THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

(OCPI)

1/23/2006 Proxy Information

We have worked closely with Furukawa, our indirect majority stockholder, in the past, and we intend to continue to work closely with Furukawa in the future. We currently purchase the majority of our lasers from Furukawa and its related parties pursuant to a Master Purchase Agreement dated October 1, 2003. During the fiscal year ended September 30, 2005, we purchased these lasers from Furukawa and its related parties in the ordinary course of business. We also sell some of our subsystems and modules in the regular course of our business to Furukawa and several of its subsidiaries and affiliates. Our purchases from these related parties amounted to $14,911,000 for the year ended September 30, 2005. Our sales to these related parties amounted to $46,000 for the year ended September 30, 2005. Accounts receivable due to us from our related parties was $5,000 at September 30, 2005. Accounts payable due by us to our related parties was $4,095,000 at September 30, 2005.

Some of our directors are also executives of Furukawa. Mr. Yukimasa Shiga is the Executive Vice President of the Administration of Subsidiaries in the United States Department of Furukawa Electric North America, Inc. Mr. Haruki Ogoshi, who became a director in July 2005, is the General Manager of the Optical Component Products Department Telecommunications Company of The Furukawa Electric Co., Ltd. Mr. Arinobu Sato, who also became a director in July 2005 is Manager of the Group Business Administration Department of The Furukawa Electric Co., Ltd.

We have entered into a registration rights agreement with Furukawa Electric North America, Inc., which includes demand registration rights and other standard rights and limitations.