Teraxion acquires intellectual property of Phaethon Communications Inc.

December 18, 2002--TeraXion Inc. has acquired the intellectual property of Phaethon Communications Inc. According to terms of the transaction, which closed December 12, 2002, TeraXion will receive Phaethon's patents and trademarks as well as technological know-how.

Phaethon Communications, a privately-held company based in Fremont, CA, has developed a comprehensive product line, including a range of fixed and tunable chromatic dispersion compensators.

"This acquisition will allow us to broaden our product line and to continue our tradition of offering innovative solutions that meet the needs of systems level manufacturers and carriers," contends Alain Chandonnet, chief executive officer of TeraXion. "Phaethon's breakthrough in the fabrication of very complex filters using a simple and elegant approach is in line with TeraXion's strategic direction."

Chromatic dispersion compensators are used in optical networks to reduce the accumulated dispersion in optical pulses carrying digital information. TeraXion manufactures fiber Bragg grating-based dispersion compensators. Phaethon's technology will complement TeraXion's manufacturing approach using holographic phase masks to offer high performance dispersion compensators at a competitive price.

For more information about TeraXion (Quebec City), visit the company's Web site at www.teraxion.com.