<PAGE>   1

                                                                  EXHIBIT 10.33



                                 EXECUTION COPY

                             DATED FEBRUARY 21, 2000





                                  BY AND AMONG

                            MRV COMMUNICATIONS, INC.

                                       AND

                        FIBER OPTIC COMMUNICATIONS, INC.

                                       AND

                SHAREHOLDERS OF FIBER OPTIC COMMUNICATIONS, INC.




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                            STOCK PURCHASE AGREEMENT

  Relating to the sale and purchase of up to one hundred percent (100%)
                    of the Ordinary Shares in the capital of
                        FIBER OPTIC COMMUNICATIONS, INC.
   and the sale and purchase of two million four hundred thousand 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                                                                                     4
4.         Deliveries at the Closing                                                                       5
5.         Representations and Warranties of FOCI and Selling Shareholders                                 5
6.         Representations and Warranties of MRV                                                          17
7.         Pre-Closing Covenants                                                                          18
8.         Conditions Precedent to Closing                                                                22
9.         Post Closing Covenants                                                                         24
10.        Indemnification and Escrow                                                                     24
11.        Termination
12.        Transfer Restriction                                                                           27
13.        Miscellaneous                                                                                  28
</TABLE>



SCHEDULES

<TABLE>
<S>            <C>
1.             List of Signing Shareholders and Shareholding

2.             List of Subsidiaries of FOCI

3.             List of Equity Interests hold by FOCI and its Subsidiaries

4.             Financial Statements of FOCI 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
</TABLE>





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<PAGE>   3

<TABLE>
<S>            <C>
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
</TABLE>



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EXHIBITS

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 FOCI's Bring-Down Certificate

D.          Form of MRV's Bring-Down Certificate

E.          Form of Employment Agreement

F.          Form of Escrow Agreement





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                            STOCK PURCHASE AGREEMENT



THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of this 21st
day of February, 2000 by and among Fiber Optic Communications, Inc., a
corporation organized and existing under the laws of the Republic of China
("FOCI"), MRV Communications, Inc., a corporation organized and existing under
the laws of Delaware, U.S.A.("MRV"), and each person listed in the schedule of
FOCI shareholders attached hereto as Schedule 1 (individually, a "Signing
Shareholder" and collectively "Signing Shareholders"), represented by their
attorneys-in-fact, Ronald Fu-Chang Wang and Steve Song-Fure Lin
("Attorneys-in-Fact") (as evidenced by a Power of Attorney attached hereto as
Exhibit A). MRV, FOCI and Signing Shareholders are referred to herein
individually as the "Party" and collectively as the "Parties".

        WHEREAS, Signing Shareholders collectively own sixty one point
eight-seven-nine percent (61.879%) of the issued and outstanding shares of the
capital stock of FOCI ("FOCI Shares"), each of them in the respective amounts
and percentages set forth on Schedule 1;

        WHEREAS, MRV is authorized to issue up to two million and four hundred
thousand (2,400,000) new common shares ("MRV Shares") prior to the sale and
transfer of FOCI Shares to MRV contemplated by this Agreement;

        WHEREAS, the Parties acknowledge that, once the transactions
contemplated in this Agreement have been consummated, the business of FOCI might
be merged into a newly formed subsidiary wholly owned by MRV ("MRV Subsidiary")
which will also incorporate some of the MRV's existing optical components
business. The ten percent (10%) ownership of MRV shareholding in MRV Subsidiary
is established as equivalent to One Million (1,000,000) shares of MRV common
stock.

        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 FOCI
Shares from Signing Shareholders and other FOCI shareholders (Signing
Shareholders and other FOCI shareholders selling their FOCI Shares to MRV
(and/or its Subsidiaries/Affiliates) collectively "Selling Shareholders"), and
Signing Shareholders desire to, and will use their best efforts to cause other
Selling Shareholders to sell and transfer their FOCI Shares to MRV (and/or its
Subsidiaries/Affiliates) in return for the consideration set forth herein; and
(ii) Signing Shareholders desire to and will cause other Selling Shareholders to
aggregately purchase up to two million and four hundred thousand (2,400,000) 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.


5


<PAGE>   6

        WHEREAS, Singing Shareholders and FOCI 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:


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 FOCI Shares

                        (a)     Selling Shareholders shall sell, transfer,
                                assign and deliver to MRV (and/or its
                                Subsidiaries/Affiliates) at the Closing (as
                                hereinafter defined), and MRV (and/or its
                                Subsidiaries/Affiliates) agrees to purchase and
                                acquire from Selling Shareholders and pay
                                therefor at the Closing, all of their respective
                                FOCI 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 FOCI Shares as of the Closing Date,
                                at and for an aggregate purchase price of Two
                                Hundred Sixty Three Million Six Hundred Thousand
                                and Zero Cents United States Dollars (US$
                                263,600,000.00) for purchasing one hundred
                                percent (100%) FOCI Shares (equaling US$Three
                                Dollars & Eighty Two Point One One Cents
                                (US$3.8211) 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 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 Selling Shareholders pro rata
                                in accordance with their percentage
                                shareholdings in FOCI; PROVIDED, HOWEVER, that
                                the MRV's Payment shall not be released from the
                                Taiwan Account to Selling Shareholders until the
                                payment due MRV for the MRV Shares being
                                purchased by Selling Shareholders (as per
                                Section 2.1.2 below) shall be fully wired by



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                                Selling Shareholders via Closing Agent (as
                                defined and discussed below) on their behalf to
                                an account designated by MRV to Selling
                                Shareholders in writing at least seven (7)
                                Business Days prior to the Closing (the "MRV
                                Account"). Furthermore, Closing Agent shall not
                                release the balance of MRV's Payment to
                                Attorneys-in-Fact for and on behalf of Selling
                                Shareholders until he pays from such funds (i)
                                the 0.3% share transfer tax imposed by Taiwan on
                                the sale of FOCI Shares by 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
                                "Sellers' Costs").

                        (b)     In the event that less than one hundred percent
                                (100%) but not less seventy five percent (75%)
                                of FOCI Shares are available for sale, the MRV's
                                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 FOCI 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 Selling
                                Shareholders, and Selling Shareholders shall
                                purchase from MRV pro rata in accordance with
                                their percentage shareholdings in FOCI, the
                                MRV's Shares, free and clear of any and all
                                Encumbrances, at and for an aggregate purchase
                                price of US$ Two Hundred Thirteen Million Six
                                Hundred Thousand and Zero Cents (US$
                                213,600,000.00) (equaling US$ eighty nine
                                (US$89) per share). The foregoing aggregate
                                purchase price (the "Selling Shareholders'
                                Payment") shall be paid by Selling Shareholders
                                via 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 the 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, Selling Shareholders (or
                                Attorney(s)-in-Fact or FOCI 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 as the
                                Closing Agent of Selling Shareholders ("Closing
                                Agent") granting said Closing Agent the
                                exclusive right to give instructions to the bank
                                with respect to the Taiwan Account.




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

                2.1.3   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, 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 Selling Shareholders, which shall be paid by
                        MRV within the period of time required by the laws of
                        the State of Delaware.

        2.2     In order to prevent any doubts, the balance of MRV's Payment
                payable to Selling Shareholders who owns one hundred percent
                (100%) of FOCI Shares after their paying of the purchase price
                of the MRV's Shares will amount to US$ fifty million (US$
                50,000,000) ("Balance MRV's Payment"). However, such Balance
                MRV's Payment shall be subject to Sellers' Costs and foreign
                exchange impacts and shall be pro rata adjusted down in the
                event that less than one hundred percent (100%) of FOCI Shares
                are available for sale to MRV. Selling Shareholders understand
                and agree to bear any risk or loss resulted from the daily
                exchange rates and the difference of the rates between buying
                and selling United States dollars.

        2.3     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 the
                Closing.

        2.4     The Parties agree that upon the successful completion of
                transfer of Balance of MRV's Payment to Attorneys-in-Fact 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 Closing Agent agree that Closing Agent will keep the Parties
                informed of the status and the progress of the Closing matters
                handled by the Closing Agent.

        2.5     Selling Shareholders agree that, upon the occurrence of any of
                the following events, the Escrowed Shares as defined in 10.2.3
                hereof shall be exchanged




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                for ten percent (10%) of MRV's shareholding in MRV Subsidiary as
                defined in the Escrow Agreement ("Exchanged Shares") within two
                years after the Closing ("Escrow Period"):

                (i)     MRV Subsidiary conducts an initial public offering on
                        NASDAQ or any other stock exchange or over-the-counter
                        market in the United States;

                (ii)    A sale of one hundred percent (100%) of the shares of
                        MRV Subsidiary to any third party buyer other than an
                        affiliate to MRV ("Third Party Buyer").

                Upon the occurrence of the condition (ii) mentioned above,
                Selling Shareholders agree to authorize Escrow Agent to exchange
                their MRV Shares for ten percent (10%) of the MRV's shareholding
                in MRV's Subsidiary before the expiration of two-year escrow
                period.


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 on the later to occur of (a) March 27, 2000, and (b)
                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 Closing being
                the "Closing Date"), but in any case not later than April 30,
                2000("Target Day") (unless the Parties shall agree upon a
                different date or location).


4.      DELIVERIES AT THE CLOSING

        4.1     Deliveries by Selling Shareholders

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

                (i) stock certificates evidencing FOCI Shares, and duly executed
                stock transfer documentation transferring thereof to MRV
                (including its nominees) and/or its Subsidiaries/Affiliates;
                (ii) Selling Shareholders' Payment, (iii) FOCI'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



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                At the Closing Date, MRV will deliver or cause to be delivered
                to Selling Shareholders (i) stock certificates evidencing MRV
                Shares; (ii) MRV's Payment; and (iii) MRV's Bring-Down
                Certificate (as defined and discussed below and substantially in
                the form attached as Exhibit D)


5.      REPRESENTATIONS AND WARRANTIES OF FOCI AND SELLING SHAREHOLDERS

FOCI and Signing Shareholders hereby and will cause other Selling Shareholders,
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   Selling Shareholders have an absolute and unrestricted right,
                power and authority to execute and deliver this Agreement and
                the Powers of Attorney and to perform their obligations
                hereunder with respect to their respective FOCI 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 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 Selling Shareholders. This
                Agreement has been duly executed and delivered by the
                Attorneys-in-Fact for and on behalf of Selling Shareholders and,
                assuming due authorization, execution and delivery by MRV and
                FOCI, constitutes the legal, valid and binding obligation of
                Selling Shareholders enforceable against Selling Shareholders in
                accordance with its terms.

        5.1.2   Selling Shareholders own their respective FOCI Shares of record
                and beneficially, free and clear of any Encumbrances or
                restrictions. [Provided that certain FOCI Shares will be
                immediately eliminated from such Encumbrances within twenty days
                after the execution of this Agreement.] Selling Shareholders
                have good title to their respective Shares and at the Closing,
                Selling Shareholders shall deliver to MRV good title to their
                respective Shares free and clear of all Encumbrances, security
                interests, restrictions, and all other claims, rights and
                interests of third parties.

        5.1.3   FOCI 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.



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        5.2     Organization and Capitalization

                5.2.1   Each of FOCI 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 FOCI 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, neither FOCI
                        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). FOCI has
                        delivered to MRV correct and complete copies of the
                        charter and bylaws of FOCI and each of its Subsidiaries
                        (as amended to date). FOCI and each of its Subsidiaries
                        is not in default under or in violation of any provision
                        of its charter or bylaws.

                5.2.2   The authorized capital stock of FOCI consists of one
                        hundred and ten million (110,000,000) shares of common
                        stock with a par value of NT$10 per share, of which
                        sixty-eight million nine hundred eighty four thousand
                        and four hundred (68,984,400) 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 FOCI
                        or any of the Selling Shareholders is a party, or by
                        which FOCI or any of the Selling Shareholders is
                        otherwise bound, providing for the issuance of any
                        additional shares or for the repurchase of shares of
                        FOCI's capital stock. No shares of the capital stock of
                        FOCI are reserved for future issuance provided that only
                        sixty-eight million nine hundred eighty four thousand
                        (68,984,000) shares out of one hundred and ten million
                        (110,000,000) shares are outstanding and issued.

                5.2.3   The Signing Shareholders listed in Schedule 1 own
                        sixty-one point eight-seven-nine percent (61.879%) of
                        the issued and outstanding shares of capital stock of
                        FOCI. All of the information set out in Schedule 1 is
                        true, correct and complete.

        5.3     Financial Condition

                5.3.1   FOCI has delivered or will deliver to MRV consolidated
                        financial statements of FOCI 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



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                        December, 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 February 29, 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 shall bear an unqualified opinion 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 FOCI
                        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.

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

                5.3.2   The inventories of each of FOCI 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 FOCI 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 FOCI and its Subsidiaries are
                        located as of the date hereof.

                5.3.3   The accounts receivable of each of FOCI 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 FOCI 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.



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        5.5     Tax Returns

                5.5.1   Each of FOCI 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 FOCI 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 FOCI and its Subsidiaries. There are no
                        tax audits currently pending with respect to FOCI and
                        its Subsidiaries. To the best knowledge of any Selling
                        Shareholders and FOCI, there is no basis for assessment
                        of any deficiency in any income taxes or any other taxes
                        or governmental charges against each of FOCI and its
                        Subsidiaries.

                5.5.2   Neither FOCI nor its Subsidiaries is a party to, and is
                        not bound by, any tax indemnification agreement, tax
                        sharing agreement or tax allocation agreement with any
                        other person, firm, corporation or other entity, and
                        neither FOCI 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 FOCI 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 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 FOCI and or any of its Subsidiaries;

                (b)     any obligation or liability incurred by FOCI 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,



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                        materially or adversely affecting any material asset of
                        FOCI 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 FOCI 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 FOCI and
                        its Subsidiaries;

                (f)     any material change in the compensation or benefits
                        payable or to become payable by FOCI 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 FOCI or any of its
                        Subsidiaries;

                (h)     any dividend declared or paid or any other stockholder
                        payment or distribution with respect to the FOCI Shares
                        or a purchase or redemption of any of the securities of
                        FOCI 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 FOCI 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 FOCI or its Subsidiaries.
                Each of FOCI and its Subsidiaries has valid legal rights to, or
                in the case of leased property, has valid leasehold interests,
                in all real properties. FOCI 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 FOCI or any of its Subsidiaries as it is
                presently conducted. True , correct and complete copies of all
                leases, evidence of FOCI interest in the real property, and all
                other instruments of title, or those of any of FOCI's
                Subsidiaries and FOCI's interest therein, with respect to all
                real property, leaseholds or other interests owned or held by
                FOCI or any of its Subsidiaries have been delivered to MRV. The
                use and occupation of such real property and the improvements
                thereon by FOCI or any of its Subsidiaries comply in all
                material respects with Applicable Law including zoning
                regulations and building codes.



14
<PAGE>   15

        5.8     Tangible Personal Property. FOCI 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 FOCI 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 FOCI 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 FOCI, threatened. FOCI 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 FOCI, such manufacture and sale does not
                infringe any rights of any other Person. FOCI 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 FOCI 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;

                (b)     involving expenditures or receipts by FOCI or any of its
                        Subsidiaries in excess of US$ 1.0 million
                        (US$1,000,000);

                (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 FOCI 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



15
<PAGE>   16

                (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. FOCI 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. FOCI 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. FOCI 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 FOCI or any of its Subsidiaries or
                any other party during or preceding FOCI or any of its
                Subsidiaries ownership or leasing of any real estate. FOCI and
                any of its Subsidiaries have delivered to MRV copies of all
                internal or external environmental audit reports prepared by or
                for FOCI 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 FOCI will result in the
                violation of:

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

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

                (c)     any Applicable Law or Permit.

                        Except for satisfaction of any conditions specified in
                        this Agreement, neither the Selling Shareholders nor
                        FOCI 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,
                FOCI and each




16
<PAGE>   17

                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. FOCI 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 FOCI and each of its Subsidiaries, threatened by or
                against FOCI and each of its Subsidiaries or affecting it in any
                court or before any governmental or administrative authority.
                FOCI 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 FOCI, none of the key employees, and no group
                of employees of FOCI or any of its Subsidiaries, plans to
                terminate his, her or their employment with FOCI or any of its
                Subsidiaries. FOCI and each of its Subsidiaries is not a party
                to any collective bargaining or union agreement. FOCI 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, FOCI 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 FOCI or any of its Subsidiaries
                pending or, to the best knowledge of any Selling Shareholders
                and FOCI, 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
                threatened against or affecting FOCI or any of its Subsidiaries.

        5.18    Employee Benefits.

                5.18.1  FOCI 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
                        unwritten plans, arrangements or practices). All
                        obligations of FOCI 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



17
<PAGE>   18

                        compensation benefits, pension and retirement benefits,
                        social security benefits, or other benefits for
                        employees of FOCI 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 FOCI or any of its Subsidiaries of
                        the employment of any employee, FOCI 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  FOCI 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 FOCI 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 FOCI and any of its Subsidiaries
                and a description of the terms of their relationships with FOCI
                or with any of its Subsidiaries and a true, correct and complete
                list of all other persons to whom FOCI and each of its
                Subsidiaries sold goods or services in the twelve months ended
                as of the date of this Agreement and by whom FOCI or any of its
                Subsidiaries has been paid or who have committed to pay Seller
                NT$160,000 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 FOCI or any of its Subsidiaries in
                the twelve months ended as of the date of this Agreement to
                which the Selling Shareholder has paid or is committed to pay
                NT$160,000 or more since the beginning of said period. The
                relations of FOCI and each of its Subsidiaries with the
                foregoing persons are good, and there are no disputes between
                FOCI or any of its Subsidiaries and any of such persons pending
                or, to the best knowledge of any Seller and FOCI 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.



18
<PAGE>   19

        5.21    Related Party Transactions. Except as set forth in Schedule 21
                hereto or as contemplated by this Agreement, no Selling
                Shareholder and no officer, or director of FOCI or any of its
                Subsidiaries has any interest in any of the assets used or held
                by FOCI in the conduct of its business or operations or is a
                party to any contract with FOCI or any of its Subsidiaries or
                affecting the business or operations of FOCI or 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 FOCI and each of its Subsidiaries;
                (b) the name of each bank in which FOCI 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 FOCI 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 FOCI 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 FOCI 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 FOCI 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 FOCI which materially
                adversely affects, or in the future may (so far as can now be
                reasonably foreseen) materially adversely affect, FOCI 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 FOCI 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




19
<PAGE>   20

                        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 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 understand 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



20
<PAGE>   21

                        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 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



21
<PAGE>   22

                        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."

                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.




22
<PAGE>   23


        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 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.

        5.27    FTC Approval. FOCI and Selling Shareholders warrant and
                represent that FOCI's revenues and market share ratio do not
                reach or exceed the amount on percentage provided in the Fair
                Trade law as required to obtain the combination approval from
                the Fair Trade Commission (the "FTC Approval") of the Republic
                of China in order to complete the transactions contemplated in
                this Agreement.


6.      REPRESENTATIONS AND WARRANTIES OF MRV

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

        6.1     Organization of MRV. MRV is a corporation duly organized,
                validly existing, and in good standing under the laws of the
                jurisdiction of its incorporation.

        6.2     Authorization of Transaction. MRV has full authority (including
                full corporate power and authority) to execute and deliver this
                Agreement and to perform its obligations hereunder. This
                Agreement constitutes the valid and legally binding obligation
                of MRV, enforceable in accordance with its terms and conditions.
                MRV 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,



23
<PAGE>   24

                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.

        6.6     Reporting Company. MRV is a reporting company under Section 12
                of the Securities Exchange Act of 1934, as amended (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.

        6.9     Disclosure. MRV has received, or will receive prior to the
                Closing, all documents, records, books or other information of
                FOCI required to be filed with the Securities and Futures
                Commission ("SFC") in the ROC in the year of 1999.


7.      PRE-CLOSING COVENANTS.



24
<PAGE>   25

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, Selling Shareholders
                shall report the transfer of the FOCI Shares to the Securities
                and Futures Commission of the ROC (the "SFC").

        7.3     Operation of Business. FOCI 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.

        7.4     Preservation of Business. FOCI 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, Selling
                Shareholders shall cause the managing team (directors,
                supervisors and Principal Employees of FOCI) to procure that
                FOCI 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



25
<PAGE>   26

                        with any of its directors, officers or employees except
                        for increase in compensation for employees and
                        probationary employees for which FOCI 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 FOCI 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;

                (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;



26
<PAGE>   27

                (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 that 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. FOCI 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;

        7.7     Notice of Developments. FOCI 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. FOCI 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 (including any acquisition structured as a
                merger, consolidation or share exchange).

        7.9     Supervisor. FOCI and Selling Shareholders agree that they will
                fully cooperate with MRV to have one of the existing supervisor
                of FOCI being replaced by a person 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    FOCI and Selling Shareholders agree to confirm to MRV in writing
                three (3) Business Days prior to the Closing the definite list
                of the name and number of shares of Selling Shareholders and
                shall have all the Selling Shareholders 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 FOCI Shares.



27
<PAGE>   28

        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
                fulfill.

        7.12    Selling Shareholders and FOCI shall cause any personal or
                corporate guarantors who provide Guaranties on the indebtness or
                other obligations of FOCI 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.

        7.13    At least five (5) Business Days prior to the Closing, Selling
                Shareholders (or Attorney(s)-in-Fact or FOCI 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 FOCI 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 ("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,
                FOCI and 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 FOCI and each of its Subsidiaries. Such list
                shall be incorporated into this Agreement as Schedule 24. FOCI
                and Signing 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    MRV shall provide the Attorneys-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.


8.      CONDITIONS PRECEDENT TO CLOSING

        8.1     Conditions to Obligation of MRV. The obligation of MRV to
                consummate the



28
<PAGE>   29


                transactions to be performed by it in connection with the
                Closing is subject to satisfaction of the following conditions:

                8.1.1   FOCI and 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 Selling Shareholders and FOCI, 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 "FOCI'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 FOCI 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 no more than those of
                        the year of 1999. For this purpose, the following
                        individuals are deemed to be "Principal Employees" of
                        FOCI and its Subsidiaries: Steve Lin, Goodman Chen,
                        Janpu Ho, Thomas Liu 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 Selling
                        Shareholders, either FOCI 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 FOCI 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 FOCI Shares shall have been
                        terminated and released prior to the Closing Date, and
                        Selling Shareholders shall have provided evidence, in
                        form and substance satisfactory to MRV, of such
                        termination and release.



29
<PAGE>   30

                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 FOCI 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 FOCI 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   FOCI 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 FOCI and its
                        Subsidiaries are satisfactory to MRV.

                MRV may waive any condition specified in this Section 8.1 if it
                executes a writing so stating at or prior to the Closing.

        8.2     Conditions to Obligation of Selling Shareholders. The obligation
                of 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 shall have complied with all of its 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.




30
<PAGE>   31

                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.

                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     FOCI and 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     FOCI and Selling Shareholders agree that they will fully
                cooperate with MRV to manage the operation and business
                conducted by FOCI and each of its Subsidiaries.

        9.3     FOCI 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 with the SEC as necessary from time to time.


10.     INDEMNIFICATION 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 MRV
                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, FOCI's
                liabilities concerning the said representations and warranties
                may be waived under the discretion of MRV without releasing the
                liabilities of 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 FOCI or any of Selling Shareholders
                        breaches any



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<PAGE>   32

                        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,
                        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 FOCI, then the Selling Shareholders
                        and FOCI 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 agree that the maximum indemnification of
                        liabilities of each Selling Shareholder shall not exceed
                        the total consideration he is entitled to receive from
                        this transaction.

                10.2.3  Escrow. The Parties agree to the following:


                        (a)     the representations, warranties, covenants and
                                obligations of Selling Shareholders shall be
                                secured by placing one million of the MRV Shares
                                owned by Selling Shareholders in escrow
                                ("Escrowed Shares") under an Escrow Agreement in
                                the form attached hereto as Exhibit F (the
                                "Escrow Agreement"). 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 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 FOCI Shares sold and delivered
                                to MRV, the number of Escrowed Shares shall be
                                adjusted down by the same percentage as those
                                FOCI Shares not available for sale are as a
                                percentage of the total FOCI 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 ("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
                                at the sole cost of Selling Shareholders and
                                shall be deducted from the MRV's payments
                                payable to Selling Shareholders.



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<PAGE>   33

        10.4    Matters Involving Third Parties

                10.4.1  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
                        "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.

                10.4.2  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.

                10.4.3  So long as the Indemnifying Party is conducting the
                        defense of the Third Party Claim in accordance with
                        Section 10.4.2 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



33
<PAGE>   34

                        Indemnified Party.

                10.3.4  In the event any of the conditions in Section 10.4.2
                        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 (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) FOCI or the members of 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 FOCI 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.





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<PAGE>   35


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 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 approval of MRV
                and; 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 FOCI (in the case of notices to be sent to FOCI 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 FOCI
                             Attention: Ronald Fu-Chang Wang
                             Fax: (886-3) 579-9766



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<PAGE>   36

                        -      To MRV
                               Attention: Edmund Glazer
                               Fax: (1-978) 952-4795

                        -      To Selling Shareholders
                               Attention:   Ronald Fu-Chang Wang
                                            Steve Song-Fure Lin
                               Fax: (886-3) 363-4816
                                    (886-3) 352-0558

        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.

        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 MRV and; 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



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<PAGE>   37

                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 WITHOUT GIVING
                EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE
                (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION)
                THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
                OTHER THAN 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 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



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<PAGE>   38

                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
                non-exclusive jurisdiction of any state or federal court sitting
                in Delaware, Massachusetts or California, U.S.A. and in Taiwan,
                R.O.C. 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 any 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 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



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<PAGE>   39

                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

                FOCI 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)     disclosure of Confidential Information to or at the
                        written request of MRV;

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

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

                (d)     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 two (2) years 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
                                five percent of the shares directly or
                                indirectly in a business which competes with the
                                type of business carried on by FOCI or its
                                Subsidiaries at Closing in the world;

                        (b)     for a period of two (2) years from the Closing
                                solicit or accept the custom of any person in
                                respect of goods or services competitive with
                                those manufactured or supplied by FOCI during
                                the period of 12 months prior to Closing, such
                                person having been a customer of FOCI in respect
                                of such goods or services




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<PAGE>   40

                                during such period;

                        (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
                                FOCI 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 FOCI or
                                        its Subsidiaries; or

                                (iii)   use any trade or domain name or e-mail
                                        address used by FOCI 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 cause the Principal Employees
                        undertake, not to, within two years after the
                        termination of their employment with FOCI 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.

                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 FOCI 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 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.




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<PAGE>   41

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



                                    MRV COMMUNICATIONS, INC.



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


                                    FIBER OPTIC COMMUNICATIONS, INC.



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


                                    SIGNING SHAREHOLDERS



                                    ---------------------------------------
                                    Represented by: Ronald Fu-Chang Wang



                                    ---------------------------------------
                                    Represented by: Steve Song-Fure Lin




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<PAGE>   42

                                     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 FOCI Shares
contemplated by this Agreement so that, after the Closing, FOCI 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 FOCI 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.



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<PAGE>   43

"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,
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



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<PAGE>   44
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 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.



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<PAGE>   45

"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)
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 FOCI or any of its
Subsidiaries other than products intended to be sold in the Ordinary Course of
Business.




45