Document:

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                                                                   EXHIBIT 10.59

                              JPS Industries, Inc.
                     555 North Pleasantburg Drive, Suite 202
                        Greenville, South Carolina 29607

                                  July 31, 2001

Mr. Michael L. Fulbright
620 Halton Road, #9201
Greenville, South Carolina 29607

Dear Mr. Fulbright:

         We are writing with respect to that certain letter agreement between
you and JPS Industries f/k/a JPS Textile Group, Inc. (the "Company"), dated as
of February 28, 1999 (the "Agreement"), pertaining to your employment by the
Company. In accordance with our recent discussions, this letter/agreement amends
the terms of your Agreement as follows (bolded text indicates modifications to
existing Agreement):

1.       Definitions. Unless otherwise specifically defined herein, each term
         used herein that is defined in the Agreement shall have the meaning
         assigned to such term in the Agreement. Each reference to "hereof",
         "hereunder", "herein" and "hereby", and each other similar reference,
         and each reference to "this Agreement" and each other similar reference
         contained in the Agreement, shall from and after the date hereof refer
         to the Agreement as amended hereby.

2.       Amendments to Section 1 (Employment). Section 1 of the Agreement is
         hereby deleted in its entirety and replaced with the following in lieu
         therefor:

                           1.       Employment. The Company agrees to employ
                  you, and you agree to be employed by the Company, commencing
                  on March 1, 1999 (the "Effective Date") and ending on October
                  31, 2003 (unless sooner terminated as hereinafter provided)
                  (the "INITIAL Employment Period"), on the terms and subject to
                  the conditions set forth in this Agreement (the "Agreement");
                  PROVIDED, HOWEVER, THAT THE INITIAL EMPLOYMENT PERIOD, AND THE
                  TERMS AND CONDITIONS OF THIS AGREEMENT, SHALL RENEW AND EXTEND
                  FOR A ONE (1) YEAR PERIOD BEGINNING ON NOVEMBER 1, 2003 AND
                  ENDING ON OCTOBER 31, 2004 (ANY SUCH EXTENSION PERIOD AND THE
                  INITIAL EMPLOYMENT PERIOD ARE COLLECTIVELY REFERRED TO HEREIN
                  AS THE "EMPLOYMENT PERIOD"), WITHOUT ANY FURTHER ACTION BY YOU
                  OR THE COMPANY TO EFFECTUATE SUCH RENEWAL AND EXTENSION,
                  UNLESS (I) YOU OR THE COMPANY PROVIDE WRITTEN NOTICE TO THE
                  OTHER PARTY ON OR BEFORE MAY 5, 2003 INDICATING THAT NO SUCH
                  RENEWAL OR EXTENSION SHALL OCCUR ON NOVEMBER 1, 2003, IN WHICH
                  EVENT THE EMPLOYMENT PERIOD SHALL EXPIRE ON OCTOBER 31, 2003,
                  OR (II) SOONER TERMINATED AS HEREINAFTER

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         PROVIDED. THE NON-RENEWAL REFERENCED IN THE IMMEDIATELY PRECEDING
         SENTENCE SHALL NOT OPERATE TO DEPRIVE YOU OF ANY OF THE COMPENSATION
         PROVIDED FOR IN SECTION 8(D) HEREOF WITH RESPECT TO ANY TERMINATION OF
         YOUR EMPLOYMENT FOLLOWING NOTICE OF NON-RENEWAL, BUT PRIOR TO
         EXPIRATION OF THE EMPLOYMENT PERIOD.

3.       Amendments to Section 3(a)(i) (Base Salary). Section 3(a)(i) of the
         Agreement is hereby deleted in its entirety and replaced with the
         following in lieu therefor:

                           (a)      (i)      Base Salary. During the Employment
                  Period, the Company shall pay you, and you shall accept from
                  the Company for your services, a salary at (A) an initial rate
                  of $550,000 per annum FOR THE PERIOD COMMENCING ON MARCH 1,
                  1999 THROUGH AND INCLUDING OCTOBER 31, 2001, AND (B) A RATE OF
                  $600,000 PER ANNUM FOR THE PERIOD COMMENCING ON NOVEMBER 1,
                  2001 AND THEREAFTER, subject to increase in the Board's sole
                  discretion (the "Base Salary"), payable in accordance with the
                  Company's policy with respect to the compensation of
                  executives. Your Base Salary will not be decreased during the
                  Employment Period.

4.       Amendments to Section 3(a)(ii) (Bonus). Section 3(a)(ii) of the
         Agreement is hereby deleted in its entirety and replaced with the
         following in lieu therefor:

                                    (ii)     Bonus. In addition to your Base
                  Salary, unless you voluntarily terminate your employment for
                  other than Good Reason (as hereinafter defined), or are
                  terminated by the Company for Cause in accordance with the
                  requirements of paragraph 7(c) hereof (as hereinafter
                  defined), you will be eligible to participate in the Company's
                  1999 Management Incentive Bonus Plan (the "1999 Bonus Plan")
                  and receive a bonus (the "Incentive Bonus") based upon the
                  attainment of the performance goals specified therein in an
                  amount calculated by the Board (or its designee) which shall
                  be not less than 50% of your Base Salary and shall not exceed
                  200% of your Base Salary. The Board shall establish a
                  performance-based annual bonus program for senior executives
                  of the Company including you for fiscal years after 1999 (a
                  "Future Bonus Plan") and award you an annual bonus opportunity
                  thereunder which is not less favorable than the opportunity
                  provided pursuant to the 1999 Bonus Plan (i.e., at least 50%
                  of your Base Salary and not more than 200% of your Base
                  Salary) without restricting the discretion of the Board to set
                  reasonable targets and criteria for such incentive
                  compensation. Any bonus plan payment that is to be made for
                  the fiscal year IN WHICH THE EMPLOYMENT AGREEMENT EXPIRES
                  PURSUANT TO SECTION 1, shall be made to you on or before
                  January 31 OF THE YEAR IMMEDIATELY FOLLOWING THE YEAR IN WHICH
                  THE EMPLOYMENT AGREEMENT SO EXPIRES.

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5.       Amendments to Section 7(d) (Termination by You). The first paragraph of
         Section 7(d) of the Agreement is hereby deleted in its entirety and
         replaced with the following in lieu therefor:

                           (d)      Termination by You. You may terminate your
                  employment hereunder for Good Reason. For purposes of this
                  Agreement, "Good Reason" shall mean (A) any material
                  diminution of your duties or status from that provided for in,
                  or any material limitation of your powers in any respect not
                  contemplated by, paragraph 2 hereof; provided, however that
                  you first deliver written notice thereof to the Board and the
                  Company shall have failed to cure such diminution or
                  limitation within thirty (30) days after receipt of such
                  written notice or (B) any material failure by the Company to
                  comply with paragraphs 3 through 5 hereof; provided, however
                  that you first deliver written notice thereof to the Board and
                  the Company shall have failed to cure such failure within ten
                  (10) days after receipt of such written notice or (C) your
                  election to terminate your employment WITHIN NINETY (90) DAYS
                  following a Change in Control (as hereinafter defined);
                  provided, however that you first deliver written notice
                  thereof to the Board or (D) your failure to be elected to the
                  Board during the Employment Period.

6.       Amendments to Section 8(d) (Other Than for Cause or For Good Reason).
         Section 8(d) of the Agreement is hereby deleted in its entirety and
         replaced with the following in lieu therefor:

                           (d)      Other Than for Cause or For Good Reason. If
                  the Company shall terminate your employment other than
                  pursuant to paragraphs 7(b) or 7(c) hereof or if you shall
                  terminate your employment for Good Reason pursuant to
                  paragraph 7(d) hereof, then:

                                    (i)      The Company shall continue to pay
                  you your Base Salary without interest through the later of (A)
                  October 31, 2003 and (B) TWO YEARS from the Date of
                  Termination, in accordance with normal payroll practices;
                  provided, however, that in the event of your death prior to
                  the expiration of payment hereunder, your estate or your
                  beneficiary shall have the right to elect to receive the
                  remaining amount hereunder in a lump sum payment; and
                  provided, further, that IF YOUR EMPLOYMENT IS TERMINATED BY
                  (A) THE COMPANY FOR ANY REASON OTHER THAN PURSUANT TO
                  PARAGRAPHS 7(B) OR 7(C) HEREOF or (B) YOU FOR GOOD REASON,
                  THEN you shall have the option to require the Company to pay
                  you the full amount required by this paragraph 8(d)(i) in one
                  lump sum on the business day immediately following the Date of
                  Termination [FOR AVOIDANCE OF DOUBT, THE AGGREGATE AMOUNT
                  PAYABLE UNDER THIS SUBSECTION IS $1.2 MILLION ($600,000 ANNUAL
                  SALARY X 2)];

                                    (ii)     The Company shall continue to pay
                  you, at the same time payable to other participants in the
                  1999 Bonus Plan or any Future

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                  Bonus Plan, an amount equal to the sum of (A) any bonus earned
                  as of the Date of Termination under the 1999 Bonus Plan or any
                  Future Bonus Plan for a fiscal year ending prior to the Date
                  of Termination but not paid as of such date, (B) a pro rata
                  portion (based on the number of days worked) of the target
                  bonus payable under the 1999 Bonus Plan (which target shall be
                  50% of your Base Salary) or any Future Bonus Plan in effect
                  for the fiscal year in which your Date of Termination occurs
                  (determined without regard to whether the performance goals
                  established under the applicable program are met) and (C) an
                  amount equal to your target bonus (which target shall be 50%
                  of your Base Salary) under the 1999 Bonus Plan or any Future
                  Bonus Plan in effect for the fiscal year in which your Date of
                  Termination occurs (determined without regard to whether the
                  performance goals established under the applicable program are
                  met), multiplied by TWO, provided, however, that IF YOUR
                  EMPLOYMENT IS TERMINATED BY (A) THE COMPANY FOR ANY REASON
                  OTHER THAN PURSUANT TO PARAGRAPHS 7(B) OR 7(C) HEREOF OR (B)
                  YOU FOR GOOD REASON, then you shall have the option to require
                  the Company to pay you the full amount required by this
                  paragraph 8(d)(ii) in one lump sum on the business day
                  immediately following the Date of Termination [FOR AVOIDANCE
                  OF DOUBT, THE AGGREGATE AMOUNT PAYABLE UNDER THIS SUBSECTION
                  IS $600,000 ($300,000 TARGET BONUS X 2)];

                                    (iii)    You shall immediately become fully
                  vested in any stock options previously granted to you
                  hereunder or otherwise, with such options remaining
                  exercisable for one year from the date of your termination of
                  employment; and

                                    (iv)     The Company shall maintain in full
                  force and effect, for your continued benefit through (A) the
                  later of October 31, 2003 and (B) TWO YEARS from the Date of
                  Termination, all employee benefit plans and programs providing
                  medical, dental and/or life insurance benefits in which you
                  (and, in the case of medical and dental insurance, your
                  spouse) were entitled to participate immediately prior to the
                  Date of Termination; provided, however that your continued
                  participation is possible under the general terms and
                  provisions of such plans and programs. In the event that your
                  participation in any such plan or program is barred, the
                  Company shall provide you (and your spouse) with comparable
                  benefits under a mirror benefit plan. Notwithstanding the
                  above, if you are employed by a new employer and you (and your
                  spouse) are eligible to and have elected to receive comparable
                  coverage from such employer (including the waiver of any
                  pre-existing condition limitation) at a comparable cost to
                  you, you shall no longer be eligible to receive coverage under
                  this paragraph.

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7.       Amendments to Section 9(a) (Restrictive Covenants and Confidentiality;
         Injunctive Relief). Section 9(a) of the Agreement is hereby deleted in
         its entirety and replaced with the following in lieu therefor:

                           (a)      You agree, as a condition to the performance
                  by the Company of its obligations hereunder, particularly its
                  obligations under paragraphs 3 through 5 hereof, that from the
                  Effective Date through THE LATER OF (X) DATE ON WHICH THE
                  EMPLOYMENT PERIOD EXPIRES PURSUANT TO SECTION 1 HEREOF OR (Y)
                  OCTOBER 31, 2003 (THE "NON-COMPETE EXPIRATION DATE"), and
                  during the additional period, if any, extending until the due
                  date of the final payment owed to you by the Company following
                  any termination of your employment by the Company other than
                  pursuant to paragraphs 7(b) or 7(c) hereof or by you for Good
                  Reason pursuant to paragraph 7(d) hereof (but without regard
                  to any election by you to take any such payment in a lump
                  sum), and, with respect to clauses (i) and (ii) below but not
                  clause (iii) below, during the further period of ONE (1) YEAR
                  following THE NON-COMPETE EXPIRATION DATE or the end of any
                  such additional period, you shall not, without the prior
                  written approval of the Board, directly or indirectly through
                  any other person, firm or corporation:

8.       Amendments to Section 12 (Notice). Section 12 of the Agreement is
         hereby deleted in its entirety and replaced with the following in lieu
         therefor:

                           12.      Notice. For purposes of this Agreement,
                  notices and all other communications provided for shall be in
                  writing and shall be deemed to have been duly given when
                  delivered or mailed by United States registered or certified
                  mail, return receipt requested, postage prepaid, addressed as
                  follows:

                           If to you:

                                  Michael L. Fulbright
                                  620 Halton Road, #9201
                                  Greenville, South Carolina 29607

                           with a copy to:

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

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                           If to the Company:

                                  JPS Industries, Inc.
                                  555 North Pleasantburg Drive, Suite 202
                                  Greenville, South Carolina 29607
                                  Attention: Board of Directors

                           with a copy to:

                                  Jones, Day, Reavis & Pogue
                                  3500 SunTrust Plaza
                                  303 Peachtree Street, N.E.
                                  Atlanta, Georgia 30308-3242
                                  Attention: Lizanne Thomas

                  or to such other address as any party may have furnished to
                  the other in writing in accordance herewith, except that
                  notices of change of address shall be effective only upon
                  receipt.

9.       Effect of Amendment. Except as amended hereby, the terms of the
         Agreement shall remain in full force and effect without change.

         Assuming this letter correctly sets forth our agreement regarding
amendments to the Agreement, please sign duplicate acknowledgment copies of same
and return one to me.

                                    Very truly yours,

                                    JPS INDUSTRIES, INC.

                                    By:      /s/ Charles R. Tutterow
                                       ----------------------------------------
                                    Title:   Executive Vice President and Chief
                                             Financial Officer

This letter correctly sets forth the amendments to terms and conditions of the
Agreement pertaining to my employment by the Company.

/s/ Michael L. Fulbright
---------------------------
Michael L. FulbrightExhibit 4.1

                                 FORM OF OPTION

THE  SECURITIES  REPRESENTED BY THIS OPTION HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE  STATE  SECURITIES  LAWS. THE
SECURITIES  HAVE BEEN ACQUIRED FOR  INVESTMENT  AND MAY NOT BE OFFERED FOR SALE,
SOLD, HYPOTHECATED,  ASSIGNED OR OTHERWISE TRANSFERRED, EXCEPT AS EXPLICITLY SET
FORTH HEREIN.

Option No. Op-________                           Date of Issuance:  ____________

                          LIGHTPATH TECHNOLOGIES, INC.

                     OPTION TO PURCHASE CLASS A COMMON STOCK

                          Void after: December 10, 2003

     This certifies  that, for value received,  ____________________________  or
any subsequent permitted holder hereof ("Holder"),  is entitled,  subject to the
terms set forth below, to purchase from LIGHTPATH TECHNOLOGIES, INC., a Delaware
corporation (the  "Company"),  _____________ ( ) shares (the "Option Shares") of
Class A Common  Stock,  $0.01 par value per share,  of the Company  (the "Common
Stock"),  as  constituted  on the date  hereof (the  "Issue  Date"),  subject to
compliance  with relevant  federal and state  securities and blue sky laws, upon
surrender hereof, at the principal office of the Company referred to below, with
the  Notice of  Exercise  form  attached  hereto as Annex A duly  executed,  and
simultaneous  payment  therefor  in  lawful  money of the  United  States at the
Exercise  Price as set  forth in  Section 2 below.  The  number,  character  and
Exercise  Price of such  shares of Common  Stock are  subject to  adjustment  as
provided  below.  The term "Option" as used herein shall include this Option and
any options delivered in substitution or exchange therefor as provided herein.

     1.   TERM OF OPTION; VESTING.

          (a)  TERM.  Subject  to the  terms and  conditions  set  forth  herein
(including, without limitation, the vesting conditions set forth in Section 1(b)
below), this Option shall be exercisable during the term (the "Term") commencing
on the effective date of a registration  statement filed by the Company with the
Securities and Exchange  Commission with respect to the  registration  under the
Securities  Act of 1933,  as amended,  of the issuance of the Option Shares upon
exercise hereof (the "Option Effective Date"),  and ending at 5:00 p.m., central
time, on December 10, 2003, and shall be void thereafter.1

          (b) No Exercise Prior to Option  Effective Date. This Option shall not
be exercisable as to the Option Shares at any time prior to the Option Effective
Date.

     2. EXERCISE PRICE. This Option will have an exercise price of three dollars
and seventy-three cents ($3.73) per share of Class A Common Stock of the Company
(the "Exercise  Price").  This Option must be exercised for the entire number of
Option  Shares  covered by it; no partial  exercise of this Option is permitted.
The Company  will not be required to honor  attempts to exercise  this Option in
part. The Exercise Price is subject to adjustment only as provided in Section 10
hereof.

----------
(1)  This Option is issued pursuant to that certain "Order and Final  Judgment,"
     entered on November 9, 2001, in "LightPath Technologies,  Inc., v. Leeburg,
     et al.," C.A. No. 18021, commenced on May 2, 2000, in the Delaware Court of
     Chancery,   New  Castle  County,   modifying  and  approving  that  certain
     "Stipulation of Settlement," filed on November 17, 2000.

                                       1
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     3. EXERCISE OF OPTION.

          (a) EXERCISE MECHANICS. The purchase rights represented by this Option
are  exercisable  by the  Holder  for no less than the  entire  number of Option
Shares  covered by this Option (with such number of Option  Shares being subject
to adjustment  only as provided in Section 10 below),  at any time, or from time
to time,  during  the term  hereof  as  described  in  Section  1 above,  by the
surrender  of this  Option  and the  Notice  of  Exercise  annexed  hereto  duly
completed  and  executed  on behalf of the  Holder,  at the  offices of both the
Option Agent and the Company, as set forth in Section 6(b) herein (or such other
office or agency of the Company as it may  designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the Company), upon
payment in full of the Exercise Price for the Option Shares  acquired,  in cash,
certified or bank funds or wire transfer of immediately available funds.

          (b) DATE OF  EXERCISE.  This  Option  shall  be  deemed  to have  been
exercised  immediately  prior  to the  close  of  business  on the  date  of its
surrender for exercise and payment of the Exercise Price as provided above,  and
the person  entitled to receive the shares of Common  Stock  issuable  upon such
exercise  shall be  treated  for all  purposes  as the  holder of record of such
shares as of the close of business on such date. As promptly as  practicable  on
or after such date, the Company, at its expense,  shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares  issuable upon such exercise.  Any provision  herein to the
contrary  notwithstanding,  no Option Shares shall be delivered  hereunder until
the registration  statement filed with the Securities and Exchange Commission to
register the issuance of the Option Shares hereunder shall have become effective
and  remain  effective  under the  Securities  Act of 1933,  as  amended,  and a
prospectus relating thereto shall have been delivered to the Holder.

          (c)  COMPLIANCE  WITH  SECURITIES  LAWS.  The Option  Shares  shall be
stamped or  imprinted  with a legend in  substantially  the  following  form (in
addition to any legend required by state securities laws):

          THE  SECURITIES  REPRESENTED  HEREBY MAY NOT BE OFFERED  FOR
          SALE, SOLD, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED,
          EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
          THE SECURITIES  ACT OF 1933, AS AMENDED,  AND ANY APPLICABLE
          STATE SECURITIES LAWS, OR AN EXEMPTION  THEREFROM UNDER SAID
          ACT AND APPLICABLE LAWS.

     4. REPLACEMENT OF OPTION. On receipt of evidence reasonably satisfactory to
the Company of the loss,  theft,  destruction or mutilation of this Option,  the
Company shall execute and deliver,  in lieu of this Option, a new option of like
tenor and amount.  At the request of the Company,  the Holder shall  provide the
Company  with an executed  Lost Option  Affidavit  substantially  in the form of
Annex B attached  hereto,  each at the cost of the  Holder,  in order to provide
reasonable protection to the Company concerning the replacement of this Option.

     5. RIGHTS OF STOCKHOLDERS. Subject to Sections 8 and 10 of this Option, the
Holder  shall not be  entitled  to vote or  receive  dividends  or be deemed the
holder of Common  Stock or any other  securities  of the Company that may at any
time be issuable on the  exercise  hereof for any  purpose,  nor shall  anything
contained  herein be  construed to confer upon the Holder,  as such,  any of the
rights of a stockholder  of the Company or any right to vote for the election of
directors or upon any matter  submitted to stockholders at any meeting  thereof,

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<PAGE>
or to give or  withhold  consent  to any  corporate  action  (whether  upon  any
recapitalization,  issuance of stock,  reclassification  of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance, or
otherwise)  or to  receive  notice  of  meetings,  or to  receive  dividends  or
subscription  rights or otherwise  until the Option shall have been exercised as
provided herein.

     6. LIMITATIONS ON TRANSFER OF OPTION.

          (a) OPTION REGISTER. The Company will maintain a register (the "Option
Register")  containing  the names and  addresses  of the Holder or Holders.  Any
Holder of this Option or any portion  thereof may change his, her or its address
as shown on the Option Register by written notice to the Company requesting such
change. Any notice or written communication required or permitted to be given to
the  Holder  may be  delivered  or given by mail to such  Holder as shown on the
Option  Register  as the  absolute  owner  of  this  Option  for  all  purposes,
notwithstanding  any notice to the contrary.  The initial  Holder of this Option
hereby  consents to the use of the following  address for purposes of the Option
Register:

                    [Holder name]
                    [Holder address]
                    [Holder address]
                    Telephone: (  ) ___-____
                    Facsimile: ( ) ___-____

          (b) OPTION AGENT.  Continental Stock Transfer and Trust Company is the
Company's agent for the purpose of maintaining  the Option Register  referred to
in Section 6(a) above,  issuing the Option  Shares,  exchanging  this Option and
replacing  this  Option.  Any  such   registration,   issuance,   exchange,   or
replacement,  as the case may be,  shall be made at the  office of such agent as
follows:

                    Continental Stock Transfer and Trust Company
                    2 Broadway, 19th Floor
                    New York, NY  10004
                    Phone: (212) 509-4000
                    Fax: (212) 509-5152

                    with copy to:

                    Donna Bogue
                    Chief Financial Officer
                    LightPath Technologies, Inc.
                    3819 Osuna, N.E.
                    Albuquerque, NM  87109

          (c)  NON-TRANSFERABILITY OF OPTION. This Option may not be offered for
sale, sold, hypothecated,  assigned or otherwise transferred, except (i) by will
or the laws of descent and distribution,  (ii) under a domestic  relations order
in  settlement  of marital  property  rights,  or (iii) to a custodian,  trustee
(including  a trustee of a voting  trust),  executor,  or other  fiduciary  in a
custodial  account,  trust or other  arrangement by which the Holder retains the
entire beneficial interest in the Option.

     7.  RESERVATION OF STOCK.  The Company  covenants that during the Term this
Option is exercisable, the Company will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of Common

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<PAGE>
Stock upon the exercise of this Option, provided,  however, the Company shall at
all times  reserve  the right to issue  treasury  shares to the Holder  upon the
exercise  hereof.  The Company  further  covenants that all Option Shares,  upon
exercise of the rights  represented  by this Option and payment of the  Exercise
Price, all as set forth herein,  will be free from all taxes,  liens and charges
in respect of the issue  thereof  (other  than taxes in respect of any  transfer
occurring  contemporaneously  or otherwise  specified  herein or liens resulting
from the Holder's actions), will be duly authorized,  validly issued, fully paid
and  nonassessable  and will not be issued in violation of any preemptive rights
(whether  statutory,  contractual  or  otherwise).  The Company  agrees that its
issuance of this Option shall  constitute full authority to its officers who are
charged with the duty of executing  stock  certificates to execute and issue the
necessary  certificates  for shares of Common  Stock upon the  exercise  of this
Option.

     8. NOTICES.

          (a)  CERTIFICATE  OF CHIEF  FINANCIAL  OFFICER.  Whenever the Exercise
Price or number of shares  purchasable  hereunder shall be adjusted  pursuant to
Section 10 hereof, the Company shall,  within thirty (30) days of the occurrence
of the event which triggered such adjustment,  issue a certificate signed by its
Chief Financial Officer setting forth, in reasonable detail, the event requiring
the  adjustment,  the  amount  of the  adjustment,  the  method  by  which  such
adjustment  was  calculated,  and  the  Exercise  Price  and  number  of  shares
purchasable hereunder after giving effect to such adjustment,  and shall cause a
copy of such certificate to be mailed (by first-class mail,  postage prepaid) to
the Holder of this Option.  The Company shall, upon the written request,  at any
time, of any such Holder, furnish or cause to be furnished to such Holder a like
certificate  setting forth:  (i) such  adjustments and  readjustments;  (ii) the
Exercise  Price at the time in  effect;  and (iii) the  number of shares and the
amount,  if any, of other  property  that at the time would be received upon the
exercise of the Option.

          (b) NOTICE OF CERTAIN FUNDAMENTAL TRANSACTIONS. In case of:

               (i) any  Extraordinary  Transaction,  as that term is  defined in
Section 10(a) hereof;

               (ii) any reclassification of the capital stock of the Company, or

               (iii) any voluntary dissolution, liquidation or winding-up of the
Company,

then, and in each such case, the Company shall promptly send to the Option Agent
and the Option Agent shall  promptly  send the Holders a notice (in such form as
shall be furnished to the Option Agent by the Company) of such  proposed  action
or offer,  such notice to be mailed by the Option  Agent to the Holders at their
addresses as they appear in the Option  Register,  which shall  specify the date
such issuance or event is to take place and the date of participation therein by
the Holders of Common Stock, if any such date is to be fixed,  and shall briefly
indicate  the effect of such  action on the  Common  Stock and on the number and
kind of any other shares of stock and on other property,  if any, and the number
of shares of Common Stock and other property,  if any, purchasable upon exercise
of each Option and the Exercise Price after giving effect to any adjustment,  if
any, which will be required as a result of such action. Any such notice shall be
given by the  Company  at least 20 days  prior to the date of the taking of such
proposed  action or the date of  participation  therein by the Holders of Common
Stock, whichever shall be the earlier.

          (c) DEEMED RECEIPT. All such notices, advices and communications shall
be  deemed to have  been  received  by the  Holder  (i) in the case of  personal
delivery,  on the date of such delivery and (ii) in the case of mailing,  on the
fifth business day following the date of such mailing.

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<PAGE>
     9. AMENDMENTS. This Option may be amended by the parties hereto without the
consent  of any Holder for the  purpose of curing any  ambiguity,  or of curing,
correcting or supplementing any defective  provision  contained herein or making
any other  provisions  with respect to matters or questions  arising  under this
Option as the  Company and the Option  Agent may deem  necessary  or  desirable;
provided, however, that the Company determines, and the Option Agent may rely on
such  determination,  that such action shall not affect  adversely the rights of
the  Holders.  Any  amendment or  supplement  to this Option that has an adverse
effect on the interests of the Holders shall require the written  consent of the
Holders of a  majority  of the then  outstanding  Options.  The  consent of each
Holder  affected  shall be  required  for any  amendment  pursuant  to which the
Exercise  Price would be  increased or the number of Option  Shares  purchasable
upon  exercise  of  Options  would be  decreased  (other  than  pursuant  to the
adjustments provided in Section 10 hereof).

          (a) NO WAIVER. No waivers of, or exceptions to, any term, condition or
provision of this Option,  in any one or more instances,  shall be deemed to be,
or construed as, a further or continuing  waiver of any such term,  condition or
provision.

     10.  ADJUSTMENTS.  The Exercise Price and the number of shares  purchasable
hereunder are subject to adjustment from time to time as follows:

          (a) MERGER,  SALE OF ASSETS,  ETC. If at any time while this Option is
outstanding  and  unexpired  there shall be (i) a  reorganization  (other than a
combination,  reclassification,  exchange  or  subdivision  of shares  otherwise
provided for herein), (ii) a merger or consolidation of the Company with or into
another  corporation  in which the  Company is not the  surviving  entity,  or a
reverse  triangular  merger in which the Company is the surviving entity but the
shares of the  Company's  capital  stock  outstanding  immediately  prior to the
merger are converted by virtue of the merger into other property, whether in the
form of  securities,  cash,  or  otherwise,  or (iii) a sale or  transfer of the
Company's  properties  and assets as, or  substantially  as, an  entirety to any
other person,  then, as a part of such  reorganization,  merger,  consolidation,
sale or  transfer,  (each an  "Extraordinary  Transaction"),  the Options  shall
terminate  on the  effective  date of  such  Extraordinary  Transaction,  unless
provision  is made in such  transaction  in the sole  discretion  of the parties
thereto for the assumption of the Options or the substitution for the Options of
new options of the successor person or entity or a parent or subsidiary thereof,
with  such  adjustment  as the  number  and  kinds of  shares  and the per share
exercise  price as shall be  necessary  to provide  Holders of the options  upon
exercise  thereof with the kind and amount of  securities,  cash or other assets
that such Holder (net of Exercise Price) would have owned  immediately after the
Extraordinary  Transaction  if such Holder had exercised the Option  immediately
before the effective date of the Extraordinary Transaction.  In the event of any
transaction which will result in such termination, the Company shall give to the
Option  Agent  written  notice  thereof.  Until  the  earlier  to  occur of such
effective  date or record date,  the Holders of Options may exercise the Options
in accordance with their terms, but after such effective date or record date, as
the case may be, Holders of Options may not exercise the Options unless they are
assumed or substituted by the successor as provided above.

          (b)  RECLASSIFICATION,  ETC.  If the  Company,  at any time while this
Option remains  outstanding and unexpired,  by reclassification of securities or
otherwise,  shall change any of the securities as to which purchase rights under
this Option exist into the same or a different number of securities of any other
class or classes,  this Option shall  thereafter  represent the right to acquire
such number and kind of  securities as would have been issuable as the result of
such change with  respect to the  securities  that were  subject to the purchase
rights under this Option  immediately  prior to such  reclassification  or other
change and the Exercise  Price  therefor shall be  appropriately  adjusted,  all
subject  to further  adjustment  as  provided  in this  Section 10 and  subject,
further,  to the requirement  that no such adjustment  shall reduce the Exercise
Price to an amount less than the per-share par value of the Option Shares.

                                        5
<PAGE>
          (c) SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time while this Option remains outstanding and unexpired shall split,  subdivide
or combine the securities as to which  purchase  rights under this Option exist,
into a different  number of securities of the same class, the Exercise Price for
such  securities  shall be  proportionately  decreased in the case of a split or
subdivision or proportionately increased in the case of a combination; provided,
however, that no such decrease shall reduce the Exercise Price to an amount less
than the per-share par value of the Option Shares.

          (d)  ADJUSTMENTS  FOR  DIVIDENDS  IN  STOCK  OR  OTHER  SECURITIES  OR
PROPERTY.  If while this Option, or any portion hereof,  remains outstanding and
unexpired the holders of the securities as to which  purchase  rights under this
Option  exist at the time shall have  received,  or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to  receive,  without  payment  therefor,  other  or  additional  stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Option shall represent the right to acquire,  in addition
to the number of shares of the security receivable upon exercise of this Option,
and without payment of any additional consideration therefor, the amount of such
other or additional  stock or other  securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had it been
the holder of record of the security  receivable upon exercise of this Option on
the date  hereof and had  thereafter,  during the period from the date hereof to
and including the date of such  exercise,  retained such shares and/or all other
additional stock available by it as aforesaid during such period,  giving effect
to all  adjustments  called for during  such  period by the  provisions  of this
Section 10.

          (e) NO  IMPAIRMENT.  The Company  will not, by any  voluntary  action,
avoid or seek to avoid the  observance or  performance of any of the terms to be
observed or performed  hereunder  by the Company,  but will at all times in good
faith assist in the carrying out of all the provisions of this Section 10 and in
the taking of all such action as may be  necessary  or  appropriate  in order to
protect the rights of the Holders of this Option against impairment. The Company
hereby  agrees  that in order to  effectuate  the  purposes  and  intent of this
Agreement,  it will not  increase the par value of the Common Stock prior to the
Termination Date without the prior written consent of the Holder.

     11. MISCELLANEOUS.

          (a) NOTICES.  All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail,  postage
prepaid (unless  specified  otherwise  herein),  at the address contained in the
Option Register.

          (b)  GOVERNING  LAW.  This Option shall be  construed  and enforced in
accordance  with and  governed by the  internal  laws of the State of  Delaware,
other than conflicts of laws principles thereof.

          (c)  HEADINGS.  The  headings  in  this  Option  are for  purposes  of
reference only, and shall not limit or otherwise affect any of the terms hereof.

          (d) SEVERABILITY AND CONFLICTS.  The invalidity or unenforceability of
any provision  hereof shall in no way affect the validity or  enforceability  of
any other provision.

                                        6
<PAGE>
     IN WITNESS WHEREOF, LightPath Technologies,  Inc. has caused this Option to
be executed by its officer thereunto duly authorized.

Dated: _________________________

LIGHTPATH TECHNOLOGIES, INC.

By: ____________________________
Name:  Donna Bogue
Title: Chief Financial Officer

Address:

LightPath Technologies, Inc.
3819 Osuna, N.E.
Albuquerque, NM  87109

Annexes
-------
Annex A  -  Notice of Exercise
Annex B  -  Affidavit of Loss
<PAGE>
                                     ANNEX A

                               NOTICE OF EXERCISE

To:  LIGHTPATH TECHNOLOGIES, INC.
     3819 Osuna, N.E.
     Albuquerque, NM  87109

     (1) The undersigned  hereby elects to purchase  _________  shares of Common
Stock of  LIGHTPATH  TECHNOLOGIES,  INC.,  pursuant to the terms of the attached
Option,  and tenders  herewith  payment of the purchase price for such shares in
full as follows:

                          ____________________________

                          ____________________________

                          ____________________________

     (2)  In  exercising  this  Option,  the  undersigned  hereby  confirms  and
acknowledges  that the  shares of  Common  Stock to be  issued  upon  conversion
thereof are being acquired  solely for the account of the undersigned and not as
a nominee for any other party, and that the undersigned will not offer,  sell or
otherwise dispose of any such shares of Common Stock, except under circumstances
that will not result in a violation of the  Securities  Act of 1933, as amended,
or any state securities laws.

     (3) Please issue a certificate or certificates  representing said shares of
Common  Stock  in the  name  of the  undersigned  or in  such  other  name as is
specified below:

                                              __________________________________
                                              (Name)

                                              __________________________________
                                              (Name)
<PAGE>
                                     ANNEX B
                            FORM OF AFFIDAVIT OF LOSS

STATE OF                 )
                         ) ss:
COUNTY OF                )

     The undersigned  (hereinafter  "Deponent"),  being duly sworn,  deposes and
says that:

1.       Deponent is an adult whose mailing address is:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

     2. Deponent is the  recipient of an Option (the  "Option")  from  LightPath
Technologies, Inc. (the "Company"), dated ____________ __, 2001 for the purchase
of up to  __________  shares of Common Stock,  par value $.01 per share,  of the
Company, at an exercise price of $________ per share.

     3. The Option has been lost,  stolen,  destroyed  or  misplaced,  under the
following circumstances:

     4. The Option was not endorsed.

     5. Deponent has made a diligent search for the Option,  and has been unable
to find or recover same, and Deponent was the unconditional  owner of the Option
at the time of loss,  and is  entitled  to the  full  and  exclusive  possession
thereof;  that neither the Option nor the rights of Deponent  therein  have,  in
whole or in part, been assigned, transferred, hypothecated, pledged or otherwise
disposed of, in any manner whatsoever,  and that no person,  firm or corporation
other than the Deponent has any right,  title, claim, equity or interest in, to,
or respecting the Option.

     6. Deponent makes this Affidavit for the purpose of requesting and inducing
the Company and its agents to issue a new option in substitution for the Option.

     7. If the Option  should ever come into the hands,  custody or power of the
Deponent or the Deponent's representatives, agents or assigns, the Deponent will
immediately and without  consideration  surrender the Option to the Company, its
representatives,  agents or assigns,  its transfer agents or subscription agents
for cancellation.
<PAGE>
     8. The Deponent hereby  indemnifies and holds harmless the Company from any
claim or demand for payment or  reimbursement of any party arising in connection
with the subject matter of this Affidavit.

Signed, sealed and dated: _________________________

                                              __________________________________
                                              Deponent

Sworn to and subscribed before me this

____ day of _________________, _________

__________________________________
Notary Public

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