Document:

Exhibit 4.1

GLOBAL EARTH ENERGY, INC.

NON-EMPLOYEE CONSULTANTS RETAINER STOCK PLAN

FOR THE YEAR 2010

1.

Introduction.  This Plan shall be known as the “Global Earth Energy, Inc. Non-Employee Consultants Retainer Stock Plan for the Year 2010” and is hereinafter referred to as the “Plan.”  The purposes of this Plan are to enable Global Earth Energy, Inc., a Nevada corporation (the “Company”), to promote the interests of the Company and its stockholders by attracting and retaining non-employee Consultants capable of furthering the future success of the Company and by aligning their economic interests more closely with those of the Company’s stockholders, by paying their retainer or fees in the form of shares of the Company’s common stock, no par value per share (the “Common Stock”).

2.

Definitions.  The following terms shall have the meanings set forth below:

“Board” means the Board of Directors of the Company.

“Change of Control” has the meaning set forth in Paragraph 12(d) hereof.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations thereunder.  References to any provision of the Code or rule or regulation thereunder shall be deemed to include any amended or successor provision, rule or regulation.

“Committee” means the committee that administers this Plan, as more fully defined in Paragraph 13 hereof.

“Common Stock” has the meaning set forth in Paragraph 1 hereof.

“Company” has the meaning set forth in Paragraph 1 hereof.

“Consultants” means the Company’s consultants and advisors only if: (i) they are natural persons; (ii) they provide bona fide services to the Company; and (iii) the services are not in connection with the offer or sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s securities.

“Deferral Election” has the meaning set forth in Paragraph 6 hereof.

“Deferred Stock Account” means a bookkeeping account maintained by the Company for a Participant representing the Participant’s interest in the shares credited to such Deferred Stock Account pursuant to Paragraph 7 hereof.

“Delivery Date” has the meaning set forth in Paragraph 6 hereof.

“Director” means an individual who is a member of the Board of Directors of the Company.

“Dividend Equivalent” for a given dividend or other distribution means a number of shares of the Common Stock having a Fair Market Value, as of the record date for such dividend or distribution, equal to the amount of cash, plus the Fair Market Value on the date of distribution of any property, that is distributed with respect to one share of the Common Stock pursuant to such dividend or distribution; such Fair Market Value to be determined by the Committee in good faith.

“Effective Date” has the meaning set forth in Paragraph 3 hereof.

“Exchange Act” has the meaning set forth in Paragraph 12(d) hereof.

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“Fair Market Value” means the mean between the highest and lowest reported sales prices of the Common Stock on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on The Nasdaq Stock Market, or, if not so listed on any other national securities exchange or The Nasdaq Stock Market, then the average of the bid price of the Common Stock during the last five trading days on the OTC Bulletin Board immediately preceding the last trading day prior to the date with respect to which the Fair Market Value is to be determined.  If the Common Stock is not then publicly traded, then the Fair Market Value of the Common Stock shall be the book value of the Company per share as determined on the last day of March, June, September, or December in any year closest to the date when the determination is to be made.  For the purpose of determining book value hereunder, book value shall be determined by adding as of the applicable date called for herein the capital, surplus, and undivided profits of the Company, and after having deducted any reserves theretofore established; the sum of these items shall be divided by the number of shares of the Common Stock outstanding as of said date, and the quotient thus obtained shall represent the book value of each share of the Common Stock of the Company.

“Participant” has the meaning set forth in Paragraph 4 hereof.

“Payment Time” means the time when a Stock Retainer is payable to a Participant pursuant to Paragraph 5 hereof (without regard to the effect of any Deferral Election).

“Stock Retainer” has the meaning set forth in Paragraph 5 hereof.

“Third Anniversary” has the meaning set forth in Paragraph 6 hereof.

3.

Effective Date of the Plan.  This Plan was adopted by the Board effective August 31, 2010 (the “Effective Date”).

4.

Eligibility.  Each individual who is a Consultant on the Effective Date and each individual who becomes a Consultant thereafter during the term of this Plan shall be a participant (the “Participant”) in this Plan, in each case during such period as such individual remains a Consultant and is not an employee of the Company or any of its subsidiaries.  Each credit of shares of the Common Stock pursuant to this Plan shall be evidenced by a written agreement duly executed and delivered by or on behalf of the Company and a Participant, if such an agreement is required by the Company to assure compliance with all applicable laws and regulations.

5.

Grants of Shares.  Commencing on the Effective Date, the amount of compensation for service to consultants shall be payable in shares of the Common Stock (the “Stock Retainer”) pursuant to this Plan.  The deemed issuance price of shares of the Common Stock subject to each Stock Retainer shall not be less than 85 percent of the Fair Market Value of the Common Stock on the date of the grant.  In the case of any person who owns securities possessing more than ten percent of the combined voting power of all classes of securities of the issuer or its parent or subsidiaries possessing voting power, the deemed issuance price of shares of the Common Stock subject to each Stock Retainer shall be at least 100 percent of the Fair Market Value of the Common Stock on the date of the grant.

6.

Deferral Option.  From and after the Effective Date, a Participant may make an election (a “Deferral Election”) on an annual basis to defer delivery of the Stock Retainer specifying which one of the following ways the Stock Retainer is to be delivered (a) on the date which is three years after the Effective Date for which it was originally payable (the “Third Anniversary”), (b) on the date upon which the Participant ceases to be a Consultant for any reason (the “Departure Date”) or (c) in five equal annual installments commencing on the Departure Date (the “Third Anniversary” and “Departure Date” each being referred to herein as a “Delivery Date”).  Such Deferral Election shall remain in effect for each Subsequent Year unless changed, provided that, any Deferral Election with respect to a particular Year may not be changed less than six months prior to the beginning of such Year, and provided, further, that no more than one Deferral Election or change thereof may be made in any Year.

Any Deferral Election and any change or revocation thereof shall be made by delivering written notice thereof to the Committee no later than six months prior to the beginning of the Year in which it is to be effected; 

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provided that, with respect to the Year beginning on the Effective Date, any Deferral Election or revocation thereof must be delivered no later than the close of business on the 30th day after the Effective Date.

7.

Deferred Stock Accounts.  The Company shall maintain a Deferred Stock Account for each Participant who makes a Deferral Election to which shall be credited, as of the applicable Payment Time, the number of shares of the Common Stock payable pursuant to the Stock Retainer to which the Deferral Election relates.  So long as any amounts in such Deferred Stock Account have not been delivered to the Participant under Paragraph 8 hereof, each Deferred Stock Account shall be credited as of the payment date for any dividend paid or other distribution made with respect to the Common Stock, with a number of shares of the Common Stock equal to (a) the number of shares of the Common Stock shown in such Deferred Stock Account on the record date for such dividend or distribution multiplied by (b) the Dividend Equivalent for such dividend or distribution.

8.

Delivery of Shares.

(a)

The shares of the Common Stock in a Participant’s Deferred Stock Account with respect to any Stock Retainer for which a Deferral Election has been made (together with dividends attributable to such shares credited to such Deferred Stock Account) shall be delivered in accordance with this Paragraph 8 as soon as practicable after the applicable Delivery Date.  Except with respect to a Deferral Election pursuant to Paragraph 6 hereof, or other agreement between the parties, such shares shall be delivered at one time; provided that, if the number of shares so delivered includes a fractional share, such number shall be rounded to the nearest whole number of shares.  If the Participant has in effect a Deferral Election pursuant to Paragraph 6 hereof, then such shares shall be delivered in five equal annual installments (together with dividends attributable to such shares credited to such Deferred Stock Account), with the first such installment being delivered on the first anniversary of the Delivery Date; provided that, if in order to equalize such installments, fractional shares would have to be delivered, such installments shall be adjusted by rounding to the nearest whole share.  If any such shares are to be delivered after the Participant has died or become legally incompetent, they shall be delivered to the Participant’s estate or legal guardian, as the case may be, in accordance with the foregoing; provided that, if the Participant dies with a Deferral Election pursuant to Paragraph 6 hereof in effect, the Committee shall deliver all remaining undelivered shares to the Participant’s estate immediately.  References to a Participant in this Plan shall be deemed to refer to the Participant’s estate or legal guardian, where appropriate.

(b)

The Company may, but shall not be required to, create a grantor trust or utilize an existing grantor trust (in either case, the “Trust”) to assist it in accumulating the shares of the Common Stock needed to fulfill its obligations under this Paragraph 8.  However, Participants shall have no beneficial or other interest in the Trust and the assets thereof, and their rights under this Plan shall be as general creditors of the Company, unaffected by the existence or nonexistence of the Trust, except that deliveries of Stock Retainers to Participants from the Trust shall, to the extent thereof, be treated as satisfying the Company’s obligations under this Paragraph 8.

9.

Share Certificates; Voting and Other Rights.  The certificates for shares delivered to a Participant pursuant to Paragraph 8 above shall be issued in the name of the Participant, and from and after the date of such issuance the Participant shall be entitled to all rights of a stockholder with respect to the Common Stock for all such shares issued in his name, including the right to vote the shares, and the Participant shall receive all dividends and other distributions paid or made with respect thereto.

10.

General Restrictions.

(a)

Notwithstanding any other provision of this Plan or agreements made pursuant thereto, the Company shall not be required to issue or deliver any certificate or certificates for shares of the Common Stock under this Plan prior to fulfillment of all of the following conditions:

(i)

Listing or approval for listing upon official notice of issuance of such shares on the New York Stock Exchange, Inc., or such other securities exchange as may at the time be a market for the Common Stock;

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(ii)

Any registration or other qualification of such shares under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee shall, upon the advice of counsel, deem necessary or advisable; and

(iii)

Obtaining any other consent, approval, or permit from any state or federal governmental agency which the Committee shall, after receiving the advice of counsel, determine to be necessary or advisable.

(b)

Nothing contained in this Plan shall prevent the Company from adopting other or additional compensation arrangements for the Participants.

11.

Shares Available.  Subject to Paragraph 12 below, the maximum number of shares of the Common Stock which may in the aggregate be paid as Stock Retainers pursuant to this Plan is 10,000,000.  Shares of the Common Stock issuable under this Plan may be taken from treasury shares of the Company or purchased on the open market.

12.

Adjustments; Change of Control.

(a)

In the event that there is, at any time after the Board adopts this Plan, any change in corporate capitalization, such as a stock split, combination of shares, exchange of shares, warrants or rights offering to purchase the Common Stock at a price below its Fair Market Value, reclassification, or recapitalization, or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, stock dividend, or other extraordinary distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company (each of the foregoing a “Transaction”), in each case other than any such Transaction which constitutes a Change of Control (as defined below), (i) the Deferred Stock Accounts shall be credited with the amount and kind of shares or other property which would have been received by a holder of the number of shares of the Common Stock held in such Deferred Stock Account had such shares of the Common Stock been outstanding as of the effectiveness of any such Transaction, (ii) the number and kind of shares or other property subject to this Plan shall likewise be appropriately adjusted to reflect the effectiveness of any such Transaction, and (iii) the Committee shall appropriately adjust any other relevant provisions of this Plan and any such modification by the Committee shall be binding and conclusive on all persons.

(b)

If the shares of the Common Stock credited to the Deferred Stock Accounts are converted pursuant to Paragraph 12(a) into another form of property, references in this Plan to the Common Stock shall be deemed, where appropriate, to refer to such other form of property, with such other modifications as may be required for this Plan to operate in accordance with its purposes.  Without limiting the generality of the foregoing, references to delivery of certificates for shares of the Common Stock shall be deemed to refer to delivery of cash and the incidents of ownership of any other property held in the Deferred Stock Accounts.

(c)

In lieu of the adjustment contemplated by Paragraph 12(a), in the event of a Change of Control, the following shall occur on the date of the Change of Control (i) the shares of the Common Stock held in each Participant’s Deferred Stock Account shall be deemed to be issued and outstanding as of the Change of Control; (ii) the Company shall forthwith deliver to each Participant who has a Deferred Stock Account all of the shares of the Common Stock or any other property held in such Participant’s Deferred Stock Account; and (iii) this Plan shall be terminated.

(d)

For purposes of this Plan, Change of Control shall mean any of the following events:

(i)

The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 80 percent or more of either (1) the then outstanding shares of the Common Stock of the Company (the “Outstanding Company Common Stock”), or (2) the combined voting power of then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that the following acquisitions shall not constitute a Change of Control (A) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company), (B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (D) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (A), (B) and (C) of paragraph (iii) of this Paragraph 12(d) are satisfied; or 

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(ii)

Individuals who, as of the date hereof, constitute the Board of the Company (as of the date hereof, “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(iii)

Approval by the stockholders of the Company of a reorganization, merger, binding share exchange or consolidation, unless, following such reorganization, merger, binding share exchange or consolidation (A) more than 60 percent of, respectively, then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation and the combined voting power of then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, binding share exchange or consolidation in substantially the same proportions as their ownership, immediately prior to such reorganization, merger, binding share exchange or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, binding share exchange or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger, binding share exchange or consolidation, directly or indirectly, 20 percent or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20 percent or more of, respectively, then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation or the combined voting power of then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, binding share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, binding share exchange or consolidation; or 

(iv)

Approval by the stockholders of the Company of (1) a complete liquidation or dissolution of the Company, or (2) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (A) more than 60 percent of, respectively, then outstanding shares of common stock of such corporation and the combined voting power of then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20 percent or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20 percent or more of, respectively, then outstanding shares of common stock of such corporation and the combined voting power of then outstanding voting securities of such corporation entitled to vote generally in the election of directors, and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.

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13.

Administration; Amendment and Termination.

(a)

The Plan shall be administered by the Compensation Committee (the “Committee”) of, or appointed by, the Board of Directors of the Company (the “Board”).  The Committee shall select one of its members as Chairman and shall act by vote of a majority of a quorum, or by unanimous written consent.  A majority of its members shall constitute a quorum.  The Committee shall be governed by the provisions of the Company’s Bylaws and of Nevada law applicable to the Board, except as otherwise provided herein or determined by the Board.  The Committee shall have full and complete authority, in its discretion, but subject to the express provisions of this Plan to administer all aspects of the Plan.  All interpretations and constructions of this Plan by the Committee, and all of its actions hereunder, shall be binding and conclusive on all persons for all purposes.

(b)

The Board may from time to time make such amendments to this Plan, including to preserve or come within any exemption from liability under Section 16(b) of the Exchange Act, as it may deem proper and in the best interest of the Company without further approval of the Company’s stockholders, provided that, to the extent required under Nevada law or to qualify transactions under this Plan for exemption under Rule 16b-3 promulgated under the Exchange Act, no amendment to this Plan shall be adopted without further approval of the Company’s stockholders and, provided, further, that if and to the extent required for this Plan to comply with Rule 16b-3 promulgated under the Exchange Act, no amendment to this Plan shall be made more than once in any six month period that would change the amount, price or timing of the grants of the Common Stock hereunder other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the regulations thereunder.  The Board may terminate this Plan at any time by a vote of a majority of the members thereof.

14.

Term of Plan.  No shares of the Common Stock shall be issued, unless and until the Directors of the Company have approved this Plan and all other legal requirements have been met.  This Plan was adopted by the Board effective August 31, 2010, and shall expire on August 31, 2020.

15.

Governing Law.  This Plan and all actions taken thereunder shall be governed by, and construed in accordance with, the laws of the State of Nevada.

16.

Information to Shareholders.  The Company shall furnish to each of its stockholders financial statements of the Company at least annually.

17.

Miscellaneous.

(a)

Nothing in this Plan shall be deemed to create any obligation on the part of the Board to nominate any Director for reelection by the Company’s stockholders or to limit the rights of the stockholders to remove any Director.

(b)

The Company shall have the right to require, prior to the issuance or delivery of any shares of the Common Stock pursuant to this Plan, that a Participant make arrangements satisfactory to the Committee for the withholding of any taxes required by law to be withheld with respect to the issuance or delivery of such shares, including, without limitation, by the withholding of shares that would otherwise be so issued or delivered, by withholding from any other payment due to the Participant, or by a cash payment to the Company by the Participant.

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IN WITNESS WHEREOF, this Plan has been executed effective as of August 31, 2010.

GLOBAL EARTH ENERGY, INC.

By  /s/ Sydney A. Harland

    Sydney A. Harland, Chief Executive Officer

7Exhibit 10.1

 

SETTLEMENT AND CROSS
LICENSE AGREEMENT

 

This Settlement and Cross License Agreement (this “Agreement”),
effective as of September 10, 2010 (the “Effective Date”), is made and
entered into by and among Finisar Corporation, a Delaware corporation with its
principal place of business at 1389 Moffett Park Drive, Sunnyvale, California 94089-1134
(“Finisar”), on the one hand, and Source Photonics, Inc., a Delaware
corporation with its principal place of business at 20550 Nordhoff Street,
Chatsworth, California 91311 (“Source Photonics”), and MRV Communications, Inc.,
a Delaware corporation with its principal place of business at 20415 Nordhoff
Street, Chatsworth, California 91311 (“MRV”) on the other hand (Finisar, Source
Photonics, and MRV are collectively referred to as “the Parties” or
individually as a “Party”).

 

R E C I T A L S

 

WHEREAS, Finisar has filed a lawsuit against Source
Photonics and MRV in the United States District Court for the Northern District
of California, Finisar Corp. v. Source Photonics, Inc.,
et al., Case No. C-10-00032 WHA,
(the “Court Action”), and a demand for arbitration against Source Photonics in
the American Arbitration Association, Finisar Corp. v. Source
Photonics, Inc., et al.,
Arbitration No. 74 494 00420 10, (the “Arbitration”) (the Court Action and
the Arbitration are collectively referred to as the “Litigation”);

 

WHEREAS, MRV was dismissed from the Court Action without
prejudice and Finisar and MRV entered into a Standstill, Tolling, and
Confidentiality Agreement on May 20, 2010, to preserve their respective
claims, rights, and defenses with respect to one another relating to any claim
that they may have against one another;

 

WHEREAS, Finisar and Fiberxon, Inc., a company
acquired by MRV, entered into a patent license agreement, effective August 16,
2004, (the “Fiberxon License”) that is the subject of the Arbitration;

 

WHEREAS, Finisar, Source Photonics, and MRV desire to settle
each of the claims and counterclaims asserted by any Party against any other
Party in the Court Action and to dismiss the Arbitration on the terms and
conditions respectively set forth in this Agreement;

 

WHEREAS, Finisar and Source Photonics and/or their
respective Affiliates each own and have rights under various U.S. and/or
foreign patents and/or applications related to optoelectronic devices;

 

WHEREAS, Finisar and Source Photonics and/or their
respective Affiliates have manufactured and sold, and intend to continue
manufacturing and selling, optoelectronic devices;

 

WHEREAS, Source Photonics, for itself and on behalf of its
Affiliates, wishes to obtain from Finisar and its Affiliates a license to
certain U.S. and/or foreign patents and/or applications owned by Finisar;

 

Confidential

 

1

 

WHEREAS, Finisar, on behalf of itself and its Affiliates,
wishes to obtain from Source Photonics and its Affiliates a license to certain
U.S. and/or foreign patents and/or applications owned by Source Photonics and
its Affiliates; and

 

WHEREAS, Finisar and its Affiliates are willing to grant
such license to Source Photonics and its Affiliates, and Source Photonics and
its Affiliates are willing to grant such license to Finisar and its Affiliates,
subject to the terms and conditions hereinafter contained.

 

NOW THEREFORE, for valuable consideration including the
License Fee, mutual covenants and promises exchanged herein, the Parties agree
as follows:

 

1.             Definitions.

 

1.1           Definitions.  As used in this Agreement, the following
defined terms shall have the meanings set forth below:

 

“Affiliate” means with respect to a Party,
any corporation or other entity that now or hereafter is controlled by or is
under common control with such Party directly or indirectly through one or more
intermediaries; provided, however, in connection with, or subsequent to, any
Change of Control, no additional corporation or entity shall become an
Affiliate based solely on being under common control with such Party.  For the purpose of this definition, “control”
means the direct or indirect ownership of more than 50% of the outstanding
voting securities of the legal entity, the right to receive more than 50% of
the profits or earnings of the legal entity, or the right to direct the policy
decisions of the legal entity. 
Notwithstanding the foregoing, in any jurisdiction where local law shall
not permit foreign equity participation of at least 50%, then “control” shall
mean the maximum percentage of such outstanding stock or rights permitted by
such local law.  For avoidance of doubt,
an entity ceases to be an Affiliate on the date it ceases to satisfy the
foregoing definition of an Affiliate to a Party.  For purposes of clarity, the Affiliates of
Source Photonics as of the Effective Date include Source Photonics USA, Inc.,
Source Photonics Taiwan, Inc., Source Photonics Santa Clara, Inc.,
Source Photonics, LLC, Source Photonics (Shenzhen) Company, Ltd., Source
Photonics (Chengdu) Company, Ltd., Source Photonics Holdings, Ltd.,
and Source Photonics (Macao Commercial Offshore) Ltd. and any entity controlled
by, as such term is used in the definition of Affiliate above, one of the
foregoing entities.  For purposes of this
Agreement, MRV will not be considered an Affiliate of Source Photonics and
Source Photonics will not be considered an Affiliate of MRV.

 

“Change of Control” means any transaction or
event (or series of transactions or events), whether by an acquisition of
securities, merger, consolidation, proxy contest, sale of all or substantially
all of a Party’s assets, or other transaction or event (or series of
transactions or events), that results in a Party not being controlled, directly
or indirectly, by a party (whether alone or with others) that controlled such
Party before such transaction or event (or series of transactions or events), whether
or not such Party survives such transaction or event (or series of transactions
or events).  For the sole purpose of this
definition and Article 8, “control” means possession of, or the power or
right to acquire possession of, directly or indirectly, the power to direct or
cause the direction of the management, business affairs or policies of such
Party (whether through ownership of securities, partnership or other ownership
interests, by contract or otherwise). 
For clarity, a restructuring or reorganization of a Party that does not
result in a change in control of such Party shall not be deemed to be a Change
of Control of such Party.

 

Confidential

 

2

 

Notwithstanding
the foregoing, the initial public offering of a Party, whether in the United
States or outside the United States, shall not constitute a Change of Control
under this Agreement.

 

“Effective Date” has the meaning ascribed
thereto in the preamble of this Agreement.

 

“Existing Product” means any product that, as
of the Effective Date, is made or sold by (i) Source Photonics, (ii) the
Affiliates of Source Photonics as of the Effective Date, (iii) Finisar, or
(iv) the Affiliates of Finisar as of the Effective Date.

 

“Finisar Licensed Patents” means each patent
asserted by Finisar in the Litigation or licensed to Fiberxon in the Fiberxon
License, as well as each U.S. or foreign patent in the same Patent Family of
the foregoing whenever issued.

 

“Source Photonics Licensed Patents” means
U.S. Patent Nos. 7,200,336 and 7,650,077, as well as each U.S. or foreign
patent in the same Patent Family of the foregoing whenever issued.

 

“Patent Family” means (i) a specified
patent, (ii) the patent(s) issuing from a specified patent
application (including a provisional application), and (iii) any and all
patents issuing from patent applications filed either from such patents, patent
applications or provisional applications or from an application claiming
priority from any of the foregoing, including, without limitation,
substitutions, extensions, reissues, renewals, reexaminations, divisionals,
continuations, continuations-in-part, requests for continued examination, and
continued prosecution applications with respect to such specified patent or
patent application, as well as all corresponding patents issued in countries
other than the country or jurisdiction associated with any of the foregoing.

 

“Grantee” means Finisar or Source Photonics,
as the case may be, as the Party to which licenses and other rights are granted
hereunder.

 

“Grantor” means Finisar or Source Photonics,
as the case may be, as the Party granting (on behalf of itself and its
Affiliates) licenses and/or other rights hereunder.

 

“Grantor Licensed Patents” means Finisar
Licensed Patents or Source Photonics Licensed Patents, as the case may be.

 

“Licensed Products” means any optoelectronic
device, such as a transceiver, transponder, or other devices with similar
functionality, which for purposes of the licenses and other rights granted to
Finisar, Source Photonics, and their respective Affiliates include, but are not
limited to, all products accused of infringing any patent in the Court Action.

 

“Licensed Revenue Cap” means the Revenue
generated by a Grantee and its Affiliates from the sale of Licensed Products in
the most recently completed twelve (12) month period ending on the last day of
the last full month preceding a Change of Control of such Grantee.  Commencing on the first day of the first full
month after the Change of Control and at each successive anniversary thereof
during the term of this Agreement, the Licensed Revenue Cap for the upcoming
twelve (12) full-month period shall be increased by 20% above the cap
applicable

 

Confidential

 

3

 

to
the immediately preceding twelve (12) full-month period.  To the extent any such upcoming twelve (12)
full-month period exceeds the term of this Agreement, the Licensed Revenue Cap
applicable to the remaining term of the Agreement shall be reduced pro rata to
the proportion of the upcoming twelve (12) full-month period that is within the
term of this Agreement.

 

“Past Damages” means any and all damages that
have accrued or resulted as of the Effective Date on account of any and all
patent infringement by any Licensed Product that has been made, used, sold,
offered for sale, imported, or distributed by Finisar, Source Photonics, or
their respective Affiliates as of the Effective Date of this Agreement.

 

“Revenue” means the gross amount received on
all sales of Licensed Products by Grantee or assignee, as the case may be, and,
as applicable, its Affiliates, less the following items: (i) trade,
quantity, and cash discounts or rebates actually allowed and taken and any
adjustments thereto, including, without limitation, those granted on account of
price adjustments, billing errors, rejected goods, damaged goods, and recall
returns; (ii) credits, refunds, rebates, charge-backs, prime vendor
rebates, fees, reimbursements, or similar payments granted or given to wholesalers
and other distributors, and buyer groups; (iii) any tax, tariff, customs
duties, excise, or other duties or governmental charges (other than an income
tax) levied on the sale, transportation, or delivery of a Licensed Product and
borne by the seller thereof; (iv) payments or rebates paid in connection
with sales of Licensed Products to any governmental or regulatory authority in
respect of any state or federal payment or reimbursement scheme or similar
program; and (v) any charge for freight, insurance, or other
transportation costs borne by the seller. 
For purposes of determining Revenue, a sale shall be deemed to have
occurred when payment has been received. 
With respect to sales through agents, the gross amount received shall be
the greater of the amount received by the Grantee or assignee, as the case may
be, and, as applicable, its Affiliates, and/or the agent for each given unit of
the Licensed Products.  With respect to
sales of Licensed Products for which there is no distinct invoice (e.g., for
Licensed Products that are sold and/or used as part of a larger product), the
Revenue shall be the average sales price of such Licensed Product when sold
separately, multiplied by the number of applicable units sold.

 

2.             License
Fee.

 

2.1           License Fee.  As part of the consideration for the license
granted by Finisar, Source Photonics agrees to make a onetime, non-refundable
payment to Finisar in the amount of fourteen-million, five-hundred-thousand
dollars ($14,500,000.00), payable as follows: 
$5,000,000.00 due by September 17, 2010; $5,000,0000.00 due by
September 24, 2010; and $4,500,000.00 due by September 30,
2010.  In addition to all remedies
available under this Agreement and under applicable law, the lower of either a
20% annual interest rate or the maximum annual interest rate allowed by law
shall apply to any delinquent payment.

 

3.             License
Grant.

 

3.1           Finisar License Grant to Source Photonics.  Subject to the terms and
conditions of this Agreement, Finisar for itself and on behalf of its Affiliates
hereby grants to Source Photonics and its Affiliates, in each case only for so
long as the applicable Affiliate remains an Affiliate of Source Photonics, and
Source Photonics for itself and on behalf of its Affiliates hereby accepts, a
worldwide, non-exclusive, fully paid-up license to the Finisar Licensed Patents
to use, make, sell, offer for sale, import, and distribute Licensed
Products.  Such license shall be
non-sublicensable and, subject to Section 8, non-transferable, and shall
expire on December 31, 2015.

 

Confidential

 

4

 

3.2           Source Photonics License Grant to Finisar.  Subject to the terms and
conditions of this Agreement, Source Photonics for itself and on behalf of its
Affiliates hereby grant to Finisar and its Affiliates, in each case for so long as the applicable
Affiliate remains an Affiliate of Finisar, and Finisar for itself and on behalf
of its Affiliates hereby accepts a worldwide, non-exclusive, fully paid-up license to the Source Photonics
Licensed Patents to use, make, sell, offer for sale, import, and distribute
Licensed Products.  Such license shall be non-sublicensable and, subject to Section 8, non-transferable,
and shall expire on December 31,
2015; however, such expiration shall not have any effect on any license rights
granted to Finisar under the Fiberxon License.

 

3.3           Binding on Affiliates.  To the extent, if any, that this Agreement is not automatically binding
on an Affiliate of a Party on or before the Effective Date, such Party will
cause such Affiliate to be bound by the terms and conditions of this Agreement
applicable to Affiliates to the same extent as if such Affiliate were a party
to this Agreement.  For avoidance of
doubt, if an Affiliate of a Party ceases to be an Affiliate of such Party, all
licenses and other rights granted to such Affiliate under the terms of this
Agreement shall terminate effective on the date such Affiliate status ceases to
exist.   Notwithstanding such event or
any term or condition of this Agreement to the contrary, all licenses granted
by a Party on behalf of such Affiliate to a Grantee and its Affiliates prior to
the date such entity ceases to be an Affiliate shall continue in full force and
effect for the term of this Agreement.

 

3.4           Unrestricted Rights to Grantor Patents.  A
Grantor shall retain the unrestricted right to use the Grantor Licensed
Patents, and to license the Grantor Licensed Patents for any purpose
whatsoever, except to the extent that any such use or license is inconsistent
with the licenses and other rights granted herein.  Except
for the licenses and rights expressly granted hereunder, no right, title, or
interest, including with respect to any discovery, invention or other
technology, data or information, or any patent, copyright, trademark, service
mark, or other industrial or intellectual property rights owned or controlled
by a Grantor or any third party, shall be granted to a Grantee or its
Affiliates or any person, by implication or otherwise, under this Agreement.  A Grantor and its Affiliates shall not be
under any obligation under this Agreement to grant to the Grantee or its
Affiliates any additional licenses and rights other than those granted hereby.

 

3.5           Covenant Not to Sue.  For the term of this Agreement, Finisar, for
itself and on behalf of its Affiliates and its respective successors and
assigns (collectively, “Finisar Covenanting Parties”), and Source Photonics for
itself and on behalf its Affiliates and its respective successors and assigns
(collectively, “Source Photonics Covenanting Parties”) (the “Finisar
Covenanting Parties” and the “Source Photonics Covenanting Parties” each a “Covenanting
Party”), hereby mutually covenant not to sue, and not to seek (or to assign to
any other person or entity the right to sue or seek): (1) Past Damages; (2) damages
that would accrue, result or otherwise occur on or before December 31,
2015, or (3) damages that would accrue, result or otherwise occur after December 31,
2015 due solely to the continued use by a purchaser of a product described in
clause (a) or (b) below distributed on or before December 31,
2015, from (i) Source Photonics, (ii) the Affiliates of Source
Photonics as of the Effective Date for so long as any such Affiliate remains an
Affiliate of Source Photonics, (iii) Finisar, or (iv) the Affiliates
of Finisar as of the Effective Date for so long as any such Affiliate remains
an Affiliate 

 

Confidential

 

5

 

of Finisar, respectively (in each case, such Party and its Affiliates
entitled to the benefit of this covenant, a “Benefited Party”), for
infringement of any patent (other than the Finisar Licensed Patents or Source
Photonics Licensed Patents, as the case may be), including any such patents
owned or otherwise controlled, whether by license or otherwise, by a
Covenanting Party as of the Effective Date or any date thereafter until December 31,
2015 or owned or otherwise controlled, whether by license or otherwise, by any
successors or assigns of such Covenanting Party as of the Effective Date or any
date thereafter until December 31, 2015, based on the use, making, having
made, sale, offering for sale, or importation of (a) any Existing Product,
or (b) any product that is a future revision of an Existing Product and that
is no more than colorably different from such Existing Product in terms of the
features disclosed in any patent subject to this Covenant Not to Sue.  For avoidance of doubt, this Covenant Not to
Sue applies to customers and distributors of a Benefited Party who purchase,
use, or distribute any such product to the same extent that this covenant
applies to the Benefited Party.  For
avoidance of doubt, the benefits conferred by the covenant will apply to any
successor or assigns of a Party in the event of a Change of Control subject to Section 8
of this Agreement; however, no acquisition, merger, consolidation,
reorganization, or similar transaction will expand the scope of products
subject to this covenant to include products made or sold by an entity that is
not a Benefited Party as of the Effective Date of this Agreement or to include
products made or sold by any Affiliate of Source Photonics or Finisar after
such entity ceases to be an Affiliate of Source Photonics or Finisar.

 

4.             Patent Marking.

 

4.1           By Source Photonics.  Source Photonics and its Affiliates shall
place a mark on every Licensed Product, or packaging therefor, which mark shall
indicate the appropriate U.S. or foreign-issued patent numbers arising under
the Finisar Licensed Patents pursuant to this Agreement in a manner reasonably
required to satisfy 35 U.S.C. Section 287. 
In addition to any other required marking, Source Photonics and its
Affiliates shall mark every product or the packaging of any product accused of
infringement in the Litigation, and all current or future products, or
packaging thereof, with corresponding characteristics to those that gave rise
to the allegation of infringement, with each patent number of which it was
accused of infringing.  The obligation to
mark the Licensed Products exists with regard to only those patent numbers that
Finisar has provided to Source Photonics in writing as being subject to this
requirement (including pursuant to the immediately preceding sentence), which
Finisar may update from time to time as additional patents issue to Finisar or
its Affiliates.  Source Photonics and its
Affiliates shall require any agents operating on their behalf to reproduce such
patent marking on each copy of the Licensed Product, or packaging therefor, and
not to alter or obfuscate such patent marking. 
Source Photonics agrees to mark, and cause its Affiliates to mark,
products based on Finisar’s constructions of the claims in the Finisar Licensed
Patents and Finisar’s allegations that such products infringe one or more
claims in the Finisar Licensed Patents. 
Source Photonics’ agreement to mark products pursuant to this provision
is not an admission by Source Photonics or its Affiliates that any product
infringes any Finisar Licensed Patents. 
Finisar for itself and on behalf of its Affiliates agrees not to
contend, in any subsequent litigation or legal proceeding or otherwise that the
marking of products by Source Photonics or any of its Affiliates constitutes
evidence that Finisar’s constructions of the claims in the Finisar Licensed
Patents is correct or that Source Photonics or any of its Affiliates infringes
any Finisar Licensed Patent.

 

Confidential

 

6

 

4.2           By Finisar.  Finisar and its Affiliates shall place a mark
on every Licensed Product, or packaging therefor, which mark shall indicate the
appropriate U.S. or foreign-issued patent numbers arising under the Source
Photonics Licensed Patents pursuant to this Agreement in a manner reasonably
required to satisfy 35 U.S.C. Section 287. 
In addition to any other required marking, Finisar and its Affiliates
shall mark its FTLX1471D3BCV and FTLX8571D3BCV products or the packaging of
these products and all current or future products, or packaging therefor, that
are no more than colorably different from these products in terms of the
features disclosed in the Source Photonics Licensed Patents with U.S. Patent
Nos. 7,200,336 and 7,650,077.  The
obligation to mark the Licensed Products exists with regard to only those
patent numbers that Source Photonics has provided to Finisar in writing as
being subject to this requirement (including pursuant to the immediately
preceding sentence), which Source Photonics may update from time to time as
additional patents issue to Source Photonics or its Affiliates.  Finisar and its Affiliates shall require any
agents operating on their behalf to reproduce such patent marking on each copy
of the Licensed Product, or packaging therefor, and not to alter or obfuscate
such patent marking.  Finisar agrees to
mark, and cause its Affiliates to mark, products based on Source Photonics’
constructions of the claims in the Source Photonics Licensed Patents and Source
Photonics’ allegations that Finisar products infringe one or more claims in the
Source Photonics Licensed Patents. 
Finisar’s agreement to mark products pursuant to this provision is not
an admission by Finisar or its Affiliates that any product infringes the Source
Photonics Licensed Patents.  Source
Photonics for itself and on behalf of its Affiliates agrees not to contend, in
any subsequent litigation or legal proceeding or otherwise, that the marking of
products by Finisar or any of its Affiliates constitutes evidence that Source
Photonics’ constructions of the claims in the Source Photonics Licensed Patents
is correct or that Finisar or any of its Affiliates infringes any Source
Photonics Licensed Patent.

 

4.3           Curing a Failure to Mark.  In the event any Party fails to mark any
Licensed Product in accordance with Section 4.1 or 4.2, the other Party
may provide written notice of such failure. 
A Party will have the opportunity to cure any failure to mark within 120
days of receiving written notice, by causing Licensed Products subsequently
made or sold to be marked in accordance with Section 4.1 or 4.2.  In any event, failure to mark is not by
itself a material breach of this Agreement.

 

5.             Releases.

 

5.1           Finisar’s Release.   Finisar for itself and on
behalf of its Affiliates and assigns and successors, hereby fully and forever releases
and discharges MRV, Source Photonics, the Affiliates of either of the foregoing
as of the Effective Date of this Agreement, and the current
and former officers, directors, attorneys, employees, representatives, agents,
successors and assigns of any of the foregoing from all claims, demands, suits,
damages, judgments, liabilities, costs, attorneys’ fees, expenses, and causes
of action, whether known or unknown, suspected or unsuspected, asserted or
unasserted, and whether arising under federal, state, local or any other law,
asserted in the Litigation or that could have been asserted in this Litigation.
For the avoidance of doubt, this release shall not have any effect on any claim, including
claims for patent infringement of the Finisar Licensed Patents or any other
patent, based on conduct occurring after the Effective
Date of this Agreement except for conduct permitted under Section 3.1 and
3.5.

 

5.2           Source Photonics Release.  Source Photonics for itself and on behalf of
its Affiliates and their assigns and successors, hereby fully and forever
releases and discharges Finisar, its Affiliates as of the Effective Date of
this Agreement, and the current and former 

 

Confidential

 

7

 

officers,
directors, attorneys, employees, representatives, agents, successors and assigns
of any of the foregoing from all claims, demands, suits, damages, judgments,
liabilities, costs, attorneys’ fees, expenses, and causes of action, whether
known or unknown, suspected or unsuspected, asserted or unasserted, and whether
arising under federal, state, local or any other law, asserted in the
Litigation or that could have been asserted in this Litigation.  For the avoidance of doubt, this release shall not have any effect on any claim,
including claims for patent infringement of the Source Photonics Licensed
Patents or any other patent, based on conduct occurring after the Effective Date of this Agreement except for conduct permitted under Section 3.2
and 3.5.

 

5.3           MRV’s Release.  MRV for itself and on behalf of its Affiliates
and assigns and successors, hereby fully and forever releases and discharges
Finisar, its Affiliates as of the Effective Date of this Agreement, and the current
and former officers, directors, attorneys, employees, representatives, agents,
successors and assigns of any of the foregoing from all claims, suits, demands,
damages, judgments, liabilities, costs, attorneys’ fees, expenses, and causes
of action, whether known or unknown, suspected or unsuspected, asserted or
unasserted, and whether arising under federal, state, local or any other law,
asserted in the Litigation or that could have been asserted in this Litigation.

 

5.4                 Waiver of Certain Rights.  In connection with this Agreement, the
Parties, on behalf of themselves and their respective Affiliates, and their
assigns and successors, expressly waive and relinquish all rights and benefits
afforded by Section 1542 of the California Civil Code, which provides as
follows:

 

A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST
IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM
OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

Further,
the Parties and all of their Affiliates expressly waive and relinquish all
rights and benefits afforded by any law in any other jurisdiction similar to Section 1542
of the California Civil Code.

 

5.5           Limitation of Releases. 
For the avoidance of doubt, the releases set forth in this Section 5
do not apply to actions to enforce any requirements or provisions of this
Agreement and do not affect the obligation of any Party to pay for products
purchased from another Party.

 

5.6           Dismissal of the Litigation.  By no later than September 13, 2010, the Parties
shall jointly, as applicable, file a Stipulation of Dismissal requesting the
dismissal with prejudice of all claims and counterclaims asserted at any time
in the Court Action between Finisar on the one hand, and Source Photonics on
the other hand, and without prejudice to the right of a Party to assert a claim
for patent infringement of any patent, including those asserted during the
Court Action, subject to compliance with Sections 3.1, 3.2 and 3.5.  The Stipulation of Dismissal shall provide
that each Party bear its own costs, expenses, and attorneys fees.  The Parties shall further take all necessary
actions to terminate the Arbitration proceeding; provided, however, that this
termination shall be without prejudice to Finisar’s right to assert that it had
and continues to have a license to the Source Photonics Licensed Patents under
the Fiberxon License.

 

Confidential

 

8

 

6.             Warranties; Disclaimer; Limitation of
Liability.

 

6.1           Mutual Warranty.  Each Party hereby represents and warrants
that (i) it has the full right and power, on behalf of itself and its
Affiliates, to enter into and perform this Agreement, and to grant the license,
covenants and the other rights set forth in this Agreement, (ii)  it has
been duly authorized by all necessary corporate or other organizational actions
to execute, deliver and perform its obligations under this Agreement, (iii) upon
execution and delivery of this Agreement by all Parties, this Agreement is
binding on and enforceable against such Party and its Affiliates, and (iv) there
are no outstanding agreements, assignments, encumbrances, or obligations of
such Party or any of its Affiliates that are inconsistent with this
Agreement.  Each Party warrants and
represents that its execution hereof has been duly authorized by all its
necessary corporate action.  Each Party,
for itself and on behalf of its Affiliates, warrants and represents that there
has been no Change of Control of, and no assignment of any patents by, such
Party or any of its Affiliates between August 1, 2010 and the Effective
Date.

 

6.2           Warranty Disclaimer.  AS TO THE SUBJECT MATTER OF THIS AGREEMENT,
AND EXCEPT AS EXPRESSLY PROVIDED IN SECTION 6.1, THE GRANTOR
MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
OR ASSUMES ANY RESPONSIBILITIES WHATSOEVER WITH RESPECT TO THE COMMERCIAL
SUCCESS, USE, SALE, OR OTHER DISPOSITION BY OR FOR GRANTEE OR THEIR
DISTRIBUTORS, USERS, OTHER CUSTOMERS, OR SUPPLIERS OF PRODUCTS INCORPORATING OR
MADE BY THE USE OF INVENTIONS LICENSED HEREIN.  Nothing in this Agreement shall be construed as:

 

(a)                                  an
admission by Grantee or any of its Affiliates as to the validity,
enforceability or infringement of any Grantor Patents, except as provided by Section 6.4
below; or

 

(b)                                 a
warranty or representation by a Grantor or any of its Affiliates as to the
validity or scope of any patent; or

 

(c)                                  a
warranty or representation by a Grantor or any of its Affiliates that anything
made, used, sold or otherwise disposed of under any license granted herein is
or will be free from infringement of patents or other intellectual property
rights of third persons; or

 

(d)                                 a
requirement that a Grantor or any of its Affiliates shall
file any patent application, secure any patent, or maintain any patent in
force; or

 

(e)                                  an
obligation of a Grantor or any of its Affiliates to
bring or prosecute actions or suits against third parties for infringement of
any of its patents or to defend any suit or action brought
by a third party which challenges or concerns any of its patents;
or

 

(f)                                    an
obligation of a Grantor or any of its Affiliates to
furnish any manufacturing and technical information or any information
concerning pending patent applications; or

 

Confidential

 

9

 

(g)           conferring
a right to use in advertising, publicity, or otherwise any trademark or trade
name of a Grantor or any of its Affiliates.

 

6.3           Limitation of Liability.  IN NO EVENT SHALL ANY PARTY
BE LIABLE TO THE OTHER PARTY OR PARTIES
FOR SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL LOSS OR DAMAGES OF ANY NATURE WHATSOEVER CONNECTED WITH OR
RESULTING FROM THE PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT, IRRESPECTIVE
OF WHETHER SUCH DAMAGES ARE REASONABLY FORESEEABLE AND REGARDLESS OF WHETHER SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT.

 

6.4           Validity of the Finisar Licensed Patents.  During the term of this Agreement, neither
Source Photonics nor any of its Affiliates will file any suit in any United
States Court or any Court in any foreign country, or file any proceeding in the
U.S. Patent and Trademark Office, challenging or contesting the validity of the
Finisar Licensed Patents or assist any third party in doing so.  Should Finisar file suit against Source
Photonics or any of it Affiliates during the term of this Agreement, asserting
infringement of any Finisar Licensed Patent based on sales in excess of the
Licensed Revenue Cap, Source Photonics and its Affiliates may challenge the
validity of the Finisar Licensed Patents in connection with any such
lawsuit..  Nothing in this provision will
prevent Source Photonics or its Affiliates from complying with a subpoena or
other court order or otherwise complying with applicable law.

 

6.5           Validity of the Source Photonics Licensed Patents.  During the term of this
Agreement, neither Finisar nor any of its Affiliates will file any suit in any
United States Court or any Court in any foreign country, or file any proceeding
in the U.S. Patent and Trademark Office, challenging or contesting the validity
of the Source Photonics Licensed Patents or assist any third party in doing
so.  Nothing in this provision will
prevent Finisar or its Affiliates from complying with a subpoena or other court
order or otherwise complying with applicable law.

 

7.             Term and  Termination.

 

7.1           Term.  The term of this Agreement shall be from the
Effective Date hereof until December 31, 2015.

 

7.2           Limited Termination.  This Agreement may not be terminated for any reason prior to its
expiration under Section 7.1, and each Party agrees that its remedy for
any breach of this Agreement shall be to bring a claim to recover damages and
to seek any other appropriate equitable relief (other than termination of this
Agreement).

 

7.3           Survival.  The provisions of Articles 2, 6, 9, and 10,
Sections 5.1, 5.2, 5.3, 7.4, 8.3, 8.4, and this Section 7.3 shall survive
expiration of this Agreement.

 

7.4           Effect of Agreement on Fiberxon License.  This Agreement supersedes the license granted
by Finisar to Fiberxon, Inc. and its Affiliates under the Fiberxon License
and, in particular, terminates (i) the License Grant under Section 2.1
of the Fiberxon License, (ii) any obligation by Source Photonics or its
Affiliates or MRV that may have existed to pay royalties pursuant to Section 3.2,
(iii) any duty to provide reports or maintain records pursuant to Article

 

Confidential

 

10

 

IV,
and (iv) any obligation to mark products pursuant to Article V of the
Fiberxon License.  However, the license
granted to Finisar and its Affiliates under the Fiberxon License, as provided
in Section 3.8 of the Fiberxon License, shall not be affected by this
Agreement and remains in full force and effect for the term of the Fiberxon
License.  For avoidance of doubt, this Section 7.4
shall not affect or modify the determination of which patents are licensed to
Fiberxon in the Fiberxon License in the definition of “Finisar Licensed
Patents.”

 

8.                                     Assignment and Change of
Control.

 

8.1                               Assignment.  None of the Parties shall
assign by operation of law or otherwise to any third party any of its rights or
obligations under this Agreement without prior written consent of the other
Parties, except that each Party shall have the right, without the requirement
of obtaining consent from the other Parties, to assign this Agreement to an
acquiring party or an entity controlled by an acquiring party, which entity
also controls the acquired entity, in connection with a Change of Control of
such Party (including a transfer to such third party by operation of law)
subject to Subsections (a) and (b) below.

 

(a)                                  Assignment in Connection with Change of Control
Where Grantee is Not The Surviving Entity.  In each
successive Change of Control of a Grantee where such Grantee is not a surviving
entity, such Grantee may assign this Agreement to an
acquiring party or an entity controlled by an acquiring party in connection with such Change of Control
(including by transfer to such third party by operation of law) without the
prior written consent of the other Parties, subject to the following terms and
conditions.  Following the Change of
Control, the license of the Agreement shall be deemed to be limited to, and
cover, the sale of Licensed Products solely to the extent that such sales
result in Revenue up to, and not to exceed, the Licensed Revenue Cap for the
applicable period following the Change of Control; provided that the assignee
may elect, in its sole discretion, to pay or cause to be paid to the Grantor a
5% royalty on that portion of the worldwide Revenue attributable to the sale of
Licensed Products that is in excess of the Licensed Revenue Cap for the
applicable period (in which event the Licensed Products for which the
associated Revenue is in excess of the Licensed Revenue Cap shall remain and be
within, and covered by, the scope of the license).  For avoidance of doubt, in the event the
assignee does not elect to pay or cause to be paid the 5% royalty described
above, the sale of Licensed Products in excess of the Licensed Revenue Cap does
not result in a breach of the Agreement, but shall not be considered
licensed.  Notwithstanding anything
herein to the contrary, for the purpose of calculating Revenue under this
Agreement, to the extent a Licensed Product is sold as a component of a
product, such as a switch or router, the amount included in Revenue with
respect to such Licensed Product shall be based on the average per unit Revenue
of such Licensed Product for the corresponding period when sold separately as a
component.

 

(b)                                 Notwithstanding the foregoing, in each successive Change of Control of
a Grantee where such Grantee is not a surviving entity and such Grantee assigns
this Agreement to an acquiring party or an entity controlled by an acquiring
party (including a transfer to such third party by operation of law), the
assignee will not be subject to the Licensed Revenue Cap (or the limitations on
the license set forth 

 

Confidential

 

11

 

in
Section 8.1(a) above) in circumstances in which (i): such Grantee is
acquired by or merged with a non-practicing financial entity, which, for the
sake of clarity, is an entity that (x) does not make or sell Licensed
Products or any other products, (y) is not under the control of an entity
that makes or sells Licensed Products or any other products (or that controls
an entity that so makes or sells, unless such entity and the assignee are not
operating their businesses in concert (i.e., such
entity and the assignee have no special business relationship as the result of
being under such common control and neither is an Affiliate of the other)), and
(z) does not have or acquire, during the term of this Agreement, a
majority ownership interest, directly or indirectly, in any entity that makes
or sells Licensed Products or any competing products (unless the acquired
entity and the assignee are not operating their businesses in concert (i.e., such entity and the assignee have no special business
relationship and neither is an Affiliate of the other)), but which financial
entity may have or acquire an ownership interest in an entity that makes or
sells downstream products that incorporate Licensed Products, such as
transceivers or transponders, as components thereof; and (ii) the assignee
is not under common control with an entity that makes or sells Licensed
Products or any competing products (unless, in the event of common control,
such commonly controlled entity and the assignee are not operating their
businesses in concert (i.e., such
entity and the assignee have no special business relationship as the result of
being under such common control and neither is an Affiliate of the other)),
does not have or thereafter during the term of this Agreement acquire an
ownership interest, directly or indirectly, in any entity that makes or sells
Licensed Products or any competing products, and does not during the term of
this Agreement merge with, be acquired by, or come under common control with
any entity that makes or sells Licensed Products or any competing products
(unless, in the event of common control, such commonly controlled entity and
the Assignee are not operating their businesses in concert (i.e., such entity and the Assignee have no special business
relationship as the result of being under such common control and neither is an
Affiliate of the other)).  For
purposes of clarity, a majority ownership includes ownership obtained by a
group in which the party (together with such party’s Affiliates (which for
purposes of this sentence only include entities that control or are under
common control with such party)) has a majority interest in the group.

 

8.2                               Change of Control Where Grantee is a Surviving
Entity.  In
each successive Change of Control of Grantee where a Grantee is a surviving
entity, from and after the Change of Control the license granted to such
Grantee shall be deemed to be limited to, and cover, the sale of Licensed
Products solely to the extent that such sales result in Revenue up to, and not
to exceed, the Licensed Revenue Cap for the applicable period following the
Change of Control, unless the Grantee elects, in its sole discretion, to pay or
cause to be paid to the Grantor a 5% royalty on that portion of the worldwide
Revenue attributable to the sale of Licensed Products that is in excess of the
Licensed Revenue Cap for the applicable period (in which event the Licensed
Products for which the associated Revenue is in excess of the Licensed Revenue
Cap shall remain and be within, and covered by, the scope of the license).  Notwithstanding anything herein to the contrary, for
the purpose of calculating Revenue under this Agreement, to the extent 

 

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a Licensed Product is sold as a component of a
product, such as a switch or router, the amount included in Revenue with
respect to such Licensed Product shall be based on the average per unit Revenue
of such Licensed Product for the corresponding period when sold separately as a
component.

 

(a)                                  Control by Non-Practicing Entity. 
Notwithstanding the foregoing, in each successive Change of Control of a
Grantee where such Grantee is a surviving entity, such Grantee will not be subject
to the Licensed Revenue Cap (or the limitations on the license set forth in Section 8.2(a) above)
in circumstances where the Change of Control results in the Grantee being
controlled by a non-practicing financial entity, which, for the sake of clarity,
is an entity that (x) does not
make or sell Licensed Products or any other products, (y) is not under the
control of an entity that makes or sells Licensed Products or any other
products (or that controls an entity that so makes or sells, unless such entity
and the Grantee are not operating their businesses in concert (i.e., such entity and the Grantee have no special business
relationship as the result of being under such common control and neither is an
Affiliate of the other)), and (z) does not have or acquire, during the
term of this Agreement, a majority ownership interest, directly or indirectly,
in any entity that makes or sells Licensed Products or any competing products
(unless the acquired entity and the Grantee are not operating their businesses
in concert (i.e., such entity and the Grantee have
no special business relationship and neither is an Affiliate of the other), but
which financial entity may have or acquire an ownership interest in an entity
that makes or sells downstream products that incorporate Licensed Products,
such as transceivers or transponders, as components thereof; and
further provided that the Grantee is
not under common control with an entity that makes or sells Licensed
Products or any competing products (unless, in the event of common control,
such commonly controlled entity and the Grantee are not operating their
businesses in concert (i.e., such
entity and the Grantee have no special business relationship as the result of
being under such common control and neither is an Affiliate of the other)), and
does not thereafter merge
with or acquire an ownership interest, directly or indirectly, in any entity
that makes or sells Licensed Products, any
competing products, or downstream products that incorporate Licensed Products,
such as transceivers or transponders, as components thereof in an amount
exceeding 25% of the combined entities’ Revenue for Licensed Products.  Notwithstanding anything herein to the contrary, for
the purpose of calculating Revenue under this Agreement, to the extent a
Licensed Product is sold as a component of a product, such as a switch or
router, the amount included in Revenue with respect to such Licensed Product
shall be based on the average per unit Revenue of such Licensed Product for the
corresponding period when sold separately as a component.  For purposes of clarity, a
majority ownership includes ownership obtained by a group in which the party
(together with such party’s Affiliates (which for purposes of this sentence
only include entities that control or are under common control with such
party)) has a majority interest in the group.

 

8.3                               Reporting and Record Keeping Requirements.  Within fourteen (14) days after each successive Change of Control, such
Grantee or the assignee, as the case may be (the “Reporting Party”), shall
provide written notice to Grantor of such Change of Control.  This notice shall either acknowledge that the
Reporting Party is subject to the Licensed Revenue Cap or shall provide all
information reasonably necessary to verify that the Reporting Party is not 

 

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13

 

subject
to the Licensed Revenue Cap.  Unless the
Reporting Party has demonstrated that it is not subject to the Licensed Revenue
Cap, the Reporting Party shall comply with the provisions of Sections 8.3(a),
(b), (c), and (d).

 

(a)                                  Licensed Revenue Cap Determination.  Within twenty-five (25) business days after
each successive Change of Control, the Reporting Party shall provide to Grantor
a report of the worldwide Revenue generated by the sale of Licensed Products in
the most recently completed twelve (12) full months preceding such Change of
Control.  Such report shall also include
a list of all revenue generating products of the Reporting Party and an indication
with respect to each product as to whether or not such product is a Licensed
Product.  Such report shall provide all
information necessary to determine the Licensed Revenue Cap.  For the avoidance of doubt, the Reporting
Party will not be required to disclose pricing information.

 

(b)                                 Quarterly Revenue Reports.  Subsequent to such Change of Control, in
addition to the report described in Section 8.3(a), the Reporting Party
shall provide within forty-five (45) days after the close of each fiscal quarter
during the term of this Agreement (including the close of any fiscal quarter
immediately following the expiration and any termination of this Agreement),
reports to Grantor setting forth all of the worldwide Revenue generated by the
sale of Licensed Products by the Grantee, its successor or assignee, and their
respective Affiliates during such quarter. 
Such reports shall also include a list of all revenue generating
products of the Reporting Party and an indication with respect to each product
as to whether or not such product is a Licensed Product.  For the avoidance of doubt, the Reporting
Party will not be required to disclose pricing information.

 

(c)                                  Records Retention.  The Reporting Party shall keep true and
accurate records and books of accounting data reasonably required for the
computation and verification of reports provided pursuant to this
Agreement.  The Reporting Party shall
retain records or books with respect to such reports for a period of five (5) years
from the date such record is generated. 
This retention requirement shall not be deemed to reduce any statute of
limitations period applicable to any potential claim and shall survive any
expiration of this Agreement.

 

(d)                                 Distribution of Reports.  The parties agree that reports will be provided
to and held in confidence by the Finisar and Source Photonics representatives
identified pursuant to Article 9. 
The parties further agree that the receiving party will not further
distribute the information without the written authorization of the Reporting
Party, which authorization will not be unreasonably withheld.

 

(e)                                  Right of Inspection.  All records and books maintained pursuant to Section 8.3(c) shall
be open for inspection upon reasonable notice (which shall not be less than ten
(10) days in advance) during business hours by an independent certified
accountant reasonably selected by Grantor and reasonably acceptable to the
Reporting Party, provided that such inspection shall not occur more than once
annually.  This Right of Inspection shall
survive any expiration or termination of this Agreement.  The party performing the inspection will be
required to sign a 

 

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14

 

confidentiality
agreement limiting the disclosure of information solely to (i) conclusions
regarding the accuracy of prior reports; (2) the method used to calculate
Revenue, and (3) other information agreed to by the Parties as necessary
to evaluate the calculation of revenue. 
The confidentiality agreement will further limit the disclose of
information to the Finisar and Source Photonics representatives identified
pursuant to Article 9.

 

8.4                               Application of License Revenue Cap.

 

(a)                                  Limitation on Licensed Revenue Cap Exceptions.  The Grantee or Licensee will
be subject to the Licensed Revenue Cap as a result of any transaction or series
of transactions that would otherwise result in the Grantee or Assignee being
subject to one of the above exceptions to the Licensed Revenue Cap if the
structure of the transaction or series of transactions has no substantial
business justification other than to circumvent the Licensed Revenue Cap.

 

(b)                                 Licensed Revenue Cap Does Not Apply To Finisar.  Finisar and its Affiliates
shall not be subject to the Licensed Revenue Cap or the Reporting and Record
Keeping Requirements provided by Section 8.3, regardless of any Change of
Control.

 

9.                                     Notices.  All notices, including notices of change of
address, required or permitted to be given hereunder shall be sufficiently
given when personally delivered, delivered by overnight courier or mailed
prepaid first class registered or certified mail and addressed to the Party for
whom it is intended at its record address, and such notice shall be effective
upon receipt, if delivered personally, or delivered by overnight courier, or
shall be effective five (5) days after it is deposited in the mail, if
mailed.  The record addresses and
facsimile numbers of the Parties are set forth below:

 

	
  If to Finisar:

  

  1389 Moffett Park Drive

  Sunnyvale, California 94089

  United States

  Attn: General Counsel

  Fax: 408-541-5660

  Phone:
  408-548-1000

  	
  If
  to Source Photonics:

  

  20550 Nordhoff Street

  Chatsworth, California 91311

  United States

  Attn: Chief Executive Officer

  Fax: 818-349-9258

  Phone: 818-773-9044

  	
  If
  to MRV:

  

  20415 Nordhoff Street

  Chatsworth, California 91311

  United States

  Attn: General Counsel

  Fax: 818-407-5867

  Phone: 818-773-0900

  

 

Any Party, at any
time, may change its previous record address or facsimile number by giving
written notice of the substitution in accordance with the provision of this Article 9.

 

10.                               General Provisions.

 

10.1                         Entire Agreement.  This Agreement constitutes the entire
agreement and understanding among the Parties, with
respect to its subject matter and, subject to Section 7.4, supersedes any
prior or contemporaneous agreements or understandings relating to the
subject matter.  There are no
representations, promises, agreements, warranties, covenants or undertakings
among the Parties other than those contained herein.

 

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15

 

10.2                           Interpretation.  Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words
using the singular or plural number also include the plural or singular number,
respectively; (iii) the terms “hereof,” “herein,” “whereby” and derivative
or similar words refer to this Agreement; and (iv) the terms “Section” and
“Article” refer to the specified Section and/or Article of this
Agreement.  Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless otherwise
specified.

 

10.3                           Patent Assignment/Encumbrance.  None of the Parties
shall assign to any third party or encumber any of its Patents
pursuant to this Agreement, unless such assignment or encumbrance is made
subject to the terms and conditions of this Agreement.

 

10.4                           Amendment; No Waiver.  This Agreement may be amended only by a
writing executed by Finisar and Source Photonics, provided that
MRV’s written consent will be required to modify those portions of Sections 5.1
or 5.3 that relate to MRV.  A Party may waive in writing compliance by a
Party with any of the terms, covenants or conditions contained in this
Agreement (except such as may be imposed by law).  No delay or omission on the part of any
Party to this Agreement in requiring performance by the other Party
or Parties or in exercising any right hereunder shall operate as a waiver of any
provision hereof or of any right or rights hereunder, and the waiver, omission
or delay in requiring performance or exercising any right hereunder on any
given occasion shall not be construed as a bar to or waiver of such performance
or right, or of any right or remedy under this Agreement on any future
occasion.

 

10.5                           Severability.  Each Section or subsection of this
Agreement shall be distinct and separate and, unless otherwise specified, the
invalidity, illegality or unenforceability of any Section or
subsection shall have no effect on any other Section or subsection.  If a court or tribunal
declares a provision of this Agreement invalid, illegal or unenforceable,
the Agreement will be deemed automatically adjusted to the minimum extent
necessary to be valid.

 

10.6                           Governing Law.  This Agreement shall be interpreted,
construed and enforced in accordance with the laws of the State of California,
without reference to its choice of law rules, except to the extent preempted by
the laws of the United States of America.

 

10.7                           Exclusive Jurisdiction.  With respect to any controversy, claim, or dispute
arising out of or in connection with this Agreement, the Parties hereby
irrevocably submit to the exclusive jurisdiction, including personal, subject
matter, or both, and venue in the United States District Court for the Northern
District of California, or an appropriate court in Santa Clara County,
California, and agrees to accept service of process by mail and waives any
jurisdictional or venue defenses otherwise available.

 

10.8                           Attorneys’ Fees.  In the event of any action to enforce this
Agreement or on account of any breach of or default under this Agreement
arising out of Section 2.1, the prevailing party in such action shall be
entitled to recover, in addition to any other relief to which it may be
entitled, all reasonable attorneys’ incurred by the prevailing party in
connection with such action (including, but not limited to, any appeal
thereof).

 

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16

 

10.9                           Interpretation of Agreement.  The Parties have
participated in the negotiation and drafting of this Agreement.  In the event that any ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties and no rule of construction, presumption or
burden of proof shall arise favoring one Party concerning the interpretation of
ambiguous provisions or otherwise by virtue of one Party’s presumed authorship
of this Agreement or any provision hereof.

 

10.10                     Further Assurances.  Each Party shall do,
or cause to be done, all such further acts, and shall execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any and all such
further documentation as the other Party
reasonably requires to carry out the purposes of this Agreement.

 

10.11                     Confidentiality.  Unless and until this
Agreement is publicly disclosed as permitted below, Source Photonics and MRV
agree to keep the terms of this Agreement in confidence and shall not disclose
any portion to any third parties, except: (a) the Parties may disclose
this Agreement to its Affiliates, and subject to an appropriate non-disclosure
agreement, to prospective acquirers, joint venture parties or collaborators, or
licensees; (b) when necessary to enforce the terms of this Agreement; (c) as
required by law, or judicial, administrative, or regulatory order, including as
required by applicable securities laws or regulations or by rule of any
recognized stock exchange; or (d) to communicate necessary information to
the Parties’ accountants, consultants, lenders, creditors, insurers, brokers,
agents, attorneys, and other persons who have a need to know in order (i) to
carry out the terms of this Agreement or (ii) for the Parties to conduct
its ordinary business activities.

 

10.12                     No Admission; No Decision on the Merits.  This Agreement sets forth a compromise and
settlement of disputed claims for the purpose of avoiding the costs,
disruptions, and uncertainties associated with litigation.  Such compromise and settlement does not constitute
a ruling on the merits, an admission as to any issue of fact or principle at
law or an admission of liability of any Party. 
Any such admission of liability is expressly denied.  It is also expressly agreed that neither this
Agreement, its execution, the performance of any of its terms nor any of its
contents shall be offered in any proceeding as evidence or an admission of
liability for patent infringement, validity, or willfulness.

 

10.13                     Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.

 

[Signature Page Follows]

 

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17

 

IN WITNESS WHEREOF, each of the Parties has  caused this Settlement and Cross
License Agreement to be executed by its duly authorized officer as of the date and year first
above written.

 

	
  Finisar Corporation

  	
   

  	
  Source Photonics, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Chris Brown

  	
   

  	
  By:

  	
  /s/ Near Margolit

  
	
  Name:

  	
  Chris Brown

  	
   

  	
  Name:

  	
  Near Margolit

  
	
  Title:

  	
  General Counsel

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
  Date:

  	
  9-10-10

  	
   

  	
  Date:

  	
  September 10, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  MRV Communcations, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Dilip Singh

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Dilip Singh

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
  Date:

  	
  September 10, 2010

  

 

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18

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