Document:

EXHIBIT 10.7
                        PREMIER MORTGAGE RESOURCES, INC.
                          CONSULTANTS COMPENSATION PLAN

1.       Purpose

         The  purpose  of this Plan is to  provide  compensation  in the form of
         Common  Stock  of  the  Company  to  eligible   consultants  that  have
         previously  rendered  services or that will render  services during the
         term of this Consultants  Compensation Plan (hereinafter referred to as
         the "Plan".)

2.       Administration

        (a)     This Plan shall be administered by the Board of Directors who
                may from time to time issue orders or adopt resolutions, not
                inconstant with the provisions of this Plan, to interpret the
                provisions and supervise the administration of this Plan. The
                CFO shall make initial determinations as to which consultants,
                professionals or advisors will be considered to receive shares
                under this Plan, and will provide a list to the Board of
                Directors. All final determinations shall be by the affirmative
                vote of a majority of the members of the Board of Directors at a
                meeting called for such purpose, or reduced to writing and
                signed by a majority of the members of the Board. Subject to the
                Corporation's Bylaws, all decisions made by the Directors in
                selecting eligible consultants (hereinafter referred to as
                "Consultants"), establishing the number of shares, and
                construing the provisions of this Plan shall be final,
                conclusive and binding on all persons including the Corporation,
                shareholders, employees and Consultants.

        (b)     The Board of Directors may from time to time appoint a
                Consultants Plan Committee, consisting of at least one Director
                and one officer, none of whom shall be eligible to participate
                in the Plan while members of the Committee. The Board of

                                       1

<PAGE>

                Directors may delegate to such Committee power to select the
                particular Consultants that are to receive shares, and to
                determine the number of shares to be allocated to each such
                Consultant.

        (c)     If the SEC Rules and or regulations relating to the issuance of
                Common Stock under a Form S-8 should change during the terms of
                this Plan, the Board of Directors shall have the power to alter
                this Plan to conform to such changes.

3. Eligibility

        (a)     Shares shall be granted only to Professionals and Consultants
                that are within that class for which Form S-8 is applicable.

        (b)     No individual or entity shall be granted more than 250,000
                shares of unrestricted Common Stock under this Plan.

4. Shares Subject to the Plan

The  total  number  of shares  of  Common  Stock to be  subject  to this Plan is
500,000.  The shares  subject to the Plan will be registered  with the SEC on or
about October 5, 2000 in a Form S-8 Registration.

5. Death of Consultant

     If Consultant  dies while he is a Consultant of the  Corporation  or of any
     subsidiary,  or within 90 days after such  termination,  the shares, to the
     extent that the  Consultant  was to he issued shares under the plan, may be
     issued to his personal  representative or the person or persons to whom his
     rights under the shares shall pass by his will or to the applicable laws of
     descent and distribution.

6. Termination of Consultant, retirement or disability

     If a  Consultant  shall  cease to be retained  by the  Corporation  for any
     reason  (including  retirement  and  disability)  other than death after he
     shall have  continuously  been so retained for his specified  term, he may,
     but  only  within  the  three-month  period   immediately   following  such
     termination, request his pro-rata number of shares for his services already
     rendered.

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<PAGE>

7. Termination of the Plan

This Plan shall  terminate one year after its adoption b the Board of Directors.
At such time, and shares which remain unsold shall be removed from  registration
by means of a post-effective amendment to the Form S-8.

8. Effective Date of the Plan

     This Plan shall become effective upon its adoption by the Board of
     Directors.

                            CERTIFICATION OF ADOPTION
                           (By the Board of Directors)

     The undersigned, being the President and Secretary of Premier Mortgage
     Resources, Inc. hereby certify that the foregoing Plan was adopted by a
     unanimous vote of the Board of Directors on October 2, 2000

                                    /s/ Joseph Cilento
                                    ----------------------------
                                    Joseph Cilento, President/Director
                                    And SecretaryExhibit 10.8

                        Premier Mortgage Resources, Inc.

                          UNANIMOUS CONSENT IN LIEU OF
                          SPECIAL MEETING OF DIRECTORS

         The undersigned, being the sole Director of PREMIER MORTGAGE RESOURCES,
INC.,  (the  "Company")  hereby  executes  this  written  consent to action,  as
provided by subsection 2 of Section  78.315 of the Nevada  Revised  Statutes and
the applicable  provisions of the corporate Bylaws, in lieu of a formal meeting.
The undersigned hereby waives,  pursuant to Section 78.375 of the Nevada Revised
Statutes and Article IV, Section 2 of the Bylaws,  all  requirements  of notice,
including notice of purpose,  whether contained in the Nevada Constitution,  the
Nevada  Corporation Law, or the Bylaws of this corporation,  and as of September
18, 2000 does hereby adopt the following resolutions:

           Approval of Registration of 500,000 shares of Common Stock
                   with the Securities and Exchange Commission

         WHEREAS, the Company has limited funds with which to pay consultants,
and it is the opinion of this Board that it is advisable and in the best
interest of the Company and its shareholders that the Company register 500,000
shares of its Common Stock in a Form S-8 Registration with the Securities and
Exchange Commission, in accordance with Rule 428 of the Securities Act of 1933
(the "Act"), for the purpose of compensating consultants with shares of the
Company's Common Stock in lieu of cash for their previously rendered and ongoing
consulting services to the Company.

         WHEREAS,  the Board has prepared a Consultants  Compensation  Plan (the
"Plan") which defines the terms and conditions under which shares will be issued
under the Plan

         NOW, THEREFORE,  BE IT RESOLVED that this Company issue, as provided in
the Plan,  up to an aggregate of 500,000  shares of its Common Stock with a Form
S-8  Registration  and that such issuance and  registration  be, and hereby are,
approved and adopted; and

         FURTHER RESOLVED, that the shares be allocated to Consultants pursuant
to the Plan;

         FURTHER RESOLVED, that the officers of the Corporation be, and they
hereby are, authorized and directed to do all such acts and things and to
execute the Form S-8, and any related documents, agreements, and certificates in
the name and on behalf of the Corporation, and to deliver or file such documents
agreements and certificates when executed, and to take all such other action,
with any such person, as is necessary, and to pay all filing fees and other fees
expenses and charges as they or any of them may deem necessary or appropriate.

         The  undersigned,  being all of the  Directors of the  Corporation,  do
hereby  consent to all the actions  described  in the  foregoing  preambles  and

<PAGE>

resolutions,  and said  actions  and  resolution  shall  have the same force and
effect as if taken at a duly  constituted  meeting of the Board of  Directors of
the  Corporation.  This  document  shall be  filed  with  the  Secretary  of the
Corporation  and shall be made a part of the  minutes of the  Corporation.  This
document may be signed in counterparts.

         IN WITNESS WHEREOF,  the undersigned Director has hereunto set his hand
and seal on this 2nd day of October, 2000.

                                            DIRECTOR:

                                            /s/ Joseph Cilento
                                            --------------------------
                                            Joseph Cilento

                                                                    Page 2 of  2<PAGE>   1
                                                                     EXHIBIT 4.2

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

                                                        Void after JULY 29, 2004

                          OPTICAL MICRO-MACHINES, INC.
                    SERIES C PREFERRED STOCK PURCHASE WARRANT

        THIS CERTIFIES THAT, for value received, Busch International is entitled
to purchase 27,967 shares of Series C Preferred Stock at $0.73 per share
("Warrant Price"), subject to adjustments and all other terms and conditions set
forth in this Warrant.

        1. Definitions. As used herein, the following terms, unless the context
otherwise requires, shall have the following meanings:

               (a) "Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

               (b) "Commission" shall mean the Securities and Exchange
Commission, or any other Federal agency at the time administering the Act.

               (c) "Company" shall mean Optical Micro-Machines, Inc., a
California corporation, and any corporation which shall succeed to or assume the
obligations of Optical Micro-Machines, Inc., under this Warrant.

               (d) "Date of Grant" shall mean July 30, 1999.

               (e) "Exercise Date" shall mean the effective date of the delivery
of the Notice of Exercise pursuant to Sections 4 and 11 below.

               (f) "Holder" shall mean any person who shall at the time be the
registered holder of this Warrant.

<PAGE>   2

               (g) "Series C Preferred Stock" shall mean shares of the Company's
presently or subsequently authorized Series C Preferred Stock, and any stock
into which such Series C Preferred Stock may hereafter be exchanged.

               (h) "Shares" shall mean shares of the Company's Common Stock, as
described in the Company's Articles of Incorporation.

        2. Issuance of Warrant and Consideration Therefor. This Warrant is
issued in consideration of the performance of services by Holder to the Company.

        3. Term. The purchase right represented by this Warrant is exercisable
only during the period commencing upon the Date of Grant and ending on the
earlier of (i) the date five (5) years following the Date of Grant, (ii) the
closing of an underwritten public offering of the Company's Common Stock
registered under the Act in which the gross proceeds to the Company are not less
than $10,000,000; or (iii) upon the closing of a consolidation or merger of the
Company (other than with its wholly-owned subsidiary) with or into, or the
transfer of all or substantially all of the Company's assets, or at least 50% of
the Company's voting stock, to another corporation (unless the owners of the
capital stock of the Company, prior to such transaction, continue to own a
majority of the capital stock of the surviving corporation).

        4. Method of Exercise and Payment.

               (a) Method of Exercise. Subject to Section 3 hereof and
compliance with all applicable Federal and state securities laws, the purchase
right represented by this Warrant may be exercised, in whole or in part and from
time to time, by the Holder by (i) surrender of this Warrant and delivery of the
Notice of Exercise (the form of which is attached hereto as Exhibit A), duly
executed, at the principal office of the Company and (ii) payment to the Company
of an amount equal to the product of the then applicable Warrant Price
multiplied by the number of Shares then being purchased pursuant to one of the
payment methods permitted under Section 4(b) below.

               (b) Method of Payment. Payment shall be made either (1) by check
drawn on a United States bank and for United States funds made payable to the
Company, or (2) by wire transfer of United States funds for the account of the
Company.

               (c) Net Issue Exercise. Notwithstanding any provisions herein to
the contrary, in lieu of exercising this Warrant for cash, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with a properly endorsed notice of
exercise and notice of such election in which event the Company shall issue to
the Holder a number of shares of Common Stock computed using the following
formula:
                   Y(A-B)
               X = --------
                      A

                                      -2-
<PAGE>   3

Where   X =    the number of shares of Common Stock to be issued to the Holder,

        Y =    the number of shares of Series C Preferred Stock purchasable
               under the Warrant or, if only a portion of the Warrant is being
               exercised, the portion of the Warrant being canceled (at the date
               of such calculation),

        A =    the fair market value of one share of the Company's Common
               Stock (at the date of such calculation), and

        B =    the Warrant Price (as adjusted to the date of such calculation).

        For purposes of the above calculation, fair market value of one share of
Common Stock shall be determined by the Company's Board of Directors in good
faith; provided, however, that where there exists a public market for the
Company's Common Stock at the time of such exercise, fair market value shall
mean the average over the preceding twenty (20) trading days (or such fewer
number of days as such public market has existed) of the mean of the high
closing bid and asked prices on the over-the-counter market as reported by
Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days (or
such fewer number of days as the Common Stock has been so traded) of the mean of
the high and low prices on the principal national securities exchange or the
National Market on which it is so traded. Notwithstanding the foregoing, in the
event the Warrant is exercised in connection with the Company's initial public
offering of Common Stock, the fair market value per share shall be the per share
offering price to the public of the Company's initial public offering.

               (d) Delivery of Certificate. In the event of any exercise of the
purchase right represented by this Warrant, certificates for the Shares so
purchased shall be delivered to the Holder within thirty (30) days of delivery
of the Notice of Exercise and, unless this Warrant has been fully exercised or
has expired, a new warrant representing the portion of the Shares with respect
to which this Warrant shall not then have been exercised shall also be issued to
the Holder within such thirty (30) day period.

               (e) No Fractional Shares. No fractional shares shall be issued in
connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall make a cash payment therefor upon the basis of the fair market
value per Share as of the date of exercise.

               (f) Company's Representations.

                      (i) All Shares which may be issued upon the exercise of
the purchase right represented by this Warrant shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws. During the period within
which the purchase right represented by this Warrant may be exercised, the
Company shall at all times have authorized, and

                                      -3-
<PAGE>   4

reserved for the purpose of issuance upon exercise of the purchase right
represented by this Warrant, a sufficient number of Shares to provide for the
exercise of the purchase right represented by this Warrant;

                      (ii) This Warrant has been duly authorized and executed by
the Company and is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors' rights;

                      (iii) The execution and delivery of this Warrant are not,
and the issuance of the Shares upon exercise of this Warrant in accordance with
the terms hereof will not be inconsistent with the Company's Articles of
Incorporation or Bylaws, do not and will not contravene any law, governmental
rule or regulation, judgment or order applicable to the Company, and do not and
will not conflict with or contravene any provision of, or constitute a material
default under, any material indenture, mortgage, contract or other instrument of
which the Company is a party or by which it is bound, or require the
registration or filing with or the taking of any action in respect of or by, any
federal, state or local government authority or agency (other than such
consents, approvals, notices, actions, filings, etc., as have already been
obtained or made, as the case may be).

        5. Adjustment of Warrant Price and Number of Shares. The number of
securities issuable upon the exercise of this Warrant and the Warrant Price
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:

               (a) Adjustment for Dividends in Stock. In case at any time or
from time to time on or after the date hereof the holders of the Common Stock of
the Company (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) 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
of the Company by way of dividend then, and in each case, the Holder of this
Warrant shall, upon the exercise hereof, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of such other or additional
stock of the Company which such Holder would hold on the date of such exercise
had it been the holder of record of such Common Stock 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 receivable
by it as aforesaid during such period, giving effect to all adjustments called
for during such period by subparagraphs (b) and (c) of this Paragraph 5.

               (b) Adjustment for Reclassification or Reorganization. In case of
any reclassification or change of the outstanding securities of the Company or
of any consolidation, merger or reorganization of the Company on or after the
date hereof, then and in each such case the Holder of this Warrant, upon the
exercise hereof at any time after the consummation of such reclassification,
change, consolidation, merger or reorganization, shall be entitled to receive,
in lieu of or in addition to the stock or other securities and property
receivable upon the exercise hereof prior to such consummation, the stock or
other securities to which such Holder would have been entitled upon such
consummation if such Holder

                                      -4-
<PAGE>   5

had exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in subparagraphs (a) and (c); in each such case, the
terms of this Paragraph 5 shall be applicable to the shares of stock or other
securities property receivable upon the exercise of this Warrant after such
consummation.

               (c) Stock Splits and Reverse Stock Splits. If, at any time on or
after the date hereof, the Company shall subdivide its outstanding shares of
Common Stock into a greater number of shares, the Warrant Price in effect
immediately prior to such subdivision shall thereby be proportionately reduced
and the number of shares receivable upon exercise of this Warrant shall thereby
be proportionately increased; and, conversely, if at any time on or after the
date hereof the outstanding number of shares of Common Stock shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall thereby be proportionately increased and the number of
shares receivable upon exercise of the Warrant shall be proportionately
decreased.

        6. Notices of Record Date, Etc. In the event of (a) any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution or the Company extends to all or substantially all of its
holders of Common Stock the right to acquire any securities issued by the
Company (the "Distribution"), (b) any capital reorganization or reclassification
of the stated capital of the Company or any consolidation or merger of the
Company with any other corporation or corporations (other than a wholly-owned
subsidiary), or the sale or distribution of all or substantially all of the
Company's property and assets (the "Reorganization Event"), or (c) any proposed
filing of a registration statement under the Act in connection with a primary
public offering of the Company's Common Stock (the "Registration Event"), the
Company will mail or cause to be mailed to the Holder a notice specifying (i)
the date of any such Distribution stating the amount and character of such
Distribution, (ii) the date on which any such Reorganization Event or
Registration Event is expected to become effective, and (iii) the time, if any,
that is to be fixed as to when the holders of record of the Company's securities
shall be entitled to exchange their shares of the Company's securities for
securities or other property deliverable upon such Reorganization Event. Such
notice shall be mailed at least thirty (30) days prior to the date therein
specified.

        7. Compliance with Act; Transferability and Negotiability of Warrant;
Disposition of Shares.

               (a) Compliance with Act. The Holder, by acceptance hereof, agrees
that this Warrant and the Shares to be issued upon the exercise hereof are being
acquired solely for its own account (or a trust account if the Holder is a
trust) and not as a nominee for any other party and not with a view toward the
resale or distribution thereof and that it will not offer, sell or otherwise
dispose of this Warrant or any Shares to be issued upon the exercise hereof
except under circumstances which will not result in a violation of the Act. Upon
the exercise of this Warrant, the Holder shall confirm in writing, in a form
satisfactory to the Company, that the Shares so issued are being acquired solely
for its own account (or a trust account if the Holder is a trust) and not as a
nominee for any other party and not with a view toward resale or distribution
thereof. This Warrant and the Shares to be issued upon the exercise

                                      -5-
<PAGE>   6

hereof (unless registered under the Act) shall be imprinted with a legend in
substantially the following form:

        THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
        ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
        STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
        ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
        OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
        SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
        ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
        PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

        In addition, this Warrant and the Shares to be issued upon the exercise
hereof shall bear any legends required by the securities laws of any applicable
states.

               (b) Transferability and Negotiability of Warrant. This Warrant
may not be transferred or assigned in whole or in part without compliance with
all applicable federal and state securities laws by the transferor and the
transferee (including the delivery of investment representation letters and
legal opinions satisfactory to the Company, if requested by the Company and the
transfer is to a person other than a general partner or affiliate of the initial
Holder). Subject to the provisions of this Warrant with respect to compliance
with the Act, title to this Warrant may be transferred by endorsement and
delivery in the same manner as a negotiable instrument transferable by
endorsement and delivery. The Company shall act promptly to record transfers of
this Warrant on its books, but the Company may treat the registered holder of
this Warrant as the absolute owner of this Warrant for all purposes,
notwithstanding any notice to the contrary.

               (c) Disposition of Shares. With respect to any offer, sale,
transfer or other disposition of any Shares acquired pursuant to the exercise of
this Warrant prior to registration of such Shares, except for any such offer,
sale, transfer or other disposition of Shares to a general partner of the
initial Holder, the Holder and each subsequent holder of this Warrant agrees to
give written notice to the Company prior thereto, describing briefly the manner
thereof, together with a written opinion of legal counsel for such holder if
such transfer is not pursuant to Rule 144, reasonably satisfactory to the
Company and its legal counsel, if requested by the Company, to the effect that
such offer, sale or other disposition may be effected without registration or
qualification (under the Act or any other Federal or state securities laws) of
such Shares and indicating whether or not under the Act, certificates for such
Shares to be sold or otherwise disposed of require any restrictive legend as to
the applicable restrictions on transferability in order to insure compliance
with the Act. Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly as practicable,
shall notify such holder that such holder may sell or otherwise dispose of such
Shares, all in accordance with the terms of the notice delivered to the Company.
If a determination has been made pursuant to this subsection (c) that the
opinion of legal counsel for the holder is not reasonably satisfactory to the
Company and its legal counsel, the Company shall so notify the holder promptly
after such determination

                                      -6-
<PAGE>   7

has been made. Notwithstanding the foregoing, such Shares may be offered, sold
or otherwise disposed of in accordance with Rule 144, provided that the Company
shall have been furnished with such information as the Company may reasonably
request to provide a reasonable assurance that the provisions of Rule 144 have
been satisfied. Each certificate representing the Shares thus transferred
(except a transfer pursuant to Rule 144(k)) shall bear a restrictive legend as
to the applicable restrictions on transferability in order to insure compliance
with the Act, unless in the aforesaid opinion of legal counsel for the holder,
such legend is not required in order to insure compliance with the Act. The
Company may issue stop transfer instructions to its transfer agent in connection
with such restrictions.

        8. Rights of Shareholders. No Holder shall be entitled to vote or
receive dividends or be deemed the holder of Shares or any other securities of
the Company which may at any time be issuable on the exercise of this Warrant
for any purpose, nor shall anything contained herein be construed to confer upon
the Holder, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action (whether upon any recapitalization, issuance of stock,
reclassification of stock, consolidation, merger, transfer of assets or
otherwise) or, except as expressly required herein, to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the Shares issuable upon exercise hereof
shall have become deliverable, as provided herein.

        9. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and amount to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor.

        10. Exchange of Warrant. Subject to the other provisions of this
Warrant, on surrender of this Warrant for exchange, properly endorsed and
subject to the provisions of this Warrant with respect to compliance with the
Act, the Company at its expense shall issue to or on the order of the Holder a
new warrant or warrants of like tenor, in the name of the Holder or as the
Holder (on payment by the Holder of any applicable transfer taxes) may direct,
for the number of Shares issuable upon exercise thereof.

        11. Notices. All notices and other communications from the Company to
the Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may be, in writing by the Company or such Holder from time
to time.

        12. Waiver. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

                                      -7-
<PAGE>   8
'
        13. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, as such laws are applied to
agreements entered into in California and to be performed solely by California
residents.

        14. Titles and Subtitles; Forms of Pronouns. The titles of the Sections
and Subsections of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in this Warrant shall
be deemed to include masculine, feminine and neuter forms.

        15. Expiration. Subject to earlier termination pursuant to Section 3
above, the right to exercise this Warrant shall expire at 5:00 P.M. California
time, on July 29, 2004.

Dated:  July 30, 1999

                                                   Optical Micro-Machines, Inc.

                                                   By: /s/ Anis Husain
                                                      --------------------------

                                                   Name: Anis Husain
                                                        ------------------------
                                                                (Print)

                                                   Title: President & CEO
                                                         -----------------------
                                      -8-
<PAGE>   9

                                    EXHIBIT A

                               NOTICE OF EXERCISE

TO:     Optical Micro-Machines, Inc.:

        1. The undersigned Holder of the attached original, executed Series C
Preferred Stock Purchase Warrant hereby irrevocably elects to exercise its
purchase right under such Warrant with respect to _______ Shares, as defined in
the Warrant, of Optical Micro-Machines, Inc.

        2. The undersigned Holder elects to pay the aggregate Warrant Price for
such Shares (the "Exercise Shares") in the following manner:

        [ ]     by the enclosed check drawn on a United States bank and for
                United States funds made payable to the Company in the amount of
                $_______________;

        [ ]     by wire transfer of United States funds to the account of the
                Company in the amount of $_________, which transfer has been
                made before or simultaneously with the delivery of this Notice
                pursuant to the instructions of the Company; or

        [ ]     pursuant to the Net Exercise provisions set forth in Section
                4(c) of the Warrant.

        3. Please issue a stock certificate or certificates representing the
appropriate number of Shares in the name of the undersigned or in such other
names as is specified below;

                      Name:
                           ---------------------------------------

                      Address:
                              ------------------------------------

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

                      Tax Ident. No.:
                                     -----------------------------

                                        By:
                                           -----------------------

Date:                                   Title:
     --------------------                     --------------------

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