceedings, including any
            compromise or settlement thereof; provided, however, that the
            Indemnified Party may, at the sole cost and expense of the
            Indemnified Party, at any time prior to the Indemnifying Party's
            delivery of the notice referred to in the first sentence of this
            clause (i), file any motion, answer or other pleadings or take any
            other action that the Indemnified Party reasonably believes to be
            necessary or appropriate to protect its interests; and provided
            further, that if requested by the Indemnifying Party, the
            Indemnified Party will, at the sole cost and expense of the
            Indemnifying Party, provide reasonable cooperation to the
            Indemnifying Party in contesting any Third Party Claim that the
            Indemnifying Party elects to contest. The Indemnified Party may
            participate in, but not control, any defense or settlement of any
            Third Party Claim controlled by the Indemnifying Party pursuant to
            this clause (i), and except as provided in the preceding sentence,
            the Indemnified Party shall bear its own costs and expenses with
            respect to such

                                      -26-
<PAGE>

            participation. Notwithstanding the foregoing, the Indemnified Party
            may take over the control of the defense or settlement of a Third
            Party Claim at any time if it irrevocably waives its right to
            indemnity under Section 9.1 with respect to such Third Party Claim.

                  (ii) If the Indemnifying Party fails to notify the Indemnified
            Party within the Dispute Period that the Indemnifying Party desires
            to defend the Third Party Claim pursuant to Section 9.2(a), or if
            the Indemnifying Party gives such notice but fails to prosecute
            vigorously and diligently or settle the Third Party Claim, or if the
            Indemnifying Party fails to give any notice whatsoever within the
            Dispute Period, then the Indemnified Party shall have the right to
            defend, at the sole cost and expense of the Indemnifying Party, the
            Third Party Claim by all appropriate proceedings, which proceedings
            shall be prosecuted by the Indemnified Party in a reasonable manner
            and in good faith or will be settled at the discretion of the
            Indemnified Party (with the consent of the Indemnifying Party, which
            consent will not be unreasonably withheld). The Indemnified Party
            will have full control of such defense and proceedings, including
            any compromise or settlement thereof; provided, however, that if
            requested by the Indemnified Party, the Indemnifying Party will, at
            the sole cost and expense of the Indemnifying Party, provide
            reasonable cooperation to the Indemnified Party and its counsel in
            contesting any Third Party Claim which the Indemnified Party is
            contesting. Notwithstanding the foregoing provisions of this clause
            (ii), if the Indemnifying Party has notified the Indemnified Party
            within the Dispute Period that the Indemnifying Party disputes its
            liability or the amount of its liability hereunder to the
            Indemnified Party with respect to such Third Party Claim, and if
            such dispute is resolved in favor of the Indemnifying Party in the
            manner provided in clause (iii) below, the Indemnifying Party will
            not be required to bear the costs and expenses of the Indemnified
            Party's defense pursuant to this clause (ii) or of the Indemnifying
            Party's participation therein at the Indemnified Party's request,
            and the Indemnified Party shall reimburse the Indemnifying Party in
            full for all reasonable costs and expenses incurred by the
            Indemnifying Party in connection with such litigation. The
            Indemnifying Party may participate in, but not control, any defense
            or settlement controlled by the Indemnified Party pursuant to this
            clause (ii), and the Indemnifying Party shall bear its own costs and
            expenses with respect to such participation.

                  (iii) If the Indemnifying Party notifies the Indemnified Party
            that it does not dispute its liability or the amount of its
            liability to the Indemnified Party with respect to the Third Party
            Claim under Section 9.1 or fails to notify the Indemnified Party
            within the Dispute Period whether the Indemnifying Party disputes
            its liability or the amount of its liability to the Indemnified
            Party with respect to such Third Party Claim, the Damages in the
            amount specified in the Claim Notice shall be conclusively deemed a
            liability of the Indemnifying Party under Section 9.1 and the
            Indemnifying Party shall pay the amount of such Damages to the
            Indemnified Party on demand. If the Indemnifying Party has timely
            disputed its liability or the amount of its liability with respect
            to such claim, the Indemnifying Party and the Indemnified Party
            shall proceed in good

                                      -27-
<PAGE>

            faith to negotiate a resolution of such dispute, and if not resolved
            through negotiations within the period of 30 calendar days
            immediately following the Dispute Period, such dispute shall be
            resolved by arbitration in accordance with Section 9.3.

            (b) In the event any Indemnified Party should have a claim under
Section 9.1 against the Indemnifying Party that does not involve a Third Party
Claim, the Indemnified Party shall deliver a written notification of a claim for
indemnity under Section 9.1 specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably ascertainable, the estimated
amount, determined in good faith, of such claim (an "Indemnity Notice") with
reasonable promptness to the Indemnifying Party. The failure by any Indemnified
Party to give the Indemnity Notice shall not impair such party's rights
hereunder except to the extent that the Indemnifying Party demonstrates that it
has been irreparably prejudiced thereby. If the Indemnifying Party notifies the
Indemnified Party that it does not dispute the claim or the amount of the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim or
the amount of the claim described in such Indemnity Notice, the Damages in the
amount specified in the Indemnity Notice will be conclusively deemed a liability
of the Indemnifying Party under Section 9.1 and the Indemnifying Party shall pay
the amount of such Damages to the Indemnified Party on demand. If the
Indemnifying Party has timely disputed its liability or the amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall proceed in good faith to negotiate a resolution of such dispute, and
if not resolved through negotiations within the period of 30 calendar days
immediately following the Dispute Period, such dispute shall be resolved by
arbitration in accordance with Section 9.3.

      Section 9.3. Arbitration. Any controversy, claim or dispute arising out of
or in connection with this Agreement or the Registration Rights Agreement,
including any question regarding its existence, validity, interpretation,
breach, or termination, shall be referred to and finally resolved in accordance
with the International Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitral tribunal may
be entered by any court having jurisdiction thereof or having jurisdiction over
any party or any party's assets.

            (a) The tribunal shall consist of three arbitrators, one of whom
shall be appointed by the Investor and the second of whom shall be appointed by
the Company. The parties shall instruct the two party-appointed arbitrators to
appoint the third arbitrator of the tribunal, who shall be the chairperson of
the tribunal, within 30 days of the last of their appointments. Notwithstanding
the foregoing, if either party should fail to appoint an arbitrator within 30
days of receiving written notice of the appointment of an arbitrator by the
other party, the second arbitrator shall, at the written request of the party
which has already made an appointment, be appointed forthwith by the American
Arbitration Association. Likewise, if the party-appointed arbitrators fail to
make an agreed appointment for the chairperson within 30 days of the last of
their appointments, either party may request in writing that the American
Arbitration Association forthwith appoint the chairperson.

            (b) The place of arbitration shall be New York, New York.

                                      -28-
<PAGE>

            (c) This arbitration clause and the conduct of the arbitral
proceedings shall be governed by the Federal Arbitration Act, 9 U.S.C.A. sec. 1
et seq.

            (d) The language of the arbitration shall be English.

            (e) Nothing in these dispute resolution provisions shall be
construed as preventing either party from seeking conservatory or similar
interim relief in any court of competent jurisdiction.

            (f) To the extent practicable, the parties shall instruct the
arbitral tribunal to render its award no more than 60 calendar days from the
date that the three member tribunal is constituted. The arbitral tribunal shall
not lose jurisdiction over the matter based on a failure to render an award
within this time period.

                                   ARTICLE X

                                  MISCELLANEOUS

      Section 10.1. Fees and Transaction Costs. In connection with the execution
of this agreement the following Sale Fees and Investor Legal Fees (as defined
below and in Schedule 10.1) are payable by the Company to the payee entities
listed in Schedule 10.1. The Investor is authorized by the Company to deduct
such amounts from any sums due to the Company on the applicable Closing Date and
to pay them to the payee entities listed in Schedule 10.1.

            (a) Sale Fees. On each Closing Date, the Company shall pay an amount
calculated in accordance with Schedule 10.1 (the "Sale Fee").

            (b) Transaction Costs. The fees, expenses and disbursements of the
Investor's counsel (the "Investor Legal Fees") shall be paid by the Company. The
Company shall pay the Investor Legal Fees on the first Closing Date, to the
extent such Investor Legal Fees can be determined on the first Closing Date. The
Company shall pay the remaining Investor Legal Fees not later than 10 days after
receipt of notice from the Investor that such amount is due. The Company agrees
to pay its own expenses incident to the performance of its obligations
hereunder.

      Section 10.2. Reporting Entity for the Common Stock. The reporting entity
relied upon for the determination of the Trade Price or Trading Volume of the
Common Stock on the Principal Market on any given Trading Day for the purposes
of this Agreement shall be the Bloomberg L.P. The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

      Section 10.3. Brokerage. Except as disclosed in Section 10.1, each of the
parties hereto represents that it has had no dealings in connection with this
transaction with any finder or broker which would impose a legal obligation to
pay any fee or commission. The Company on the one hand, and the Investor, on the
other hand, agree to indemnify the other against and hold the other harmless
from any and all liabilities to any persons claiming brokerage commissions or

                                      -29-
<PAGE>

finder's fees on account of services purported to have been rendered on behalf
of the indemnifying party in connection with this Agreement or the transactions
contemplated hereby.

      Section 10.4. Notices. 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 at the address or
number designated below (if delivered on a Trading Day during normal business
hours where such notice is to be received), or the first Trading Day following
such delivery (if delivered other than on a Trading Day during normal business
hours where such notice is to be received) or (b) on the third Trading 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 the Company:

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

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

            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 Investor:

            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 71 69
            Facsimile: +41 22 929 53 94

                                      -30-
<PAGE>

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

            Clifford Chance Rogers & Wells LLP
            200 Park Avenue
            New York, NY  10166
            Attention: Earl S. Zimmerman, Esq.
            Telephone: (212) 878-8000
            Facsimile: (212) 878-8375

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

      Section 10.5. Assignment. Neither this Agreement nor any rights of the
Investor or the Company hereunder may be assigned by either party to any other
Person. Notwithstanding the foregoing, the Investor's interest in this Agreement
may be assigned at any time, in whole or in part, to any Affiliate of the
Investor upon the prior written consent of the Company, which consent shall not
to be unreasonably withheld provided, however, that any such assignment or
transfer shall relieve the Investor of its duties under this Agreement only upon
performance thereof by any such assignee or transferee.

      Section 10.6. Amendment; No Waiver. No party shall be liable or bound to
any other party in any manner by any warranties, representations or covenants
except as specifically set forth in this Agreement. Except as expressly provided
in this Agreement, neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by
both parties hereto. The failure of the either party to insist on strict
compliance with this Agreement, or to exercise any right or remedy under this
Agreement, shall not constitute a waiver of any rights provided under this
Agreement, nor estop the parties from thereafter demanding full and complete
compliance nor prevent the parties from exercising such a right or remedy in the
future.

      Section 10.7. Annexes and Exhibits; Entire Agreement. All annexes and
exhibits to this Agreement are incorporated herein by reference and shall
constitute part of this Agreement. This Agreement and the Registration Rights
Agreement set forth the entire agreement and understanding of the parties
relating to the subject matter hereof and thereof and supersede all prior and
contemporaneous agreements, negotiations and understandings between the parties,
both oral and written, relating to the subject matter hereof.

      Section 10.8. Survival. The provisions of Articles VI, VIII, IX and X, and
of Section 7.3, shall survive the termination of this Agreement.

      Section 10.9. Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.

                                      -31-
<PAGE>

      Section 10.10. Title and Subtitles. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

      Section 10.11. Counterparts. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.

      Section 10.12. Choice of Law. This Agreement shall be construed under the
laws of the State of New York.

      Section 10.13. Other Expenses. In the event that a dispute between the
parties is not determined by a Board of Arbitration, the non-prevailing party in
any action, suit or proceeding shall bear all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
defense or settlement of such action, suit or proceeding.

                                      -32-
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

                           CRESCENT INTERNATIONAL LTD.

                           By:
                               ----------------------------------------
                               Name:
                               Title:

                           FIBERCORE, INC.

                           By:
                               ----------------------------------------
                               Name:
                               Title:

<PAGE>

                                  SCHEDULE 10.1

                           FEES AND TRANSACTION COSTS

In accordance with Section 10.1 of the Agreement, the following amounts are
payable by the Company and the Investor is authorized to deduct such amounts
from the Investment Amount and to pay such amounts to the following payee
entities:
<TABLE>
<CAPTION>
 EVENTS TRIGGERING       FEES /       AMOUNT ON WHICH THE         PAYEE ENTITY           AMOUNT
    THE PAYMENT        TRANSACTION     FEE IS CALCULATED
                         COSTS
-------------------------------------------------------------------------------------------------
<S>                   <C>             <C>                    <C>                       <C>
Closing Date for      Sale Fee        $3,000,000             GreenLight                $67,500
the First Sale                                               (Switzerland) S.A.
-------------------------------------------------------------------------------------------------
Closing Date for      Legal Fees      Investor Legal Fees    Crescent International    Investor
the First Sale                                               Ltd.                      Legal Fees
-------------------------------------------------------------------------------------------------
Closing Date for a    Sale Fee        The Investment         GreenLight                2.25%
Subsequent Sale                       Amount of the Sale     (Switzerland) S.A.
-------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT A
                            FORM OF CLOSING STATEMENT

                                CLOSING STATEMENT

===============================================================================
Closing Date........................   [Date] ("Closing Date")
-------------------------------------------------------------------------------
Investor............................   Crescent International Ltd.("Investor")
-------------------------------------------------------------------------------
Company.............................   FiberCore, Inc. ("Company")
-------------------------------------------------------------------------------
Transaction.........................   The closing of the sale by the Company to
                                       Investor of shares of the Company's
                                       Common Stock pursuant to the Stock
                                       Purchase Agreement dated August 20, 2001
                                       (the "Stock Purchase Agreement").
                                       Capitalized terms not otherwise defined
                                       herein shall have the meaning assigned by
                                       the Stock Purchase Agreement.
-------------------------------------------------------------------------------
Maximum Commitment Amount...........   $19,000,000
-------------------------------------------------------------------------------
Purchase Price for Common Stock.....   $[determined at applicable Closing of a
                                       Sale]
-------------------------------------------------------------------------------
Shares of Common Stock Sold.........   ________
-------------------------------------------------------------------------------
Closing Disbursements:
1.  Investment Amount...............   $__________
2.  Less: Sale Fee..................   $__________
3.  Less: Investor Legal Fees.......   $__________
4.  Net Amount......................   $__________
-------------------------------------------------------------------------------
Actions on Subscription Date

-------------------------------------------------------------------------------
1.  Stock Purchase Agreement........   The Investor and the Company executed the
                                       Stock Purchase Agreement.
-------------------------------------------------------------------------------
2. Registration Rights Agreement....   The Investor and the Company executed the
                                       Registration Rights Agreement.
-------------------------------------------------------------------------------
3.  Instructions to Transfer Agent..   The Company executed and delivered
                                       irrevocable Instructions to the Transfer
                                       Agent and the Transfer Agent confirmed
                                       and accepted such instructions. A copy of
                                       such instructions and acceptance was
                                       received by the Investor's legal counsel.
-------------------------------------------------------------------------------

<PAGE>

Actions at Closing:
1. Legal Opinion....................   Cadwalader, Wickersham & Taft delivered
                                       its legal opinion. Lionel Sawyer &
                                       Collins delivered its legal opinion.
-------------------------------------------------------------------------------
2. Wire Transfer....................   Upon confirmation of above actions by
                                       Investor's legal counsel, Investor will
                                       wire to the Company the Net Amount
                                       indicated on the front page hereof, and
                                       thereafter deliver to the Transfer Agent
                                       a Wire Transfer Notice indicating
                                       completion of delivery by wire transfer
                                       to the Company the Net Amount.
-------------------------------------------------------------------------------

ACKNOWLEDGED AND AGREED:
Crescent International Ltd.            FiberCore, Inc.

By:                                    By:
   ----------------------------           ----------------------------
===============================================================================

===============================================================================
TOTAL PURSUANT TO THE STOCK PURCHASE                               $19,000,000
AGREEMENT
-------------------------------------------------------------------------------
Sale of Common Stock                                                    <$.00>
-------------------------------------------------------------------------------
REMAINING BALANCE                                               $_____________
===============================================================================

                                      -2-

<PAGE>

                                    EXHIBIT B
                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                    EXHIBIT C
                           TRANSFER AGENT INSTRUCTIONS

                                 FIBERCORE, INC.
                               253 WORCESTER ROAD
                                  P.O. BOX 180
                               CHARLTON, MA 01610

                                                               August 20, 2001

Interstate Transfer Company
6084 South 900 East (Suite 101)
Salt Lake City, UT  84121

Attention: Ms. Janis Patterson:

Dear Janis:

      Reference is made to the Stock Purchase Agreement (the "Agreement"), dated
as of August 20, 2001 between Crescent International Limited (the "Investor")
and FiberCore, Inc. (the "Company"). Pursuant to the Agreement, the Investor has
agreed to purchase from the Company and the Company has agreed to sell to the
Investor from time to time shares of Common Stock of the Company (the "Common
Stock"). As a condition to the effectiveness of the Agreement, the Company has
agreed to issue to you, as the transfer agent for the Common Stock (the
"Transfer Agent"), these instructions (the "Irrevocable Instructions") relating
to the Common Stock to be issued to the Investor (or a permitted assignee)
pursuant to the Agreement. Any term used herein and not otherwise defined shall
have the meaning set forth in the Agreement.

      1. MECHANICS OF DELIVERY OF CERTIFICATES REPRESENTING COMMON STOCK

      a. First Sale. Upon confirmation by the Company or the Investor of
transfer of the funds due to the Company pursuant to the First Sale, the
Transfer Agent shall deliver to the Investor by overnight courier certificates
representing Common Stock as promptly as practicable, but in no event later than
three business days after the Closing Date relating to the First Sale.

      b. Subsequent Sales. Upon confirmation by the Company or the Investor of
transfer of the funds due to the Company pursuant to a Subsequent Sale, the
Transfer Agent shall deliver to the Investor by overnight courier certificates
representing Common Stock as promptly as practicable, but in no event later than
three Trading Days after any Closing pursuant to which the Investor acquires
Common Stock under the Agreement, or after any request that a Legend be removed.

<PAGE>

      c. Address.  Unless otherwise  notified in writing by the Investor,  the
certificates  delivered  to the  Investor  pursuant to the  Agreement  and the
preceding two paragraphs shall be delivered at the following address:

      Salomon Smith Barney
      Attn:  Alex Cann
      3333 Peachtree Road
      Suite 800
      Atlanta, GA 30326
      DTC 0418
      Ref. Crescent International Ltd. A/C # 410-26691-18

      With notice to:

      GreenLight (Switzerland) SA
      84, Av. Louis-Casai
      P.O. Box 161
      CH-1216 Cointrin/Geneva
      Switzerland

      2. ISSUANCE OF COMMON STOCK WITHOUT THE LEGEND

      a. Pursuant to the Agreement, the Company is required to prepare and file
with the Commission, and maintain the effectiveness of, a registration statement
or registration statements registering the resale of the Common Stock acquired
or to be acquired by the Investor. The Company will advise the Transfer Agent in
writing of the effectiveness of any such registration statement promptly upon
its being declared effective. The Transfer Agent shall be entitled to rely on
such advice and shall assume that such registration statement remains effective
unless the Transfer Agent is otherwise advised in writing by the Company and
shall not be required to independently confirm the continued effectiveness of
such registration statement. In the circumstances set forth in paragraph (b)
below, the Transfer Agent shall deliver to the Investor certificates
representing Common Stock not bearing the Legend without requiring further
advice or instruction or additional documentation from the Company or its
counsel or the Investor or its counsel or any other party (other than as
described in such paragraphs).

      b. At any time after the effective date of the applicable registration
statement (provided that the Company has not informed the Transfer Agent in
writing that such registration statement is not effective) upon any surrender of
one or more certificates evidencing Common Stock which bear the Legend,
accompanied by a notice from the Investor, its broker, custodian or permitted
assignee requesting the issuance of new certificates free of the Legend to
replace those surrendered and setting forth whether a transfer is pursuant to a
registration statement or Rule 144, the Transfer Agent shall promptly deliver to
the Investor certificates representing the Common Stock not bearing the Legend,
in such names and denominations as requested, provided that:

                                      -2-
<PAGE>

            i.   if pursuant to a registration statement, the Investor (or its
      broker, custodian or permitted assignee) shall confirm in writing to the
      Transfer Agent that the Investor has complied with the prospectus delivery
      requirements under the Securities Act;

            ii.   if pursuant to Rule 144(k) the Investor (or its broker,
      custodian or permitted assignee) shall deliver to the Transfer Agent an
      opinion of counsel satisfactory to the Company, to the effect that the
      Investor is permitted to dispose of such Common Stock without limitation
      as to amount or manner of sale pursuant to Rule 144 under the Securities
      Act; or

            iii.   if pursuant to Rule 144 (other than pursuant to Rule 144(k)),
      the Investor (or its broker, custodian or permitted assignee) shall
      deliver to the Transfer Agent an opinion of counsel satisfactory to the
      Company, to the effect that (i) the Investor has held the shares of Common
      Stock for at least one year, (ii) counting the shares surrendered as being
      sold upon the date the unlegended certificates would be delivered to the
      Investor (or the Trading Day immediately following if such date is not a
      Trading Day), during the three months ending upon such delivery date the
      Investor will not have sold more than the greater of (a) one percent (1%)
      of the total number of outstanding shares of Common Stock or (b) the
      average weekly trading volume of the Common Stock for the preceding four
      weeks and (iii) the Investor has complied with the manner of sale and
      notice requirements of Rule 144 under the Securities Act.

      Any advice, notice or instructions to the Transfer Agent required or
permitted to be given hereunder may be transmitted via facsimile to the Transfer
Agent's facsimile number of (801) 281-9750.

      The certificates bearing the Legend shall be surrendered and delivered to
the Transfer Agent at the following address:

      Interstate Transfer Company
      6084 South 900 East (Suite 101)
      Salt Lake City, UT  84121
      Attention: Ms. Janis Patterson:
      Tel: (801) 281-9746

      3. FEES OF TRANSFER AGENT; INDEMNIFICATION

      The Company agrees to pay the Transfer Agent for all fees and expenses
incurred in connection with these Irrevocable Instructions. The Company agrees
to indemnify the Transfer Agent and its officers, employees and agents, against
any losses, claims, damages or liabilities, joint or several, to which it or
they become subject based upon the performance by the Transfer Agent of its
duties in accordance with the Irrevocable Instructions.

                                      -3-
<PAGE>

      4. THIRD PARTY BENEFICIARY

      The Company and the Transfer Agent acknowledge and agree that the Investor
is an express third party beneficiary of these Irrevocable Instructions and
shall be entitled to rely upon, and enforce, the provisions hereof.

                                 FIBERCORE, INC.

                                 By:
                                     ---------------------------------
                                     Name:
                                     Title:

AGREED:

INTERSTATE TRANSFER COMPANY

By:
    ---------------------------------
    Name:
    Title:

                                      -4-
<PAGE>

                                   EXHIBIT D-1

               FORM OF OPINION OF THE COMPANY'S NEVADA COUNSEL

                                 August __, 2001

Crescent International Ltd.
c/o GreenLight (Switzerland) SA
84, av Louis-Casai, P.O. Box 42
1216 Geneva, Cointrin
Switzerland

Re: Stock Purchase Agreement Between Crescent International Ltd. and FiberCore,
Inc.

Ladies and Gentlemen:

      This opinion is furnished to you pursuant to Section 6.10 of the Stock
Purchase Agreement by and between Crescent International Ltd., a Bermuda entity
(the "Investor") and FiberCore, Inc. (the "Company"), dated August __, 2001 (the
"Stock Purchase Agreement"), which provides for the issuance and sale by the
Company of up to $19,000,000 worth of shares of Common Stock of the Company (the
"Commitment Shares"). All terms used herein have the meanings defined for them
in the Stock Purchase Agreement unless otherwise defined herein.

      We have acted as special Nevada counsel for the Company in connection with
the Stock Purchase Agreement and the Registration Rights Agreement between the
Investor and the Company, dated August __, 2001 (the "Registration Rights
Agreement" and together with the Stock Purchase Agreement, the "Agreements").

      As counsel, we have reviewed the Agreements and have made such legal and
factual examinations and inquiries as we have deemed advisable or necessary for
the purpose of rendering this opinion. In addition, we have examined, among
other things, originals or copies of such corporate records of the Company,
certificates of public officials and such other documents and questions of law
that we consider necessary or advisable for the purpose of rendering this
opinion. In such examination we have assumed the genuineness of all signatures,
the authenticity and completeness of all documents submitted to us as originals,
the conformity to original documents of all copies submitted to us as copies
thereof, the legal capacity of natural persons, and the due execution and
delivery of all documents (except as to due execution and delivery by the
Company) where due execution and delivery are a prerequisite to the
effectiveness thereof.

                                     E-1-1

<PAGE>

      We have relied upon the certificates of public officials and corporate
officers with respect to the accuracy of all matters contained therein. For
purposes of the opinion in Paragraph 4 below, we assume that no offer to sell or
purchase the Commitment Shares was made in the State of Nevada.

      As used in this opinion, the expression "to our knowledge" refers to the
current actual knowledge of the attorneys of this firm who have worked on
matters for the Company solely in connection with the Agreements.

      For purposes of this opinion, we have assumed that you have all requisite
power and authority, and have taken any and all necessary corporate action, to
execute and deliver the Agreements, and we are assuming that the representations
and warranties made by the Investor in the Agreements and pursuant thereto are
true and correct.

      Based upon and subject to the foregoing, we are of the opinion that:

      1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Nevada and has all requisite
corporate power and authority to carry on its business and to own, lease and
operate its properties and assets as described in the Company's SEC Documents.

      2. The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Agreements and to issue the
Commitment Shares. The execution and delivery of the Agreements by the Company
and the consummation by it of the transactions contemplated thereby have been
duly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. Each of the Agreements has been duly executed and delivered by the
Company.

      3. The execution, delivery and performance of the Agreements by the
Company and the consummation by the Company of the transactions contemplated
thereby, including, without limitation, the issuance of the Commitment Shares,
do not and will not (i) result in a violation of the Company's Articles or
Bylaws; (ii) to our knowledge, conflict with, or constitute a material default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, indenture, instrument or any "lock-up"
or similar provision of any underwriting or similar agreement to which the
Company is a party or (iii) result in a violation of any Nevada law, rule or
regulation applicable to the Company or by which any property or asset of the
Company is bound or affected, except for such violations as would not,
individually or in the aggregate, have a Material Adverse Effect. To our
knowledge, the Company is not in violation of any terms of its Articles or
Bylaws.

      4. The issuance of the Commitment Shares in accordance with the Stock
Purchase Agreement will be in compliance with Nevada state securities laws. When
so issued and paid for in accordance with the Stock Purchase Agreement, and
assuming that at the time of such

                                     E-2-2

<PAGE>

issuance the Company will have sufficient authorized but unissued shares for
such issuance, and that the certificates representing such shares are duly
executed and delivered, the Commitment Shares will be duly and validly issued,
fully paid and nonassessable, and free of any liens, encumbrances and preemptive
or similar rights contained in the Articles or Bylaws.

      Nothing herein shall be deemed an opinion as to the laws of any
jurisdiction other than the State of Nevada.

      This opinion is intended solely for the use of the addressee in connection
with the Agreements. It may not be relied upon by any other person or for any
other purpose, or reproduced or filed publicly by any person without the prior
written consent of this firm.

                                          Very truly yours,

<PAGE>

                                   EXHIBIT D-2

                         FORM OF SPECIAL COUNSEL OPINION

                                 August___, 2001

Crescent International Ltd.
c/o GreenLight (Switzerland) SA
84, av Louis-Casai, P.O. Box 42
1216 Geneva, Cointrin
Switzerland

Re:     Stock Purchase Agreement Between Crescent
        International Ltd. and FiberCore, Inc.

Ladies and Gentlemen:

            We have acted as special counsel to FiberCore, Inc., a Nevada
corporation (the "Company") in connection with the Transaction Documents, as
hereinafter defined, including the Stock Purchase Agreement, dated as of the
date hereof (the "Stock Purchase Agreement") by and between Crescent
International Ltd., a Bermuda entity (the "Investor"), and the Company, which
provides for the issuance and sale by the Company of shares of Common Stock of
the Company for consideration of up to $19,000,000. Capitalized terms used
herein but not defined herein have the respective meanings given to them in the
Stock Purchase Agreement. We are rendering this opinion letter to you at the
request of the Company pursuant to Section 6.10 of the Stock Purchase Agreement.

            In rendering the opinions set forth below, we have examined and
relied upon the originals, copies or specimens, certified or otherwise
identified to our satisfaction, of the Transaction Documents (as defined below)
and such certificates, corporate and public records, agreements, instruments,
opinions, and other documents, including, among other things, the documents
delivered on the date hereof, as we have deemed appropriate as a basis for the
opinions expressed below. In such examination we have assumed the genuineness of
all signatures, the authenticity of all documents, agreements and instruments
submitted to us as originals, the conformity to original documents, agreements
and instruments of all documents, agreements and instruments submitted to us as
copies or specimens, the authenticity of the originals of such documents,
agreements and instruments submitted to us as copies or specimens, and the
accuracy of the matters set forth in the documents, agreements and instruments
we reviewed. As to any facts material to such opinions that were not known to
us, we have relied upon statements and representations of the Company, including
those contained in the Transaction Documents, and of officers and other
representatives of the Company, and of public officials. Except as expressly set
forth herein, we have not undertaken any independent investigation (including,
without limitation, conducting any review, search or investigation of any public
files, records or dockets) to determine the existence or absence of the facts
that are

<PAGE>

material to our opinions, and no inference as to our knowledge concerning such
facts should be drawn from our reliance on the representations of the Company in
connection with the preparation and delivery of this letter.

            In particular, we have examined and relied upon:

            1.   the Stock Purchase Agreement, and

            2.   the Registration Rights Agreement between the Investor and the
Company, dated as of the date hereof (the "Registration Rights Agreement")

Items 1 and 2 above are referred to in this letter as the "Transaction
Documents". References in this letter to "Applicable Laws" shall mean those
laws, rules and regulations of the State of New York and of the United States of
America which, in our experience, are normally applicable to transactions of the
type contemplated by the Transaction Documents. References in this letter to the
term "Governmental Authorities" means executive, legislative, judicial,
administrative or regulatory bodies of the State of New York or the United
States of America. References in this letter to the term "Governmental Approval"
means any consent, approval, license, authorization or validation of, or filing,
recording or registration with, any Governmental Authority pursuant to
Applicable Laws.

            We have also assumed that all documents, agreements and instruments
have been duly authorized, executed and delivered by all parties thereto, that
all such parties had the power and legal right to execute and deliver all such
documents, agreements and instruments, and that except with respect to the
Company, such documents, agreements and instruments are valid, binding and
enforceable obligations of such parties. As used herein, "to our knowledge",
"known to us" or words of similar purpose mean the actual knowledge, without
independent investigation, of any lawyer in our firm actively involved in the
transactions contemplated by the Transaction Documents.

            We express no opinion concerning the laws of any jurisdiction other
than the laws of the State of New York and, to the extent expressly referred to
in this opinion letter, the federal laws of the United States of America. With
respect to all matters of Nevada law, we call your attention to the opinion
dated as of the date hereof, and delivered to you pursuant to the Stock Purchase
Agreement, of Lionel Sawyer & Collins and our opinion is subject to the same
assumptions, qualifications and limitations with respect to such matters as are
contained in such opinion.

            Based upon and subject to the foregoing, we are of the opinion that:

            1. The Stock Purchase Agreement and the Registration Rights
Agreement each constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, receivership or other laws relating to or affecting creditors'
rights generally, and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), and except that the
enforcement of rights with respect to indemnification and contribution
obligations and

                                     E-2-2

<PAGE>

provisions purporting to waive or limit rights to oral amendments to written
agreements or rights of set off may be limited by applicable law or
considerations of public policy.

            2. The execution and delivery by the Company of each of the Stock
Purchase Agreement and the Registration Rights Agreement and the performance by
the Company of its obligations thereunder (a) do not require any Governmental
Approval to be obtained on the part of the Company, except those that have been
obtained and, to our knowledge, are in effect, and (b) do not result in a
violation of any Applicable Laws applicable to the Company except for such
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.

            3. To our knowledge, there is no legal or governmental action,
investigation or proceeding pending or threatened against the Company (a)
asserting the invalidity of the Stock Purchase Agreement, and the Registration
Rights Agreement, (b) seeking to prevent the consummation of any of the
transactions provided for in the Stock Purchase Agreement and the Registration
Rights Agreement, or (c) which would materially and adversely affect the ability
of the Company to perform its obligations under, or the validity or
enforceability (with respect to the Company) of, the Stock Purchase Agreement
and the Registration Rights Agreement. For purposes of the opinion set forth in
this paragraph, we have not regarded any legal or governmental actions,
investigations or proceedings to be "threatened" unless the potential litigant
or Governmental Authority has communicated in writing to the Company a present
intention to initiate such actions, investigations or proceedings against the
Company.

            4. The issuance and the sale of the Commitment Shares in accordance
with the Stock Purchase Agreement will be exempt from registration under the
Securities Act of 1933, as amended.

            We are furnishing this opinion letter to you solely for your benefit
in connection with the transactions referred to herein. This opinion letter is
not to be relied upon, used, circulated, quoted or otherwise referred to by any
other person or entity or for any other purpose without our prior written
consent. In addition, we disclaim any obligation to update this opinion letter
for changes in fact or law, or otherwise.

                                    Very truly yours,

                                     E-2-3

<PAGE>

                                   EXHIBIT D-3

                         FORM OF SPECIAL COUNSEL OPINION

                                          _______, 200_

Crescent International Ltd.
c/o GreenLight (Switzerland) SA
84, av Louis-Casai, P.O. Box 42
1216 Geneva, Cointrin
Switzerland

      Re:   Stock Purchase Agreement Between Crescent International Ltd. and
            FiberCore, Inc.

Ladies and Gentlemen:

            We have acted as special counsel to FiberCore, Inc., a Nevada
corporation (the "Company"), in connection with the Transaction Documents, as
that term is defined in our Opinion Letter dated _______, including the Stock
Purchase Agreement, dated as of August __, 2001 (the "Stock Purchase
Agreement"), by and between Crescent International Ltd., a Bermuda entity (the
"Investor"), and the Company, which, among other things, provides for the
issuance and sale by the Company of the common stock of the Company, par value,
$.001 per share, (the "Common Stock") for consideration of up to $19,000,000.
Capitalized terms used herein but not defined herein have the respective
meanings given to them in the Stock Purchase Agreement. We are rendering this
letter to you at the request of the Company pursuant to Section 7.2(g) of the
Stock Purchase Agreement.

            A Registration Statement on Form S-3 (File No. _____) was filed by
the Company under the Securities Act of 1935 (the "Securities Act"), with the
Securities and Exchange Commission (the "Commission") on ______, and became
effective on _____,__, 2000_ (excluding any exhibits thereto, the "Registration
Statement"). The securities registered under the Registration Statement are
comprised of shares of Common Stock issued pursuant to the Stock Purchase
Agreement.

            We assume, for purposes of this letter, the conformity of the text
of each document filed with the Commission through the Commission's Electronic
Data Gathering, Analysis and Retrieval System in connection with the
Registration Statement to the printed document reviewed by us. This letter is
also limited to the actual knowledge, without independent investigation, of any
lawyer in our firm actively involved in the transactions contemplated by the
Stock Purchase Agreement.

            We have not ourselves checked the accuracy, completeness or fairness
of, or otherwise verified, the information contained in the Registration
Statement and we do not pass upon such information or assume any responsibility
therefor. However, in the course of our

<PAGE>

review of the Registration Statement, we have attended certain conferences and
participated in conversations with representatives of the Company and your
representatives. On the basis of the information that we gained in the course of
the representation referred to above and our examination of the Transaction
Documents, considered in light of our understanding of applicable law and the
experience we have gained through our practice, nothing has come to our
attention in the course of our review of the Registration Statement that causes
us to believe that, as of the effective date of the Registration Statement under
the Securities Act, the Registration Statement contained an untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, it being
understood that we express no view as to any information incorporated by
reference in the Registration Statement or as to the adequacy or accuracy of the
financial, numerical, statistical or quantitative information included in the
Registration Statement.

            We are furnishing this letter to you solely for your benefit in
connection with the transactions referred to herein. This letter is not to be
relied upon, used, circulated, quoted or otherwise referred to by any other
person or for any other purpose without our prior written consent. In addition,
we disclaim any obligation to update this letter for changes in fact or law, or
otherwise.

                                       Very truly yours,

                                     E-2-2

<PAGE>

                                    EXHIBIT E
                             COMPLIANCE CERTIFICATE

      The undersigned, __________, hereby certifies, with respect to shares of
common stock of FiberCore, Inc. (the "Company") issuable pursuant to Article II
of the Stock Purchase Agreement, dated August 20, 2001, by and between the
Company and Crescent International Ltd. (the "Agreement"), as follows:

      1. The undersigned is the duly elected [Office] of the Company.

      2. The representations and warranties of the Company set forth in Article
IV of the Agreement are true and correct as though made on and as of the date
hereof.

      3. The Company has performed all covenants and agreements to be performed
by the Company on or prior to the Closing Date related to the Notice and has
complied in all material respects with all obligations and conditions contained
in Article VII of the Agreement.

      The undersigned has executed this Certificate this ____ day of __________,
____.

                                 By:
                                     ---------------------------------
                                     Name:
                                     Title:

<PAGE>

                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                           CRESCENT INTERNATIONAL LTD.

                                       AND

                                 FIBERCORE, INC.

                           DATED AS OF AUGUST 20, 2001

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I  CERTAIN DEFINITIONS............................................1

      Section 1.1. "Affiliate"............................................1

      Section 1.2. "Capital Shares".......................................2

      Section 1.3. "Closing"..............................................2

      Section 1.4. "Closing Date".........................................2

      Section 1.5. "Closing Statement"....................................2

      Section 1.6. "Commitment Period"....................................2

      Section 1.7. "Commitment Shares"....................................2

      Section 1.8. "Common Stock".........................................2

      Section 1.9. "Condition Satisfaction Date"..........................2

      Section 1.10. "Daily Trading Value".................................2

      Section 1.11. "Damages".............................................2

      Section 1.12. "Effective Date"......................................2

      Section 1.13. "Exchange Act"........................................3

      Section 1.14. "First Sale"..........................................3

      Section 1.15. "First Sale Shares"...................................3

      Section 1.16. "Investment Amount"...................................3

      Section 1.17. "Legend"..............................................3

      Section 1.18. "Material Adverse Effect".............................3

      Section 1.19. "Maximum Commitment Amount"...........................3

      Section 1.20. "Maximum Sale Amount".................................3

      Section 1.21. "NASD"................................................3

      Section 1.22. "Outstanding".........................................3

      Section 1.23. "Person"..............................................4

      Section 1.24. "Principal Market"....................................4

      Section 1.25. "Purchase Price"......................................4

      Section 1.26. "Registrable Securities"..............................4

      Section 1.27. "Registration Rights Agreement".......................4

      Section 1.28. "Registration Statement"..............................4

      Section 1.29. "Regulation D"........................................5

      Section 1.30. "Representative"......................................5

                                      -ii-
<PAGE>

      Section 1.31. "Sale"................................................5

      Section 1.32. "Sale Date"...........................................5

      Section 1.33. "Sale Fees"...........................................5

      Section 1.34. "Sale Notice".........................................5

      Section 1.35. "Sale Notice Date"....................................5

      Section 1.36. "SEC".................................................5

      Section 1.37. "SEC Documents".......................................5

      Section 1.38. "Section 4(2)"........................................5

      Section 1.39. "Securities Act"......................................5

      Section 1.40. "Short Sale"..........................................5

      Section 1.41. "Strategic Investor"..................................5

      Section 1.42. "Subscription Date"...................................6

      Section 1.43. "Subsequent Sale".....................................6

      Section 1.44. "Subsequent Sale Shares"..............................6

      Section 1.45. "Subsidiary"..........................................6

      Section 1.46. "Trade Price".........................................6

      Section 1.47. "Trading Day".........................................6

      Section 1.48. "Trading Volume"......................................6

      Section 1.49. "Transfer Agent Instructions".........................6

      Section 1.50. "Underwriter".........................................6

ARTICLE II  SALE AND PURCHASE OF COMMON STOCK; TERMINATION OF
               OBLIGATIONS................................................6

      Section 2.1. Sales..................................................6

      Section 2.2. Twenty Percent Limitation..............................7

      Section 2.3. Sale Notice............................................8

      Section 2.4. Closings...............................................8

      Section 2.5. Termination of Agreement and Investment
                     Obligation...........................................9

ARTICLE III  REPRESENTATIONS AND WARRANTIES OF INVESTOR................ ..9

      Section 3.1. Intent.................................................9

      Section 3.2. Sophisticated Investor.................................9

      Section 3.3. Authority..............................................9

      Section 3.4. Not an Affiliate.......................................9

      Section 3.5. Organization and Standing..............................9

      Section 3.6. Absence of Conflicts..................................10

                                      -ii-

<PAGE>

      Section 3.7. Disclosure; Access to Information.....................10

      Section 3.8. Manner of Sale........................................10

      Section 3.9. Resale Restrictions...................................10

      Section 3.10. Short Sales..........................................10

ARTICLE IV  REPRESENTATIONS AND WARRANTIES OF THE COMPANY................11

      Section 4.1. Organization of the Company...........................11

      Section 4.2. Authority.............................................11

      Section 4.3. Corporate Documents...................................11

      Section 4.4. Books and Records.....................................11

      Section 4.5. Capitalization........................................12

      Section 4.6. Registration and Listing of Common Stock..............12

      Section 4.7. Financial Statements..................................12

      Section 4.8. SEC Documents.........................................13

      Section 4.9. Exemption from Registration; Valid Issuances; New
                     Issuances...........................................13

      Section 4.10. No General Solicitation or Advertising...............13

      Section 4.11. No Conflicts.........................................14

      Section 4.12. No Material Adverse Change...........................15

      Section 4.13. No Undisclosed Liabilities...........................15

      Section 4.14. No Undisclosed Events or Circumstances...............15

      Section 4.15. No Integrated Offering...............................15

      Section 4.16. Litigation and Other Proceedings.....................15

      Section 4.17. No Misleading or Untrue Communication................15

      Section 4.18. Material Non-Public Information......................15

ARTICLE V  COVENANTS OF THE INVESTOR.....................................16

      Section 5.1. Compliance............................................16

      Section 5.2. Confidential Information..............................16

      Section 5.3. Periodic Reports......................................16

      Section 5.4. Short Sales...........................................16

ARTICLE VI  COVENANTS OF THE COMPANY.....................................16

      Section 6.1. Registration Rights...................................16

      Section 6.2. Listing of Common Stock...............................16

      Section 6.3. Exchange Act Registration.............................17

      Section 6.4. Legends...............................................17

      Section 6.5. Corporate Existence...................................17

                                      -iv-

<PAGE>

      Section 6.6. Additional SEC Documents..............................17

      Section 6.7. Notice of Certain Events Affecting Registration;
                     Suspension of Right to Make a Subsequent Sale.......17

      Section 6.8. Consolidation; Merger.................................18

      Section 6.9. Issuance of Shares....................................18

      Section 6.10. Legal Opinions.......................................18

      Section 6.11. No Similar Arrangement; Right of First Refusal.......18

      Section 6.12. Confidential Information.............................19

      Section 6.13. Public Announcements.................................19

      Section 6.14. Delivery of Share Certificates.......................20

ARTICLE VII  CONDITIONS TO DELIVERY OF SALE NOTICES AND
               CONDITIONS TO CLOSING.....................................20

      Section 7.1.  Conditions Precedent to the Obligation of the
                      Company to Issue and Sell Common Stock.............20

      Section 7.2.  Conditions Precedent to the Right of the Company
                      to Deliver a Sale Notice and the Obligation of the
                      Investor to Purchase Common Stock..................20

      Section 7.3.  Due Diligence Review; Non-Disclosure of
                      Non-Public Information.............................23

ARTICLE VIII  LEGENDS....................................................24

      Section 8.1. Legends...............................................24

      Section 8.2. No Other Legend or Stock Transfer Restrictions........25

      Section 8.3. Investor's Compliance.................................25

ARTICLE IX  INDEMNIFICATION; ARBITRATION.................................25

      Section 9.1. Indemnification.......................................25

      Section 9.2. Method of Asserting Indemnification Claims............25

      Section 9.3. Arbitration...........................................28

ARTICLE X  MISCELLANEOUS.................................................29

      Section 10.1. Fees and Transaction Costs...........................29

      Section 10.2. Reporting Entity for the Common Stock................29

      Section 10.3. Brokerage............................................29

      Section 10.4. Notices..............................................30

      Section 10.5. Assignment...........................................31

      Section 10.6. Amendment; No Waiver.................................31

      Section 10.7. Annexes and Exhibits; Entire Agreement...............31

      Section 10.8. Survival.............................................31

      Section 10.9. Severability.........................................31

                                      -v-

<PAGE>

      Section 10.10. Title and Subtitles.................................32

      Section 10.11. Counterparts........................................32

      Section 10.12. Choice of Law.......................................32

      Section 10.13. Other Expenses......................................32

                                      -vi-

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