Document:

Exhibit 10.26

                             EBIZ ENTERPRISES, INC.
                              15695 NORTH 83RD WAY
                            SCOTTSDALE, ARIZONA 85260

                                October 20, 2000

John D. Fern
J.E. Matthew, LLC
600 Central Avenue, Suite 214
Highland Park, Illinois 60035

Re:  JEM Ventures EBIZ, LLC ("HOLDER")/$7.1
     Million Debenture ("DEBENTURE")

Dear John:

     This letter sets forth our  understanding  related to  modification  of the
Debenture in connection with your sale of 2,500,000  shares (the "SALE") of Ebiz
stock to The Canopy Group, Inc. ("CANOPY") under the terms of that certain Stock
and Warrant Purchase Agreement dated October 19, 2000 ("PURCHASE AGREEMENT").

     1.   Ebiz agrees to convert $2,083,500 principal amount of the Debenture in
          exchange for 2,500,000  million  shares of Ebiz common stock  ($0.8334
          per share).

     2.   The $2,083,500  converted amount shall be applied solely to reduce the
          outstanding  principal  of the  Debenture.  Holder  shall  reduce  the
          required  balance of the letter of credit  securing  the  Debenture by
          $2,083,500 immediately upon the closing of the Sale.

     3.   Provided  Ebiz has  obtained  net  sales  in the  ordinary  course  of
          business  (excluding any  inter-company  sales) of at least 90% of the
          revenues  projected  on Exhibit A,  Holder  shall  further  reduce the
          required balance of the letter of credit (a) in the amount of $208,250
          upon  attainment  of the net sales set forth on Exhibit A for November
          and (b) in the  additional  amount of $208,250 upon  attainment of the
          net sales  set forth on  Exhibit A for  December.  Ebiz  shall  notify
          Holder and shall  certify the amount of the net sales on or before the
          fifth day  following  the date which is the earlier of the last day of
          the  applicable  month or such earlier  time as the required  revenues
          have been  obtained.  Holder shall have five  business days to confirm
          the  net  revenue  amounts  upon  receipt  of the  notification.  Upon
          confirmation  by  Holder,  or upon the sixth  business  day  following
          receipt  of  notification  from the  Company,  Holder  shall  make the
          reductions in the letter of credit  requirements  specified  above. In
          the event the revenue requirements for either November or December are
          not met, Ebiz and Holder shall reasonably agree on revenue targets for
<PAGE>
          succeeding  months  and  the  required   reduction  shall  occur  upon
          attainment of such targets. The balance of the letter of credit may be
          reduced by further  conversions  of the  Debenture,  but in all events
          shall be reduced in the  amounts  and at the times  specified  without
          regard to any further conversions of the Debenture occurring.

     4.   Upon the final  reduction  of the  letter of  credit as  specified  in
          paragraph 3, the accrued  interest on the Debenture  shall be added to
          principal and the total shall be the restated principal balance of the
          Debenture.  The ratio of the remaining balance of the letter of credit
          to the restated Debenture principal balance shall be the ratio for all
          future  reductions of the letter of credit for future  conversions  of
          the Debenture.  For example,  if the restated principal balance of the
          Debenture  equals $4.5 million and the balance of the letter of credit
          equals $1.75 million, the letter of credit requirement will be reduced
          by 1.75/4.5 for each $1 of principal converted thereafter.

     5.   Holder understands that the modification of the Debenture as specified
          herein is a disclosure  item not set forth in the prospectus that is a
          part  of  the  current  registration  statement  covering  the  shares
          issuable  upon  conversion  of the  Debenture.  Ebiz will commence the
          preparation of an amended  registration  statement within five days of
          the closing of the Sale and shall cause such registration statement to
          be filed with the Commission as soon as practical thereafter.

     6.   Ebiz  agrees  that  the  conversion  price  for a  total  of  $416,500
          principal  amount of the  Debenture  shall be reduced to the lesser of
          $1.00 or the average of the lowest  three  trade  prices of Ebiz stock
          for the 15 consecutive days ending on the trading day of submission of
          a  Conversion  Notice (as defined in the  Debenture,  as amended,  and
          referred to herein as the "MARKET PRICE"). This concession shall be in
          addition to the two previous  concessions  which are for the reduction
          of the  conversion  price  for a total  of (a)  $264,086.95  principal
          amount of the Debenture to the lesser of $1.00 or the Market Price and
          (b)  $2,332,126.15  principal amount of the Debenture to the lesser of
          $3.84 or the Market Price.  All concessions are for total  conversions
          whether  related to  outstanding  principal  or interest  and shall be
          applied  in the  reverse  order of the  grant of the  concession.  All
          conversions  shall be of principal and the interest  related solely to
          the principal  converted.  Upon conversion of the concession  amounts,
          all remaining  principal and interest shall be converted at the prices
          specified in the Debenture.

     7.   The exercise price for the warrants for the purchase of 245,000 shares
          granted  Holder at the issuance of the Debenture  shall be restated to
          $4.00 per share.  The term of the warrants for the purchase of 125,000
          shares  granted  for a $250,000  advance on the release of funds under
          the  letter of credit  and for  37,500  shares  granted  for a loan of
          $75,000  shall be for three years from the date of the advance and the
          loan.

                                        2
<PAGE>
     8.   Holder waives all rights of first refusal with respect to the issuance
          of warrants to Canopy in connection  with the Sale as set forth in the
          Purchase  Agreement  and  further  agrees  that the Company may file a
          registration  statement  with  respect to the  shares of common  stock
          underlying  such  warrants  as  provided  in  the  Investors'   Rights
          Agreement delivered under the Purchase  Agreement.  Holder also agrees
          that  the  Company  may file one or more  registration  statements  to
          fulfill its  obligations as specified in Schedule 7.20 of the Purchase
          Agreement  and may adopt stock  option plans and issue  options  under
          such  plans  as  contemplated  in  Schedule  2.4(a)  of  the  Purchase
          Agreement.

     9.   The Debenture and the Securities  Purchase  Agreement dated August 25,
          1999  pursuant to which the  Debenture  was issued and all  amendments
          thereto  shall be  modified  as  specified  herein.  All  terms of the
          Debenture and Securities Purchase Agreement,  as amended, not modified
          hereby shall remain in force and effect.

     Please  indicate your agreement to the above by execution of a copy of this
letter where  indicated  below and return of the same,  via facsimile and "HARD"
copy via mail to our office.

                                        EBIZ ENTERPRISES, INC.

                                        By: /s/ Stephen C. Herman
                                            ------------------------------------
                                            Name: Stephen C. Herman
                                            Title: Chief Operations Officer

Agreed:

JEM VENTURES EBIZ, LLC

By: /s/ David A. White
    ---------------------------------
    Name: David A. White
    Title: Member Manager

                                        3
<PAGE>
                                    EXHIBIT A

              MONTH                                          REVENUE
              -----                                         ----------
          November 2000                                     $1,576,000
          December 2000                                     $1,924,000

                                        4<PAGE>   1

                                                                    EXHIBIT 10.1

                              OPTICAL ACCESS, INC.
                             2000 STOCK OPTION PLAN
                          ADOPTED AS OF__________, 2000

     1.   Purpose.

          (a) This Plan document is intended to implement and govern two
separate Stock Option Plans of Optical Access, Inc., a Delaware corporation
("Company"), and its Parent or Subsidiary Corporation(s), if any:

               (i) the Optical Access, Inc. 2000 Incentive Stock Option Plan
("Plan A"); and

               (ii) the Optical Access, Inc., 2000 Nonstatutory Stock Option
Plan ("Plan B").

Plan A provides for the granting of options that are intended to qualify as
incentive stock options ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). Plan
B provides for the granting of options that are not intended to so qualify.
Unless specified otherwise, all provisions of this Plan relate equally to both
Plan A and Plan B (collectively, the "Plans"), which Plans are condensed into
one plan document solely for purposes of administrative convenience and are not
intended to constitute tandem plans.

               (b) The purpose of these Plans is to retain the best available
persons for positions of substantial responsibility and to provide additional
incentives for the accomplishment of key Company objectives. The Plans are
intended to accomplish this purpose by allowing the Company to grant options
("Options") to purchase shares of the Company's voting Common Stock, $0.001 par
value per share ("Common Stock"). (For purposes of these Plans, "Parent
Corporation" and "Subsidiary Corporation" shall mean corporations as defined in
Code Sections 425(e) and 425(f), respectively. Additionally, "Company" shall
include any Parent Corporation or Subsidiary Corporation that may exist).

     2.   Administration. Subject to Section 10, the Plans shall be administered
          as follows:

          (a) The Plans shall be administered by the Company's Board of
Directors (the "Board") or a committee ("Committee") appointed by the Board,
which Committee shall be constituted to comply with applicable laws. If the
Committee is administering the Plans, then the functions of the Board specified
herein shall be administered by the Committee as authorized by the Board and to
the extent permitted pursuant to applicable law.

          (b) The Board shall have sole authority in its absolute discretion (i)
to determine which employees, consultants and non-employee directors of the
Company shall receive Options ("Optionees"), and (ii) subject to the express
provisions of these Plans, to determine the time when Options shall be granted,
the terms and conditions of Options other

<PAGE>   2

than those terms and conditions fixed under these Plans, and the number of
shares which may be issued upon exercise of the Options. The Board shall adopt
by resolution such rules and regulations as may be required to carry out the
purposes of the Plans and shall have authority to do everything necessary or
appropriate to administer the Plans. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees.
Administration of the Plans with respect to members of the Committee shall not
be delegated, but shall at all times remain vested in the Board. The Board may
from time to time remove members from, or add members to, the Committee, and
vacancies on the Committee shall be filled by the Board. Furthermore, the Board
at any time by resolution may abolish the Committee and revest in the Board the
administration of the Plans.

          (c) With respect to Options granted to a member of the Board, the
Board shall take action by a vote sufficient without counting the vote of such
member of the Board, although such member of the Board may be counted in
determining the presence of a quorum at a meeting of the Board which authorizes
the granting of Options to such member of the Board.

          (d) The Committee, if appointed pursuant to this Section 2, shall
report to the Board the name of the person granted Options, the number of shares
covered by each Option, and the terms and conditions of each such Option.

     3.   Eligibility.

          (a) Persons who shall be eligible to receive Options under these Plans
shall be as follows:

               (i) in the case of Plan A, employees of the Company who render
those types of services which tend to contribute materially to the success of
the Company; and

               (ii) in the case of Plan B, employees described in subsection
3(a)(i) above, consultants and advisors, and any non-employee directors of the
Company who render those types of services which tend to contribute materially
to the success of the Company.

          (b) Consultants and advisors who receive options under Plan B must be
natural persons who provide bona fide services to the Company that are not
connected to the offer or sale of securities in a capital-raising transaction,
and do not directly or indirectly provide or maintain a market for the Company's
securities.

          (c) The determination as to whether an employee, consultant or
non-employee director is eligible to receive Options hereunder shall be made by
the Board in its sole discretion, and the decision of the Board shall be binding
and final. Options may be granted to one or more such persons without being
granted to other eligible persons, as the Board may deem fit.

     4.   Number of Shares. The maximum aggregate number of shares which may be
optioned and sold under these Plans is ____________shares of authorized but
unissued Common

<PAGE>   3

Stock of the Company. Shares of Common Stock that (a) are repurchased by the
Company after the issuance hereunder pursuant to the exercise of an Option, or
(b) are not purchased by the Optionee prior to the expiration or termination of
the applicable Option, shall again become available to be covered by Options to
be issued hereunder and shall not, as of the effective date of such repurchase
or expiration, be counted as covered by an outstanding Option for purposes of
the above-described maximum number of shares which may be optioned hereunder.

     5.   Option Price.

          (a) The Option Price for shares of Common Stock to be issued under
Plan A shall be equal to or greater than the fair market value of such shares on
the date on which the Option covering such shares is granted as determined by
the Board of Directors in its sole discretion, exercised in good faith. The
Option Price for shares of Common Stock to be issued under Plan B shall be equal
to or greater than 85% of the fair market value of such shares on the date on
which the Option covering such shares is granted as determined by the Board of
Directors in its sole discretion, exercised in good faith. If on the date on
which such Option is granted the Optionee is a Restricted Stockholder, then such
Option Price shall be equal to or greater than one hundred ten percent (110%) of
the fair market value of the shares on the date such Option is granted. For the
purposes of the Plans, a "Restricted Stockholder" is an individual who, at the
time an Option is granted under the Plans, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company, with stock ownership to be determined in light of the attribution rules
set forth in Section 424(d) of the Code. The fair market value of shares of
Common Stock for all purposes of the Plans is to be determined by the Board in
its sole discretion, exercised in good faith.

          (b) Notwithstanding the foregoing, the Option Price for a nonstatutory
option granted to an Optionee, other than a Restricted Stockholder, shall be
equal to or greater than 85% of the fair market value of such shares on the date
on which the Option covering such shares is granted.

     6.   Term of the Plans. The Plans shall be effective on_________, and
continue in effect until___________, unless terminated earlier by action of the
Board; no option may be granted hereunder after__________.

     7.   Exercise of Options. Subject to the limitations set forth herein
and/or in any applicable Stock Option Agreement entered into hereunder, Options
granted under these Plans shall be exercisable in accordance with the following
rules:

          (a) General. Subject to the other provisions of this Section 7,
Options shall vest and become exercisable at such times and in such installments
as the Board shall provide in each individual Stock Option Agreement; provided,
however, that, except in the case of Options granted to officers, directors or
consultants, Options must vest at a rate of at least 20% per year for over a
five-year period from the date the Option is granted; and provided, further,
that by a resolution adopted after an Option is granted the Board may, on such
terms and conditions as it

<PAGE>   4

may determine to be appropriate and subject to the specific provisions of this
Section 7, accelerate the time at which such Option or installment thereof may
be exercised. For purposes of these Plans, any vested installment of an Option
granted hereunder shall be referred to as an "Accrued Installment."

          (b) Exercise of Options. An Option may be exercised in accordance with
this Section 7 as to all or any portion of the shares covered by an Accrued
Installment of the Option from time to time during the applicable option period,
except that an Option shall not be exercisable with respect to fractions of a
share.

          (c) Payment. The Option Price shall be paid at the time the Option is
exercised; in cash or its cash equivalent, as determined by the Board. The Board
may, in its sole discretion, accept payment on behalf of the Company (i) in the
form of shares of Common Stock, which in the case of shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and have a fair market value on the date of surrender
equal to the aggregate exercise price of the shares as to which said Option
shall be exercised, subject to all restrictions and limitations of applicable
law, (ii) by cancellation of any indebtedness owed by the Company to the
optionee, (iii) by a full recourse promissory note executed by the optionee (the
terms of any promissory note may be changed by the Committee from time to time
to comply with all applicable laws, regulations and rules of the Board of
Governors of the Federal Reserve System, Internal Revenue Service or Securities
and Exchange Commission regulations and any other governmental agency having
jurisdiction), (iv) by requesting that the Company withhold whole shares of
Common Stock then issuable upon exercise of the Stock Option (based on the fair
market value of the Common Stock on the date of exercise), (v) by arrangement
with a broker which is acceptable to the Board where payment of the exercise
price is made pursuant to an irrevocable direction to the broker to deliver all
or part of the proceeds from the sale of the shares underlying the Option to the
Company, or (vi) by any combination of the foregoing. In the case of an
Incentive Stock Option, the right to make payment in the form of already owned
shares may be authorized only at the time of grant. Any payment in the form of
stock already owned by the optionee may be effected by use of an attestation
form approved by the Board; and such stock may be returned to the Company. If
returned, such shares shall again be available for issuance in connection with
future stock options and awards under the Plans. An Optionee's right to use
shares of Common Stock to exercise an Option is expressly conditioned upon his
or her making representations and warranties satisfactory to the Company
regarding his or her title to the shares used to exercise such Option and that
he or she has full power to deliver such shares without obtaining the consent or
approval of any person or governmental authority other than those which have
already given consent or approval in a form satisfactory to the Company. The
equivalent dollar value of the shares used to effect the purchase shall be the
fair market value of the shares as determined by the Board.

          (d) The aggregate fair market value (determined as of the date of the
grant of the Option) of the shares of Common Stock to which Options granted
under Plan A are exercisable for the first time by any employee of the Company
during any calendar year under all incentive

<PAGE>   5

stock option plans of the Company shall not exceed $100,000. The limitation
imposed by this Section 7(d) shall not apply with respect to Options granted
under Plan B.

          (e) The Board may require the voluntary surrender of all or a portion
of any Option granted under the Plans as a condition precedent to a grant of a
new Option. Subject to the provisions of the Plans, such new Option shall be
exercisable at the price, during such period and on such other terms and
conditions as are specified by the Board at the time the new Option is granted;
provided, however, that should the Board so require, the number of shares
subject to such new Option shall not be greater than the number of shares
subject to the surrendered Option. Upon their surrender, the Options shall be
canceled and the shares previously subject to such canceled Options shall again
be available for grants of Options hereunder.

     8.   Termination of Options. Subject to the provisions of this Section 8,
all installments of an Option shall expire and terminate on such date(s) as
the Board shall determine at the time of a grant ("Option Termination Date"),
but in no event later than ten (10) years from the date such Option was granted.
Unless provided otherwise in this Section 8 or in the Stock Option Agreement
pursuant to which an Option is granted, an Option may be exercised when Accrued
Installments accrue as provided in such Stock Option Agreement and at any time
thereafter until, and including, the day before the Option Termination Date. In
no event shall any Option be exercised on or after the expiration of said
maximum applicable period, regardless of the circumstances then existing
(including but not limited to the death or termination of employment of the
Optionee).

          (a) Restricted Stockholders. An Option granted under Plan A to a
Restricted Stockholder shall by its terms not be exercisable after the
expiration of five (5) years from the date such Option was granted.

          (b) Sale or Reorganization of Company. Upon the consummation of a
transaction: (i) that by its terms offers to all or substantially all of the
stockholders of the Company an opportunity to receive cash or securities
(whether debt, equity or other and whether issued by the Company or a third
party) in exchange for all or a portion of their shares of common stock of the
Company, however, a sale of the Company shall not be considered to have occurred
as a result of the pro rata distribution by MRV Communications, Inc., to its
stockholders of capital stock of the Company; (ii) in which the stockholders of
the Company approve a plan of complete dissolution or liquidation of the
Company; or (iii) that involves the sale of all or substantially all of the
Company's property or a sale of more than eighty percent (80%) of the then
outstanding stock of the Company to another corporation (each transaction a
"Sale"), the Board may, without limitation and in its sole and absolute
discretion, do any, or any combination, of the following:

               a. declare that the time period relating to the exercise of any
Stock Option shall accelerate and become exercisable;

<PAGE>   6

               b. declare that any indebtedness incurred pursuant to Section
7(c) above shall be forgiven and the collateral pledged in connection with any
such loan shall be released in full or in part;

               c. declare that the value of all or some of the outstanding
Options shall, to the extent determined by the Board at or after grant, be
cashed out by a payment of cash or other property, as the Board may determine,
on the basis of the "Sale Price" (as defined in below) as of the date the Sale
occurs or such other date as the Board may determine prior to the Sale;

               d. permit a successor corporation, if applicable, pursuant to a
written agreement signed by the parties, to substitute equivalent Options or
provide substantially similar consideration to Optionees as was or will be
provided to stockholders of the Company after making any appropriate adjustment
as such parties deem necessary or appropriate for restrictions attaching to such
Options, including, but not limited to, vesting and exercise price; provided,
however, that the terms and conditions of the substitute Options shall comply
with the provisions of Section 425 of the Code, such that the excess of the
aggregate fair market value of the shares subject to such substitute Option
immediately after the substitution or assumption over the aggregate option price
of such shares is not more than the excess of the aggregate fair market value of
all shares subject to the substitute Option or the assumption of the old option
does not give the holder thereof additional benefits which he or she did not
have under such old option; or

               e. declare that any unexercised Options issued hereunder (or any
unexercised portion thereof) shall terminate and cease to be effective.

          For purposes of this Section 8(b), "Sale Price" means the higher of
(i) the highest price per share paid in any transaction related to a Sale of the
Company or (ii) the highest price per share paid in any transaction reported on
the exchange or national market system on which the Common Stock is listed, at
any time during the preceding sixty (60) day period as determined by the Board,
except that, in the case of Incentive Stock Options, such price shall be based
only on transactions reported for the date on which the Board decides to cash
out such Options.

          An Optionee's individual Stock Option Agreement may, but is not
required to, provide what occurs upon a Sale. To the extent an Optionee's
individual Stock Option Agreement determines what occurs upon a Sale, the terms
of such Stock Option Agreement shall be dispositive in the event of a Sale;
provided that if the terms of such Optionee's individual Stock Option Agreement,
together with the terms of any other Stock Option Agreement granted hereunder,
pertaining to what occurs upon a Sale would materially impair an acquiror's
ability to use the "pooling of interests" accounting method to account for the
acquisition, as described in the immediately preceding paragraph, then the Board
shall have, in its sole and absolute discretion, the right to modify (to the
least extent possible and still permit the acquiror to use "pooling of
interests") the terms of the Stock Option Agreement, solely with respect to
those terms pertaining to what occurs upon a Sale.

<PAGE>   7

          Notwithstanding the foregoing, in the event that any such agreement
shall be terminated without consummating the disposition of said stock or
assets:

          (i) any unexercised non-vested installments that had become
exercisable solely by reason of the provision of Section 8(b) shall again become
non-vested and unexercisable as of said termination of such agreement, and

          (ii) the exercise of any option that had become exercisable solely by
reason of this Section 8(b) shall be deemed ineffective and such installments
shall again become non-vested and unexercisable as of said agreement of such
agreement.

          (c) Termination of Employment Other Than By Death or Disability. If
the employment of an Optionee with the Company is terminated for any reason
other than death or permanent and total disability, any installments under the
Option which have not accrued as of the employment termination date shall expire
and become unexercisable as of the employment termination date. All Accrued
Installments as of the employment termination date shall remain exercisable for
a period not to exceed the earlier of (i) three (3) months following the
employment termination date or (ii) the Option Termination Date, determined
without regard to this Section 8(c).

          (d) Death or Disability of Optionee While Employed. If the employment
of an Optionee with the Company is terminated by reason of death or permanent
and total disability, any unexercised, to the extent then exercisable, Accrued
Installments of Options granted hereunder to such Optionee shall expire and
become unexercisable as of the earlier of the applicable Option Termination
Date, or within six months after the date of termination of employment of such
Optionee by reason of his death or permanent and total disability. Any such
Accrued Installments of a deceased Optionee may be exercised prior to their
expiration only by the person or persons to whom the Optionee's Option rights
pass by will or by laws of descent and distribution. Any installments under such
a deceased or disabled Optionee's Option that have not accrued as of the date of
his termination of employment due to death or permanent and total disability
shall expire and become unexercisable as of said termination date. For purposes
of these Plans, the term "permanent and total disability" shall be defined under
Code Section 22(e)(3).

          (e) Extensions. Notwithstanding the provisions covering the
exercisability of Options following termination of employment, as described in
Sections 8(c) and (d), respectively, the Board may, in its sole discretion, with
the consent of the Optionee or the Optionee's estate (in the case of the death
of Optionee), extend the period of time during which Accrued Installments shall
remain exercisable, provided that in no event shall such extension go beyond the
Option Termination Date. In the case of Incentive Stock Options, extensions
under this Section 8(e) may result in loss of the favorable treatment accorded
incentive stock options under the Code.

<PAGE>   8

     9.   Authorization to Issue Options and Stockholder Approval. Options
granted under the Plans, and the exercise of such options, shall be conditioned
upon the Company having obtained all required regulatory approvals, free of any
conditions not acceptable to the Board, authorizing the Company to issue such
Options or shares. The grant of Options under the Plans also is conditioned on
approval of the Plans by the stockholders of the Company within twelve (12)
months after the date hereof.

     10.  Stock Option Agreement. The terms and conditions of Options granted
under the Plans shall be evidenced by a Stock Option Agreement executed by the
Company and the person to whom the Option is granted. Each Stock Option
Agreement shall incorporate these Plans by reference and shall include such
provisions as are determined to be necessary or appropriate by the Board.

     11.  Stock Restriction Agreement. As a condition to the granting of any
Option hereunder and the subsequent exercise of any such Option, the Board may
require the Optionee to enter into a Stock Restriction Agreement with the
Company for the purpose of limiting the sale or other transfer of ownership of
Common Stock acquired by the Optionee.

     12.   Amendment or Termination of the Plans.

          (a) The Board may amend, suspend and/or terminate the Plans at any
time, provided, however, that except as provided in Section 17 below, the Board
shall not amend the Plans in the following respects without stockholder
approval:

               (i) To increase the maximum number of shares subject to the
Plans;

               (ii) To change the designation or class of persons eligible to
receive Options under the Plans; or

               (iii) To extend the term of the Plans or the maximum Option
exercise period.

          (b) Furthermore, the Plans may not, without the approval of the
stockholders, be amended in any manner that would cause Incentive Stock Options
issued hereunder to fail to qualify as Incentive Stock Options as defined in
Code Section 422. Notwithstanding the foregoing, no amendment, suspension or
termination of the Plans shall adversely affect Options granted on or prior to
the date thereof, as evidenced by the execution of a Stock Option Agreement by
both the Company and the Optionee, without the consent of such Optionee.

     13.  Options Not Transferable. Options granted under these Plans may not be
sold, pledged, hypothecated, assigned, encumbered, gifted or otherwise
transferred or alienated in any manner, either voluntarily or involuntarily by
operation of law, other than by will or the laws of descent or distribution, and
may be exercised during the lifetime of an Optionee only by such Optionee.

<PAGE>   9

     14.  Restrictions on Issuance of Shares. The Company, during the term of
these Plans, will use its best efforts to seek to obtain from the appropriate
regulatory agencies any requisite authorization in order to issue and sell such
number of shares of its Common Stock as shall be sufficient to satisfy the
requirements of the Plans. The inability of the Company to obtain from any such
regulatory agency having jurisdiction thereof the authorization deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any shares
of its stock hereunder shall relieve the Company of any liability in respect of
the nonissuance or sale of such stock as to which such requisite authorization
shall not have been obtained.

     15.  Adjustments Upon Changes in Capitalization. If the outstanding shares
of Common Stock of the Company are increased, decreased, changed into or
exchanged for a different number or kind of shares of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split
or reverse stock split, upon proper authorization of the Board an appropriate
and proportionate adjustment shall be made in the number or kind of shares, and
the per-share option price thereof, which may be issued in the aggregate and to
individual Optionees under these Plans upon exercise of Options granted under
the Plans; provided, however, that no such adjustment need be made if, upon the
advice of counsel, the Board determines that such adjustment may result in the
receipt of federally taxable income to holders of Options granted hereunder or
the holders of Common Stock or other classes of the Company's securities. If any
Option granted under the Plans shall terminate for any reason or expire before
such Option is exercised in full, the securities which might otherwise have been
issued upon exercise of such Option shall again become available for purposes of
these Plans.

     16.  Representations and Warranties. As a condition to the granting and the
exercise of any portion of an Option, the Company may require the person
receiving or exercising such Option to make any representation and/or warranty
to the Company as may, in the judgment of counsel to the Company, be required
under any applicable law or regulation, or any ruling of any governmental agency
with respect to the Company, including but not limited to a representation and
warranty that the Option and/or shares are being acquired only for investment
and without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required under the
Securities Act of 1933, as amended ("1933 Act"), or any other applicable law,
regulation or rule of any governmental agency.

     17.  No Enlargement of Employee Rights. These Plans are purely voluntary
on the part of the Company, and while the Company hopes to continue them
indefinitely, the continuance of the Plans shall not be deemed to constitute a
contract between the Company and any employee, or to be consideration for or a
condition of the employment of any employee. Nothing contained in the Plans
shall be deemed to give any employee the right to be retained in the employ of
the Company or to interfere with the right of the Company to discharge or retire
any employee thereof at any time. No employee shall have any right to or
interest in Options authorized hereunder prior to the grant of such an Option to
such employee, and upon such grant he or she shall have only such rights and
interests as are expressly provided herein, subject,

<PAGE>   10

however, to all applicable provisions of the Company's Articles of
Incorporation, as the same may be amended from time to time.

     18.  Special Section 368 (c) Limitation. Notwithstanding any other
provision of this Plan to the contrary, no award shall be converted into shares
of Common Stock (including, but not limited to, upon exercise of an Option) if
the effect of such conversion would cause MRV Communications, Inc. to not be in
control of the Company for purposes of Section 368 (c) of the Code or prevent
MRV Communications, Inc. from filing a consolidated federal income tax return
with the Company. Any purported conversion (including, but not limited to, an
attempt to exercise an Option) shall be void and without force or effect. Any
award purported to be converted into shares of Common Stock shall remain
outstanding without any change in rights or obligations or the Optionee or the
Company. No cash or other form of consideration shall be paid or delivered in
connection with any conversion prevented by this limitation. If MRV
Communications, Inc. disposes of all or substantially all of its interest in the
Company, this Section 18 shall be without further force or effect.

     19.  Legends: Options and Stock Certificates. Unless an appropriate
registration statement is filed pursuant to the 1933 Act with respect to the
shares of Common Stock issuable under these Plans, each certificate representing
such Common Stock shall be endorsed with the following legend or its equivalent:

          "Neither the Option pursuant to which the shares represented
          by this certificate are issued nor said shares have been
          registered under the Federal Securities Act of 1933, as
          amended ("Act"). Transfer or sale of such securities or any
          interest therein is unlawful except after registration, or
          pursuant to an exemption from the registration requirements,
          as provided in the Act and the regulations thereunder."

          In addition to the foregoing legend, each Stock Option Agreement and
each certificate representing shares of Common Stock acquired upon exercise of
an Option shall be endorsed with all legends, if any, required by applicable
state securities laws to be placed on the Stock Option Agreement and/or the
certificate.

     20.  Financial Information. The Company shall deliver annually financial
statements to each employee granted an Option hereunder until such Option
expires or is otherwise canceled.

     21.  Withholding of Taxes. The grant of Options hereunder and the issuance
of Common Stock pursuant to the exercise of such Options is conditioned upon the
Company's reservation of the right to withhold, in accordance with any
applicable law, from any compensation payable to the Optionee any taxes required
to be withheld by federal, state or local law as a result of the grant of
exercise of any such Option.

<PAGE>   11

     22.  Applicable Law. These Plans shall be governed by and construed in
accordance with the laws of the State of California.

     23.  Invalid Provision. In the event that any provision of the Plans is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid unenforceable provision was not contained herein.

     24.  Limitation on Amount of Securities Offered. Until such time as the
Company becomes subject to the reporting requirements of Sections 13 or 15(d) of
the Exchange Act, the aggregate sales price of Common Stock sold in reliance on
Rule 701 of the Securities Act within the preceding twelve (12) months under the
Plans and any other agreement granting options or awards under Rule 701, or
number of shares of Common Stock, as the case may be, shall not exceed the
greatest of: (i) $1,000,000, (ii) 15% of the total assets of the Company,
measured as of the end of its most recent balance sheet date (if no older that
its last fiscal year end), or (iii) 15% of the outstanding Common Stock,
including securities (other than securities issued pursuant to the Plans)
convertible or exchangeable for Common Stock. For purposes of this Section 24,
the aggregate sales price of Common Stock sold in reliance on Rule 701 shall be
measured on the date the Option is granted, based on the exercise price of the
Option.

     25.  Disclosure Requirements. A copy of this Plan shall be delivered to all
Optionees. Until such time as the Company becomes subject to the reporting
requirements of Sections 13 or 15(d) of the Exchange Act, the Company shall
deliver the following disclosure documents to the Optionee within a reasonable
period of time before the applicable date of exercise, conversion or sale if the
aggregate offering price of securities subject to outstanding offers plus the
offering price of securities sold in the preceding twelve (12) months, as a
result of Options issued under the Plans, exceeds $5,000,000:

          (a)  A summary of the material terms of the Plans;

          (b)  Information about the risks associated with purchasing the shares
of stock in the Company; and

          (c)  Financial statements as of a date no more than 180 days before
the sale of securities pursuant to this Section 25.

     26.  Successors and Assigns. The Plans shall be binding on and inure to the
benefit of the Company and the employees to whom an Option is granted hereunder,
and such employees' heirs, executors, administrators, legatees, personal
representatives, assignees and transferees.

                            [signature page follows]

<PAGE>   12

         IN WITNESS WHEREOF, pursuant to the due authorization and adoption of
these Plans, as amended, by the Board on September 29, 2000, the Company has
caused these Plans to be duly executed by its duly authorized officers.

                                           OPTICAL ACCESS, INC.

                                           By:  _______________________________
                                                    Guy Avidan

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]