Exhibit 10.3
CONSENT AND WAIVER
April 4, 2007
Deutsche Bank, AG
London Branch
c/o Deutsche Bank AG
31 West 52nd Street
New York, New York 10019
Attn: Nick Brumm
        Tracy Fu
Ladies and Gentlemen:
Reference is made to that certain Convertible Note, dated as of June 4, 2003, as
amended as of June 13, 2003 (the “Note”) issued by MRV Communications, Inc. (the
“Company”) in favor of Deutsche Bank, AG London Branch (the “Lender”) pursuant
to a Securities Purchase Agreement dated June 4, 2003 (the “Agreement”).
The purpose of this letter is to inform you that the Company is currently
engaged in an acquisition transaction which may impact certain covenants in the
Note. As publicly announced, on January 26, 2007, the Company and its
newly-formed, wholly-owned subsidiaries, Lighthouse Transition Corporation and
Lighthouse Acquisition Corporation (“LAC”), entered into an Agreement and Plan
of Merger (the “Merger Agreement”) with Fiberxon, Inc., a privately-held
Delaware corporation (“Fiberxon”), under which the Company agreed to acquire
Fiberxon. The closing of the Fiberxon acquisition is subject to the satisfaction
of various conditions precedent, including completion of an audit of Fiberxon’s
financial statements for fiscal years 2006, 2005 and 2004, and obtaining
necessary governmental and third-party approvals and consents in the U.S. and
China as well as other customary closing conditions. Assuming the transaction
closes as expected, through mergers of Fiberxon with the Company’s wholly owned
subsidiaries (the “Mergers”), LAC will succeed to Fiberxon’s name, business,
properties and assets and will assume its obligations and will remain a
wholly-owned subsidiary of the Company. Following the closing of the
acquisition, the Company intends to contribute the capital stock of Fiberxon to
Luminent, Inc. (“Luminent”), a wholly-owned subsidiary of the Company, or
otherwise combine Fiberxon’s business with Luminent’s business.
Pursuant to the Merger Agreement, the total consideration payable to the holders
of Fiberxon’s capital stock is approximately $130,896,170. The merger
consideration consists of 21,188,630 shares of the Company’s common stock
(including the assumption of shares underlying the outstanding Fiberxon stock
options), an amount of cash equal to approximately $17,396,170, and an amount
equal to approximately $31,500,000 of deferred consideration payment. The number
of shares of the Company’s common stock to be issued is fixed; the calculation
of the shares to be issued was initially determined based on a price of $3.87
per share, however the option exchange ratio to be used in the assumption of the
Fiberxon options will depend on the price of the Company’s common stock just
prior to and at the time of closing. The aggregate deferred consideration
payment may be (i) increased in the event that the portion of the proceeds of
the proposed initial public offering of Luminent (the “Luminent IPO”)
apportioned to the Fiberxon stockholders is more than $31,500,000, or
(ii) decreased (a) by any successful

 

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claims made against the certain funds set aside to provide recourse to MRV for
certain matters and any expenses incurred by the Stockholder’s Agent and (b) in
the event the value of the portion of the proceeds of the Luminent IPO
apportioned to the Fiberxon stockholders is less than $31,500,000.
In addition, in the interim period prior to closing of the transactions
contemplated by the Merger Agreement, the Company is also taking actions to
assist Fiberxon in procuring additional lines of credit. In doing so, the
Company obtained a letter of credit in favor of one of Fiberxon’s existing
banking creditors on March 29, 2007, and may obtain one or more additional
letters of credit in favor of Fiberxon’s banking creditors, which may or may not
require the Company to provide a deposit account or other security to the
issuing bank. Attached is a copy of the Company’s Current Report on Form 8-K
filed on April 3, 2007 with the U.S. Securities and Exchange Commission
reporting this financing arrangement.
In accordance with the terms of Section 8(e) of the Agreement and Section 11 of
the Note, the Company hereby requests, to the extent applicable:

  •   a waiver from the terms set forth in Section 8 of the Note, including the
Lender’s waiver and release of any Event of Default by the Company under
Section 8, as a result of the incurrence of additional Indebtedness with respect
to the Deferred Consideration Payment at the time of the closing of the Mergers,
and as a result of any secured indebtedness resulting from the Company’s
provision of a letter of credit or other guarantee in support of the issuance of
one or more lines of credit of up to $5 million in the aggregate to Fiberxon;
and     •   a waiver from the terms set forth in Section 2(e)(iv)(D) of the
Note, including the Lender’s waiver and release of any Event of Default by the
Company under Section 2(e)(iv)(D), as a result of any issuances of options at a
per share exercise price lower than $2.32, if applicable at the time of the
determination of the option exchange ratio and the assumption of the Fiberxon
options upon closing of the Mergers.

Please indicate your agreement and written consent to the foregoing by signing
this letter and returning the executed original to the undersigned at the
address set forth above within three business days of receipt. Please also send
a copy of the executed letter via facsimile to the undersigned at
(818) 407-5656. Please note, the Company intends to file a Current Report on
Form 8-K reporting the scope and effect of this waiver within four days of its
receipt. Consistent with the requirements of Section 4(i) of the Agreement, the
Company will provide you a copy of the Current Report prior to its filing.

 

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If you have any further questions, please contact either the undersigned at
(818) 773-0900 or Shoshannah D. Katz of Kirkpatrick & Lockhart Preston Gates
Ellis LLP at (310) 552-5063.

                  Sincerely,
 
                MRV COMMUNICATIONS, INC.
 
           
 
  By:   /s/ Noam Lotan    
 
                Name:   Noam Lotan     Title:     Chief Executive Officer

     
cc:
  Mark A. Klein
 
  Shoshannah D. Katz

      AGREED AND ACCEPTED:
 
    DEUTSCHE BANK, AG LONDON BRANCH
 
   
By:
  /s/ Sunil Hariani /s/ Andrea Leung
 
   
 
    Title: Director Managing Director

     
4/17/07
   
 
Date