<PAGE>   1

                                                                  EXHIBIT 10.21





                                                                  EXECUTION COPY

                                      DATED
                                 APRIL 26, 2000




                                  BY AND AMONG

                            MRV COMMUNICATIONS, INC.

                                       AND

                               QUANTUM OPTECH INC.

                                       AND

                       SHAREHOLDERS OF QUANTUM OPTECH INC.






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

                            STOCK PURCHASE AGREEMENT

  Relating to the sale and purchase of up to one hundred percent (100%) of the
                        Ordinary Shares in the capital of
                               QUANTUM OPTECH INC.

                 and the sale and purchase of certain number of
                       Ordinary Shares in the capital of
                            MRV COMMUNICATIONS, INC.
--------------------------------------------------------------------------------


                                BAKER & MCKENZIE
                           15th Floor, Hung Tai Centre
                             168 Tun Hwa North Road
                                 Taipei, Taiwan

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                                                PAGE
<S>   <C>                                                                                <C>
1.    Definitions......................................................................   2
2.    The Transaction..................................................................   2
3.    The Closing......................................................................   5
4.    Deliveries at the Closing........................................................   5
5.    Representations and Warranties of QOI and Selling Shareholders...................   6
6.    Representations and Warranties of MRV...........................................   18
7.    Pre-Closing Covenants...........................................................   19
8.    Conditions Precedent to Closing.................................................   23
9.    Post Closing Covenants..........................................................   25
10.   Indemnification and Escrow......................................................   26
11.   Termination.....................................................................   29
12.   Transfer Restriction............................................................   29
13.   Miscellaneous...................................................................   29
</TABLE>

<TABLE>
<CAPTION>
SCHEDULES
<S>     <C>
1.      List of Signing Shareholders and Shareholding
2.      List of Subsidiaries of QOI
3.      List of Equity Interests hold by QOI and its Subsidiaries
4.      Financial Statements of QOI and its Subsidiaries
5.      List of Warehouses
6.      List of Liabilities
7.      List of Material Changes
8.      List of Real Properties
9.      List of Tangible Personal Property
10.     List of Intellectual Properties
11.     List of License of any Intellectual Properties
12.     List of Contracts
13.     List of Permits
14.     List of Non-Renewable Permit
15.     List of Encumbrances
16.     List of Litigation
17.     List of Employee Benefits
18      List of Unemployment Compensation
19.     List of Distributors
20.     List of Suppliers
21.     List of Related Party Transaction
22.     List of Directors; Officers; Banks and Powers of Attorney
23.     List of Insurance
24.     List of Principal Employees
25.     List of Patents and Intellectual Property to be Transferred to QOI
</TABLE>


                                       i
<PAGE>   3
<TABLE>
<S>     <C>
26.     List of Selling Shareholder Guarantees for Indebtedness of QOI
27.     List of Pledged Shares
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS
<S>   <C>
A.    Form of Power of Attorney to be issued to Attorneys-in-Fact
B.    Form of Power of Attorney to be issued to Closing Agent
C.    Form of QOI's Bring-Down Certificate
D.    Form of MRV's Bring-Down Certificate
E.    Form of Employment Agreement
F.    Form of Escrow Agreement
G.    Letter of Consent for Principal Employees
</TABLE>


                                       ii
<PAGE>   4

                            STOCK PURCHASE AGREEMENT


THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of this 26th
day of April, 2000 by and among Quantum Optech Inc., a corporation organized and
existing under the laws of the Republic of China ("QOI") with its principal
executive office located at No. 14-1 Lane 78, Yan Her St., Chu Pei City, Hsinchu
Hsine, Taiwan, ROC, MRV Communications, Inc., a corporation organized and
existing under the laws of Delaware, U.S.A. with its principal executive office
located at 20415 Nordhoff St., Chatsworth, CA 91311 U.S.A.("MRV"), and each
person listed in the schedule of QOI shareholders attached hereto as Schedule 1
(individually, a "Signing Shareholder" and collectively the "Signing
Shareholders"), represented by their attorney-in-fact, Keh-shium Liu
("Attorney-in-Fact") (as evidenced by a Power of Attorney attached hereto as
Exhibit A). MRV, QOI and the Signing Shareholders are referred to herein
individually as the "Party" and collectively as the "Parties".

     WHEREAS, the Signing Shareholders collectively own approximately
seventy-one percent (71%) of the issued and outstanding shares of the capital
stock of QOI (the "QOI Shares"), each of them in the respective amounts and
percentages set forth on Schedule 1;

     WHEREAS, MRV is authorized to issue up to Five-Hundred-Fourteen Thousand,
Two Hundred Eighty Six (514,286) new common shares ("MRV Shares") prior to the
sale and transfer of QOI Shares to MRV contemplated by this Agreement;

     WHEREAS, subject to the terms and conditions of this Agreement, (i) MRV
desires to by itself and/or its Subsidiaries or Affiliates purchase up to one
hundred percent (100%) but no less than seventy-five percent (75%) of QOI Shares
from the Signing Shareholders and other QOI shareholders (the Signing
Shareholders and other QOI shareholders selling their QOI Shares to MRV (and/or
its Subsidiaries/Affiliates) collectively the "Selling Shareholders"), and the
Signing Shareholders desire to, and will use their best efforts to cause other
Selling Shareholders to sell and transfer their QOI Shares to MRV (and/or its
Subsidiaries/Affiliates) in return for the consideration set forth herein; and
(ii) the Signing Shareholders desire to and will cause other Selling
Shareholders to aggregately purchase certain MRV Shares from MRV, and MRV
desires to sell the MRV Shares up to the same amount to Selling Shareholders in
return for the consideration set forth herein.

     WHEREAS, the Signing Shareholders and QOI will use their best efforts to
obtain the consent of other Selling Shareholders to be a Party of this Agreement
and to be bound by the terms and conditions herein.

     NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
<PAGE>   5
1.   DEFINITIONS

1.1  Generally. As used in this Agreement, capitalized terms not otherwise
     defined shall have the meanings specified in the text hereof or on Annex 1
     hereto (which is incorporated herein by reference), which meanings shall be
     applicable to both the singular and plural forms of the term defined.

2.   THE TRANSACTION

2.1  At the Closing (as hereinafter defined), upon satisfaction of the terms and
     conditions set forth herein:

     2.1.1     Purchase and Sale of QOI Shares

     (a)       The Selling Shareholders shall sell, transfer, assign and deliver
               to MRV (and/or its Subsidiaries/Affiliates) at the Closing, and
               MRV (and/or its Subsidiaries/Affiliates) agrees to purchase and
               acquire from the Selling Shareholders and pay therefor at the
               Closing, all of their respective QOI Shares, free and clear of
               any and all Encumbrances, consisting of up to one hundred percent
               (100%) of the total number of issued and outstanding QOI Shares
               as of the Closing Date, at and for an aggregate purchase price of
               approximately Thirty Six Million United States Dollars
               (US$ 36,000,000.00) for purchasing one hundred percent (100%) QOI
               Shares (equaling One United States Dollar and Eighty-Nine point
               Five United States Cents (US$1.895) per share). The foregoing
               aggregate purchase price (the "MRV's Payment") shall be paid by
               MRV (and/or its Subsidiaries/Affiliates) at the Closing by wire
               transfer to a single bank account in Taiwan designated by the
               Selling Shareholders to MRV (and/or its Subsidiaries/Affiliates)
               in writing at least seven (7) Business Days prior to the Closing
               (the "Taiwan Account"). Such Taiwan Account shall be agreed by
               MRV. The MRV's Payment shall be divisible among the Selling
               Shareholders pro rata in accordance with their percentage
               shareholdings in QOI; PROVIDED, HOWEVER, that the MRV's Payment
               shall not be released from the Taiwan Account to the Selling
               Shareholders and be used as the payment due MRV for the MRV
               Shares being purchased by the Selling Shareholders (as per
               Section 2.1.2 below) and fully wired by the Selling Shareholders
               via the Closing Agent (as hereinafter defined and discussed) on
               their behalf to an account designated by MRV to the Selling
               Shareholders in writing at least seven (7) Business Days prior to
               the Closing (the "MRV Account"). Furthermore, the Selling
               Shareholders shall be liable for (i) the 0.3% share transfer tax
               imposed by Taiwan on the sale of QOI Shares by the Selling
               Shareholders ("The Taiwan Stock Transfer Tax"); (ii) whatever
               costs and fees charged relating to the Taiwan Account for the
               wire transfer; and (iii) the Escrow Fees as described in Section
               10.2.3 (c) below and in the Escrow Agreement (above (i), (ii),
               and (iii) collectively referred to as the "Sellers' Costs").

     (b)       In the event that less than one hundred percent (100%) but not
               less than seventy-five percent (75%) of QOI Shares are available
               for sale, the MRV's


                                       2
<PAGE>   6
               Payment shall be adjusted down by the same percentage as those
               shares not available for sale are as a percentage of the total
               shares of outstanding shares on the date of execution of this
               Agreement. If less than seventy-five percent (75%) of QOI Shares
               are available for sale to MRV, MRV shall not be obligated to
               complete the transactions contemplated in this Agreement.

     2.1.2     Purchase and Sale of MRV Shares

     (a)       MRV shall issue and sell to the Selling Shareholders, and the
               Selling Shareholders shall purchase from MRV pro rata in
               accordance with their percentage shareholdings in QOI, the MRV
               Shares, free and clear of any and all Encumbrances, at and for an
               aggregate purchase price of Thirty Six Million United States
               Dollars (US$36,000,000.00) (equaling Seventy United States
               Dollars (US$70) per share). The foregoing aggregate purchase
               price (the "Selling Shareholders' Payment") shall be paid by the
               Selling Shareholders via the Closing Agent at the Closing by wire
               transfer to the MRV Account. The wire transfer shall be effected
               immediately upon receipt of each installment of MRV's Payment in
               the Taiwan Account. In order to secure and assure the payment to
               MRV of the Selling Shareholders' Payment, which shall be made
               using a portion of the funds first wired by MRV to the Taiwan
               Account, at least five (5) Business Days prior to the Closing,
               the Selling Shareholders (or Attorney(s)-in-Fact or QOI in whose
               name the Taiwan Account shall be registered) shall give the
               Taiwan Account passbook, chops and a power-of-attorney in the
               form attached as Exhibit B (Power of Attorney-Form B) to the law
               firm of Baker & McKenzie, Taipei Office represented by David Liou
               as the Closing Agent of the Selling Shareholders (the "Closing
               Agent") granting said Closing Agent the exclusive right to give
               instructions to the bank with respect to the Taiwan Account.

     (b)       In the event that less than one hundred percent (100%) but not
               less than seventy-five (75%) of QOI Shares are available for
               sale, the number of MRV Shares to be sold to the Selling
               Shareholders and the Selling Shareholders' Payment shall be
               adjusted down by the same percentage as those QOI Shares not
               available for sale are as a percentage of the total QOI Shares of
               outstanding on the date of execution of this Agreement. The
               Selling Shareholders shall advise MRV of the actual number of QOI
               Shares being sold within one month of the execution of this
               Agreement.

     2.1.3     The definite purchaser(s) of QOI Shares and its respective
               purchasing volume of shares in QOI, and recipient(s) of the
               Selling Shareholders' Payment shall be determined and advised by
               MRV in writing to QOI and the Attorney-in-Fact at least Five (5)
               Business Days prior to the Closing. In each of the above
               transactions, the seller shall be liable to pay any applicable
               taxes or duties on the issuance or sale of its shares of stock to
               other party. Thus, the Selling Shareholders shall be liable for
               the payment of the Taiwan Stock Transfer Tax, which shall be
               deducted and paid from the Taiwan Account, as discussed above.
               MRV shall be liable for the payment of the taxes or duties (if
               any) on the issuance and sales of the MRV Shares to the Selling
               Shareholders, which shall be paid by MRV within the


                                       3
<PAGE>   7
               period of time required by the laws of the State of Delaware.

     2.1.4     The number of MRV Shares (514,286 shares) to be delivered shall
               be determined according to the following (subject to a pro rata
               deduction in case that less than 100% of the QOI Shares are
               delivered on Closing):

     (a)       The value of 171,429 MRV Shares delivered upon Closing, valued at
               the closing price of the MRV common stock as reported on NASDAQ
               for the day of the signing of this Agreement, or, if NASDAQ is
               not trading on such day, the earliest date preceding said date on
               which NASDAQ was open for trading (the "Base Value"). In the
               event that the value of the such number of MRV shares decreases
               in value by more than One Million United States Dollars
               (US$ 1,000,000) between the date of signing this Agreement and
               the effective date of a registration statement filed with United
               States Securities and Exchange Commission (the "SEC") registering
               such shares, (the decrease to be determined by subtracting the
               value of the shares (by reference to the closing price) on the
               date of the SEC effective registration from the Base Value), MRV
               shall issue to the Selling Shareholders, after the effective date
               of the SEC registration, pro rata that number of additional
               shares of common stock so that the aggregate amount of shares
               shall equal as close an amount as possible to said Base Value,
               without issuing any fractional interests in its shares. However,
               MRV is not obligated to issue additional shares for any decrease
               in the value of the shares below United States dollars One
               Million.

     (b)       171,428 MRV Shares, regardless of the value at the Closing Date
               of said MRV Shares.

     (c)       171,429 MRV Shares, to be placed with the Escrow Agent and held
               under the terms of this Agreement and the Escrow and Pledge
               Agreement attached hereto.

     2.1.5     The Principal Employees listed in Schedule 24 shall be granted by
               MRV the options to purchase the common stock of MRV. Such options
               shall have an intrinsic value of Four Million United States
               Dollars (US$4,000,000), based on the difference between the
               exercise price and the fair market value of MRV common stock
               valued at the same price as the closing price of the MRV common
               stock as reported on NASDAQ immediately prior to the signing of
               this Agreement. Such options shall vest and become exercisable in
               equal installments at the rate of 1.667% per month commencing on
               the last day of the first full month after the date of this
               Agreement and shall be issued in exchange for equivalent options
               such employees hold in QOI, if any. The exercise price for the
               share options shall be between Six United States Dollars (US$6)
               and Ten United States Dollars (US$10).

2.2  Notwithstanding the transaction mechanism described in Sections 2.1.1 and
     2.1.2, MRV shall have the option to carry out a direct shares swap if MRV's
     verification with the Taiwan authorities reveals that such direct shares
     swap is feasible prior to


                                       4
<PAGE>   8

     the Closing.

2.3  The Parties agree that upon the successful completion of transfer of the
     Selling Shareholders' Payment to the MRV's Account in accordance with the
     provisions of this Agreement, the Closing Agent will thereupon be deemed to
     have been released from any and all obligation arising hereunder or from
     the Agreement. The Parties further agree any of them will not hold the
     Closing Agent liable or responsible for any act it may do or omit to do in
     the exercise of reasonable care, as prudent administrator, in good faith,
     and in compliance with this Agreement. The Parties and the Closing Agent
     agree that the Closing Agent will keep the Parties informed of the status
     and the progress of the Closing matters handled by the Closing Agent.


3.   THE CLOSING

3.1  The closing of the transactions contemplated by this Agreement (the
     "Closing") shall take place at the office of Baker & McKenzie, Taipei
     office and be held over a five (5) day or longer period (given the
     necessity of effecting international wire transfers and considering the
     time differences involved), commencing five (5) Business Days after all
     conditions to the closing of the transactions contemplated by this
     Agreement have been satisfied or waived (the fourth or the last day of the
     Closing being the "Closing Date"), but in any case not later than June 30,
     2000 (the "Target Day") (unless the Parties shall agree upon a different
     date or location).


4.   DELIVERIES AT THE CLOSING

4.1  Deliveries by the Selling Shareholders

     At the Closing, the Selling Shareholders shall deliver or cause to be
     delivered to MRV:

     (i) stock certificates evidencing QOI Shares, and duly executed stock
     transfer documentation transferring thereof to MRV (including its nominees)
     and/or its Subsidiaries/Affiliates; (ii) the Selling Shareholders' Payment,
     (iii) QOI's Bring-Down Certificate (as defined and discussed below and
     substantially in the form attached as Exhibit C); (iv) written consents and
     the powers of attorney from the other Selling Shareholders as described in
     Section 7.10 and (iv) such other instruments, certificates or documents as
     MRV may reasonably request.

4.2  Deliveries by MRV

     At the Closing Date, MRV shall deliver or cause to be delivered to the
     Selling Shareholders (i) stock certificates evidencing MRV Shares; (ii)
     MRV's Bring-Down Certificate (as defined and discussed below and
     substantially in the form attached as Exhibit D); and (iii) such other
     instruments, certificates or documents as the Selling Shareholders may
     reasonably request.


                                       5
<PAGE>   9

5.   REPRESENTATIONS AND WARRANTIES OF QOI AND THE SELLING SHAREHOLDERS

QOI and the Signing Shareholders hereby and shall cause other Selling
Shareholders, unless otherwise indicated, jointly and severally, represent,
warrant and covenant to MRV as follows at the date hereof and again as of the
Closing Date as follows:

5.1  Power, Authority and Ownership

     5.1.1     Each of the Selling Shareholders individually represents and
               warrants that it has the absolute and unrestricted right, power
               and authority to execute and deliver this Agreement and the
               Powers of Attorney and to perform its obligations hereunder with
               respect to its respective QOI Shares. The Attorneys-in-Fact have
               been duly authorized by each of the Signing Shareholders and
               shall obtain the authorization from the other Selling
               Shareholders before the Closing to execute, deliver and perform
               this Agreement and the transactions contemplated herein for and
               on behalf of Selling Shareholders by valid Powers of Attorney
               duly executed by the Selling Shareholders. This Agreement has
               been duly executed and delivered by the Attorneys-in-Fact for and
               on behalf of each of the Selling Shareholders and, assuming due
               authorization, execution and delivery by MRV and QOI, constitutes
               the legal, valid and binding obligation of each of the Selling
               Shareholders enforceable against the Selling Shareholders in
               accordance with its terms.

     5.1.2     Each of the Selling Shareholders individually represents and
               warrants that it own its respective QOI Shares of record
               beneficially, free and clear of any Encumbrances or restrictions.
               Provided that certain QOI Shares will be immediately eliminated
               from such Encumbrances within twenty days after the execution of
               this Agreement. Each of the Selling Shareholders has good title
               to its respective Shares and at the Closing, each of the Selling
               Shareholders shall deliver to MRV good title to its respective
               Shares free and clear of all Encumbrances, security interests,
               restrictions, and all other claims, rights and interests of third
               parties.

     5.1.3     QOI has full corporate power and authority, including all
               necessary approvals of its directors and shareholders, to execute
               and deliver this Agreement and to perform its obligations
               hereunder and to consummate the transactions contemplated hereby.

5.2  Organization and Capitalization

     5.2.1     Each of QOI and its Subsidiaries as set forth on Schedule 2 is a
               corporation duly organized, validly existing, and in good
               standing under the laws of their respective jurisdictions of
               their incorporation and has full corporate power and authority to
               conduct business and is in good standing under the laws of each
               jurisdiction where such qualification is required. Each of QOI
               and its Subsidiaries has full corporate power and authority and
               all material licenses, permits, and authorizations necessary to
               carry on the business in which it is now being engaged and to own
               and use the properties owned and used by it. Except as set forth
               in Schedule 3 or in the Financial Statements,


                                       6
<PAGE>   10

               neither QOI nor its Subsidiaries hold any shares of the capital
               stock or other equity interests of or investment in any other
               Person (other than bank accounts). QOI has delivered to MRV
               correct and complete copies of the charter and bylaws of QOI and
               each of its Subsidiaries (as amended to date). QOI and each of
               its Subsidiaries are not in default under or in violation of any
               provision of its charter or bylaws.

     5.2.2     The authorized capital stock of QOI consists of Thirty Million
               (30,000,000) shares of common stock with a par value of NT$10 per
               share, of which Nineteen Million (19,000,000) shares are issued
               and outstanding. All issued shares have been duly authorized,
               validly issued and are fully paid and non-assessable, with [no]
               preemptive rights. There are no outstanding obligations, options,
               warrants, preemptive rights or other agreements or commitments to
               which QOI or any of the Selling Shareholders is a party, or by
               which QOI or any of the Selling Shareholders is otherwise bound,
               providing for the issuance of any additional shares or for the
               repurchase of shares of QOI's capital stock. No shares of the
               capital stock of QOI are reserved for future issuance provided
               that only Nineteen Million (19,000,000) shares out of Thirty
               Million (30,000,000) shares are outstanding and issued.

     5.2.3     The Signing Shareholders listed in Schedule 1 own approximately
               seventy-one percent (71%) of the issued and outstanding shares of
               capital stock of QOI. All of the information set out in Schedule
               1 is true, correct and complete.

5.3  Financial Condition

     5.3.1     QOI has delivered or shall deliver to MRV within one month of the
               execution of this Agreement consolidated financial statements of
               QOI and its Subsidiaries, which are collectively attached hereto
               as Schedule 4 consisting of (i) audited balance sheets and
               statements of income for the fiscal years ended December 31, 1997
               through 1999, (the "Financial Statements", the latest audited
               balance sheet being the "Audited Balance Sheet"), and (ii)
               unaudited balance sheet and statements of income for the fiscal
               period ended March 31, 2000 (the "Latest Financial Statements",
               said balance sheet being the "Latest Balance Sheet"). The
               Financial Statements and the Latest Financial Statements
               (including the notes thereto) have been prepared in accordance
               with US GAAP applied on a consistent basis throughout the periods
               covered thereby and the Financial Statements shall bear an
               unqualified opinion from the auditors, and the Latest Financial
               Statements shall bear a review report from the auditors. Except
               as explained in the notes thereto, the Audited Financial
               Statements and Latest Financial Statements fairly present the
               financial condition, assets, liabilities, equity and results of
               operations of QOI and each of its Subsidiaries as of their
               respective dates and periods, are and will be correct and
               complete in all material respects, and have been and will be
               prepared in accordance with generally accepted accounting
               principles applied on a consistent basis throughout the periods
               involved.


                                       7
<PAGE>   11

               QOI has obtained or will obtain a written consent by the Closing
               from the auditor (the "Auditor Consent") to include their opinion
               on the Financial Statements in order to comply with MRV's
               necessary filing with the SEC.

     5.3.2     The inventories of each of QOI and its Subsidiaries are not
               obsolete or damaged, are fit for their particular use, and are
               not defective, such that they are of a quantity and quality
               usable or saleable in the ordinary course of the business of QOI
               and its Subsidiaries for the amounts reflected on the Latest
               Balance Sheet, exclusive of any reserve allocable thereto,
               subject only to changes in the Ordinary Course of Business. All
               inventories reflected on the Latest Financial Statements are
               stated at not more than the lower of cost or fair market value
               thereof, with adjustments for obsolete, damaged or otherwise not
               readily marketable items. Set forth on Schedule 5 hereto is a
               complete list of the addresses of all warehouses or other
               facilities in which inventories of each of QOI and its
               Subsidiaries are located as of the date hereof.

     5.3.3     The accounts receivable of each of QOI and its Subsidiaries are
               valid receivables, collectible to the extent of the excess
               thereof over any reserves set forth on the Latest Balance Sheet,
               and are subject to no defenses, counterclaims or set-offs.

5.4  Absence of Undisclosed Liabilities. Each of QOI and its Subsidiaries has no
     liabilities or obligations (whether absolute, accrued, contingent or
     otherwise and whether due or to become due, including liabilities for taxes
     and interest and penalties thereon) except (i) the liabilities set forth on
     the Latest Balance Sheet and (ii) the liabilities and obligations set forth
     in Schedule 6 hereto.

5.5  Tax Returns

     5.5.1     Each of QOI and its Subsidiaries has filed with the appropriate
               governmental agencies all required tax returns, is not in default
               with respect to any such filing, is not delinquent in payment of
               any taxes shown to be due on any such tax return or claimed to be
               due by any taxing authority, and has paid or made on the Latest
               Balance Sheet adequate provision or reserves for all taxes
               (including but not limited to, all income, withholding,
               corporate, excise, and value added taxes, real and personal
               property taxes, occupation taxes, social security taxes, and
               interest and penalties) payable by it, or attributable to all
               periods ending on or prior to the date of the Latest Balance
               Sheet. Each of QOI and its Subsidiaries has not given any waiver
               or extension of any period of limitation governing the time of
               assessment or collection of any tax. No deficiency in any tax
               payment is claimed by any tax authority for any taxable years of
               QOI and its Subsidiaries. There are no tax audits currently
               pending with respect to QOI and its Subsidiaries. To the best
               knowledge of any of the Selling Shareholders and QOI, there is no
               basis for assessment of any deficiency in any income taxes or any
               other taxes or governmental charges against each of QOI and its
               Subsidiaries.

     5.5.2     Neither QOI nor its Subsidiaries is a party to, and is not bound
               by, any tax indemnification agreement, tax sharing agreement or
               tax allocation


                                       8
<PAGE>   12

               agreement with any other person, firm, corporation or other
               entity, and neither QOI nor its Subsidiaries is responsible for
               any tax obligation or liability of any such other person, firm,
               corporation or other entity.

     5.5.3     Neither QOI nor any of its Subsidiaries has, or has at any time
               had, a taxable presence or permanent establishment in any country
               other than the Republic of China, the PRC or each jurisdiction
               where it is incorporated, under the Applicable Laws of such
               country or under any Income Tax Treaty between that country and
               the Republic of China.

5.6  Absence of Certain Changes. Except as disclosed in Schedule 7 attached
     hereto, since the date of the Latest Balance Sheet, there has not been:

     (a)       any material adverse change in the financial condition, assets,
               liabilities, equity, operations, business or prospects of QOI and
               or any of its Subsidiaries;

     (b)       any obligation or liability incurred by QOI or any of its
               Subsidiaries other than obligations and liabilities incurred in
               the Ordinary Course of Business;

     (c)       any damage, destruction or loss, whether or not covered by
               insurance, materially or adversely affecting any material asset
               of QOI and its Subsidiaries;

     (d)       any Encumbrance placed on , or any claim, right or interest of
               any third party of any nature whatsoever asserted against, any
               material asset of QOI and its Subsidiaries;

     (e)       any purchase or sale or other disposition, or any agreement or
               other arrangement for the purchase or sale or other disposition,
               of any material asset of QOI and its Subsidiaries;

     (f)       any material change in the compensation or benefits payable or to
               become payable by QOI or its Subsidiaries to any of its employees
               or agents or any new bonus payment or arrangement or employee
               benefit made to or with any of them;

     (g)       any material change with respect to the management or supervisory
               personnel of QOI or any of its Subsidiaries;

     (h)       any dividend declared or paid or any other stockholder payment or
               distribution with respect to the QOI Shares or a purchase or
               redemption of any of the securities of QOI or any of its
               Subsidiaries or the execution of any agreement or commitment to
               do so; or

     (i)       any other event or condition of any character that may materially
               and adversely affect the financial condition , assets,
               liabilities, equity, operations, business or prospects of QOI or
               any of its Subsidiaries.

5.7  Real Property. Schedule 8 sets forth a complete list of all real property
     owned or leased by either QOI or its Subsidiaries. Each of QOI and its
     Subsidiaries has valid


                                       9
<PAGE>   13

     legal rights to, or in the case of leased property, has valid leasehold
     interests, in all real properties. QOI or any of its Subsidiaries has valid
     and outstanding leasehold interests in all real property that it leases
     from others and the improvements situated thereon, all of which are listed
     and identified on the Schedule 8 hereto. All such real estate and
     improvements (including all buildings, or portions thereof, and all
     fixtures) are in good repair and operating condition, normal wear and tear
     and required maintenance (which has heretofore been regularly performed)
     excepted, are suitable and fit for the purposes for which they are
     currently being used, and are sufficient to conduct the business of QOI or
     any of its Subsidiaries as it is presently conducted. True , correct and
     complete copies of all leases, evidence of QOI interest in the real
     property, and all other instruments of title, or those of any of QOI's
     Subsidiaries and QOI's interest therein, with respect to all real property,
     leaseholds or other interests owned or held by QOI or any of its
     Subsidiaries have been delivered to MRV. The use and occupation of such
     real property and the improvements thereon by QOI or any of its
     Subsidiaries comply in all material respects with Applicable Law including
     zoning regulations and building codes.

5.8  Tangible Personal Property. QOI and any of its Subsidiaries has good and
     marketable title to all of the tangible personal property which it owns, as
     reflected on the Latest Balance Sheet and Schedule 9 hereto (except as sold
     or otherwise disposed of or acquired in the Ordinary Course of Business or
     otherwise consistent with this Agreement). All machinery, equipment,
     furniture and fixtures, and computer hardware and software used by QOI or
     any of its Subsidiaries are in good operating condition and repair, normal
     wear and tear and required maintenance (which has heretofore been regularly
     performed) excepted, are suitable and fit for the purposes for which they
     are currently being used.

5.9  Intellectual Properties. Schedule 10 hereto lists all of the Intellectual
     Properties, specifying in each case whether such Intellectual Properties
     rights are owned or used under license, as well as specifying whether QOI
     or any of its Subsidiaries act as licensor of any such Intellectual
     Properties Rights. All license agreements and all other instruments
     relating to licenses of any Intellectual Property Rights are described in
     Schedule 11, and true and complete copies thereof have been provided to
     MRV. None of the Intellectual Properties have been held or stipulated to be
     invalid in any litigation which has been concluded and the validity of none
     of the Intellectual Properties has been questioned in any litigation
     currently pending or, to the best knowledge of any Selling Shareholders and
     QOI, threatened. QOI and any of its Subsidiaries owns or possesses the
     Intellectual Properties necessary to manufacture and sell its products,
     and, to the best knowledge of any Selling Shareholders and/or QOI, such
     manufacture and sale does not infringe any rights of any other Person. QOI
     or any of its Subsidiaries, has not received any notice of conflict thereof
     with the asserted rights of any other Person, firm, corporation or other
     entity, and QOI or any of its Subsidiaries has the right to bring an action
     for any infringement of any of the Intellectual Properties.

5.10 Contracts. There is no Contract:

     (a)       extending for a period of time longer than 12 months;


                                       10
<PAGE>   14

     (b)       involving expenditures or receipts by QOI or any of its
               Subsidiaries in excess of US$ One-Hundred Thousand (US$100,000);

     (c)       relating to the borrowing of money or guarantying any obligation
               for borrowed money or otherwise, other than endorsements for
               collection;

     (d)       with any insider or any affiliate;

     (e)       prohibiting or substantially restricting QOI or any of its
               Subsidiaries from freely engaging in business in any part of the
               world;

     (f)       with a sales agent or representative, dealer, or distributor; or

     (g)       any other contract, commitment or lease outside of the usual and
               Ordinary Course of Business,

         except such Contracts listed in Schedule 12 attached hereto.

5.11 Permits. QOI and any of its Subsidiaries holds all of the Permits required
     by Applicable Law to own any and all of its assets, and to operate its
     business as that business is now conducted. Schedule 13 hereto contains a
     true and complete list of all such Permits. Except as specified on Schedule
     14, all Permits are renewable in the Ordinary Course of Business and will
     remain in full force and effect following the Closing pursuant to this
     Agreement.

5.12 Compliance with Applicable Law and Permits. QOI and any of its Subsidiaries
     are conducting, and has conducted, the business in compliance with all
     Applicable Laws and Permits, and has received no notice that it is in
     breach of any such Applicable Law or Permit. QOI or any of its Subsidiaries
     have not processed, stored, disposed, transported, handled, emitted,
     discharged, or released any Waste Material, whether on or off the real
     estate. Neither of Selling Shareholders has any knowledge or information or
     reason to believe that any Waste Material, tanks, containers, cylinders,
     drums or cans were buried on the real estate by QOI or any of its
     Subsidiaries or any other party during or preceding QOI or any of its
     Subsidiaries ownership or leasing of any real estate. QOI and any of its
     Subsidiaries have delivered to MRV copies of all internal or external
     environmental audit reports prepared by or for QOI or any of its
     Subsidiaries.

5.13 No Conflict. Neither the entering into nor the delivery of this Agreement
     nor the performance of the transactions contemplated therein by Selling
     Shareholders and QOI will result in the violation of:

     (a)       any of the provisions of the Articles of Incorporation, By-Laws
               and other constitutional documents of QOI ;

     (b)       any Contract to which QOI or any Selling Shareholders, including
               QOI, is a party; or

     (c)       any Applicable Law or Permit.


                                       11
<PAGE>   15

     Except for satisfaction of any conditions specified in this Agreement,
     neither the Selling Shareholders nor QOI are required to give prior notice
     to, or obtain any consent, approval or authorization of, or make any
     declaration or filing with, any governmental authority, or any other
     person, firm, corporation or other entity in connection with the execution
     or delivery of this Agreement or the consummation of the transactions
     contemplated hereby.

5.14 No Encumbrances. Except as set forth in Schedules 15 hereto, QOI and each
     of its Subsidiaries have good title to all of its assets which they owns,
     free and clear of all Encumbrances or any other claims, rights or interests
     of any other Person, firm, corporation or other entity of any nature
     whatsoever.

5.15 No Defaults. QOI and any of its Subsidiaries has performed, or has taken
     all actions reasonably necessary to enable it to perform when due, all
     material obligations under all Contracts and Permits, all of which are in
     full force and effect, and there has not occurred any material default or
     other event which with the lapse of time or giving of notice or both may
     become a material default under any such Contract or Permit.

5.16 Litigation. Except as set forth on Schedule 16 hereto, there are no claims,
     actions, suits or proceedings pending or, to the best knowledge of QOI and
     each of its Subsidiaries, threatened by or against QOI and each of its
     Subsidiaries or affecting it in any court or before any governmental or
     administrative authority. QOI or any of its Subsidiaries is subject to no
     decree, judgment, order or notice of any kind which enjoins or restrains it
     from taking any action of any kind whatsoever.

5.17 Employee and Labor Matters. To the best knowledge of any Selling
     Shareholders and QOI, none of the key employees, and no group of employees
     of QOI or any of its Subsidiaries, plans to terminate his, her or their
     employment with QOI or any of its Subsidiaries. QOI and each of its
     Subsidiaries are not a party to any collective bargaining or union
     agreement. QOI and each of its Subsidiaries is in compliance in all
     material respects with all Applicable Law respecting employment and
     employment practices, terms and conditions of employment, and wages and
     hours. Since its incorporation, QOI or any of its Subsidiaries has
     experienced no significant union organization attempts and no material work
     stoppage due to any labor disagreement with respect to its business. There
     is no unfair labor practice charge or complaint against QOI or any of its
     Subsidiaries pending or, to the best knowledge of any Selling Shareholders
     and QOI, threatened, in any court or before any governmental or
     administrative authority. There is no labor strike, request for
     representation, slowdown or stoppage actually pending or, to the best
     knowledge of them, threatened against or affecting QOI or any of its
     Subsidiaries.

5.18 Employee Benefits.

     5.18.1    QOI and each of its Subsidiaries have no employment, consulting,
               agency, commission, retirement, severance pay, non-competition,
               profit-sharing, deferred compensation or pension agreements or
               plans, or related practice, whether written or oral, formal or
               informal, other than as identified on Schedule 17 hereto (true,
               correct and complete copies of which have been delivered to MRV,
               including reasonably detailed summaries of any


                                       12
<PAGE>   16

               unwritten plans, arrangements or practices). All obligations of
               QOI and each of its Subsidiaries, whether arising by operation of
               law, by contract or by past custom, for payments by it with
               respect to unemployment compensation benefits, pension and
               retirement benefits, social security benefits, or other benefits
               for employees of QOI and any of its Subsidiaries, including but
               not limited to, those set forth on Schedule 19, in respect of
               periods prior to the Closing have been paid in full, or adequate
               provision therefor has been made in the Latest Balance Sheet.

     5.18.2    Upon termination by QOI or any of its Subsidiaries of the
               employment of any employee, QOI or any of its Subsidiaries shall
               not incur any liability for any severance or termination pay or
               other similar payment except as required by law expressly
               provided in the agreements or plans set forth on, or otherwise
               disclosed in Schedule 18.

     5.18.3    QOI or any of its Subsidiaries does not maintain, contribute to
               or have any liability under any funded or unfunded, medical,
               health or life insurance plan or arrangement for present or
               future retirees or present or future terminated employees except
               group insurance and as required by the Labor Insurance Act and
               the National Health Insurance Act.

5.19 Sufficient Assets. The assets identified in this Agreement or on the Latest
     Balance Sheet constitute all of the tangible and intangible rights and
     assets necessary for the conduct of, or used or held by QOI and each of its
     Subsidiaries in connection with, its business and operations as they are
     presently being conducted.

5.20 Customers, Distributors and Suppliers. Schedule 19 hereto contains a true,
     correct and complete list of all distributors, representatives and agents
     of QOI and any of its Subsidiaries and a description of the terms of their
     relationships with QOI or with any of its Subsidiaries and a true, correct
     and complete list of all other persons to whom QOI and each of its
     Subsidiaries sold goods or services in the twelve months ended as of the
     date of this Agreement and by whom QOI or any of its Subsidiaries has been
     paid or who have committed to pay QOI NT$500,000 or more since the
     beginning of said period. Schedule 20 contains a true, correct and complete
     list of all persons who provided goods or services to QOI or any of its
     Subsidiaries in the twelve months ended as of the date of this Agreement to
     which QOI or any of its Subsidiaries has paid or is committed to pay
     NT$500,000 or more since the beginning of said period. The relations of QOI
     and each of its Subsidiaries with the foregoing persons are good, and there
     are no disputes between QOI or any of its Subsidiaries and any of such
     persons pending or, to the best knowledge of any Selling Shareholder and
     QOI or any of its Subsidiaries, threatened. True, correct and complete
     copies of all contracts with all of the foregoing persons have been
     delivered to MRV and are in full force and effect in accordance with their
     terms, and there are no defaults or allegations or claims of default
     thereunder.

5.21 Related Party Transactions. Except as set forth in Schedule 21 hereto or as
     contemplated by this Agreement, no the Selling Shareholder and no officer,
     or director of QOI or any of its Subsidiaries has any interest in any of
     the assets used or held by QOI in the conduct of its business or operations
     or is a party to any contract with QOI or any of its Subsidiaries or
     affecting the business or operations of QOI or


                                       13
<PAGE>   17

     any of its Subsidiaries.

5.22 Directors; Officers; Banks; and Powers of Attorney. Schedule 22 hereto is a
     true and complete list showing: (a) the names of all of directors and
     officers of QOI and each of its Subsidiaries; (b) the name of each bank in
     which QOI and each of its Subsidiaries has an account or safety deposit
     box, and the names of all persons authorized to draw thereon or to have
     access thereto; and (c) the names of all persons holding powers of attorney
     from QOI and each of its Subsidiaries together with a summary statement of
     the terms thereof.

5.23 Insurance. Schedule 23 hereto sets forth all existing insurance policies
     held by QOI and each of its Subsidiaries relating to its business. Each
     such policy is in full force and effect, is with responsible insurance
     carriers and is in an amount and scope customary for persons engaged in
     businesses and having assets similar to those of QOI and each of its
     Subsidiaries. All claims arising under such policies and all premiums that
     are due and payable thereunder have been paid in full.

5.24 Disclosure. No representation or warranty by the Selling Shareholders
     and/or QOI in this Agreement, and no certificate or statement furnished or
     to be furnished to MRV pursuant to this Agreement or in connection with the
     transactions contemplated hereby, contains or shall contain any untrue
     statement of material fact, or omits or shall omit to state a material fact
     necessary in order to make the statements contained herein and therein not
     misleading. There is no fact known to a Selling Shareholder or QOI which
     materially adversely affects, or in the future may (so far as can now be
     reasonably foreseen) materially adversely affect, QOI or any of its
     Subsidiaries, its financial condition its business or its prospects which
     has not been set forth in this Agreement or other information or material
     provided in writing by QOI to MRV.

5.25 Representations and Warranties Regarding Acquisition of MRV Shares. Each of
     the Selling Shareholders represents and warrants to MRV as follows:

     5.25.1    Disclosure; Access to Information. Each of the Selling
               Shareholders has received or will receive prior to the Closing
               all documents, records, books and other information pertaining to
               such Selling Shareholder's investment in MRV that have been
               requested by such Selling Shareholder, including the opportunity
               to ask questions and receive answers. MRV is subject to the
               periodic reporting requirements of the United States Securities
               Exchange Act of 1934 (the "Exchange Act"), and each of the
               Selling Shareholders has reviewed or received copies of any such
               reports filed by MRV with the SEC under the Exchange Act that
               have been requested by such Selling Shareholder.

     5.25.2    Manner of Sale. At no time were any of the Selling Shareholders
               presented with or solicited by or through any leaflet, public
               promotional meeting, television advertisement or any other form
               of general solicitation or advertising.

     5.25.3    Registration or Exemption Requirements. Each of the Selling
               Shareholders further acknowledges and understands that the MRV
               Shares


                                       14
<PAGE>   18

               may not be transferred, resold or otherwise disposed of in the
               United States except in a transaction registered under the United
               States Securities Act of 1933 (the "Securities Act") and any
               applicable state securities laws, or unless an exemption from
               such registration is available.

     5.25.4    No Legal, Tax or Investment Advice. Each of the Selling
               Shareholders understands that nothing in this Agreement or any
               other materials presented to the Selling Shareholders in
               connection with the purchase of MRV Shares constitutes legal, tax
               or investment advice. The Selling Shareholders have relied on,
               and have consulted with, such legal, tax and investment advisors
               as they, in their sole discretion, have deemed necessary or
               appropriate in connection with their purchase of the MRV Shares.

     5.25.5    No Registration, Review or Approval. Each Selling Shareholder
               acknowledges and understands that the offering and sale of MRV
               Shares pursuant to this Agreement has not been reviewed or
               approved by the SEC or by any state or other securities
               commission, authority or agency, and is not registered under the
               Securities Act or under the securities or "blue sky" laws, rules
               or regulations of any state. Each Selling Shareholder
               acknowledges, understands and agrees that the MRV Shares are
               being offered and sold hereunder pursuant to an offshore offering
               exemption to the registration provisions of the Securities Act
               pursuant to Regulation S promulgated under such Act. Each Selling
               Shareholder understands that MRV is relying upon the truth and
               accuracy of the representations, warranties, agreements,
               acknowledgments and understandings of such Selling Shareholder
               set forth herein in order to determine the applicability of such
               exemptions and the suitability of each Selling Shareholder to
               acquire the MRV Shares.

     5.25.6    Investment Intent. Without limiting its ability to resell the MRV
               Shares pursuant to an effective registration statement, or an
               exemption from such registration, each Selling Shareholder is
               acquiring the MRV Shares solely for its own account and not with
               a view to the distribution, assignment or resale to others. Each
               Selling Shareholder understands and agrees that it may bear the
               economic risk of its investment in the MRV Shares for an
               indefinite period of time.

     5.25.7    Offering Outside the United States. Each Selling Shareholder is
               not a "U.S. Person" as defined in Regulation S (as the same may
               be amended from time to time) promulgated under the Securities
               Act. At the time the buy order for this transaction was
               originated, each Selling Shareholder was outside the United
               States and no offer to purchase the MRV Shares was made in the
               United States. Each Selling Shareholder agrees not to reoffer or
               sell the MRV Shares, or to cause any transferee permitted
               hereunder to reoffer or sell the MRV Shares, within the United
               States, or for the account or benefit of a U.S. Person, (i) as
               part of the distribution of the MRV Shares at any time, or (ii)
               otherwise, only in a transaction meeting the requirements of
               Regulation S under the Securities Act, including without
               limitation, where the offer (i) is not made to a person in the
               United States


                                       15
<PAGE>   19

               and either (A) at the time the buy order is originated, the Buyer
               is outside the United States or MRV and any person acting on its
               behalf reasonably believe that the buyer is outside the United
               States, or (B) the transaction is executed in, on or through the
               facilities of a designated offshore securities market and neither
               the seller nor any person acting on its behalf knows that the
               transaction has been pre-arranged with a buyer in the United
               States, and (ii) no direct selling efforts shall be made in the
               United States by the buyer, an affiliate or any person acting on
               their behalf, or in a transaction registered under the Securities
               Act or pursuant to an exemption from such registration.

     5.25.8    Regulation S Offering Transfer Restrictions. The transaction
               restrictions in connection with this offshore offer and sale
               restrict each Selling Shareholder from offering and selling to
               U.S. Persons, or for the account or benefit of a U.S. Person, for
               a period of time (the "Distribution Compliance Period"). The
               Distribution Compliance Period for the MRV Shares is one (1) year
               from the Closing.

     5.25.9    Legend. A legend substantially in the following form will be
               placed on any certificates or other documents evidencing the MRV
               Shares so as to restrict the resale, pledge, hypothecation or
               other transfer thereof in accordance with the provisions hereof
               and the provisions of Regulation S promulgated under the
               Securities Act:

               "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
               REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (TOGETHER
               WITH THE REGULATIONS PROMULGATED THEREUNDER, THE "SECURITIES
               ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
               PLEDGED OR HYPOTHECATED WITHIN THE UNITED STATES (AS THAT TERM IS
               DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT) OR
               TO A U.S. PERSON (AS THAT TERM IS DEFINED IN REGULATION S) IN THE
               ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SAID
               ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN EXEMPTION
               FROM SUCH REGISTRATION IS AVAILABLE. HEDGING TRANSACTIONS
               INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
               COMPLIANCE WITH THE SECURITIES ACT."

               "THE SHARES REPRESENTED BY THIS CERTIFICATE (THE "SHARES") MAY
               NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR ANY MANNER
               DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF CERTAIN STOCK
               PURCHASE AGREEMENT AND ESCROW AND PLEDGE AGREEMENT (COLLECTIVELY
               THE "AGREEMENTS") BETWEEN MRV COMMUNICATIONS, INC. (THE
               "COMPANY") AND THE REGISTERED HOLDER OF THE SHARES (OR THE
               PREDECESSOR IN INTEREST TO THE SHARES) (COLLECTIVELY THE
               "HOLDER") (AND, IN THE CASE OF THE ESCROW AND PLEDGE


                                       16
<PAGE>   20

               AGREEMENT, THE LAW FIRM OF BAKER & MCKENZIE, TAIPEI OFFICE AS
               ESCROW AGENT). THE AGREEMENTS GRANT CERTAIN RIGHTS IN FAVOR OF
               THE COMPANY, INCLUDING HAVING THE SHARES PLACED IN ESCROW WITH
               ESCROW AGENT UNDER THE ESCROW AND PLEDGE AGREEMENT AND CREATING A
               FIRST PRIORITY PLEDGE AND SECURITY INTEREST IN THE SHARES TO
               SECURE OBLIGATIONS OF THE HOLDER TO THE COMPANY ARISING OUT OF
               THE ESCROW AND PLEDGE AGREEMENT AND SECTION 10 OF THE STOCK
               PURCHASE AGREEMENT. THE SECRETARY OF THE COMPANY WILL UPON
               WRITTEN REQUEST FURNISH A COPY OF THE AGREEMENTS TO A HOLDER OR
               AN INTERESTED PARTY WITHOUT CHARGE."

     5.25.10   Permitted Offers and Sales. Offers and sales of MRV Shares prior
               to the expiration of the Distribution Compliance Period (or the
               effective date of the Registration Statement) may be made (only
               if otherwise so permitted by this Agreement) pursuant to the
               following conditions:

               (a)  The purchaser of the MRV Shares, other than a distributor,
                    certifies that it is not a U.S. Person and is not acquiring
                    the MRV Shares for the account or benefit of any U.S. Person
                    or is a U.S. Person who purchased the MRV Shares in a
                    transaction that did not require registration under the
                    Securities Act;

               (b)  The Purchaser of the MRV Shares agrees to sell such
                    securities only in accordance with Regulation S as
                    promulgated under the Securities Act, pursuant to
                    registration under the Securities Act, or pursuant to an
                    available exemption from registration; and agrees not to
                    engage in hedging transactions with regard to such MRV
                    Shares unless in compliance with the Securities Act; and

               (c)  The MRV Shares contain a legend, substantially in the form
                    of Section 5.25.9 herein, to the effect that transfer of the
                    MRV Shares is prohibited except in accordance with
                    Regulation S, pursuant to registration under the Securities
                    Act, or pursuant to an available exemption from
                    registration; and that hedging transactions involving those
                    MRV Shares may not be conducted unless in compliance with
                    the Securities Act.

     5.25.11   No Hedging. Selling Shareholders agree not to engage in hedging
               transactions with respect to the MRV Shares prior to the
               expiration of the Distribution Compliance Period. For offers and
               sales of the MRV Shares prior to the expiration of the
               Distribution Compliance Period, such offering materials must
               state that hedging transactions involving those securities may
               not be conducted unless in compliance with the Securities Act and
               Regulation S promulgated thereunder.

5.26 Brokers' Fees. Selling Shareholders shall be responsible to pay any fees or
     commissions to any broker or finder, with respect to the transactions


                                       17
<PAGE>   21

               contemplated by this Agreement for which the Selling Shareholders
               could be liable or obligated. MRV and the Escrow Agent shall not
               be responsible whatsoever with respect to such fees or
               commission.


6.   REPRESENTATIONS AND WARRANTIES OF MRV

MRV represents and warrants to QOI and the Selling Shareholders that the
statements contained in this Section 6 are correct and complete as of the date
of this Agreement and as of the Closing Date.

6.1  Organization of MRV. MRV and its Subsidiaries/Affiliates are corporations
     duly organized, validly existing, and in good standing under the laws of
     the jurisdiction of their incorporation.

6.2  Authorization of Transaction. MRV and its Subsidiaries/Affiliates have full
     authority (including full corporate power and authority) to execute and
     deliver this Agreement and to perform their obligations hereunder. This
     Agreement constitutes the valid and legally binding obligation of MRV and
     its Subsidiaries/Affiliates, enforceable in accordance with its terms and
     conditions. MRV and its Subsidiaries/Affiliates need not give any notice
     to, make any filing with, or obtain any authorization, consent, or approval
     of any government or governmental agency in order to consummate the
     transactions contemplated by this Agreement other than the filings required
     by the Hart-Scott-Rodino Act.

6.3  Brokers' Fees. MRV has no Liability or obligation to pay any fees or
     commissions to any broker or finder with respect to the transactions
     contemplated by this Agreement for which MRV could become liable or
     obligated.

6.4  No Conflicts. Neither the execution and delivery of this Agreement nor the
     consummation by MRV of the transactions contemplated hereby will (i)
     violate any of the provisions of the by-law of MRV, (ii) violate any
     provision of Applicable Law, rule or regulation which violation would
     prevent MRV from being able to consummate the transactions contemplated by
     this Agreement, or (iii) conflict with or result in a breach of, require
     consent under, give rise to a right of termination of, or accelerate the
     performance required by the terms of any judgement, court order or consent
     decree, or any agreement, indenture, mortgage or instrument to which MRV is
     a party or to which either of its property is subject, or constitute a
     default thereunder.

6.5  Capitalization; Validity of Securities. As of the date hereof and as of the
     Closing Date, all issued and outstanding ordinary shares of MRV are and
     will be duly authorized, validly issued, fully paid and non-assessable. The
     MRV Shares when issued and paid for in accordance with the terms and
     conditions of this Agreement, will be validly authorized, legally issued,
     fully paid and non-assessable, and the delivery to the Selling Shareholders
     pursuant to this Agreement shall vest in them good and marketable title
     thereto, free of any Encumbrances, except for restrictions on transfers set
     forth herein or imposed by law and except for any Encumbrance created by
     the Selling Shareholders themselves.


                                       18
<PAGE>   22

6.6  Reporting Company. MRV is a reporting company under Section 12 of the
     Exchange Act required to file periodic reports pursuant to Section 13 or 15
     of the Exchange Act and has timely filed all such periodic reports with the
     SEC during the past 12 months.

6.7  Approvals. No consent, approval, order, or authorization of, or
     registration, qualification, designation, declaration, or filing with, any
     governmental authority is required on the part of MRV in connection with
     the execution and delivery of this Agreement, the offer, issuance, sale,
     and delivery of the MRV Shares, or the other transactions to be consummated
     at the Closing, as contemplated by this Agreement, except such filings as
     shall have been made prior to and shall be effective on and as of the
     Closing (except for filings required under the Hart-Scott-Rodino Act or the
     United States securities laws or regulations or the regulations of the
     NASDAQ Stock Market or the Applicable Laws). Based on the representations
     made by the Selling Shareholders in Section 5 of this Agreement, the offer
     and sale of the MRV Shares to Selling Shareholders will be in compliance
     with applicable U.S. Federal and state securities laws.

6.8  Compliance. MRV is, in all material respects, in compliance with all laws,
     regulations, and orders applicable to its present business and has all
     permits and licenses required thereby where the failure to so be in
     compliance or to have such permits or licenses would be reasonable likely
     to materially adversely affect, the business, prospects, condition
     (financial or otherwise), affairs, or operations of MRV and its
     subsidiaries taken as a whole.


7.   PRE-CLOSING COVENANTS.

The Parties agree as follows with respect to the period between the execution of
this Agreement and the Closing:

7.1  General. Each of the Parties will use its best efforts to take all action
     and to do all things necessary, proper, or advisable in order to consummate
     and make effective the transactions contemplated by this Agreement
     (including satisfaction, but not waiver, of the closing conditions set
     forth in Section 8 below).

7.2  Approvals, Notices and Consents. Each of the Parties will shall use their
     best efforts to satisfy all Conditions Precedent to the Closing and will
     give any necessary notices to third parties, and will use its best efforts
     to obtain any necessary third party consents, that MRV reasonably may
     request in connection with the matters referred to in Section 5 above. Each
     of the Parties will (and will cause to) give any notices to, make any
     filings with, and use its best efforts to obtain any authorizations,
     consents, and all necessary Approvals. Without limiting the generality of
     the foregoing, the Selling Shareholders shall report the transfer of the
     QOI Shares to the SFC.

7.3  Operation of Business. QOI and each of its Subsidiaries will not engage in
     any practice or take any action outside the Ordinary Course of Business of
     or which results in a material adverse change in the business, financial
     condition, operations or results of operations of, except for actions to
     which MRV has given its prior consent.


                                       19
<PAGE>   23

7.4  Preservation of Business. QOI and each of its Subsidiaries will keep its
     business and properties substantially intact, including its present
     operations, physical facilities, working conditions, and relationships with
     lessors, licensors, suppliers, customers, and employees.

7.5  Reserved Matters

     Between the date hereof and Closing, the Selling Shareholders and QOI shall
     cause the managing team (directors, supervisors and Principal Employees of
     QOI) to procure that QOI and each of its Subsidiaries shall not without the
     prior consent in writing of MRV:

     (a)       enter into any transaction or incur any obligation or liability
               (absolute or contingent), except for current liabilities
               incurred, and contracts and transactions entered into, in the
               Ordinary Course of Business;

     (b)       dispose of or acquire any assets or properties or cancel any
               debts or claims, except in each case in the Ordinary Course of
               Business;

     (c)       increase any benefits to employees under pension, insurance or
               other employee benefit programs or enter into any deferred
               compensation agreement with any of its directors, officers or
               employees except for increase in compensation for employees and
               probationary employees for which QOI or any of its Subsidiaries
               is contractually bound to give;

     (d)       enter into an agreement to do any of the things described in
               Section 5.10;

     (e)       cease to pay its creditors in the Ordinary Course of Business;

     (f)       repay any loan capital in whole or in part (other than
               indebtedness to its bankers) or become bound or liable to be
               called upon to repay prematurely any loan capital or borrowed
               moneys;

     (g)       declare any dividend or pass any resolutions or do anything in
               the conduct or management of the affairs of either QOI or any of
               its Subsidiaries which would be likely materially to reduce the
               value of the business;

     (h)       suffer any material adverse change in its financial condition,
               assets, business, properties, liabilities, earnings, operations,
               affairs or prospects;

     (i)       waive or release any right of a material or substantial value
               howsoever arising;

     (j)       incur any capital expenditure or make any capital commitment of
               an amount in excess of US$1.0 million (US$1,000,000) or dispose
               of any fixed assets having a value of more than US$1.0 million
               (US$1,000,000) in aggregate;

     (k)       make any purchase or sale or introduce any method of management
               or operation in respect of the business except in a manner
               consistent with proper prior practice;


                                       20
<PAGE>   24

     (l)       discharge or satisfy any lien or encumbrance or any other
               obligation or liability (absolute or contingent) other than
               liabilities in the Ordinary Course of Business;

     (m)       pass any resolution the result of which would be its winding up,
               liquidation or receivership, or make any composition or
               arrangement with creditors;

     (n)       carry on any business other that the business or otherwise change
               the nature or geographical area of its business;

     (o)       enter into any partnership or joint venture arrangement or set up
               any subsidiary or associated company;

     (p)       create any fixed or floating charge, lien (other than a lien
               arising by operation of law) or other encumbrance over the whole
               or any part of its undertaking, property or assets;

     (q)       undertake anything which would require accounting treatment by
               way of provision, reserve or extraordinary item;

     (r)       make, amend or terminate any contract, loan, guarantee or other
               arrangement with any Selling Shareholders or any of their
               respective Affiliates;

     (s)       make, amend or terminate any long-term, unusual or onerous
               contract (long-term meaning a contract under which the
               obligations of any party thereto may remain outstanding for more
               than twelve (12) months) or take any action which could, as a
               consequence of any action taken by another party, result in any
               of the same.

7.6  Full Access. QOI and each of its Subsidiaries will permit representatives
     of MRV to have full access on a confidential basis at all reasonable times,
     and in a manner so as not to interfere with the normal business operations
     of, to all premises, properties, personnel, books, records (including Tax
     records), contracts, and documents of or pertaining to QOI and each of its
     Subsidiaries;

7.7  Notice of Developments. QOI and each of its Subsidiaries will give prompt
     written notice to MRV of any material adverse development causing a breach
     of any of the representations and warranties in Section 5 above. Each Party
     will give prompt written notice to the others of any material adverse
     development causing a breach of any of its own representations and
     warranties in Sections 5 and 6 above.

7.8  Exclusivity. QOI and each of its Subsidiaries will not solicit, initiate,
     or encourage the submission of any proposal or offer from any other Person
     relating to the acquisition of any capital stock or other voting
     securities, or any substantial portion of the assets, of QOI (including any
     acquisition structured as a merger, consolidation or share exchange).

7.9  Supervisor. QOI and Selling Shareholders agree that they will fully
     cooperate with MRV to have one of the existing supervisor of QOI being
     replaced by a person


                                       21
<PAGE>   25

     designated by MRV ("Nominee Supervisor") for purpose of conducting the
     special shareholders meeting to elect the new directors and supervisors and
     to conduct other necessary corporate actions after the Closing. MRV agrees
     that it shall cause Nominee Supervisor to resign from its position in the
     event that the Closing is not completed prior to Target Date or any other
     date as agreed by the Parties.

7.10 QOI and Selling Shareholders agree to confirm to MRV in writing within one
     month of execution of this Agreement the definite list of the name and
     number of shares of Selling Shareholders and shall cause all the Selling
     Shareholders to agree to be a Party of this Agreement and bear the same
     obligations and liabilities as the Signing Shareholders under this
     Agreement and Escrow Agreement and issue a Power of Attorney in the form
     attached as Exhibit A to authorize the Attorneys-in-Fact to sign this
     Agreement and perform their obligations hereunder on their behalf in
     connection with their respective QOI Shares.

7.11 The Parties shall each use their best efforts to procure the fulfillment of
     the conditions set forth in Section 8 hereof on or before the Closing, and
     in particular, shall furnish such information, supply such documents, and
     do all such acts and things as may be required to enable such conditions to
     be fulfilled.

7.12 The Selling Shareholders and QOI shall cause any personal or corporate
     guarantors who provide Guaranties on the indebtedness or other obligations
     of QOI or any of its Subsidiaries to continually provide guaranties over
     the same after the execution of this Agreement in accordance with the
     current terms thereof. MRV shall use good faith efforts to determine and
     take suitable measures for relieving or indemnifying the personal or
     corporate guarantors who provide Guaranties on the indebtedness of QOI or
     any of its Subsidiaries as listed in Schedule 26 as soon as practicable
     after Closing.

7.13 At least five (5) Business Days prior to the Closing, the Selling
     Shareholders (or Attorney(s)-in-Fact or QOI in whose name the Taiwan
     Account shall be registered) shall give the Taiwan Account passbook, chops
     and the Power-of-Attorney-Form B to Closing Agent.

7.14 The Selling Shareholders shall sign through their duly authorized
     representative (i) an Escrow Agreement with the Escrow Agent as described
     in Section 10.2.3; and (ii) any other documents required in this Agreement
     or in the Escrow Agreement.

7.15 The Selling Shareholders (or Attorney(s)-in-Fact or QOI in whose name the
     Taiwan Account shall be registered) shall, prior to five (5) Business Days
     prior to the Closing, give the Taiwan Account passbook, chops and a Power
     of Attorney-Form B to the law firm of Baker & McKenzie, Taipei Office as
     the Closing Agent of Selling Shareholders (the "Closing Agent") granting
     said Closing Agent the exclusive right to give instructions to the bank
     with respect to the Taiwan Account.

7.16 Within twenty (20) days after the execution of this Agreement, QOI and the
     Selling Shareholders shall be responsible to implement and provide a list
     of Principal Employees (as defined and discussed below) which shall include
     the key employees in the technical team of QOI and each of its
     Subsidiaries. Such list shall be incorporated into this Agreement as
     Schedule 24. QOI and the Signing


                                       22
<PAGE>   26

     Shareholders shall be responsible to implement and provide any other
     necessary information to be contained in the Schedules relating to the
     warranties and representations described in Section 5 of this Agreement.

7.17 QOI and the Selling Shareholders shall cause Mr. Nang-Wang Wang and other
     employees of QOI to assign and transfer, at no charge, title to all patents
     and other Intellectual Property rights (including, but not limited to, all
     registrations and applications for such patents and other Intellectual
     Property rights registered with or applied to the Intellectual Property
     Office of the Republic of China) set forth in Schedule 25 hereto to QOI,
     within twenty (20) days of execution of this Agreement.

7.18 MRV shall provide the Attorney-in-Fact copies of its most recent public
     filings with the SEC (including MRV's most recent available financial
     statements) within two weeks of the execution of this Agreement.

7.19 Both Parties agree to discuss and identify a mutually acceptable manner by
     which MRV can support QOI, up to One Million, Three-Hundred Thousand United
     States Dollars (US$1,300,000), for the balance of payment for two Type
     APS1104 Vacuum Coating System machines, during the period between execution
     of this Agreement and Closing. If the Parties are able to agree on a manner
     for MRV to provide said support, it shall be a condition precedent to
     Closing that MRV provide such support in accordance with the agreed terms.


8.   CONDITIONS PRECEDENT TO CLOSING

8.1  Conditions to Obligation of MRV. The obligation of MRV to consummate the
     transactions to be performed by it in connection with the Closing is
     subject to satisfaction of the following conditions:

     8.1.1     QOI and the Selling Shareholders shall have complied with all of
               their respective agreements and covenants contained herein to be
               performed at or prior to the Closing, and all their
               representations and warranties contained herein shall be true and
               accurate on and as of the Closing Date with the same effect as
               though made on and as of the Closing Date, except that
               representations and warranties that were made as of a specified
               date shall continue on the Closing Date to have been true as of
               the specified date, and MRV shall have received a certificate of
               the Selling Shareholders and QOI, dated as of the Closing Date,
               substantially in the form of Exhibit C certifying as to the
               fulfillment of the condition set forth in this Section 8.1.1 (the
               "QOI's Bring-Down Certificate").

     8.1.2     MRV shall have received the written agreement (in the form
               attached as Exhibit E) of the "Principal Employees" of QOI and
               each of its Subsidiaries to continue in the employment of said
               companies for a period of at least two (2) years after the
               Closing Date on mutually agreed upon salary and benefit terms
               (including the stock option plan) and on such other terms as MRV
               normally requires of its employees. In any event, their salary
               and other cash benefits shall be based on those of the year of
               1999. For this purpose, the


                                       23
<PAGE>   27

               following individuals are deemed to be "Principal Employees" of
               QOI and its Subsidiaries: Wang Nong Wang, Keh-shium Liu, Wen-Shan
               Chiang, Chen-Chung Chu and any other Principal Employees whose
               names are shown in Schedule 24.

     8.1.3     No statute, rule or regulation, or order of any court or
               administrative agency shall be in effect which restrains or
               prohibits from consummating the transaction contemplated hereby.

     8.1.4     No material action, suit or proceeding before any court or any
               governmental body or authority against the Selling Shareholders,
               either QOI or its Subsidiaries, or pertaining to the transactions
               contemplated by this Agreement or their consummation, shall have
               been instituted on or before the Closing Date.

     8.1.5     The Approvals and all necessary agreements and consents of any
               third parties for which QOI is required to obtain shall have been
               obtained, and true and complete copies thereof delivered to MRV.

     8.1.6     Each Encumbrance or obligation to create any Encumbrance, if any,
               on QOI Shares shall have been terminated and released prior to
               the Closing Date, and the Selling Shareholders shall have
               provided evidence, in form and substance satisfactory to MRV, of
               such termination and release.

     8.1.7     During the Closing, there shall not have occurred any event or
               condition materially and adversely affecting the assets or the
               financial condition, results of operations or business prospects
               of QOI or any of its Subsidiaries from those reflected in the
               Financial Statements, except as disclosed in this Agreement or
               the Schedules hereto.

     8.1.8     Selling Shareholders and QOI shall have delivered to MRV at the
               Closing each agreement, instrument, certificate and document
               required by this Agreement and the Financial Statements, the
               Latest Financial Statements, and the Auditor Consent as required
               by Section 5.3.1 of this Agreement, and Selling Shareholders'
               Payment shall be received by MRV during the Closing.

     8.1.9     QOI Shares available for sale to MRV in accordance with the terms
               of this Agreement shall be not less than seventy-five percent
               (75%).

     8.1.10    All final due diligence results on QOI and its Subsidiaries are
               satisfactory to MRV.

     8.1.11    QOI and Selling Shareholders shall confirm, within two weeks from
               the execution of this Agreement, whether Fair Trade Commission
               (FTC) approval is required. If FTC approval is required, all
               Parties shall cooperate to obtain such approval. If required,
               obtaining such approval shall be a condition precedent to
               Closing.

     MRV may waive any condition specified in this Section 8.1 if it executes a
     writing


                                       24
<PAGE>   28

     so stating at or prior to the Closing.

8.2  Conditions to Obligation of the Selling Shareholders. The obligation of the
     Selling Shareholders to consummate the transactions to be performed by it
     in connection with the Closing is subject to satisfaction of the following
     conditions:

     8.2.1     MRV and its Subsidiaries/Affiliates shall have complied with all
               of their agreements and covenants contained herein to be
               performed at or prior to the Closing, and all their
               representations and warranties contained herein shall be true and
               accurate on and as of the Closing Date with the same effect as
               though made on and as of the Closing Date, except that
               representations and warranties that were made as of a specified
               date shall continue on the Closing Date to have been true as of
               the specified date and Selling Shareholders shall have received a
               certificate dated as of the Closing Date, substantially in the
               form of Exhibit D certifying as to the fulfillment of the
               condition set forth in this Section (the "MRV's Bring-Down
               Certificate").

     8.2.2     No statute, rule or regulation, or order of any court or
               administrative agency shall be in effect which restrains or
               prohibits the Parties from consummating the transaction
               contemplated hereby.

     8.2.3     The Approvals and all necessary agreements and consents of any
               third parties shall have been obtained and true and complete
               copies thereof delivered to Selling Shareholders

     8.2.4     MRV's' Payment shall, via Closing Agent, be made to
               Attorneys-in-Fact for and on behalf of Selling Shareholders
               during the Closing.

     8.2.5     MRV and MRV Subsidiary shall have delivered to Selling
               Shareholders at the Closing each agreement, instrument,
               certificate and document required by this Agreement.

     Selling Shareholders may waive any condition specified in this Section 8.2
     if it executes a writing so stating at or prior to the Closing.


9.   POST CLOSING COVENANTS

9.1  QOI and the Selling Shareholders agree that they will fully cooperate with
     MRV to convene all necessary corporate actions including but not limited to
     holding the shareholders meetings and the directors meetings to elect the
     new directors and Supervisors and to amend the article of incorporation, if
     necessary.

9.2  QOI and the Selling Shareholders agree that they will fully cooperate with
     MRV to manage the operation and business conducted by QOI and each of its
     Subsidiaries within one year of Closing.

9.3  QOI and Selling Shareholders agree that they will fully cooperate with MRV
     and use their best efforts to obtain further additional consents from the
     auditors on the Financial Statements to include auditor's reports in other
     filing to be made by MRV


                                       25
<PAGE>   29

     with the SEC as necessary from time to time.

9.4  MRV shall promptly provide certificates or documents to QOI and Selling
     Shareholders, should the government of ROC or Applicable Law require QOI or
     the Selling Shareholders to submit the same.

9.5  MRV agrees to file a registration statement with the U.S. Securities and
     Exchange Commission (the "SEC") within appropriate days as reasonably
     determined by MRV following the Closing to register the MRV Shares to be
     issued to the Selling Shareholders under the transaction hereunder and
     exercise its best efforts to obtain as soon as practicable an effective
     registration statement aimed to release the Selling Shareholders from the
     resale restriction imposed by the Regulation S under the Securities Act of
     1933, as amended. Provided however, MRV does not guarantee the successful
     registration and the time period required to obtain such successful
     registration.


10.  INDEMNIFICATION, PLEDGE AND ESCROW

10.1 Survival of Representations and Warranties

     All of the representations and warranties contained in Sections 5 and 6
     above, shall survive the Closing hereunder (even if the other Party knew or
     had reason to know of any misrepresentation or breach of warranty at the
     time of Closing) and continue in full force and effect for a period of two
     (2) years thereafter (subject to any applicable statutes of limitations).
     Provided however, QOI's liabilities concerning the said representations and
     warranties may be waived under the discretion of MRV without releasing the
     liabilities of the Signing Shareholders.

10.2 Indemnification Provisions

     10.2.1    MRV shall indemnify, defend and hold harmless the Selling
               Shareholders against any and all losses that any of them may
               suffer, sustain or become subject to as a result of any breach by
               MRV of its warranties, representations, agreements or covenants
               set forth in this Agreement.

     10.2.2    In the event that QOI or any of the Selling Shareholders breaches
               any of their covenants in Sections 7 and 9 above or any of its
               representations and warranties in Section 5 above or any other
               obligations set forth in this Agreement other than those
               contained in Section 13.18 for which the relevant Party shall be
               responsible, and, if there is an applicable survival period
               pursuant to Section 10.1 above, provided that MRV makes a written
               claim for indemnification against the Selling Shareholders and/or
               QOI, then the Selling Shareholders (or, in the case of Section
               13.18, the relevant responsible Party only) and QOI agree to
               jointly and severally indemnify MRV from and against the entirety
               of any Adverse Consequences MRV may suffer through and after the
               date of the claim for indemnification (including any Adverse
               Consequences MRV may suffer after the end of any applicable
               survival period) resulting from, arising out of, relating to, in
               the nature of, or caused by the breach. The Parties further agree
               that MRV shall


                                       26
<PAGE>   30

               first look to the Escrow Shares to satisfy any indemnity claim.

               The Parties agree that the maximum indemnification of liabilities
               of each Selling Shareholder shall be capped at the value of MRV
               Shares each Selling Shareholder received, determined by the
               closing price for MRV Shares on the date SEC registration of the
               shares (as referred to in Section 9.5) becomes effective;
               provided, however, that in no event shall the value per share for
               the purposes of determining the cap exceed Seventy United States
               Dollars (US$70) per share, nor shall the value for said purpose
               fall below Fifty-Eight United States Dollars per share.

     10.2.3    Pledge and Escrow. The Parties agree the following:

               (a)  the representations, warranties, covenants and obligations
                    of the Selling Shareholders shall be secured by placing
                    One-Hundred-Seventy-One Thousand, Four-Hundred Twenty-Nine
                    (or the appropriate pro rata share thereof in the case that
                    less than 100% of the QOI Shares are delivered) of the MRV
                    Shares owned by the Selling Shareholders in escrow (the
                    "Escrowed Shares") under an Escrow Agreement in the form
                    attached hereto as Exhibit F (the "Escrow Agreement") and
                    pledge the Escrowed Shares to the Escrow Agent (defined
                    below) in favor of MRV. Schedule 27 sets out the names of
                    the Selling Shareholders and their respective ownership
                    interest in the Escrowed Shares. In the event that payment
                    is required to MRV as a result of invocation of the
                    indemnification clauses of this Agreement, the Escrowed
                    Shares shall be taken from the escrow account and delivered
                    to MRV pro rata to the shareholding of the Selling
                    Shareholders in MRV Shares or as shall otherwise be agreed
                    among the Selling Shareholders.

                    Notwithstanding the above, in the event that less than 100%
                    of QOI Shares sold and delivered to MRV, the number of
                    Escrowed Shares shall be adjusted down by the same
                    percentage as those QOI Shares not available for sale are as
                    a percentage of the total QOI Shares of outstanding on the
                    date of execution of this Agreement.

               (b)  The Parties shall appoint the firm of Baker & McKenzie,
                    Taipei office, with David T. Liou as its representative, as
                    escrow agent (the "Escrow Agent") to proceed pursuant to the
                    Escrow Agreement.

               (c)  The relevant escrow fees ("Escrow Fees") as described in the
                    Escrow Agreement shall be borne equally by the Selling
                    Shareholders and MRV. The Selling Shareholders and MRV shall
                    each pay their portion, in cash, on the Closing Date.

10.3 Matters Involving Third Parties

     10.3.1    If any third party shall notify any Party (the "Indemnified
               Party") with respect to any matter (a "Third Party Claim") which
               may give rise to a claim for indemnification against any other
               Party (the


                                       27
<PAGE>   31

               "Indemnifying Party") under this Section 10, then the Indemnified
               Party shall promptly notify each Indemnifying Party thereof in
               writing; provided, however, that no delay on the part of the
               Indemnified Party in notifying any Indemnifying Party shall
               relieve the Indemnifying Party from any obligation hereunder
               unless (and then solely to the extent) the Indemnifying Party
               thereby is prejudiced.

     10.3.2    Any Indemnifying Party will have the right to defend the
               Indemnified Party against the Third Party Claim with counsel of
               its choice reasonably satisfactory to the Indemnified Party so
               long as (A) the Indemnifying Party notifies the Indemnified Party
               in writing within fifteen (15) days after the Indemnified Party
               has given notice of the Third Party Claim that the Indemnifying
               Party will indemnify the Indemnified Party from and against the
               entirety of any Adverse Consequences the Indemnified Party may
               suffer resulting from, arising out of, relating to, in the nature
               of, or caused by the Third Party Claim, (B) the Indemnifying
               Party provides the Indemnified Party with evidence reasonably
               acceptable to the Indemnified Party that the Indemnifying Party
               will have the financial resources to defend against the Third
               Party Claim and fulfill its indemnification obligations
               hereunder, (C) the Third Party Claim involves only money damages
               and does not seek an injunction or other equitable relief, (D)
               settlement of, or an adverse judgment with respect to, the Third
               Party Claim is not, in the good faith judgment of the Indemnified
               Party, likely to establish a precedential custom or practice
               materially adverse to the continuing business interests of the
               Indemnified Party, and (E) the Indemnifying Party conducts the
               defense of the Third Party Claim actively and diligently.

     10.3.3    So long as the Indemnifying Party is conducting the defense of
               the Third Party Claim in accordance with Section 10.3.2 above,
               (A) the Indemnified Party may retain separate co-counsel at its
               sole cost and expense and participate in the defense of the Third
               Party Claim, (B) the Indemnified Party will not consent to the
               entry of any judgment or enter into any settlement with respect
               to the Third Party Claim without the prior written consent of the
               Indemnifying Party, and (C) the Indemnifying Party will not
               consent to the entry of any judgment or enter into any settlement
               with respect to the Third Party Claim without the prior written
               consent of the Indemnified Party.

     10.3.4    In the event any of the conditions in Section 10.3.2 above is or
               becomes unsatisfied, however, (A) the Indemnified Party may
               defend against, and consent to the entry of any judgment or enter
               into any settlement with respect to, the Third Party Claim in any
               manner it reasonably may deem appropriate (and the Indemnified
               Party need not consult with, or obtain any consent from, any
               Indemnifying Party in connection therewith), (B) the Indemnifying
               Parties will reimburse the Indemnified Party promptly and
               periodically for the costs of defending against the Third Party
               Claim


                                       28
<PAGE>   32

               (including reasonable attorneys' fees and expenses), and (C) the
               Indemnifying Parties will remain responsible for any Adverse
               Consequences the Indemnified Party may suffer resulting from,
               arising out of, relating to, in the nature of, or caused by the
               Third Party Claim to the fullest extent provided in this Section
               10.


11.  TERMINATION.

11.1 Termination of Agreement. Certain of the Parties may terminate this
     Agreement as provided below:

     11.1.1    The Parties may terminate this Agreement by mutual written
               consent at any time prior to the Closing; and

     11.1.2    Either party to this Agreement may terminate this Agreement by
               giving written notice to the other party if the Closing shall not
               have occurred on or before Target Day, except that the right to
               terminate this Agreement pursuant to this Section 11 shall not be
               available to (A) QOI or the members of the Selling Shareholders
               if the failure to consummate the Closing on or before such date
               was caused by or resulted from the failure of any member of
               Selling Shareholders or QOI to fulfill any of its obligations
               under this Agreement or (B) MRV if the failure to consummate the
               Closing on or before such date was caused by or resulted from
               MRV's failure to fulfill any of its obligations under this
               Agreement.

11.2 Effect of Termination. If any Party terminates this Agreement pursuant to
     Section 11.1 above, all further obligations of the Parties hereto shall
     become null and void and no party shall have any liability to any other
     party, unless the basis for such termination was the failure by such party
     to fulfill its covenants and agreements set forth herein. In the event that
     the Closing is not completed, either Party will destroy or return to the
     other Party the Confidential Information of the other Party.


12.  TRANSFER RESTRICTION

Each of the Selling Shareholders agree that the Selling Shareholders shall not
sell the MRV Shares in a group at one time more than one hundred thousand
(100,000) shares. Such grouped sales shall be further restricted to a total of
one hundred thousand (100,000) shares in any given month. This restriction does
not apply if a Selling Shareholder is selling the MRV Shares alone and not in
concert in any way with any other Selling Shareholders.


13.  MISCELLANEOUS

13.1 Press Releases and Public Announcements

     No Party shall issue any press release or make any public announcement
     relating to the subject matter of this Agreement prior to the Closing
     without the prior written


                                       29
<PAGE>   33

     approval of the other Parties; provided, however, that any Party may make
     any public disclosure it believes in good faith is required by Applicable
     Law or any listing or trading requirement concerning its publicly-traded
     securities (in which case the disclosing Party will notify the other
     Parties of such disclosure forty-eight (48) hours prior to making the
     disclosure).

13.2 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
     remedies upon any Person other than the Parties and their respective
     successors and permitted assigns.

13.3 Notices

     All notices and other communications required or permitted under this
     Agreement shall be in writing and shall be sent by facsimile transmission
     to the other parties at the fax number set forth below for MRV (in the case
     of a notice to be sent to MRV) or for QOI (in the case of notices to be
     sent to QOI or the Selling Shareholders prior to the Closing--after the
     Closing they shall designate a representative and provide a fax number for
     this purpose), with a copy sent by first class mail or express courier to
     said parties at the address provided to the other parties, or to such other
     fax number and/or address as a party may hereinafter designate by notice to
     the other. Notice shall be effective on the date it is sent by facsimile
     transmission if the facsimile transmission report confirms receipt by the
     receiving fax.

          -    To QOI
               Attention: Keh-shium Liu
               Fax: (886-3) 555-0430

          -    To MRV
               Attention: Noam Lotan
               Fax: (1-978) 952-4795

          -    To Selling Shareholders
               Attention: Keh-shium Liu
               Fax: (886-3) 555-0430


13.4 Headings

     The headings contained in this Agreement (including but not limited to the
     titles of the Schedules and Exhibits hereto) have been inserted for
     convenience of reference only, and neither such headings nor the placement
     of any term hereof under any particular heading shall in any way restrict
     or modify any of the terms or provisions hereof. Terms used in the singular
     shall be read in the plural, and vice versa, and terms used in the
     masculine gender shall be read in the feminine or neuter gender when the
     context so requires.

13.5 Schedules, Exhibits and Annexes

     All Schedules, Exhibits and Annexes attached to this Agreement constitute
     an integral part of this Agreement as if fully rewritten herein.


                                       30
<PAGE>   34

13.6 Entire Agreement

     This Agreement (including the documents referred to herein) constitutes the
     entire agreement among the Parties and supersedes any prior understandings,
     agreements, or representations by or among the Parties, written or oral, to
     the extent they related in any way to the subject matter hereof.

13.7 Succession and Assignment

     This Agreement shall be binding upon and inure to the benefit of the
     Parties named herein and their respective successors and permitted assigns.
     No Party may assign either this Agreement or any of its rights, interests,
     or obligations hereunder without the prior written approval of the other
     Parties; provided, however, that MRV may (i) assign any or all of its
     rights and interests hereunder to one or more of its Affiliates and (ii)
     designate one or more of its Affiliates to perform its obligations
     hereunder (in any or all of which cases MRV nonetheless shall remain
     responsible for the performance of all of its obligations hereunder).

13.8 Counterparts

     This Agreement may be executed in one or more counterparts, each of which
     shall be deemed an original but all of which together will constitute one
     and the same instrument.

13.9 GOVERNING LAW

     THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
     LAWS OF TAIWAN, THE REPUBLIC OF CHINA.

13.10 Amendments and Waivers

     No amendment of any provision of this Agreement shall be valid unless the
     same shall be in writing and signed by the Parties. No waiver by any Party
     of any default, misrepresentation, or breach of warranty or covenant
     hereunder, whether intentional or not, shall be deemed to extend to any
     prior or subsequent default, misrepresentation, or breach of warranty or
     covenant hereunder or affect in any way any rights arising by virtue of any
     prior or subsequent such occurrence.

13.11 Severability

     Any term or provision of this Agreement that is invalid or unenforceable in
     any situation in any jurisdiction shall not affect the validity or
     enforceability of the remaining terms and provisions hereof or the validity
     or enforceability of the offending term or provision in any other situation
     or in any other jurisdiction.

13.12 Cost and expenses

     Except this Agreement provides otherwise, each of the Parties shall bear
     its own


                                       31
<PAGE>   35

     costs and expenses (including but not limiting to legal fees and expenses)
     incurred in connection with this Agreement and the transactions
     contemplated hereby.

13.13 Construction

     The Parties have participated jointly in the negotiation and drafting of
     this Agreement. In the event an ambiguity or question of intent or
     interpretation arises, this Agreement shall be construed as if drafted
     jointly by the Parties and no presumption or burden of proof shall arise
     favoring or disfavoring any Party by virtue of the authorship of any of the
     provisions of this Agreement. Any reference to any federal, state, local,
     or foreign statute or law shall be deemed also to refer to all rules and
     regulations promulgated thereunder, unless the context requires otherwise.
     The word "including" shall mean including without limitation. The Parties
     intend that each representation, warranty, and covenant contained herein
     shall have independent significance. If any Party has breached any
     representation, warranty, or covenant contained herein in any respect, the
     fact that there exists another representation, warranty, or covenant
     relating to the same subject matter (regardless of the relative levels of
     specificity) which the Party has not breached shall not detract from or
     mitigate the fact that the Party is in breach of the first representation,
     warranty, or covenant.

13.14 Specific Performance

     Each of the Parties acknowledges and agrees that the other Parties would be
     damaged irreparably in the event any of the provisions of this Agreement
     are not performed in accordance with their specific terms or otherwise are
     breached. Accordingly, each of the Parties agrees that, the other Parties
     shall be entitled to an injunction or injunctions to prevent breaches of
     the provisions of this Agreement and to enforce specifically this Agreement
     and the terms and provisions hereof in any action instituted in any court
     of Taiwan, the Republic of China or any other state thereof having
     jurisdiction over the Parties and the matter, in addition to any other
     remedy to which they may be entitled, at law or in equity.

13.15 Submission to Jurisdiction

     Any dispute relating to the validity, performance, construction or
     interpretation of this Agreement that cannot be resolved amicably among the
     Parties shall be submitted to the jurisdiction of the Taipei District Court
     in any action or proceeding arising out of or relating to this Agreement
     and agrees that all claims in respect of the action or proceeding may be
     heard and determined in such court. Each Party further agrees not to bring
     any action or proceeding arising out of or relating to this Agreement in
     any other court. Each of the Parties waives any defense of inconvenient
     forum to the maintenance of any action or proceeding so brought and waives
     any bond, surety, or other security that might be required of any other
     Party with respect thereto. Any Party may make service on any other Party
     by sending or delivering a copy of the process to the Party to be served at
     the address and in the manner provided for the giving of notices in Section
     13.3 above. Nothing in this Section 13.15, however, shall affect the right
     of any Party to serve legal process in any other manner permitted by law or
     at equity. Each Party agrees that a final judgment in any action or
     proceeding so brought shall be conclusive and may be


                                       32
<PAGE>   36

     enforced by suit on the judgment or in any other manner provided by law or
     at equity.

13.16 Attorney's Fees

     In the event that a party to this Agreement commences any legal action
     under this Agreement to enforce any of its rights hereunder, or to recover
     damages for any breach or default by the other party or parties hereto of
     any of its (their) obligations hereunder, the prevailing party in any such
     legal action shall be entitled to recover from the other party all of its
     costs and expenses incurred in connection with such legal action, including
     reasonable attorneys' fees,

13.17 Confidential Information

     QOI and each of Selling Shareholders and MRV shall:-

     (a)       not use or disclose to any person Confidential Information; and

     (b)       use all reasonable endeavours to prevent the use or disclosure of
               Confidential Information by any person.

     This Section 13.17 does not apply to:-

     (a)       use or disclosure of Confidential Information required to be
               disclosed by law, regulation or any revenue authority;

     (b)       disclosure of Confidential Information to professional advisers
               for the purpose of advising MRV or QOI; or

     (c)       Confidential Information which is in the public domain other than
               as a consequence of a breach of this Section 13.17.

13.18 Non-Competition

     13.18.1   The Selling Shareholders hereby jointly and severally undertake
               (except as otherwise agreed in writing with MRV) not to, either
               solely or jointly with any other Person (either on their own
               account or as the agent of any other Person):-

               (a)  for a period of one (1) year from Closing carry on or be
                    engaged or concerned or (except as the holder of shares in a
                    listed company which confer not more than two per cent. of
                    the votes which can generally be cast at a general meeting
                    of the company), interested, or hold more than ten percent
                    of the shares directly or indirectly in a business which
                    competes with the type of business carried on by QOI or its
                    Subsidiaries at Closing in the world; provided, however,
                    that in the event QOI ceases to conduct a type of business
                    during the one year period, said business shall be removed
                    from this restriction;

               (b)  for a period of two (2) years from the Closing solicit or
                    accept the


                                       33
<PAGE>   37

                    custom of any person in respect of goods or services
                    competitive with those manufactured or supplied by QOI
                    during the period of 12 months prior to Closing, such person
                    having been a customer of QOI in respect of such goods or
                    services during such period; provided, however, that in the
                    event QOI ceases to sell a type of goods or services during
                    the two year period, said goods or services shall be removed
                    from this restriction;

               (c)  for a period of two (2) years from the Closing induce,
                    solicit or endeavour to entice to leave the service or
                    employment of any employee of QOI or its Subsidiaries,
                    likely (in the opinion of MRV) to be:-

                    (i)   in possession of confidential information relating to;
                          or

                    (ii)  able to influence the customer relationships or
                          connections of QOI or its Subsidiaries; or

                    (iii) use any trade or domain name or e-mail address used by
                          QOI at any time during the two (2) years immediately
                          preceding the date of this agreement or any other name
                          intended or likely to be confused with any such trade
                          or domain name or e-mail address.

     13.18.2   Selling Shareholders shall use best efforts to cause the
               Principal Employees to undertake, not to, within two years after
               the termination of their employment with QOI or its Subsidiaries
               either solely or jointly with other Person (either on their own
               account or as the agent of any other Person) conduct any
               behaviors provided in Section 13.18.1. In the case that any
               Principal Employee breaches any obligations contained in the
               Principal Employee's Letter of Consent (Exhibit G), the Escrowed
               Shares belonging to such breaching Principal Employee and the
               unexercised stock options of the breaching Principal Employee
               referred to in Article 2.1.5 shall be forfeited and shall be
               redistributed among non-breaching Principal Employees by MRV on a
               pro rata basis or other methods deemed appropriate by MRV.

     13.18.3   Selling Shareholders agree that the undertakings contained in
               this Section 13.18 are reasonable and are entered into for the
               purpose of protecting the goodwill of the business of QOI and its
               Subsidiaries and that accordingly the benefit of the undertakings
               may be assigned by MRV and its successors in title without the
               consent of the Selling Shareholders.

     13.18.4   Each undertaking contained in this Section 13.18.3 is and shall
               be construed as separate and severable and if one or more of the
               undertakings is held to be against the public interest or
               unlawful or in any way an unreasonable restraint of trade or
               unenforceable in whole or in part for any reason the remaining
               undertakings or parts thereof, as appropriate, shall continue to
               bind Selling Shareholders.

     13.18.5   If any undertaking contained in this Section 13.18 shall be held
               to be void


                                       34
<PAGE>   38

               but would be valid if deleted in part or reduced in application,
               such undertaking shall apply with such deletion or modification
               as may be necessary to make it valid and enforceable. Without
               prejudice to the generality of the foregoing, such period (as the
               same may previously have been reduced by virtue of this Section
               13.18.4) shall take effect as if reduced by six months until the
               resulting period shall be valid and enforceable.

13.19 Both Parties shall promptly determine the appropriate measures to deal
      with the share split which may be approved by the shareholders meeting of
      MRV to be held in May 2000.


                                       35
<PAGE>   39

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.


                  MRV COMMUNICATIONS, INC.

                  /s/ NOAM LOTAN
                  --------------------------------
                  By: Noam Lotan
                  Title: President & CEO


                  QUANTUM OPTECH INC.

                  /s/ KEH-SHIUM LIU
                  --------------------------------
                  By: Keh-shium Liu
                  Title: Vice-Chairman


                  SIGNING SHAREHOLDERS

                  /s/ KEH-SHIUM LIU
                  --------------------------------
                  Represented by: Keh-shium Liu


                                       36
<PAGE>   40

                                     ANNEX 1

DEFINITIONS

"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and reasonable attorneys' fees and expenses.

"AFFILIATE" means in relation to any Party, any company, other commercial entity
or person which directly or indirectly controls, or is controlled by, under
common control with, any Party or any of the Parties' directors, supervisors or
management personnel.

"APPROVALS" means (i) the approval granted by the Hsinchu Science-based
Industrial Park Administration of the acquisition by MRV of QOI Shares
contemplated by this Agreement so that, after the Closing, QOI shall be deemed
to be a foreign invested company with foreign investment approval (an "FIA
company"), (ii) the approval required under Hart-Scott-Rodino Act, and (iii) any
other governmental or regulatory approvals of the transactions contemplated
hereunder which may be required by Applicable Law (if any).

"APPLICABLE LAW" shall include all laws, ordinances, rules, regulations,
administrative or judicial orders, injunctions, notices, approvals or judgment
of any federal, national, state, provincial or local government or governmental
department, agency, or instrumentality.

"BUSINESS DAY" means any day on which banks in both New York and Taiwan are open
for business.

"CLOSING" has the meaning set forth in Section 3.

"CLOSING DATE" has the meaning set forth in Section 3.

"CLOSING AGENT" shall have the meaning set forth in Section 2.1.1 (a).

"CONFIDENTIAL INFORMATION" means any information concerning the transactions
contemplated in this Agreement and is not already generally available to the
public.

"CONTRACT" means any agreement, contract, obligation, promise, or understanding
(whether written or oral and whether express or implied) that is legally binding
on either QOI or any of its Subsidiaries.

"ENCUMBRANCE" means any security interest, lien, claim, option, warrant,
easement, limitation, restriction, royalty, charge, pledge, preemptive or other
right, restraint on alienation, voting trust or arrangement, proxy, shareholders
agreement, mortgage or other encumbrance.

"ESCROW AGENT" shall have the meaning set out in Section 10.2.3.

"ESCROW AGREEMENT" means an Escrow Agreement to be signed by and among MRV,


                                       1
<PAGE>   41

Escrow Agent and Signing Shareholders in connection with Escrowed Shares on the
same date of this Agreement.

"ESCROWED SHARES" shall have the meaning as defined in Section 10.2.3.

"FINANCIAL STATEMENTS" has the meaning set forth in Section 5.3.1.

"GUARANTIES" means any guaranty or other surety provided by a Person Company in
respect of any indebtedness or other obligation.

"HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

"INDEMNIFIED PARTY" has the meaning set forth in Section 10.3.1 below.

"INDEMNIFYING PARTY" has the meaning set forth in Section 10.3.1 below.

"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).

"KNOWLEDGE" means actual knowledge after reasonable investigation.

"LATEST BALANCE SHEET" shall name the meaning set out in Section 5.3.1.

"LATEST FINANCIAL STATEMENTS" shall have the meaning set out in Section 5.3.1.

"LOSS" shall mean any liability, loss, damage, claim, cost, deficiency,
delegation, or expense (including any penalty and any reasonably legal fees and
costs) incurred by a party.

"LIABILITY" means any liability (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), including
any liability for Taxes.

"NEW TAIWAN DOLLARS" or "NT$" shall mean the lawful currency of the Republic of
China.

"ORDINARY COURSE OF BUSINESS" means the ordinary course of business


                                       2
<PAGE>   42

consistent with past custom and practice (including with respect to quantity and
frequency).

"PARTY" has the meaning set forth in the preface above.

"PERMIT" means all governmental licenses, registrations, authorizations,
permits, and approvals, and all applications therefor.

"PERSON" means an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).

"POWER OF ATTORNEY" means a Power of Attorney in the form of Exhibit A attached
hereto, duly executed by each Selling Shareholder in favor of the
Attorneys-in-Fact, by which each Selling Shareholder appoints and authorizes the
Attorneys-in-Fact, jointly and severally, to execute for and on behalf of the
Selling Shareholder this Agreement, and any and all other documents in
connection with the performance by Selling Shareholder of its/his/her
obligations hereunder, and to take all actions necessary or appropriate for the
performance of the transaction contemplated herein for and on behalf of the
Selling Shareholder.

"SUBSIDIARY", as it relates to any Person, means a corporation or other type of
entity of which such Person owns (or has the right to acquire either by contract
or exercise of outstanding options, warrants or other convertible instruments)
50% or more of the capital stock or equity interest.

"TARGET DAY" shall have the meaning set out in Section 3.1.

"TAX" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.

"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.

"THIRD PARTY CLAIM" has the meaning set forth in Section 10.3.1.

"US GAAP" means United States generally accepted accounting principles as in
effect from time to time.

 "U.S. PERSON" means: (i) any natural person resident in the United States, (ii)
any partnership or corporation organized or incorporated under the laws of the
United States, (iii) any estate of which any executor or administrator is a U.S.
Person, (iv) any trust of which any trustee is a U.S. Person, (v) any agency or
branch of a foreign entity located in the United States, (vi) any
non-discretionary account or similar account (other than an estate or trust)


                                       3
<PAGE>   43

held by a dealer or other fiduciary for the benefit or account of a U.S. Person,
(vii) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated, or, if an
individual resident, in the United States, or (viii) any partnership or
corporation, if organized under the laws of any foreign jurisdiction and formed
by any U.S. Person principally, for the purpose of investing in securities and
registered under the Securities Act, unless it is organized or incorporated and
owned by accredited Selling Shareholders (as defined in Rule 501(a) under the
Securities Act who are not natural persons, estates or trusts.

"WASTE MATERIAL" shall mean any pollutant, contaminant, hazardous or toxic
material or other material produced, discharged or emitted by QOI or any of its
Subsidiaries other than products intended to be sold in the Ordinary Course of
Business.

                                       4