Document:

LOAN AGREEMENT

      This Loan Agreement (the "Agreement"), dated as of June 20, 2000, is
entered into by and between:

(i)   ALGAR S.A. - EMPREENDIMENTOS E PARTICIPACOES, a company duly organized and
      validly existing in accordance with the laws of the Federative Republic of
      Brazil, with its head office at Avenida Alexandrino Garcia, 2689, Distrito
      Industrial, in the City of Uberlandia, State of Minas Gerais, enrolled
      before the National Registry of Legal Entities of the Ministry of Finance
      (CNPJ/MF) under No 17.835.026-0001-52 here represented by its duly
      authorized representative (hereinafter referred to as the "Lender");

and

(ii)  FIBERCORE, INC., a company duly organized and validly existing in
      accordance with the laws of the state of Nevada, United States of America,
      with its head office at 253, Worcester Road, Charlton, MA, here
      represented by its duly authorized representative(s) (hereinafter referred
      to as the "Borrower");

and as Intervening and Consenting party:

(iii) FIBERCORE LTDA., a corporation duly organized and validly existing under
      the laws of the Federal Republic of Brazil, with head offices in the City
      of Sao Paulo, State of Sao Paulo, at Rua Libero Badaro, 293, enrolled
      before the National Registry of Legal Entities of the Ministry of Finance
      (CNPJ/MF) under No. 03.767.078/0001-24, herein represented by its duly
      authorized representative (hereinafter referred to as "FCI Brazil")

WHEREAS the Lender proposes to lend to the Borrower, and the Borrower proposes
to borrow from the Lender, the aggregate principal amount of US$ 10,000,000.00
(ten million United States dollars) (the "Principal Amount").

NOW, THEREFORE, the parties hereto agree as follows:

1. THE LOAN AND DISBURSEMENT PROCEDURE

      1.1. The Lender hereby lends to the Borrower, and the Borrower hereby
borrows from the Lender, the amount of US$ 10,000,000.00 (ten million United
States dollars) (the "Loan").

      1.2. The disbursement of the Loan shall be made within one business day
from the date hereof (the "Disbursement Date") upon execution and delivery of
the Note (as defined in Section 4.1. below). The Loan shall be disbursed in
Reais, calculated in accordance with the commercial exchange market valid for
the day immediately prior to the date of the disbursement, as published by the
Central Bank of Brazil through the SISBACEN system under PTAX 800 rate, option
5, or any other rate publicly available that may replace the PTAX 800 rate. The
Borrower hereby gives irrevocable instructions to the Lender to disburse the
proceeds of the Loan, as provided herein, in the account no. 00907202, held in
Bank Boston Banco Multiplo S.A. (the "Bank") by FCI Brazil.

      1.2.1. The Borrower hereby agrees and confirms that deposit confirmation
issued by the Bank in name of FCI Brazil shall constitute evidence of the
disbursement of the Loan provided for in this Agreement.

      1.3. It is hereby agreed and understood that the Borrower shall apply the
proceeds of the Loan in the acquisition Mamore Participacoes S.A., a company
duly organized and validly existing in accordance with the laws of the
Federative Republic of Brazil, with its head office at Avenida Alexandrino
Garcia, 2689, Suite 7, room A, Distrito Industrial, in the City of Uberlandia,
State of Minas Gerais, as provided for in the Investment Agreement dated of June
1st, 2000, entered into between the Lender and the Borrower.

2. PAYMENT OF THE LOAN

      2.1. The Borrower promises to repay the Loan in one installment, in the
amount of US$ 10,000,000.00 (ten million United States dollars), on December 31,
2000 (the "Maturity Date").

      2.2. The Borrower further promises to pay interest to the Lender on the
unpaid Principal Amount of the Loan at the rate per annum equal to 6% (six per
cent), calculated pro rata tempore, from the Disbursement Date until the date on
which the Loan is paid in full. Interest on the Loan shall also be paid by the
Borrower to the Lender at the Maturity Date.

      2.3. Any and all payments to be made by the Borrower hereunder, including
principal of and interest on the Loan, shall be made in immediately available
funds, at the account no. 49.964-1, held by the Lender at Banco Bradesco S.A.,
Branch 0265-8, of the amount in Reais of the United State dollars amount then
due and payable converted at the PTAX 800 rate, option 5, issued by the Central
Bank of Brazil through the SISBACEN system, obtained in the day immediately
prior to the date of the respective payment, or any other rate publicly
available that may replace the PTAX 800 rate.

      2.4. The parties hereby agree that the Principal Amount shall be reduced
to US$ 9,000,000.00 (nine million United State dollars) in the event that the
Borrower makes all payments due thereunder on or before August 31, 2000. In the
event that the Principal Amount is reduced as provided for herein, interest
shall be applicable to the reduced Principal Amount.

      2.5. If the Borrower shall fail to make any payment due hereunder on the
Maturity Date, the Maturity Date shall be extended to March 31, 2001 (the
"Extended Maturity Date"). In this case, in addition to the original interest
rate of 6% (six percent) per annum, the Borrower shall pay to the Lender a
contractual damage in the amount equal to US$ 300,000.00 (three hundred thousand
United State dollars) per month for each month the payment is delayed beyond
December 31, 2000. The contractual damage shall be prorated for the number of
days actually elapsed if payment occurs prior to the end of a month.

      2.6. Whenever any payment under this Agreement shall be stated to be due
on a day which is not a business day (a business day shall be any day on which
dealings in currencies and exchange between banks may be carried on in the City
of Sao Paulo, Brazil, and Boston, Massachusetts, such payment shall be made on
the next succeeding business day, unless such a day shall fall in the first day
of the next succeeding calendar month, in which event such payment shall be made
on the preceding business day.

      2.7. All payments to be made under this Agreement by the Borrower shall be
made free and clear of any cost (for instance, exchange or other bank fees), as
well as of any deduction for any present or future taxes or similar charges
imposed by Federative Republic of Brazil or United States of America or any
other jurisdiction through which payments are made (or any political subdivision
or taxing authority thereof or therein).

      2.8. If any applicable law, regulation or directive, or any change therein
or in the interpretation thereof, or compliance by the Lender with any request
(whether or not having the force of law) of any relevant Central Bank or other
comparable agency, subjects the Lender to any tax of any kind whatsoever with
respect to this Agreement or changes the basis of taxation of payments to the
Lender of principal, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of the Lender imposed in
Brazil) or imposes, modifies or deems applicable any reserve, special deposit or
similar requirement against foreign assets held by, or deposits in or for the
account of, or advances or loans by, or any other acquisition of funds by, any
office of the Lender or to this Agreement or the Loan made hereunder, and the
result of any of the foregoing is to increase the cost to the Lender of
maintaining the Loan or to reduce any amount receivable in respect thereof, then
the Borrower shall pay to the Lender, upon its demand, additional amounts which
will compensate the Lender for such increased cost or reduced amount receivable,
as determined by the Lender with respect to this Agreement. A certificate as to
any additional amounts payable pursuant to the preceding sentence submitted by
the Lender to the Borrower shall be conclusive, absent manifest error.

      2.9. If the Borrower shall fail to make any payment due hereunder on the
Extended Maturity Date, the Borrower shall pay to the Lender an additional
interest of 1% (one per cent) per month, calculated from the date of the failure
until the date the respective outstanding amount is paid in full plus a penalty
equivalent to 10% (ten per cent) of the due amount.

      2.10 It is hereby expressly agreed by the parties that the Borrower may
indicate any of its subsidiaries duly organized and validly existing in
accordance with the laws of the Federative Republic of Brazil to effectuate the
payment of the Loan.

3. REPRESENTATIONS AND WARRANTS

      3.1. The Borrower hereby represents and warrants that: (a) the Borrower is
a corporation duly organized, validly existing and in good standing under the
laws of the state of Nevada, United States of America and has full power,
authority and legal right to own its assets and to transact its business and to
execute, deliver and perform this Agreement and the Note, and has taken all
necessary corporate and legal action to authorize the execution, delivery and
performance of this Agreement and the Note and the borrowing hereunder on the
terms and conditions hereof; (b) this Agreement and the Note constitute legal,
valid and binding obligations of the Borrower enforceable against it in
accordance with its terms; (c) the execution, delivery and performance by the
Borrower of this Agreement and the Note will not violate the charter, by-laws or
other corporate rules of the Borrower or any provision of law or regulation or
any judgment, order or decree of any court, arbitrator or governmental authority
or of any agreement of any nature whatsoever, binding upon the Borrower and its
assets; (d) all consents and exemptions required in connection with the
execution, delivery, performance, validity or enforceability of this Agreement
and the Note have been obtained and are in full force and effect; and (e) the
execution, delivery and performance by the Borrower of this Agreement and the
Note constitute private and commercial acts rather than governmental and public
acts.

      3.2. If: (a) the Borrower fails to pay when due any amount due by it under
this Agreement or the Note; or (b) the Borrower fails to make any payment on any
pecuniary obligation (other than this Agreement) of any nature whatsoever
(including contingent obligations), or defaults in the performance of any
agreement under which any such obligation is created if the effect of such
default is to cause such obligation or to permit the holder or holders of such
obligation or a trustee or trustees on behalf of the holder or holders to
declare such obligation, due prior to its normal maturity; or (c) the Borrower
becomes insolvent or unable to pay its debts as they mature, or consents to the
appointment of a trustee, intervener or receiver for it or for all or a
substantial part of its property, or any such trustee, intervener or receiver is
appointed; or (d) bankruptcy, dissolution, reorganization, intervention,
arrangement or liquidation proceedings (or similar proceedings analogous in
purpose or effect) are instituted by or against the Borrower; or (e) a warrant
of attachment or execution or similar process against any substantial part of
the assets of the Borrower is issued; or (f) any representation or warranty made
by the Borrower in this Agreement proves to have been incorrect; or (g) any
consent or exemption referred to in this Agreement is revoked or terminated or
fails to be issued or ceases to be in full force and effect; or (h) in the
opinion of the Lender, there occurs an impairment of the financial condition of
the Borrower, then, and in any such event, the Lender may, by notice of default
given to the Borrower, declare the outstanding amount under this Agreement and
the Note to be immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived by the
Borrower.

4. NOTE

      4.1. Prior to and as a condition precedent to the making of the Loan
hereunder and to evidence further the obligation of the Borrower to pay the
Loan, the Borrower shall execute and deliver to the Lender a promissory note of
the Borrower ("Note"), such Note to be in the form of Exhibit A hereto,
appropriately completed, dated the date of the Loan and in the aggregate amount
(including the Principal Amount and interest) of the Loan.

      4.2. In the event the Maturity Date is extended, as provided for in
Section 2.5. herein, the Borrower shall issue a new promissory note to be in the
form of Exhibit A hereto, appropriately completed, in the aggregate amount of
the outstanding debt (including the Principal Amount, interest and applicable
penalties) of the Loan.

5. MISCELLANEOUS

      5.1. The Borrower shall indemnify the Lender for, and hold the Lender
harmless from, any present or future claim or liability for any registration
charge or any stamp, excise or other similar taxes and any penalties or interest
with respect thereto, which may be imposed by any jurisdiction in connection
with this Agreement or any modification or enforcement hereof.

      5.2. No action or omission by the Lender shall constitute a waiver of any
rights or remedies of the Lender hereunder. Such rights and remedies are
cumulative and not exclusive of any rights or remedies provided by law. Payment
of the Principal Amount of and interest on this Agreement and the Note shall not
discharge the Borrower's obligation with respect to any other amounts payable
hereunder.

      5.3. The Borrower agrees to indemnify the Lender and to hold the Lender
harmless from any loss or expense which the Lender may sustain or incur as a
consequence of the default by the Borrower in payment of any amount due under
this Agreement, including any reasonable legal and court fees incurred by Lender
in the process of enforcing its rights provided for in this Agreement, the Note
or other related documents. This covenant shall survive payment of this
Agreement.

      5.4. This Agreement and the Note shall be governed by, and construed in
accordance with, the laws of the Federative Republic of Brazil. The Borrower
hereby irrevocably submits in any legal proceeding relating to this Agreement to
the non-exclusive in personam jurisdiction of the Courts of the City of Sao
Paulo, State of Sao Paulo, Brazil.

      5.5. The Lender may at any time assign its rights and obligations under
this Agreement to any party of its choice, provided that the Borrower is
notified of such assignment. The Borrower is prohibited from assigning any of
its rights and obligations under this Agreement without prior written approval
of the Lender.

In witness hereof the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

                  ALGAR S.A. - EMPREENDIMENTOS E PARTICIPACOES

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

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

                  FIBERCORE, INC.

                  ---------------------------------------------
                  By: Mohd A Aslami
                  Title: President Chief Executive Officer

      As Intervening and Consenting Party

                  FIBERCORE LTDA.

                  ---------------------------------------------
                  By: Regina Maria Piza de Assumpcao Ribeiro do Valle
                  Title: Delegate Manager

WITNESSES:

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

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

<PAGE>

                                 PROMISSORY NOTE

US$ 10,000,000.00                                           Date: June 20, 2000.

FOR VALUE RECEIVED, FIBERCORE, INC. a company duly organized and validly
existing in accordance with the laws of the state of Nevada, United States of
America, with its head office at 253, Worcester Road, Charlton, MA, by this
promissory note hereby unconditionally promises to pay to the order of ALGAR
S.A. - EMPREENDIMENTOS E PARTICIPACOES ("ALGAR"), a company duly organized and
validly existing in accordance with the laws of the Federative Republic of
Brazil, with its head office at Avenida Alexandrino Garcia, 2689, Distrito
Industrial, in the City of Uberlandia, State of Minas Gerais (the "Payee"), on
December 31, 2000, at the bank account no. 49.964-1, held by Algar at Banco
Bradesco S.A., Branch 0265-8,, the correspondent amount, in Reais, of US$
10,000,000.00, free and clear of any taxes and/or withholdings whatsoever, in
immediately available funds.

The exchange rate to be used in order to exchange the above-referred amount in
Reais shall be the PTAX 800 rate, option 5, issued by the Central Bank of Brazil
through the SISBACEN system, obtained in the day immediately prior to the date
of the respective exchange, or any other rate publicly available that may
replace the PTAX 800 rate.

This promissory note is issued in accordance with the Loan Agreement dated June
20, 2000, between FIBERCORE, INC. and ALGAR S.A. - EMPREENDIMENTOS E
PARTICIPACOES.

                                 FIBERCORE, INC.

                  ---------------------------------------------
                       By: Mohd A Aslami
                       Title: President Chief Executive Officer================================================================================

                             SHARE PLEDGE AGREEMENT

                                      among

                                 FiberCore, Inc.

                                       and

                  Algar S.A. - Empreendimentos e Participacoes

                                       and

                            Xtal Fibras Opticas S.A.

                                       and

                            Mamore Participacoes S.A.

                               Dated June 20, 2000

================================================================================

<PAGE>

                             SHARE PLEDGE AGREEMENT

By this private  instrument,  dated as of June 20, 2000, and in the best form of
law, the parties herein below:

I.       FiberCore, Inc., a company duly organized and validly existing duly
         organized under the Laws of the State of Nevada, United States of
         America, with its principal head office at 253, Worcester Road,
         Charlton, MA ("FCI"), herein duly represented by its legal
         representative, or any other legal entity or individual designated by
         FCI (FCI and/or entity designated by FCI, hereinafter designated as
         "Grantee");

II.      Algar S.A. - Empreendimentos e Participacoes, a company duly organized
         and validly existing under the Laws of the Federative Republic of
         Brazil, with its principal head office in the city of Uberlandia, State
         of Minas Gerais, at Av. Alexandrino Garcia, 2689, Distrito Industrial
         ("Algar"), enrolled with the National Registry of Legal Entities of the
         Ministry of Finance ("CNPJ/MF") under No. 17.835.026/0001-52
         (hereinafter designated as "Grantor"), herein duly represented by its
         legal representative;

III.     Xtal Fibras Opticas S.A., a company duly organized and validly existing
         under the Laws of the Federative Republic of Brazil, with its principal
         head office in the city of Uberlandia, State of Minas Gerais, at Av.
         Alexandrino Garcia, 2689, Distrito Industrial, enrolled with the
         National Registry of Legal Entities of the Ministry of Finance
         (CNPJ/MF) under No. 71.340.707/0001-95 hereinafter designated as
         "Xtal"), herein duly represented by its legal representative; and

IV.      Mamore Participacoes S.A., a company duly organized and validly
         existing under the Laws of the Federative Republic of Brazil, with its
         principal head office in the city of the City of Uberlandia, State of
         Minas Gerais, at Avenida Alexandrino Garcia, 2689, cj. 07, Sala A,
         Distrito Industrial, enrolled with the National Registry of Legal
         Entities of the Ministry of Finance (CNPJ/MF) under No.
         03.509.491/0001-99 (hereinafter designated as the "Company") herein
         duly represented by its legal representative.

WHEREAS Grantee and Grantor have entered into an Investment Agreement dated June
20, 2000 (the "Investment Agreement"), pursuant to which Grantee will hold 90%
(ninety percent) of the shares of the Company, in accordance with the terms and
conditions set forth in the Investment Agreement, and Grantor will hold 10% (ten
percent) of the shares of the Company;

WHEREAS, on the date hereof, the total issued and outstanding share capital of
the Company is R$ 6,488,612.00, fully subscribed and entirely paid in, divided
into 648,864A and 5,839,748B voting common shares, with no par value, all in
book-entry form (hereinafter referred to as the "Shares");

WHEREAS, Grantor owns the number of Shares of the Company set forth opposite its
name as evidenced in Exhibit A attached hereto and made an integral part hereof;

WHEREAS, Grantor has assumed several debts of Xtal, by means of the execution of
the assumption of indebtedness agreements attached hereto as Annex B ("Assumed
Indebtedness"), and, the creditors of such Assumed Indebtedness were not
informed of the assumption, therefore, Xtal is still liable for mentioned debts
before third parties;

WHEREAS, Grantor has expressly agreed to pay the Assumed Indebtedness at
maturity, related to Xtal ;

WHEREAS, Grantor has agreed to indemnify Grantee against any and all costs,
contingencies, liabilities and lost profits resulting from facts, acts,
conditions or contingencies which existed at or occurred on or before the
Closing Date, in accordance with and subject to the procedures established in
Section V of the Investment Agreement (the "Algar's Indemnification
Obligations", as such term is defined in Section V of the Investment
Agreement");

WHEREAS, Grantor intends to guarantee to the Grantee that Grantor will remain
liable for the debts of Xtal assumed by means of the Assumption of Indebtedness,
as well as any costs, liabilities, contingencies and lost profits related to
Xtal that has its beginning in a fact, act or condition that have occurred
before and on the Closing Date of the Investment Agreement, Grantor has agreed
to pledge for the benefit of Grantee 10% (ten percent) of the Shares that
Grantor now owns in the share capital of the Company, which shall remain at all
times free and clear of liens, burdens, debts, claims or doubts;

WHEREAS it is a condition precedent for the execution of the Investment
Agreement, that the Grantor has executed and delivered to Grantee the present
Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
set forth herein, the parties have agreed to execute this Agreement as follows:

1. Wherever used in this Agreement, unless the context shall otherwise require
or the terms are otherwise defined herein, the terms defined in the Investment
Agreement shall have the same meanings herein.

1.1      In addition:

         (i)     "Additions" shall mean any charges, whether judicial or not,
                 attorneys' fees, costs, expenses and any other additions or
                 supplements to the Secured Indebtedness which may be incurred
                 by Grantee in connection with the enforcement of the Pledge
                 hereunder;

         (ii)    "Civil Code" shall mean the Brazilian Civil Code containing the
                 legislative framework of the civil law system in Brazil;

         (iii)   "Commercial Code" shall mean the Brazilian Commercial Code
                 containing the legislative framework of commercial transactions
                 and operations in Brazil;

         (iv)    "Guaranteed Obligations" shall mean the Assumed Indebtedness
                 and Algar's Indemnification Obligations;

         (v)     "GRANTEE" shall mean FCI;

         (vi)    "GRANTOR" shall mean Algar;

         (vii)   "Pledged Shares" shall mean each of the Shares described in
                 Exhibit A which are subject to the Pledge created under Section
                 2 below; "Pledged Shares" shall also comprise: (i) all shares
                 of the Company received by GRANTOR as a result of stock splits
                 or stock bonuses or stock dividends on or with respect to any
                 Pledged Shares; and (ii) all shares (of any company) received
                 by GRANTOR in exchange, replacement or substitution of any
                 Pledged Shares; and

         (viii)  "Corporation Law" shall mean Federal Law No. 6,404/76, and any
                 and all amendments thereto.

2. As security to secure payment of the Guaranteed Obligations, as well as the
Additions, GRANTOR hereby pledges (hereinafter referred to as the "Pledge") for
the benefit of GRANTEE the Pledged Shares.

2.1      GRANTOR hereby represents that:

         2.1.1 it is the sole holder of record and beneficial owner of the
Pledged Shares listed in Exhibit A and that the Pledged Shares are free and
clear from any lien, burden, debt, claim or doubts and that there exists no
claim, action, suit, investigation or proceeding pending or, to the knowledge of
GRANTOR, threatened before any arbitrator or before any court or other authority
which relates to such Pledged Shares;

         2.1.2 this Agreement has been duly authorized, executed and delivered
by it and constitutes its legal, valid and binding obligation; and

         2.1.3 no consent, approval, authorization or other order from any third
party is required for (i) the execution and delivery of this Agreement by it or
(ii) for the exercise by GRANTEE of the rights in respect of the Pledged Shares
pursuant to this Agreement, except as may be required in connection with the
disposition of the Pledged Shares by laws affecting the offering and sale of
securities generally.

3. Pursuant to the relevant provision of the Commercial Code, and, more
specifically, Section 39 of the Corporation Law, the Pledge set forth hereunder
shall be constituted by means of the registration thereof in the relevant books
of the Company, and shall remain in effect until the Pledge is released in
accordance with Section 12 of this Agreement.

         3.1 GRANTEE or its designees shall have the full right at any time to
inspect the registration books of the Company to verify the good standing of the
Pledge created hereunder.

4. So long as no Guaranteed Obligation is due and not paid by the GRANTOR (in
accordance with the provisions of the Investment Agreement), any and all cash
dividends pertaining to the Shares shall be freely payable by the Company to the
GRANTOR and GRANTOR shall continue to exercise all voting rights and any other
rights attached to the Pledged Shares.

5. GRANTOR hereby agrees that until the Pledge is released in accordance with
Section 12 of this Agreement it shall not:

         (i)     sell, transfer, assign, dispose or agree to sell, transfer,
                 assign or dispose of any of its Pledged Shares to any third
                 parties and/or assign or transfer any of its rights and
                 obligations under this Agreement, except as provided for in
                 Articles 6.4 of the Shareholders' Agreement dated June 20, 2000
                 , entered into among FCI, Fibercore Ltda. ("FCI Brazil"),
                 Algar, Xtal and the Company (the "Shareholders' Agreement");

         (ii)    exercise its voting rights aiming at the dissolution,
                 liquidation, winding up or extinction of the Company; or

         (iii)   create or permit the creation of any lien, burden or
                 encumbrance on the Pledged Shares or on a part thereof save for
                 the Pledge created hereunder.

6. The Company hereby agrees not to recognize any of the transactions referred
to in Section 5 of this Agreement (other than the Pledge hereunder) or any other
transaction in violation of the provisions set forth herein.

7. GRANTEE hereby expressly acknowledges and agrees that so long as no
Guaranteed Obligation is due and not paid by the Grantor (in accordance with the
provisions of the Investment Agreement), the voting rights attributed to the
Pledged Shares shall not be impaired by the Pledge created herein and GRANTOR
agrees with such acknowledgment.

8. GRANTOR shall give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may be
legally necessary (in the reasonable judgment of GRANTEE) to create, preserve,
perfect or validate the Pledge granted pursuant hereto or to enable GRANTEE to
exercise and enforce its rights hereunder with respect to the Pledge hereunder.

9. In the event that any Guaranteed Obligation is due and not paid by the
GRANTOR (in accordance with the provisions of the Investment Agreement) beyond
any applicable grace period thereof and provided that such non-payment has not
been remedied within the contractual or mutually agreed time frame then, in
addition to having the right to exercise any rights and remedies of a secured
party upon default under the law, the GRANTEE may sell the Pledged Shares at any
public or private sale in accordance with Article 774, item III of the Brazilian
Civil Code.

10. The proceeds resulting from any collection, sale or enforcement of the
Pledge hereunder, or any other cash at the time held by the GRANTEE in
connection with the Pledged Shares, shall be applied by the GRANTEE, in its sole
discretion, to the payment, in whole or in part, of the Guaranteed Obligations
and any Additions in full. If such proceeds are not sufficient to cover the
Guaranteed Obligations and any Additions, GRANTEE shall allocate such proceeds
to any part of the Guaranteed Obligations and any Additions in its sole
discretion.

11. (a) GRANTOR hereby appoints GRANTEE, as its attorney-in-fact, granting to
GRANTEE express, special and irrevocable powers to sell, assign and transfer to
third parties as many Pledged Shares as necessary to settle the Guaranteed
Obligations, including its relevant Additions, according to the terms and
conditions set forth herein and in the Investment Agreement, to take any action
and to execute all the necessary documents and forms to consummate such acts,
including but not limited to, the execution of the competent share purchase
agreement, to receive the relevant price therefor and to grant release, as well
as to apply the proceeds thereof for the partial or total payment of the
Guaranteed Obligations, including its relevant Additions.

     (b) Such irrevocable power of attorney is granted by GRANTOR for the
benefit of GRANTEE in accordance with Article 774, item III and Article 1317,
items I and II, of the Brazilian Civil Code and shall remain in force until the
complete fulfillment and payment of all Secured Indebtedness under the
Investment Agreement and any Additions, as well as of the GRANTOR's obligations
under this Agreement.

     (c) In exercising its rights and remedies under this Agreement, GRANTEE
shall be under no duty or obligation and shall incur no liability toward GRANTOR
other than returning the balance of the proceeds from the sale of the Pledged
Shares, if any, after the Secured Indebtedness and its relevant Additions have
been paid in full to the GRANTOR.

12. (a) The Pledge set forth hereunder shall become effective immediately upon
its registration in the books of the Company and shall remain in full force and
effect until the date on which any of the call and put options provided for in
Articles 6.3, 6.4 and 6.5 of the Shareholders' Agreement is exercised as
provided for therein.

     (b) Upon the expiration of the Pledge, the notation of its termination and
of the release of the Shares shall be promptly made in the books of the Company.

     (c) Except as provided for in this Section 12, the Pledge created herein
can only be canceled or partially released if preceded by an express written
consent of GRANTEE.

13. No waiver by either party of any condition, nor the breach of any term and
covenant contained herein, in one or more instances shall be deemed to be or be
construed as a further or continuous waiver of any such condition or breach, or
a waiver of any other condition or of any breach of any other term or covenant.

14. Any amendment hereto shall only be valid if made in writing and executed by
all the parties hereto. The GRANTOR agrees to register this Agreement and any
amendment hereto with the competent Cartorio de Registro de Titulos e
Documentos, within fifteen (15) days after the execution of the relevant
agreement, and to promptly provide the other parties hereto with a registered
copy of this Agreement and of any such amendment to this Agreement with such
"Cartorio". For registration purposes only, the amount of this Agreement is R$
600,000.00 (six hundred thousand Reais).

15. It is expressly agreed by the parties that any and all costs, expenses,
duties and taxes related to the execution and the registration of this Agreement
and any amendment to this Agreement with the appropriate "Cartorio" referred to
above shall be borne solely by the GRANTEE;

16. This Agreement is executed, and any amendment to this Agreement shall be
executed, in both Portuguese and English versions and, in case of conflict, the
English version shall prevail and control.

17. This Agreement binds and inures to the benefit of the parties hereto,  their
heirs and  successors,  provided that neither the Company nor GRANTOR may assign
or transfer, in whole or in part, their rights and obligations hereunder without
the prior written consent of GRANTEE.

18. The validity and interpretation of this Agreement and the legal relations of
the parties hereto shall be governed by the laws of Brazil. The parties hereto
irrevocably agree to submit any dispute arising hereunder to the exclusive
jurisdiction of the central courts sitting in the city of Sao Paulo, State of
Sao Paulo, Brazil, with the exclusion of any other court, no matter how
privileged it may be or become.

19. The parties hereto hereby agree that no amendment to this Agreement shall be
deemed a novation of any of the obligations or provisions set forth herein.

20. Any notice or request required or permitted to be given or made hereunder
shall be in writing. Such notice or request shall be deemed to have been duly
given or made when it shall be delivered by hand, registered airmail, cable or
telex, or facsimile to the party to which it is required or permitted to be
given or made as such party's address specified below or at such other address
as such party shall have designated by notice to the party giving such notice or
making such request.

        (a) if to Grantor:         Algar S.A. - Empreendimentos e Participacoes
                                   Avenida Alexandrino Garcia, 2689
                                   Distrito Industrial, Uberlandia
                                   Att:  Nelson Cascelli Reis

        (b) if to Grantee:         FiberCore, Inc.
                                   P.O. BOX 180
                                   253 Worcester Road
                                   Charlton, MA  01507, U.S.A
                                   Att: Dr. Mohd Aslami

        (c) if to the Company :    Mamore Participacoes S.A.
                                   Alexandrino Garcia, 2689, cj. 07, Sala A
                                   Distrito Industrial, Uberlandia
                                   Att: Antonio Carlos de Campos

        (d) if to Xtal:            Xtal Fibras Opticas S.A.
                                   Avenida Alexandrino Garcia, 2689 - Sala 8
                                   Distrito Industrial, Uberlandia
                                   Att:  Antonio Carlos de Campos

         IN WITNESS WHEREOF, and in the presence of the two (2) witnesses below,
the  parties   hereto  have  duly  executed  this  Agreement  in  several  equal
counterparts each of which is an original,  but all of which together constitute
one and the same  agreement  and to be  effective  as of the day and year  first
above written.

                                     FiberCore, Inc.

                                     -------------------------------------------
                                     By: Mohd A Aslami
                                     Title: President Chief Executive Officer

                                     Algar S.A. - Empreendimentos e
                                     Participacoes S.A.

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

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

                                      Xtal Fibras Opticas S.A.

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

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

                                      Marmore Participacoes S.A.

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

                                      ------------------------------------------
                                      By: Jose Mauro Leal Costa
                                      Title: Attorney-in-fact

Witnesses:

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

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

<PAGE>

                                    EXHIBIT A

       Ownership of Shares of the Company and Shares Subject to the Pledge

<TABLE>
<CAPTION>

------------------------- ------------- ----------------------- ----------------- -------------------

                          Total         % of the Total           Total No.         % of Pledged
                          No. of        Issued and               of Pledged        Shares in the
                          Shares        Outstanding              Shares            Total Issued and
                          Owned         Share Capital                              Outstanding
                                                                                   Share Capital

------------------------- ------------- ----------------------- ----------------- -------------------
<S>                        <C>                <C>                   <C>                 <C>

Algar S.A.                  648,863           10%                   648,863              10%
Empreendimentos
e Participacoes
------------------------- ------------- ----------------------- ----------------- -------------------

</TABLE>

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