Document:

EXHIBIT 10.1

  Agreement for the Acquisition of Xtal Fibras Opticas S.A. by FiberCore, Inc.

This Agreement for the Acquisition of Xtal Fibras Opticas S.A. by FiberCore Inc,
dated as of April 26, 2000 is entered into by and among:

I.       FiberCore, Inc. ("FCI"), a company duly organized and validity existing
         under the laws of the United States of America, with its head office at
         253,  Worcester  Road,  Charlton,  MA,  here  represented  by its  duly
         authorized  representative,  (or a  subsidiary  of FCI  (FCI  and  such
         subsidiary  of FCI being  collectively  hereinafter  referred to as the
         "Buyer");

II.      Algar S.A. - Empreendimentos e Participacoes,  a company duly organized
         and validity existing under the laws of Brazil, with its head office at
         Avenida Alexandrino Garcia, 2689, Distrito  Industrial,  Uberlandia-MG,
         here  represented by its duly  authorized  representative  (hereinafter
         referred to as the "Seller"); and

III.     Xtal  Fibras  Opticas  S.A.,  a company  duly  organized  and  validity
         existing  under the laws of  Brazil,  with its head  office at  Avenida
         Alexandrino Garcia, 2689, Suite 8, Distrito Industrial,  Uberlandia-MG,
         here  represented by its duly  authorized  representative  (hereinafter
         referred to as "Xtal");

NOW,  THEREFORE,  the parties  hereby agree to enter into this Agreement for the
Acquisition  of Xtal Fibras Opticas S.A. by FiberCore,  Inc. (the  "Agreement"),
which will be governed by the following terms and conditions:

SECTION  1  PURPOSE:  This  Agreement  sets  forth a  summary  of the  terms and
conditions  pursuant  to  which  FCI or a  subsidiary  of FCI is  interested  in
purchasing (i) 100% (one hundred  percent) of the  outstanding  stock of or (ii)
substantially all the assets and specified  liabilities of Xtal from Seller. The
form in which the sale is effected  will be decided as part of the due diligence
to be  undertaken  by  Buyer  pursuant  to  Section  7  hereof.  Subject  to the
provisions of Section 13 hereof,  Buyer expects to close this transaction at the
earliest  in 60  (sixty)  days after the  acceptance  by Seller of the terms and
conditions herein  established and the return of a signed copy of this Agreement
or  June  30,  2000  (the   "Closing   Date"),   whichever   date  comes  later.
Notwithstanding   the  provisions   below  but  subject  to  the  time  schedule
established  herein,  the Buyer and Seller  agree to use their  best  efforts to
structure  the  transaction  contemplated  hereby  in  a  tax  efficient  manner
acceptable to Seller and Buyer.

         The terms and conditions pursuant to which Buyer would be interested in
acquiring Xtal from Seller are as follows:

SECTION 2 PURCHASE  PRICE:  The purchase  price for Xtal shall be  US$25,000,000
(twenty-five million US dollars) (the "Purchase Price"),  payable as follows and
subject to the following terms and conditions:

         (a) The Buyer shall initially acquire 90% (ninety percent) of the stock
of Xtal or substantially all of the assets of Xtal and specified  liabilities of
Xtal  subject  to Seller  holding a 10% (ten  percent)  equity  interest  in the
purchasing entity, under the following payment conditions:

                           (i)  US$2,000,000  (two million US dollars)  shall be
              paid in cash within 30 (thirty)  days after the  execution of this
              Agreement  or on May 31,  2000,  whichever  date is  later,  which
              amount shall be held as a deposit pursuant to the terms hereof and
              pursuant to an escrow agreement to be executed among Buyer, Seller
              and a first class bank,  acceptable to FCI and Seller, The deposit
              plus accrued interest is to be paid to Seller or returned to Buyer
              as provided in Section 10 hereof;

                           (ii) an  additional  US$8,000,000  (eight  million US
              dollars) shall be paid in cash on the Closing Date, which is to be
              60 (sixty) days from the  execution of this  Agreement or June 30,
              2000, whichever date is later;

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                           (iii)  US$10,000,000 (ten million US dollars) through
              a  promissory  note (the  "US$10,000,000  Promissory  Note") of an
              equivalent  amount  bearing  interests  at  the  rate  of 6%  (six
              percent) per annum calculated from the Closing Date until the date
              such payment is made,  such promissory note to be delivered on the
              Closing  Date;  the  promissory  note  shall be  payable  180 (one
              hundred and eighty) days following the Closing Date or on December
              31, 2000, whichever date is later (the "maturity date"); provided,
              however,  that the principal  amount of such note shall be reduced
              to US$7,500,000 (seven million,  five hundred thousand US dollars)
              in the event  Seller does not deliver to Buyer on the Closing Date
              an  executed   non-cancelable   3  (three)  year  purchase   order
              ("Purchase  Order") at prevailing market prices covering a minimum
              of 50% (fifty percent) of the optical fiber requirements of Seller
              and/or its affiliated  companies and, provided  further,  that the
              principal  amount of such note shall be  reduced  to  US$9,000,000
              (nine  million US dollars) (or  US$6,500,000  (six  million,  five
              hundred  thousand US dollars) in the event that the Purchase Order
              referred to above is not executed by Seller) in the event that the
              Buyer makes all payments due  thereunder  on or before  August 31,
              2000;

                           (iv) in the event  that the  Buyer  does not make the
              payment due under the  promissory  note  referred to in  2(a)(iii)
              above by its maturity date, the maturity date shall be extended to
              the date which is 3 (three) months following the original maturity
              date or to March  31,  2001,  whichever  is later  (the  "extended
              maturity date"), and, in addition to the original interest rate of
              6% (six  percent)  per annum,  the Buyer  shall pay an  additional
              interest of 3% (three percent) per month, calculated from the date
              of extension until the date the promissory note is paid in full;

                           (v) US$1,250,000 (one million,  two hundred and fifty
              thousand US dollars)  through a promissory  note of an  equivalent
              amount bearing interest at the rate of 6% (six percent) per annum,
              calculated  from the Closing  Date until the date such  payment is
              made,  such  promissory  note to be delivered on the Closing Date;
              such note  shall be payable  450 (four  hundred  and  fifty)  days
              following the Closing Date, provided that the principal amount and
              interest of such promissory note shall be proportionately  reduced
              in the event that Gross  Profit of Xtal or the  purchasing  entity
              for the year 2000 does not achieve certain  levels,  as defined on
              Annex A; and

                          (vi) US$1,250,000 (one million,  two hundred and fifty
              thousand US dollars)  through a promissory  note of an  equivalent
              amount bearing interest at the rate of 6% (six percent) per annum,
              calculated  from the Closing  Date until the date such  payment is
              made,  such  promissory  note to be delivered on the Closing Date;
              such  note  shall be  payable  810  (eight  hundred  and ten) days
              following the Closing Date, provided that the principal amount and
              interest of such promissory note shall be proportionately  reduced
              in the event that Gross  Profit of Xtal or the  purchasing  entity
              for the year 2001 does not achieve certain  levels,  as defined on
              Annex A.

         (b) On the date which is 1080 (one thousand and eighty) days  following
the Closing  Date,  the Buyer  shall,  pursuant  to the Buyer's  Call Option (as
described below),  acquire all the remaining shares held by Seller in Xtal or in
the purchasing entity upon a payment in cash of US$2,500,000 (two million,  five
hundred  thousand US dollars)  plus interest at the rate of 6% (six percent) per
annum, calculated from the Closing Date until the date such payment is made. The
Buyer,  notwithstanding anything contained herein to the contrary,  reserves the
right to prepay this amount at any time without penalty.

         (c) Notwithstanding the above, the total of the 2 (two) payments due by
the Buyer as provided  for in  Sections  2(a)(v) and (vi) above shall not exceed
under any  circumstances  an amount equal to principal  amount of US$  2,500,000
(two  million,  five  hundred  thousand  US  dollars)  as  increased  by accrued
interests  on such  principal  amount.  Seller shall not be required to make any
payments  to Buyer under  Sections  2(a)(v) and (vi) above in the event that the
Gross Profit of Xtal or the purchasing entity is negative for the years 2000 and
2001.

         (d) In the event that the Buyer fails to comply with any of its payment
obligations referred to above, the Buyer shall pay to Seller a penalty of 10% of
the payment due,  plus legal and courts fees incurred by Algar in the process of
enforcing its rights provided for in the Purchase Agreement.

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         (e) For  purposes  of this  Section  2 "Gross  Profit"  means the gross
profit of Xtal for a specific year  determined in accordance  with the Generally
Accepted  Accounting  Principles used in Brazil  ("Brazilian GAAP") based on the
conditions and assumptions contained in the projections attached hereto as Annex
B.  Seller  shall  have the right to appoint an  independent  accountant  of its
choice to verify and confirm the Gross Profit  presented  by Xtal.  In the event
that there is any  discrepancy  in the Gross  Profit  presented  by Xtal and the
Gross Profit  determined by the  independent  accountant  selected by Seller and
that the Gross Profit in either year is lower than as  projected  due to actions
taken by Xtal at the direction of FCI, its management and/or employees, then the
parties mutually agree to jointly appoint a third party  independent  accountant
(whose costs, fees and expenses shall be equally divided between the parties) to
make an independent evaluation of the Gross Profit and to evaluate the effect on
Gross Profit caused by such  actions.  The actual Gross Profit shall be adjusted
based  on the  evaluation  performed  by  such  independent  accountant  jointly
appointed by the parties disregarding the effects of such actions (the "Adjusted
Gross Profit") and such Adjusted  Gross Profit shall be used in determining  the
payments due pursuant to Section s 2(a)(v) and (vi) above.

SECTION 3     FINANCIAL INFORMATION:  The purchase price for Xtal referred to in
Section 2 above is derived from an  evaluation  of the  financial  statements of
Xtal as of December 31, 1999 and other financial  information and projections of
Xtal as of such date, as well as other  information  that has been  furnished to
Buyer. It will be a condition to closing that there has been no material adverse
change in the business, properties,  condition (financial or other) or prospects
of Xtal or Xtal's local economic environment since December 31, 1999.

SECTION 4     AGREEMENTS:

         (a) Purchase  Agreement.   Subject  to the tax  structure  to be agreed
between the Seller and the Buyer,  the  Purchase  Agreement  with respect to the
transaction   contemplated  hereby  shall  be  in  customary  form  for  similar
transactions between parties similarly situated,  in form and substance mutually
satisfactory to the parties, containing standard representations and warranties,
standard  conditions  to closing  (in  addition  to those  conditions  set forth
herein) and standard  indemnities.  Conditions to closing would also include the
conditions that (i) there are no legal actions or proceedings (including related
to environmental issues) pending or threatened which materially adversely affect
the business or properties of Xtal or the proposed sale to Buyer,  (ii) Xtal has
all material licenses and permits required for the conduct of its business,  all
of  which  licenses  and  permits  may be  transferred  to  Buyer as part of the
proposed sale,  (iii) all requisite  governmental and other third party consents
have  been  obtained  (other  than the  approval  of the  Antitrust  Authorities
referred to in Section 8 below),  and (iv) the  purchase  agreement  and related
agreements  have been  approved by the  respective  Boards of  Directors  of the
parties,  which  approvals  shall be obtained no latter than May 30,  2000.  The
Purchase Agreement and all related agreements and documents shall be governed by
the laws of the  Federative  Republic  of  Brazil  and shall be  written  in the
English  language or shall be  accompanied  by a certified  English  translation
thereof. The English text of all documents shall govern.

         (b) Shareholders'  Agreement: On the Closing Date, Seller and the Buyer
shall  enter into a  Shareholders'  Agreement  (the  "Shareholders'  Agreement")
providing for substantially the following:

         (i)   the  Shareholders'  Agreement  shall be  valid as long as  Seller
               remains as a shareholder of Xtal or the purchasing entity;

         (ii)  the Board of Directors of Xtal or the purchasing  entity shall be
               comprised of 3 (three) members;

         (iii) Seller  shall  have the right to  appoint  1 (one)  member of the
               Board of Directors  and Buyer shall have the right to appoint the
               other 2 (two) members of the Board of Directors;

         (iv)  the Buyer shall be responsible  for the operations of Xtal or the
               purchasing entity and shall be entitled to appoint the management
               of Xtal or the purchasing entity;

         (v)   the  unanimous   vote  of  the  Board  of  Directors  or  of  the
               shareholders  of Xtal or the purchasing  entity,  as the case may
               be, shall be required to approve (a) any  incurrence of financial
               debt in an  aggregate  principal  amount  exceeding  US$5,000,000
               (five million US dollars),  during the period between the Closing
               Date and the payment in full of the US$10,000,000 Promissory Note
               (the  "Promissory  Note  Payment  Date"),  and,  thereafter,  any
               incurrence  of financial  debt in an aggregate  principal  amount
               exceeding  US$15,000,000  (fifteen  million  US  dollars)  over a
               period of 3 (three)  years  counted  from the Closing  Date,  (b)
               capital  expenditures  in excess of

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                  US $500,000  (five  hundred  thousand US dollars),  during the
                  period  between  the  Closing  Date  and the  Promissory  Note
                  Payment Date, and  US$15,000,000  (fifteen million US dollars)
                  over a period  of 3 (three)  years  counted  from the  Closing
                  Date,  (c)  sale  of  assets  not in the  ordinary  course  of
                  business  in excess of  US$200,000  (two  hundred  thousand US
                  dollars),  during the period  between the Closing Date and the
                  Promissory  Note Payment Date,  and  US$500,000  (five hundred
                  thousand US dollars)  over a period of 3 (three) years counted
                  from the Closing Date, (d) any transaction between Xtal, Buyer
                  and any related party and any  transaction not in the ordinary
                  course of  business,  except for the  Technology  Transfer and
                  Licensing  Agreement in the course entered into by Xtal, Buyer
                  and any  related  party;  (e)  the  liquidation,  spin-off  or
                  winding-up  of  Xtal  or the  purchasing  entity;  and (f) any
                  amendments  to the  by-laws of Xtal or the  purchasing  entity
                  which may  affect the  rights  granted  to the shares  held by
                  Seller; (g) during the period between the Closing Date and the
                  Promissory Note Payment Date, the merger,  consolidation,  any
                  corporate  restructuring of Xtal or the purchasing entity; and
                  (h)  during  the  period  between  the  Closing  Date  and the
                  Promissory Note Payment Date, any amendments to the by-laws of
                  Xtal or the purchasing entity;

         (vi)     in  the  event  that  the  Buyer   decides  to,   directly  or
                  indirectly, sell, dispose or otherwise transfer any portion of
                  its  interest in Xtal or in the  purchasing  entity to a third
                  party,  or a substantial  portion of the assets of Xtal or the
                  purchasing  entity,  Seller  shall (i) have the right of first
                  refusal in relation to such sale on the same price and payment
                  conditions as such third party or (b) demand the  acceleration
                  of the payment due pursuant to Section 2(b) above;

         (vii)    Seller  shall not be required in any event to  participate  or
                  contribute  in any form in any capital  increase or investment
                  plan carried out by the Buyer in  connection  with Xtal or the
                  purchasing  entity. In the event that the Buyer implements any
                  capital  increase in Xtal or in the  purchasing  entity  which
                  causes the interest held by Seller to be diluted,  the amounts
                  due by the Buyer  pursuant to Section  2(b) above shall not be
                  changed and the Buyer shall remain  obliged to acquire all the
                  remaining  shares held by Seller in Xtal or in the  purchasing
                  entity for a payment in cash equivalent to  US$2,500,000  (two
                  million,  five hundred  thousand US dollars)  plus interest at
                  the rate of 6% (six  percent) per annum,  calculated  from the
                  Closing Date until the date such payment is made;

         (viii)   the Seller  shall  not  be  entitled  to  claim  any  dividend
                  distribution  in  relation  to its  shares  in  Xtal or in the
                  purchasing entity;

         (ix)     pursuant to a call option (the  "Buyer's  Call  Option") and a
                  put option, the Buyer shall have the right to acquire from the
                  Seller  and the  Seller  shall  have the  right to sell to the
                  Buyer all the  remaining  shares  held by Seller in Xtal or in
                  the  purchasing  entity  in  accordance  with  the  terms  and
                  conditions set forth in Section 2(b) above;

         (x)      in the  event  that the Buyer  does not pay the  US$10,000,000
                  Promissory Notes in full at the extended  maturity date (March
                  31,  2001),  the Seller  shall have a call option  against the
                  Buyer  (the  "Seller's  Call  Option")  pursuant  to which the
                  Seller  shall have the right to acquire from the Buyer and the
                  Buyer shall be obliged to sell to the Seller, at the exclusive
                  option of the Seller, either (A) such amount of shares of Xtal
                  or the purchasing entity, upon a payment of US$9,000,000 (nine
                  million US dollars), as required to, following any acquisition
                  pursuant  to  this  Section   4(b)(x)(A),   result  in  Seller
                  retaining a 100% (one hundred percent)] interest in Xtal or in
                  the purchasing,  in which case the Buyer shall forfeit all its
                  rights  related  to the  Xtal's  shares  or the  shares of the
                  purchasing  entity  and the  Seller  shall  have the  right to
                  immediately remove and replace all of the members of the Board
                  of Directors  appointed by the Buyer and to resume in full the
                  management of the Xtal or the purchasing  entity;  or (B) such
                  amount  of  shares of Xtal or the  purchasing  entity,  upon a
                  payment of R$1,00 (one real),  as required to,  following  any
                  acquisition  pursuant to this  Section  4(b)(x)(B),  result in
                  Seller retaining a 60% (sixty percent)] interest in Xtal or in
                  the purchasing  entity, in which case the Buyer shall have the
                  right to retain a minority  board position in the new Board of
                  Directors appointed by Seller;

         (xi)     in the event that the Seller exercise the Seller's Call Option
                  pursuant to Section 4(b)(x)(B) above, the Buyer shall have the
                  right of first refusal in relation to any  subsequent  sale by
                  Seller of its interest in Xtal or in the purchasing  entity to
                  a third party on the same price and payment conditions as such
                  third party; and

         (xii)    the Seller shall have the right to exercise the Seller's  Call
                  Option  mentioned  in item (x) above  during  the period of 30
                  (thirty)  days  counted  as from the  extended  maturity  date
                  (March 31,
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                  2001) of the  US$10,000,000  Promissory  Note, upon payment of
                  the amount  mentioned  in (x) above in cash.  In the event the
                  Buyer   accomplishes   its   obligations  of  payment  to  the
                  US$10,000,000  Promissory Note plus accrued  interests  during
                  such 30-day  period  prior to the payment by the Seller of the
                  amount related to the Seller's Call Option,  upon notification
                  to the Seller, then the Seller's Call Option shall be null and
                  void.

SECTION 5 EMPLOYMENT AGREEMENTS:  Seller agrees to use its commercial reasonable
efforts to assist Buyer in reaching  agreements  with key  employees as to their
continued  employment by Xtal or the purchasing entity for not less than 1 (one)
year,  on  customary  terms  and  conditions,   including,   where  appropriate,
non-compete,  confidentiality and non-solicitation of customers agreements,  and
to otherwise  assist Buyer in  continuing  the  employment  of all other current
employees of Xtal.

SECTION 6  COVENANT NOT-TO-COMPETE: NON-SOLICITATION OF EMPLOYEES.

         (a)  Consistent  with the  intention  of  Seller to  withdraw  from the
manufacture  of  optical  fiber,  at the  closing,  Seller  shall  enter into an
agreement (the "Non-compete Agreement") with Buyer pursuant to which Seller will
agree not to compete  with  Buyer  (including  Xtal),  for a period of three (3)
years,  in the business of Xtal as it exists on the closing date (the "Competing
Business").  The Non-compete  Agreement shall incorporate the terms set forth in
this Section 6 and shall be in customary form for similar  transactions  between
parties similarly situated.

         (b) Given the importance of Xtal's  employees and their value to Buyer,
which is reflected in the purchase  price,  during the period of the Non-compete
Agreement, Seller will agree (i) not to induce any person to leave the employ of
Xtal and (ii) not to hire any person who was an employee  of Xtal within  twelve
(12) months prior to the date of hire by Seller,  unless  consented to by Buyer,
which consent will not be unreasonably withheld.

SECTION 7 DUE DILIGENCE; CAPITAL EXPENDITURES;  CURRENT NEGOTIATIONS:  The Buyer
expects to promptly proceed with its due diligence investigation,  which it will
use its best efforts to complete  within 30 (thirty) days of the signing of this
Agreement or May 31, 2000, whichever date is later. Seller will provide to Buyer
complete and accurate copies of all books,  records,  date and other information
of Xtal as Buyer may  reasonably  request.  Buyer may make direct  contact  with
existing  customers,  suppliers  and employees of Xtal with the prior consent of
Seller  with  respect to the  entity  contacted  and the manner of such  contact
(which  consent  will  not be  unreasonably  withheld,  in  connection  with its
evaluation of the business of Xtal).  In the event that,  upon completion of the
due diligence process, the Buyer discovers any material  discrepancies in any of
the  information  previously  submitted  to Buyer,  the Buyer shall  immediately
notify Seller about such  discrepancy.  Seller shall then have 5 (five) business
days to respond to such  notification by either agreeing with the discrepancy or
disagreeing with the discrepancy indicating the amount in which it believes such
discrepancy should be. If Seller agrees with the discrepancy,  it shall have the
option to remedy such material  discrepancy  within a reasonable  period of time
(not to exceed 30 days).  If Seller  does not agree  with the  discrepancy,  the
Buyer shall have 5 (five) business days to respond to Seller's prior response by
either (i) agreeing  with the amount  suggested by Seller,  in which case Seller
shall have the option to remedy such  material  discrepancy  within a reasonable
period of time (not to exceed 30  days),  or (ii)  disagreeing  with the  amount
suggested  by  Seller,  in which  case both  parties  shall  jointly  appoint an
independent  expert to  determine  the  amount of the  discrepancy.  Upon  final
determination  of the discrepancy by the independent  expert (whose costs,  fees
and expenses shall be equally  divided  between the parties),  Seller shall have
the option to remedy such  material  discrepancy  within a reasonable  period of
time  (not to  exceed  30 days).  In the  event  that,  in any of the  preceding
situations,  Seller  decides not to remedy the material  discrepancy,  Buyer may
terminate this Agreement or Buyer and Seller may in mutual agreement renegotiate
the terms and conditions of the  transaction.  For purposes of this Section 7, a
"material discrepancy" shall mean any discrepancy which reduces the net worth of
Xtal by over  US$500,000  (five  hundred  thousand US dollars) as  calculated in
accordance with Brazilian GAAP (based on the financial  statements of Xtal as of
December 31, 1999).  Between the date hereof and the Closing Date, Buyer will be
entitled to approve all proposals for Xtal to make any capital  expenditures  or
to enter into other financial  commitments  involving  expenditures in excess of
U$50,000 (fifty  thousand US dollars),  provided that such approval shall not be
required for the capital expenditures and financial  commitments listed in Annex
C hereto.

SECTION 8 EXPENSES;  BROKERAGE;  ANTI-TRUST  APPROVALS;  LIABILITY:  Each of the
parties hereto shall pay its own expenses,  including,  but not limited to, fees
and  disbursements  of attorneys  and  financial or other  advisors  incurred in
connection with the execution of this Agreement or the transactions contemplated
hereby. Any and all costs,  expenses or liabilities  incurred in connection with
the  presentation  of the transaction  contemplated  herein

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before the Brazilian Antitrust Authorities, including, but not limited to, legal
consultant's fees, filling fees and governmental expenses,  shall be exclusively
borne by the Buyer. Seller shall or Seller shall cause Xtal to assist the Buyer,
without any charge,  in preparing  necessary  documents which are required to be
submitted to the Antitrust Authorities. In the event of any actions or approvals
by the Anti-Trust  authorities (other than the actions and approvals referred to
in the preceding  sentence) is required to be initiated by the Buyer in relation
to or in connection with the anti-trust approvals required for the completion of
the  transactions  solely  by reason of any  particular  situation  attributable
exclusively to Seller, Seller shall bear the reasonable expenses including,  but
not limited to, fees and  disbursements  of  attorneys  and  financial  or other
advisors  associated  with such proceeding up to the maximum amount of US$50,000
(fifty  thousand US dollars).  Each party shall hold  harmless the other for any
broker's or finder's  fee.  The Buyer agrees that Seller and Xtal shall not have
any  liability  to third  parties of any nature  whatsoever  with respect to the
transactions contemplated herein by virtue of the execution of this Agreement or
otherwise.

SECTION 9  EXCLUSIVITY:  From the date hereof until the earlier of June 30, 2000
or the  termination  of this  Agreement  pursuant to Section 15, Seller will not
directly or indirectly  solicit or consider inquiries or proposals or enter into
an agreement or negotiate  with any other party to sell or enter into any merger
or consolidation with respect to the business or assets of Xtal or any shares of
any class of capital stock of Xtal, and Seller will not permit Xtal to engage in
any  transaction  not in the ordinary  course of business,  provided that Seller
shall be released  from the  exclusivity  commitment  provided for herein in the
event  that (i) the  Board of  Directors  of the  Buyer  does  not  approve  the
transaction  contemplated herein by May 31, 2000 or (ii) the deposit referred to
in Section 10 below is not made within 30  (thirty)  days of the signing of this
Agreement or May 31, 2000, whichever date is later.

SECTION 10 TERMS AND CONDITIONS RELATING TO BUYER'S DEPOSIT.  Within 30 (thirty)
days of the signing of this Agreement or May 31, 2000,  whichever date is later,
Buyer  shall  pay the sum of  US$2,000,000  (two  million  US  dollars)  into an
offshore escrow account at a first class bank, acceptable to FCI and Seller. The
deposit (including accrued interest) shall be paid to Seller on the Closing Date
or in the event a closing  does not occur,  in 60 (sixty) days after the signing
of this  Agreement  or June 30,  2000,  whichever  date is later  on;  provided,
however,  the deposit  (including  accrued interest) shall not be paid to Seller
but instead  shall be returned to Buyer in 60 (sixty)  days after the signing of
this Agreement or June 30, 2000,  whichever  date is later,  in the event of the
following:

                 a. Any of the closing  conditions set forth in Sections 3, 4, 6
and 7 hereof or in the definitive  Purchase  Agreement are not satisfied,  other
than as a result of Buyer's action or inaction; or

                 b.  Litigation  or a  regulatory  proceeding  is  commenced  or
threatened which may block or delay the consummation of this transaction,  other
than litigation initiated by or on behalf of the Buyer.

SECTION 11  IRREVOCABILITY;  BINDING  EFFECT:  This Agreement is executed by the
Seller and the Buyer on an  irrevocable  basis and shall bind the Seller and the
Buyer and their successors of any kind.

SECTION 12  CONFIDENTIALITY.  Prior to or  simultaneously  with the execution of
this  Letter  of  Intent,  the  parties  have  executed  mutual  Confidentiality
Agreements,  in the form of Annex D hereto.  In  addition,  none of the  parties
shall issue any press release or make any similar public disclosure intended for
mass  distribution  pertaining  to  the  existence  of  this  Agreement  or  the
transactions  contemplated herein without the prior written consent of the other
party;  provided,  however,  that each  party  shall be  permitted  to make such
disclosures  as its  counsel  deems  necessary  to comply  with,  and to prevent
violation of, applicable laws, rules or regulations.

SECTION 13 FORCE  MAJEURE.  Seller and Buyer  shall not be liable for any delays
caused by reasons beyond their reasonable  control.  Any dates in this Agreement
shall be  extended  for  reasonable  periods  to reflect  delays  caused by such
factors.

SECTION 14 GOVERNING LAW. Dispute  Resolution.  This Agreement shall be governed
and construed in accordance with the laws of the Federative  Republic of Brazil.
Any disputes  arising  under this  Agreement  which  cannot be settled  amicably
between  the  parties and shall not be ruled by legal  provisions  of  Brazilian
public law shall be referred to arbitration in New York, New York, United States
of America under the auspices of the American Arbitration Association,  before a
single  arbitrator  appointed  by  the  American  Arbitration  Association.

                                       18
<PAGE>

The arbitrator  shall be a practicing  attorney  having a minimum of twenty (20)
years' experience in international  business  transactions.  Each of the parties
retains the rights to seek judicial assistance:  (a) to compel arbitration;  (b)
to obtain interim measures of protection  rights prior to institution of pending
arbitration  and any such  action  shall  not be  construed  as a waiver  of the
arbitration  proceedings by the parties;  and (c) to enforce any decision of the
arbitrators,  including  the final  award.  In case the  parties  seek  judicial
assistance, the Central Courts of the City of Sao Paulo shall have jurisdiction,
and the provisions of Article 639 of the Brazilian Civil Procedure Code shall be
applicable.

SECTION 15 TERMINATION OF THE AGREEMENT. This Agreement shall terminate upon the
earliest to occur of the following: (i) written notice from Buyer to Seller that
Buyer's due diligence has failed to confirm the information  previously provided
to Buyer by Seller and Seller  has  failed to remedy the  discrepancy;  (ii) the
execution of definitive  agreements in connection  with the closing of the sale;
(iii) the  distribution  of the  deposit to the Seller or the Buyer  pursuant to
Section  10,  (iv) the Board of  Directors  of the Buyer  does not  approve  the
transaction  contemplated  herein by May 31, 2000 or (v) the deposit referred to
in  Section  10 above is not made in 30  (thirty)  days of the  signing  of this
Agreement or by May 31, 2000, whichever date is later.

IN WITNESS WHEREOF,  the parties sign this Agreement in four (4) counterparts of
equal form and content, together with the two (2) undersigned witnesses.

                                               /s/ Jose Mauro Leal Costa
                                               -------------------------
                                               Algar S.A.
                                               By: Jose Mauro Leal Costa
                                               Title: Chief Executive Officer

                                               /s/ Nelson Cascelli Reis
                                               ------------------------
                                               Algar S.A.
                                               By: Nelson Cascelli Reis
                                               Title: Attorney-in-fact

                                               /s/ Antonio Carlos De Campos
                                               ----------------------------
                                               Xtal Fibras Opticas S.A.
                                               By: Antonio Carlos De Campos
                                               Title: Executive Director

                                                /s/ Mohd A. Aslami
                                                ------------------
                                                FiberCore, Inc.
                                                By: Mohd A. Aslami
                                                Title: President and CEO
Witnesses:

1.   -   /s/ Ali Seraj
         -------------
         Name: Ali Seraj
         R.G.:

2.   -   /s/ Francisco Smolka
         --------------------
         Name: Francisco Smolka
         R.G.

                                       19CONSULTING AGREEMENT

         This  Agreement  is made and entered  into this 28th day of  September,
1999,  between  PalmWorks,  Inc.  (Nevada) (the "Company") and Northwest Capital
Partners,  L.L,C.  (the  "Consultant"),  and sets forth the terms and conditions
upon  which the  Consultant  will act as  financial  advisor  to the  Company in
connection with the completion of the financing described m Exhibit "A" attached
hereto (the "Financing").

         In  consideration  for the  mutual  promises  and  covenants  contained
herein,  and for other  good and  valuable  consideration,  receipt  of which is
hereby acknowledged, the parties hereto agree as follows:

1. PURPOSE.  The Company hereby engages the Consultant during the term hereof to
arrange financing, as a finder, for the Company upon terms and conditions as set
forth herein and in accordance  with the  requirements  set forth in Exhibit "A"
(the  "Financing").  Consultant  shall  also  have a right of first  refusal  to
consult with the Company  regarding  appropriate  financings  subsequent  to the
Financings  set forth in Exhibit "A" for a period of three years  following  the
term of this Agreement.

2. TERM. The term of this Agreement shall be for a period of 36 months, provided
that the Interim  Financing  shall be completed no later than December 31, 1999.
An offering  pursuant to Rule 504 or other  applicable Rule adopted  pursuant to
the Securities Act of 1933, as amended (the "Act"), shall be completed within 30
days of' the Company's  approval  and,  following the quotation of the Company's
common stock on the NASD OTC Bulletin Board.

3. DUTIES OF THE CONSULTANT.  During the term hereof,  Consultant  shall provide
the Company  with the benefit of its best  judgment  and efforts to complete the
Financing on a reasonable business basis in accordance with the requirements set
forth in Exhibit "A." It shall be Consultant's duty to suggest and evaluate from
the standpoint of financial soundness the Company's business plans and programs,
corporate  financial  structures,  and  corporate  organization,  and any  other
financial  matters  involving  the Company.  In  connection  with the  financing
contemplated by this Agreement,  Consultant  agrees that it will advise and work
with the Company to complete the Financing  successfully in accordance with Rule
504 or other  applicable  Rule under the Act and the related and applicable Blue
Sky laws of the states in which the  financing is  completed.  Consultant  shall
advise the Company of each proposed broker or other financing or referral source
identified  by  Consultant  prior  to  authorizing  any   participation  in  the
Financing.  Consultant shall use its best efforts,  after receiving  information
from Company  sufficient to comply with the  informational  requirements of Rule
15c2-11 under the Securities  Exchange Act of 1934 (the "1934 Act"),  to arrange
for the  shares  of  common  stock of the  Company  to be quoted on the NASD OTC
Bulletin Board either by direct  application and approval through the NASD or by
reverse merger. The Company and the Consultant shall review the filing of a Form
10 (1934 Act form) with the U.S.  Securities  and Exchange  Commission  upon the
execution  of this  agreement.  Company  agrees  that it will  accept  Financing
amounts at each closing  contemplated  by Exhibit "A" which are in excess of the
amounts in Exhibit "A" if Consultant is able to raise such additional amounts in
accordance  with the  appropriate  disclosure  and the  securities  registration
exemption  provisions  of the Act and the relevant  Blue Sky laws.  Consultant's
duties shall also include, but not be limited to:

3.1 Assist the  Company's  management  in the  development  and  execution  of a
strategic short-term, intermediate term and long-term financial plan;

3.2 Assist the Company in the negotiation of the terms of the Financings;

3.3 Assist the management of the Company in connection with inquiries made by or
on behalf of any proposed brokers and investors;

3.4 Assist the  management  of the Company in the  preparation  of  presentation
materials for the purpose of pursuing the Financing;

3.5 Using its best efforts,  on terms acceptable to the Company,  to arrange the
Financings as described in Exhibit "A" attached hereto.

3.6 If the Company and the Consultant determine that a direct application to the
NASD is not in the best interest of the Company and  determine  that the Company
go public by way of a reverse  merger with an existing  publicly  traded company
the  Consultant  will be  responsible  for the location and  acquisition of such
public company including all costs associated with its acquisition.

<PAGE>

4.       CONSULTANT'S COMPENSATION.

4.1 The Company  shall pay  Consultant a fee of $5,000 for each month or partial
month this  Agreement has been in effect,  providing  that such payment shall be
paid, as accrued,  at the closing of the Interim  Financing and then  continuing
through the closing of the Second and Third Stage  Financings,  as  described in
Exhibit  "A,"  by the  Consultant.  Upon  the  closing  of the  Third  Stage  of
Financing,  the fee of $5,000 per month will be extended  for an  additional  36
months, for duties to be mutually agreed upon by the parties.

4.2 The Company agrees that, at the closing of the first Interim  Financing,  as
described  in Exhibit  "A," by the  Consultant  or at the time the Company  goes
public,  the Company  will issue to the  Consultant  1,500,000  shares of common
stock of the Company at value of $0.01 per share. The Consultant's  shares shall
be held in escrow by the Company's  lawyer pursuant to an escrow  agreement that
releases the  Consultant's  shares to the  Consultant  based upon the  following
terms and conditions:

         Upon the  completion  of the First Interim  Financing,  as described in
Exhibit "A", the Consultant  shall have earned 750,000 shares of the Company and
such shares will be  delivered to the  Consultant.  Upon the  completion  of the
Second Interim Financing, as described in Exhibit "A", the Consultant shall have
earned an  additional  750,000  shares of the  Company  and such  shares will be
delivered to the Consultant.  Upon the Company's receipt of the aggregate amount
of  $1,000,000  through any  combination  of the Interim,  Second or Third Stage
financings  as described in Exhibit  "A", the  Consultant  shall have earned all
1,500,000  shares  of the  Company  and such  shares  will be  delivered  to the
Consultant.  In the event that the Company terminates this agreement the Company
retains  the right to  purchase  all of the  Consultant's  shares that remain in
escrow for $0.01 per share.

4.3 The  Company  agrees  to issue the  Consultant  an  option  to  purchase  an
additional  1,000,000 shares at $0.01 per share. This option can be exercised at
any  time  upon the  Company's  market  capitalization  achieving  the  value of
$100,000,000.00  or more.  The shares  under this  option  will be issued by the
company as  restricted  shares at a value of $0.01 per share and will be granted
"piggy-back"  rights so that the shares will be  registered  upon the  Company's
first registration after the share's issuance.

4.4 The  Company  agrees  that it shall  reimburse  Consultant  for  reasonable,
out-of-pocket  expenses  incurred  by  Consultant  in  performing  the  services
provided pursuant to this Agreement,  provided that such  out-of-pocket  expense
reimbursement  shall not exceed $3,000 in any calendar  month or partial  month,
and provided  that any  expenses in excess of $500 in any  calendar  month shall
require advance approval by the Company.  Such reimbursement  shall be paid upon
the within 30 days of the Company's  receipt of the Consultant's  invoice.  Such
reimbursement  may be claimed for any month  commencing with the signing of this
Agreement and monthly thereafter to the date of each closing,  payable within 30
days of receipt.

4.5 If the Consultant is  unsuccessful  in introducing  investors to the Company
(either  directly  or  through  a  broker)  who  would  be  willing  to fund the
Financings  contemplated in Exhibit "A" within the time periods set forth,  this
Agreement  may be  terminated  at the  Company's  discretion,  unless  otherwise
extended by mutual  consent.  Such consent will be implied should the Company be
in or continue  negotiation  with investors  which should  reasonably  result in
successful  Financing or should the Company  accept fund from one of the sources
introduced  to the  Company by the  Consultant  during  this  period.  Following
termination,  however, Consultant will be entitled to the consideration above as
to  those  stages  of  the  Financing  completed  and in the  event  that  after
termination  a  financing  of any kind or amount is  consummated  with any party
introduced  to the Company by the  Consultant  during a period of twelve  months
after termination of this Agreement.

<PAGE>

5.       INDEMNIFICATION.

5.1 The Company  agrees to indemnify  the  Consultant,  its agents and employees
against  any  and  all   claims,   lawsuits,   and   litigation   arising   from
representations  of the Company  made to  Consultant  or  prospective  investors
concerning its business plan and financial condition. Such indemnification shall
include reasonable attorney's fees to defend any such actions or claims.

5.2 The  Consultant  agrees to indemnify  the Company,  its agents and employees
against  any  and  all   claims,   lawsuits,   and   litigation   arising   from
representations of the Consultant made to prospective  investors  concerning the
Company except for those  representations  constituting  information provided by
the Company.  Such indemnification  shall include reasonable  attorney's fees to
defend any such actions or claims.

5.3 Promptly  after  receipt by an  indemnified  party of notice of any claim or
commencement  of any  action in respect of which  indemnity  may be sought,  the
indemnified  party will notify the indemnifying  party in writing of the receipt
or  commencement  thereof  and the  indemnifying  party  shall have the right to
assume the  defense of any such claim or action  (including  the  employment  of
counsel reasonably satisfactory to the indemnified party and the payment of fees
and expenses of such counsel),  after which the indemnifying  party shall not be
liable to the  indemnified  party for any legal fees incurred by the indemnified
party in  connection  with the defense of such claim or action.  Notwithstanding
the prior sentence,  the  indemnified  party shall have the right to control its
defense if, in the opinion of its counsel,  the  indemnified  party's defense is
unique or separate to it, as the case may be, as opposed to a defense pertaining
to the indemnifying  party. In such event, the indemnified  party shall have the
right to retain counsel reasonably satisfactory to the indemnifying party at the
indemnifying  party's  expense to represent it in any claim or action in respect
of which  indemnity may be sought and agrees to cooperate with the  indemnifying
party and the  indemnifying  party's counsel on the defense of any such claim of
action, it being understood,  however, that the indemnifying party shall not, in
connection with any such claim or action or separate but  substantially  similar
or  related  claim or action in the same  jurisdiction  arising  out of the same
general  circumstances,  be liable for the reasonable  fees and expenses of more
than one separate firm of attorneys, unless the defense of one indemnified party
subject to the same claim or action. No party shall be liable for any settlement
of any claim or action effected without its written consent.

6. REPRESENTATION AND WARRANTIES. Company represents and warrants a follows:

6.1 The  Company  has  been  duly  incorporated  and is  validly  existing  as a
corporation  in good  standing  under  the laws of the  state of  Nevada  and is
qualified as a foreign corporation where required.

6.2 The shares of common  stock of the Company  which will be  delivered  to the
investors  Consultant  will be duly authorized and validly issued and fully paid
and nonassessable.

<PAGE>

7. CONDITIONS PRECEDENT. Consultant's duties to use its best efforts to complete
the Financings contemplated herein shall be subject to:

7.1 The  Company  will not  change or modify  the  Company's  capital  structure
without the prior  written  consent of  Consultant,  which  consent shall not be
unreasonably withheld.

7.2 The Company will submit quarterly budgets to Consultant during the period of
the Financing and for one year after successful completion of the Financing.

7.3 The Company will provide all pertinent  information  in connection  with the
Company's  assets,  including,  but not limited to, all tangible and  intangible
assets, and all copyright and trademark information.

7.4 The Company shall have received executed employment  agreements from each of
its  officers  and  Directors  and other key  individuals  in a form  reasonably
appropriate in accordance with industry standards.

7.5 The Company will provide  Consultant with all information and  verifications
thereof which  Consultant or its legal counsel may  reasonably  request from the
Company in a manner and form satisfactory to Consultant and its legal counsel.

7.6 Receipt by Consultant of suitable  financial  statements of the Company that
are in form and substance  satisfactory to Consultant,  in its sole  discretion.
The Company shall provide financial statements consisting of a balance sheet and
a related  statement of income for the period then ended,  which fairly  present
the financial condition of each as of their respective dates and for the periods
involved,  and such  statements  shall be prepared in accordance  with generally
accepted accounting principles  consistently applied or upon such other basis as
the parties shall mutually agree and for the periods  mutually agreed upon among
the parties.

7.7 All existing  shares of the Company have or will be issued in  accordance to
Rule 4(2) of the 1933 Act and consequently,  such securities will be "Restricted
Securities"  as such term is defined in Rule 144 as  promulgated  under the 1933
Act and thus will be subject to certain resale  limitations as contained in Rule
144 and the certificates  shall bear the following  restrictive  legend limiting
their resale under Rule 144 of the Act.

                  "THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE BEEN
                  ACQUIRED  PURSUANT TO A TRANSACTION  EFFECTED IN RELIANCE UPON
                  SECTION 4(2) OF THE  SECURITIES  ACT OF 1933,  AS AMENDED (THE
                  "ACT"),  AND  HAVE  NOT BEEN  THE  SUBJECT  OF A  REGISTRATION
                  STATEMENT  UNDER THE ACT OR ANY STATE  SECURITIES  ACT.  THESE
                  SECURITIES  MAY NOT BE SOLD OR  OTHERWISE  TRANSFERRED  IN THE
                  ABSENCE OF SUCH REGISTRATION OR APPLICABLE EXEMPTION THEREFROM
                  UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES ACT."

8.       CONDITIONS AND SUBSEQUENT.

8.1 For a period of three years from the date of closing of a Financing arranged
by Consultant  pursuant to this Agreement,  the Company will provide Consultant,
at its expense,  following a reasonable request by Consultant for the purpose of
reviewing and/or protecting the Company's shareholder's  interests,  with copies
of stock transfer  sheets from the Company's  Transfer  Agent, as well as weekly
DTC Reports from the Depository  Trust Company to the extent such reports can be
made  available to a party that is not an  affiliate  of the  Company,  and will
provide  Consultant with all publicly  available  financial reports and publicly
available  reports  of  material  developments  regarding  the  Company  and its
compliance with laws and  regulations  applicable  thereto.

8.2 For a period of three  years  after the date  that the  Company's  shares of
common stock  commence  trading on the NASD OTC Bulletin  Board,  the  Company's
executive  offices  and  directors  who own at least  five  percent  (5%) of the
Company's common stock ("Principal  Stockholders") and the Company shall provide
the  Company's  officers  with the right of first  refusal  with  respect to any
offering  (public or private) of the Company's  securities by either the Company
or the Principal Stockholders involving more than 1000 shares of stock.

<PAGE>

         For a period of three years after the date that the Company's shares of
common stock  commence  trading on the NASD OTC Bulletin  Board,  the  Company's
executive  officers  and  directors  who own at least five  percent  (5%) of the
Company's common stock ("Principal  Stockholders") and the Company shall provide
the Company with the second right of first  refusal with respect to any offering
(public or private)  of the  Company's  securities  by either the Company or the
Principal Stockholders involving more than 1000 shares of stock.

         For a period of three years after the date that the Company's shares of
common stock  commence  trading on the NASD OTC Bulletin  Board,  the  Company's
executive  officers  and  directors  who own at least five  percent  (5%) of the
Company's common stock ("Principal  Stockholders") and the Company shall provide
the  Consultant  with the  third  right of first  refusal  with  respect  to any
offering  (public or private) of the Company's  securities by either the Company
or the Principal Stockholders involving more than 1000 shares of stock.

         For a period of three years after the date that the Company's shares of
common stock  commence  trading on the NASD OTC Bulletin  Board,  the  Company's
executive  officers  and  directors  who own at least five  percent  (5%) of the
Company's common stock ("Principal  Stockholders") and the Company shall provide
the other  Principal  Stockholders of the Company with the fourth right of first
refusal  with  respect to any  offering  (public or  private)  of the  Company's
securities by either the Company or the Principal  Stockholders  involving  more
than 1000 shares of stock.

8.3 The Company's  officers and  directors  will use their best efforts to cause
each Principal  Shareholder and each other holder of 5% or more of the Company's
common stock to enter into an agreement with Consultant pursuant to the terms of
which each such person  shall agree not to sell any shares  owned by such person
on the NASD OTC  Bulletin  Board,  for a period of twelve  months after the date
that the  Company's  shares of common  stock  commence  trading  on the NASD OTC
Bulletin Board, without  Consultant's prior written consent,  which consent will
not be  unreasonably  withheld.  Provided  that each such  person may sell up to
1,000  shares  every three  months  after the first 180 days has passed the date
that the Company's shares common stock commence trading on the NASD OTC Bulletin
Board.

8.4  Consultant  shall be  entitled  for a period of five  years to  nominate  a
director for the  Company's  board of  directors  which the  Company's  existing
directors  will support.  Such  director  shall be paid the same salary as other
directors (for director's  duties  performed) and shall participate in all bonus
programs granted to the Company's board of directors.

9.  TERMINATION  OF  RELATIONSHIP.  This  Agreement  shall  terminate  upon  the
happening of any one of the following events:

9.1 Either party may terminate  this  Agreement  upon ten days written notice to
the other that a material  breach by the other of the terms or covenants of this
agreement  shall have  occurred and such breach shall not have been cured within
ten days after such notice.

9.2 Either party shall have the right (but not the obligation) to terminate this
Agreement  upon  written  notice to the other  party if such  terminating  party
reasonably determines that the other party or any of its directors,  officers or
controlling  shareholders has engaged in any unlawful,  wrongful,  or fraudulent
act against the Company or its shareholders.

<PAGE>

9.3 Either party shall have the right (but not the obligation) to terminate this
Agreement upon written notice to the other party if such terminating party shall
determine that any material fact concerning the other party  represented to them
during the course of  performing  their  undertakings  under this  Agreement are
misstated or untrue or that the other party has intentionally  failed to provide
the terminating party with material facts concerning the other party.

9.4 Either party may terminate  this  Agreement at any time: (i) in the event of
war; (ii) in the event of any material adverse change in the business,  property
or financial  condition of the Company (of which  terminating party shall be the
sole judge);  (iii) in the event of any action,  suit or proceeding at law or at
equity  against the Company or  Consultant,  or by any  Federal,  State or other
commission or agency where any unfavorable  decision would materially  adversely
affect the business, property, financial condition or income of a party; (iv) in
the event of adverse market  conditions of which event the terminating  party is
to be the sole  judge.  Further,  Consultant's  commitment  will be  subject  to
receipt  by  Consultant  of all  information  and  verifications  thereof  which
Consultant or their counsel may reasonably  request from the Company in a manner
and form satisfactory to Consultant.

In the event of  Termination  by  Consultant,  upon grounds stated herein above,
Consultant  shall be entitled to accrued  fees and  expense  reimbursements  and
shares  otherwise  payable  shall  be  paid as  though  this  Agreement  was not
terminated.

10.      MISCELLANEOUS.

10.1  Authorization.  This  Agreement  has been duly  authorized,  executed  and
delivered by and on behalf of the Company and the Consultant.

10.2  Notices.  Any notice or other  communication  required or permitted by any
provision of this Agreement shall be in writing and shall be deemed to have been
given or served for all purposes if delivered  personally  or sent by registered
or certified mail, return receipt requested,  postage prepaid,  addressed to the
parties as follows:

         To Consultant:                     Northwest Capital Partners, L.L.C.
                                            Mr. Brent Nelson
                                            10900 NE 8th Street, Suite 900
                                            Bellevue, Washington  98004
                                            Tel:  425-455-1969
                                            Fax:  425-990-5979

         To the Shareholders

         and to the Company:                PalmWorks, Inc. (Nevada)
                                            Mr. James T. Voss
                                            2525 South Shore Blvd., Suite 309
                                            League City, TX  77573-2989
                                            Tel:  281-334-5940
                                            Fax:  281-334-0889

<PAGE>

10.3  Validity;  Complete  Agreement.  The  validity and  enforceability  of any
provision  hereof shall in no way affect the validity or  enforceability  of any
other provision hereof.  This Agreement sets forth the entire  understanding and
embodies the entire  agreement of the parties with respect to the subject matter
covered  hereby  and  supersedes  all prior or  contemporaneous  oral or written
agreements, understandings,  arrangements,  negotiations or communications among
the parties hereto.

10.4  Amendment.  This  Agreement  shall not be  modified  or amended  except by
written agreement of the parties hereto.

10.5 Governing Law. This Agreement shall be governed by the laws of the state of
Washington giving effect to that state's conflict of laws principle.

         In witness whereof,  the parties hereto have executed this Agreement as
of the date first above written.

NORTHWEST CAPITAL PARTNERS, L.L.C.

By       /s/ Brent Nelson
         -----------------------------
         Brent Nelson, President

PALMWORKS, INC. (NEVADA)

By       /s/ James T. Voss
         ------------------------
         James T. Voss, Chairman & CEO

<PAGE>

                                   EXHIBIT "A"

                            PalmWorks, Inc. (Nevada)

                             Financing Requirements
                   Attached hereto and made a part hereof the
                   Agreement between PalmWorks, Inc. (Nevada)
                     and Northwest Capital Partners, L.L.C.
                            Dated September 28, 1999

MINIUMUM AMOUNT                                               APPROXIMATE DATE
---------------                                               ----------------
$350,000 Interim Financing                                    October 31, 1999
$650,000 Interim Financing (1)                                December 31, 1999
$500,000 Interim Financing                                      March 31,2000
Second and Third Stage financing as required (2)

(1)      The price per share of common stock shall be  determined by the Company
         following consultation with Consultant.

(1)      The term "Interim Financing" as used in the Agreement shall include
         segment 1, 2, and 3 above.

(2)      Within 6 months after the date the Company's  common stock is quoted on
         the NASD OTC Bulletin Board, provided that the Company has subsequently
         filed  with the  U.S.  Securities  and  Exchange  Commission  a Form 10
         pursuant to Section 12(g) of the 1934 Act.

<PAGE>

                            PALMWORKS, INC. (NEVADA)
                         APPROVAL OF CAPITAL RESTRUCTURE

         The  undersigned  hereby  agree to  revise  the  Capital  Structure  of
PalmWorks, Inc. (Nevada) a indicated below.  Furthermore,  the undersigned agree
to allow the  PalmWorks,  Inc.  (Nevada)  Compensation  Committee to grant stock
options  from those  shares of stock  reserved  in the  Employee  Pool to new or
existing hires, in accordance with the option package structure guidelines to be
determined by the PalmWorks,  Inc. (Nevada) Compensation  Committee,  and at the
Committee's discretion.

Signed this 28th day of September, 1999 by:

/s/ Brent Nelson
---------------------
Brent Nelson

President, Northwest Capital Partners, L.L.C.

/s/ James T. Voss
----------------------
James T. Voss

Chairman & CEO, PalmWorks, Inc. (Nevada)

                                        Number of Shares of Common Stock
Shareholder                                    After Restructuring
James T. Voss                                        2,000,000
Ellen S. Eckler                                      1,400,000
Mike Barnwell                                          250,000
Stock Options                                        1,600,000
Northwest Capital                                    1,500,000
                                                     ---------
TOTAL                                                6,750,000

Financing Required                            Dollars Received
------------------                            ----------------
October 31, 1999                                     $ 350,000
December 31, 1999                                    $ 650,000
March 31, 2000                                       $ 500,000
                                                     ---------
TOTAL                                               $1,500,000

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