SEPTEMBER 14, 2010 -- Finisar Corp. (NASDAQ: FNSR) says it has reached a settlement and cross license agreement with Source Photonics, Inc. that resolves a lawsuit in which Finisar claimed infringement of its portfolio of digital diagnostics and transceiver module patents. The agreement also provides a general release to Source Photonics' parent company, MRV Communications, Inc.

Under the terms of the agreement, Source Photonics will pay a $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 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.

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