Finisar Corporation and Source Photonics Settle Patent Dispute

Under the terms of the Settlement Agreement, Source Photonics will pay a license fee to Finisar in the amount of $14.5 million for a fully paid-up license to the Finisar digital diagnostics and transceiver module patents through December 31, 2015. Payment in full is to be made by September 30, 2010. The Settlement Agreement also provides a fully paid-up license to Finisar of certain Source Photonics patents and a mutual covenant not to sue for certain products currently made or sold by Source Photonics or Finisar, in each case through December 31, 2015. If Source Photonics is subject to a change in control, shipments subject to the license granted by Finisar to its digital diagnostics and transceiver module patents will be limited to a 20% annual revenue growth rate.